Fearing another recession after global markets took a beating yesterday? The Toronto stock market appeared headed for a positive open Friday as a stronger than expected reading on U.S. employment for July calmed anxieties about the state of the American economy.
The U.S. Labour Department’s non-farm payrolls report said employment rose by 117,000 in July, higher than the approximately 80,000 jobs that economists had expected. Also, the jobless rate edged down 0.1% to 9.1%.
There was more good news: the data also showed that the economy created 56,000 jobs more than originally thought in May and June.
The data came out a day after pessimism over the U.S. economy and the big debt problems facing eurozone countries such as Spain and Italy pushed the TSX to its biggest one-day slide in more than two years.
U.S. futures took off following the report with the Dow industrials futures ahead 83 points to 11,454, the Nasdaq futures ran ahead 19.75 points to 2,229.35 while the S&P 500 futures climbed 12 points to 1,210.7.
Meanwhile, the Canadian dollar gained strength following the data from the U.S., Canada’s largest trading partner, up 0.18 of a cent to 102.27 cents US.
Traders also took in data showing that Canadian job growth for July came in at 7,100, less than half what economists expected.
Diminishing confidence in the global economy pushed the TSX down 436 points Thursday while the Dow Jones industrials tumbled 513 points.
Investors continued to selloff on foreign markets Friday as Japan’s Nikkei 225 stock average slid 3.7 per cent, Hong Kong’s Hang Seng dived 4.3 per cent while China’s Shanghai Composite Index lost 2.2 per cent.
European bourses were mainly much lower as leaders face the prospect that Italy and Spain won’t be able to hold out until a new, strengthened bailout fund is in place to prop them up.
London’s FTSE 100 index dropped 2.24 per cent, Frankfurt’s DAX lost 1.95 per cent while the Paris CAC 40 was up 1.22 per cent.
