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Canadian Stocks Are Dipping Despite Solid Jobs Report - Canadian Commentary

The Canadian stock market is down slightly in early trade Friday, adding to the modest losses of the previous session. Weakness in energy and gold stocks is weighing on the market this morning, despite the larger than expected increase in August employment growth.

Data from Statistics Canada this morning showed that the Canadian economy added 22,000 jobs in August. Economists had been expecting an increase of 19,000 jobs. The Canadian unemployment rate also dipped to 6.2 percent in August.

Markets in the United States are little changed Friday morning. Concerns about the economic impact of Hurricane Irma are weighing on the markets. The category 4 storm is expected to make landfall in Florida early Sunday. Meanwhile, North Korea is celebrating a holiday on Saturday, which could be a key date for another intercontinental ballistic missile launch.

Markets in Europe are turning in a mixed performance Friday, fluctuating between small gains and losses. Investors remain concerned by the tensions between the U.S. and North Korea, as well as Hurricane Irma.

The benchmark S&P/TSX Composite Index is down 28.61 points or 0.19 percent at 14,995.92.

On Thursday, the index closed down 35.30 points or 0.23 percent, at 15,024.53. The index scaled an intraday high of 15,072.86 and a low of 15,018.05.

The Capped Materials Index is down 1.19 percent. Agnico Eagle Mines (AEM.TO) is slipping 0.13 percent and Franco-Nevada (FNV.TO) is losing 0.09 percent.
Potash Corporation of Saskatchewan Inc. (POT.TO) is falling 0.51 percent and Agrium Inc. (AGU.TO) is weakening by 0.29 percent.

The Gold Index is decreasing 0.66 percent. Gold prices are up slightly Friday morning, adding to recent gains that have brought prices to yearly highs.

Eldorado Gold (ELD.TO) is losing 0.59 percent and Goldcorp (G.TO) is decreasing 0.17 percent. B2Gold (BTO.TO) is weakening by 1.88 percent and Yamana Gold (YRI.TO) is falling 2.50 percent. Kinross Gold (K.TO) is declining 1.60 percent and Barrick Gold (ABX.TO) is surrendering 1.33 percent. IAMGOLD (IMG.TO) is losing 1.83 percent.

The Energy Index is falling 0.66 percent. Crude oil prices are inching lower Friday morning, slipping just below $49 a barrel. Data from the U.S. Energy Information Administration Thursday showed that U.S. crude supplies climbed by 4.6 million barrels last week.

Crescent Point Energy (CPG.TO) is weakening by 1.75 percent and Canadian Natural Resources (CNQ.TO) is losing 0.48 percent. Enbridge (ENB.TO) is slipping 0.06 percent and Encana (ECA.TO) is declining 1.98 percent. Suncor Energy (SU.TO) is lower by 0.13 percent and Cenovus Energy (CVE.TO) is surrendering 1.57 percent.

The Capped Information Technology Index is losing 0.21 percent. Descartes Systems Group (DSG.TO) is down 1.67 percent and BlackBerry (BB.TO) is falling 0.09 percent. Sierra Wireless (SW.TO) is weakening by 0.60 percent.

The Capped Healthcare Index is higher by 0.76 percent. Valeant Pharmaceuticals International is rising 0.55 percent and Extendicare (EXE.TO) is gaining 0.21 percent.

The heavyweight Financial Index is increasing 0.15 percent. Royal Bank of Canada (RY.TO) is rising 0.14 percent and Bank of Nova Scotia (BNS.TO) is climbing 0.13 percent. Toronto-Dominion Bank (TD.TO) is gaining 0.38 percent and Bank of Montreal (BMO.TO) is adding 0.04 percent. Canadian Imperial Bank of Commerce (CM.TO) is advancing 0.24 percent.

The Capped Telecommunication Services Index is up 0.06 percent. BCE (BCE.TO) is climbing 0.26 percent.

The Capped Industrials Index is up 0.04 percent. Canadian Pacific Railway (CP.TO) is rising 0.07 percent and Canadian National Railway (CNR.TO) is higher by 0.30 percent.

On the economic front, China's exports increased at a slower pace in August on softening global demand, while imports growth exceeded expectations.

Exports increased 5.5 percent year-on-year in August, slower than July's initially estimated 7.2 percent growth, data from the General Administration of Customs revealed Friday. Shipments were forecast to grow 6 percent.

At the same time, imports advanced 13.3 percent annually, faster than the expected growth of 10 percent.

As a result, the trade surplus totaled $42 billion in August versus the expected level of $48.5 billion.

German exports recovered in July but the pace of growth was weaker than forecast, data from Destatis showed Friday.

Exports grew 0.2 percent month-on-month in July, reversing a 2.7 percent fall in June. Shipments were forecast to climb 1.3 percent.

At the same time, imports advanced 2.2 percent, in contrast to a 4.4 percent decline in June. Nonetheless, the rate was slower than the expected 2.8 percent.

As a result, the trade surplus decreased to around adjusted EUR 19.6 billion from EUR 21.2 billion a month ago.

Germany's labor cost growth increased slightly in the second quarter after slowing in the first quarter, Destatis reported Friday. The index of labor cost gained 2.3 percent year-on-year, following a 2.2 percent rise in the first quarter.

France's industrial production increased as expected in July after falling in the previous month, the statistical office Insee reported Friday. Industrial output rose 0.5 percent month-over-month in July, reversing a 1.1 percent drop in June. The figure also matched consensus estimate.

UK industrial production grew at a slower pace in July due to weak oil and gas extraction, data from the Office for National Statistics showed Friday. Industrial production grew 0.2 percent month-on-month in July, slower than the 0.5 percent increase seen in June. The monthly rate came in line with expectations.

The UK visible trade deficit widened in three months to July primarily due to an increase in the imports of finished manufactured goods, the Office for National Statistics said Friday. The visible trade deficit increased by GBP 1.1 billion to GBP 34.4 billion in three months ended July.

Wholesale inventories in the U.S. rose by more than anticipated in the month of July, according to a report released by the Commerce Department on Friday. The Commerce Department said wholesale inventories climbed by 0.6 percent in July, matching the downwardly revised increase in June.

Economists had expected inventories to rise by 0.4 percent compared to the 0.7 percent increase originally reported for the previous month.

In commodities, crude oil futures for October delivery are down 0.16 or 0.33 percent at $48.93 a barrel.

Natural gas for October is down 0.061 or 2.05 percent at $2.92 per million btu.

Gold futures for December are up 1.60 or 0.12 percent at $1,351.90 an ounce.

Silver for December is up 0.034 or 0.19 percent at $18.15 an ounce.

by RTTNews Staff Writer

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