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Canadian Stocks Are Little Changed Despite Strong Data - Canadian Commentary

The Canadian stock market is nearly flat in early trade Friday, despite the release of a pair of strong economic reports. Canadian employment and GDP both came in better than expected this morning. However, investors remain in a cautious mood ahead of today's vote on tax reform in the U.S. Senate.

Data from Statistics Canada showed that the employment increased for the second consecutive month in November. Employment rose by 79,500 jobs, following an increase of 35,300 jobs in September. Economists had forecast an uptick of 10,000 jobs.

The unemployment rate fell by 0.4 percentage points to 5.9 percent, the lowest rate since February 2008. This beats forecast for a drop to 6.2 percent and follows a reading of 6.3 percent in the preceding month.

Separate data from the same agency showed that nation's economic growth improved more than forecast in September.

On a seasonally adjusted monthly basis, the GDP rose 0.2 percent in September after edging down 0.1 percent in August. Economists were looking for a gain of 0.1 percent.

On an annualized basis, the GDP improved 1.7 percent on the third quarter, exceeding forecasts for an increase of 1.6 percent. The second quarter estimate was revised to 4.3 percent, which has been initially reported as a 4.5 percent rise.

Markets in Europe are turning in a mixed performance at the end of the trading week. Investor sentiment took a hit following the release of the disappointing Chinese manufacturing data. Traders are also in a cautious mood ahead of the Senate's vote on U.S. tax reform legislation.

Markets on Wall Street are dipping in early trade Friday. Traders appear reluctant to make any significant moves amid uncertainty about the prospects for the Senate Republican tax reform bill.

The benchmark S&P/TSX Composite Index is up 25.47 points or 0.16 percent at 16,092.95.

On Thursday, the index closed up 99.76 points or 0.62 percent, at 16,067.48. The index scaled an intraday high of 16,101.18 and a low of 16,004.86.

The Gold Index is decreasing 1.22 percent. Gold prices are nearly flat Friday morning ahead of a crucial vote on U.S. tax reform in Congress.

IAMGOLD (IMG.TO) is falling 3.13 percent and Goldcorp (G.TO) is weakening by 1.16 percent. Kinross Gold (K.TO) is declining 3.34 percent and Eldorado Gold (ELD.TO) is surrendering 1.35 percent. Yamana Gold (YRI.TO) is down 0.91 percent.

Barrick Gold (ABX.TO) is losing 0.39 percent. The company announced that it has acquired 48 million common shares of Reunion Gold.

The Capped Materials Index is down 0.81 percent. Agnico Eagle Mines (AEM.TO) is decreasing 1.33 percent and Franco-Nevada (FNV.TO) is falling 1.95 percent. Agrium (AGU.TO) is lower by 0.16 percent.

The Capped Information Technology Index is losing 0.47 percent. BlackBerry (BB.TO) is falling 1.51 percent and Sierra Wireless (SW.TO) is declining 2.13 percent. Descartes Systems Group (DSG.TO) is surrendering 1.76 percent.

The Capped Healthcare Index is lower by 0.26 percent. Concordia International (CXR.TO) is falling 1.52 percent and Extendicare (EXE.TO) is losing 0.11 percent. ProMetic Life Sciences (PLI.TO) is decreasing 0.37 percent.

The Capped Industrials Index is down 0.14 percent. Canadian National Railway (CNR.TO) is lower by 0.01 percent and Finning International (FTT.TO) is weakening by 0.74 percent. WestJet Airlines (WJA.TO) is falling 1.05 percent.

The Energy Index is rising 1.67 percent. Crude oil prices are rising Friday morning after OPEC agreed to extend its supply quota plan with Russia through 2018.

Suncor Energy (SU.TO) is advancing 0.45 percent and Encana (ECA.TO) is climbing 3.08 percent. Crescent Point Energy (CPG.TO) is increasing 3.51 percent and Husky Energy (HSE.TO) is adding 0.83 percent. Cenovus Energy (CVE.TO) is gaining 3.82 percent and Canadian Natural Resources (CNQ.TO) is up 2.54 percent. Imperial Oil (IMO.TO) is higher by 1.51 percent.

The heavyweight Financial Index is increasing 0.42 percent. Royal Bank of Canada (RY.TO) is gaining 0.59 percent and Bank of Montreal (BMO.TO) is up 0.40 percent. Toronto-Dominion Bank (TD.TO) is rising 0.59 percent
Canadian Imperial Bank of Commerce (CM.TO) is climbing 2.10 percent. Bank of Nova Scotia (BNS.TO) is higher by 0.45 percent.

National Bank of Canada (NA.TO) advancing 0.30 percent. The company reported a profit for its fourth quarter that beat expectations. The company said its bottom line climbed to C$531 million, or C$1.40 per share. This was higher than C$463 million, or C$1.24 per share, in last year's fourth quarter. The bank also boosted its dividend.

The Capped Telecommunication Services Index is up 0.11 percent. TELUS (T.TO) is rising 0.55 percent.

BCE (BCE.TO) is losing 0.19 percent after it announced the upcoming launch of Lucky Mobile, a low-cost prepaid mobile alternative for budget-conscious Canadians with monthly plans starting at just $20.

Canadian oil sands producer MEG Energy (MEG.TO) expects higher production in 2018. The stock is now up 2.38 percent.

On the economic front, China's factory activity expanded at the weakest pace in five months in November as subdued growth in new orders and a substantial fall in employment coincided with a decline in business sentiment, survey results from IHS Markit showed Friday.

The Caixin Purchasing Managers' Index dropped to 50.8 in November from 51.0 in October. The expected reading was 50.9.

Eurozone manufacturing activity expanded notably in November underpinned by production and new orders, survey data from IHS Markit showed Friday. The final factory Purchasing Managers' Index rose to 60.1 in November, its best reading apart from April 2000's series-record high. The score improved from 58.5 in October.

The UK manufacturing sector expanded at the fastest pace in more than four years in November, driven by production and new orders, data from IHS Markit showed Friday.

The IHS Markit/Chartered Institute of Procurement & Supply Purchasing Managers' Index rose to 58.2 in November from a revised 56.6 in October. This was the highest score since August 2013. The score was forecast to rise moderately to 56.5 from October's originally estimated value of 56.3.

In commodities, crude oil futures for January delivery are up 1.25 or 2.18 percent at $58.65 a barrel.

Natural gas for January is up 0.053 or 1.75 percent at $3.078 per million btu.

Gold futures for February are up 0.1 or 0.01 percent at $1,276.80 an ounce.

Silver for March is down 0.149 or 0.90 percent at $16.325 an ounce.

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