Markets likely to turn to U.S. jobs data

Another round of uncertainty is likely to hit traders this week as they scour earnings and data to glean hints of where the U.S. economy is headed — a search that will keep them busy all the way to new jobs data on Friday.

Another round of uncertainty is likely to hit traders this week as they scour earnings and data to glean hints of where the U.S. economy is headed — a search that will keep them busy all the way to new jobs data on Friday.

The highly-anticipated numbers have been on the radar of economists for weeks and are partly to blame for a relative pause on market direction, as traders wait on the sidelines until they get a clearer sense of the U.S. economic situation.

The TSX ended last week up 0.75 per cent, while the Dow was up 1.5 per cent, as earnings season gave investors some reason to cheer while oil prices also strengthened to a four-week high.

On Friday, investors took in some mildly disappointing economic data from south of the border.

The U.S. Commerce Department reported that real gross domestic product grew at a 2.2 per cent annualized rate in the first three months of 2012, which is off from a three per cent increase in the fourth quarter of 2011. The data came in below the 2.7 per cent growth rate that economists had predicted.

Data on the U.S. employment situation is expected to offer the greatest insight into whether investors should brace themselves for a spring pullback in the markets.

“The payrolls data will set the tone for the next several weeks,” CIBC chief economist Avery Shenfeld said in a note.

“Jobless claims data hint at a result that is neither as bad as March nor as strong as the two months before that, but we will also look to any revisions to that trouble March figure.”

The U.S. Labour Department’s data for March disappointed with employers adding only 120,000 jobs in March, half the average pace in the preceding three months.

CIBC World Markets is targeting 160,000 job adds for April, while it said the consensus is for 165,000.

U.S. non-farm payrolls are due Friday, with consensus expectations for an increase of 168,000 jobs, according to estimates from BMO Capital Markets.

“The report should reinforce the view that companies remain cautious about hiring, though less so than last summer,” said BMO Capital Markets deputy chief economist Doug Porter.

Canadian earnings season is also underway and numerous major companies are slated to report this week. Included on the list are oil heavyweights Suncor Energy (TSX:SU) and Talisman Energy (TSX:TLM), as well as supermarket giant Loblaw (TSX:L) and airline carrier WestJet Airlines (TSX:WJA).

In addition to the spate of earnings and U.S. data, markets will also have to deal with a persistent concern about the state of the eurozone economies.

“I think the market’s (saying) that they’re much more concerned about other economies outside the U.S.,” said Gareth Watson, vice-president at Richardson GMP Ltd. in an interview.

“Yes, the U.S. is recovering slowly, but it’s still recovering, so it’s still a positive takeaway relative to other parts of the world.”

Spain’s economic problems have become the epicentre of Europe’s debt crisis in recent weeks as investors worry over its ability to push through austerity and reforms at a time of recession and mass unemployment.

Last week, earnings from U.S. companies with a presence in Europe only added to already troubling data.

Ford Motor Co. said its net income fell by 45 per cent in the first quarter as European sales plummeted and the company paid higher taxes. And coffee company Starbucks also reported a slowdown of sales in Europe.

In Canada, real GDP numbers for February are scheduled for Monday, and expectations are for a rise of 0.2 per cent.

“Indicators for February have been all over the map, so we suspect overall GDP will land close to the middle ground with a mild 0.1 per cent increase,” said Porter.

Other data for the U.S. includes ISM manufacturing report on Tuesday, and non-manufacturing on Thursday.

The Canadian dollar will also be in focus after rising 1.19 cents last week to close at 101.94 on Friday.

Just Posted

Patrons practice on a putting green as the Whitestone Bridge looms in the distance at Trump Golf Links at Ferry Point in the Bronx borough of New York on Tuesday, May 4, 2021. Former President Donald Trump has a rich history of fighting back when he’s down and making others pay, and that’s exactly how he intends to deal with New York City over its plans to fire his company from running the city golf course. (AP Photo/John Minchillo)
Dump Trump? Kicking him off NYC golf course may not be easy

Trump Organization has been reeling after the Capitol riots

A photo illustration made December 14, 2012 in Montreal shows a computer in chains. THE CANADIAN PRESS/Ryan Remiorz
Irish health system says it’s targeted in ransomware attack

Health care systems have been a target before

A woman wearing a mask talks on her phone near an exhibition depicting a rover in Mars in Beijing on Friday, May 14, 2021. China says its Mars probe and accompanying rover are to land on the red planet sometime between early Saturday morning and Wednesday Beijing time. (AP Photo/Ng Han Guan)
China Mars rover to land between Saturday and Wednesday

Only the United States has successfully landed a spacecraft on Mars

Smoke rises following Israeli airstrikes on a building in Gaza City, Thursday, May 13, 2021. Weary Palestinians are somberly marking the end of the Muslim holy month of Ramadan, as Hamas and Israel traded more rockets and airstrikes and Jewish-Arab violence raged across Israel. (AP Photo/Hatem Moussa)
Palestinians flee as Israeli artillery pounds northern Gaza

Israel called up 9,000 reservists as fighting intensifies

Bo’s Bar and Grill owner Brennen Wowk said the hospitality industry is looking for more clarity from the province around what conditions must be met to allow for restaurants reopening. (Advocate file photo)
Frustated restaurant owners want to know government’s reopening plan

Restaurant owners feel they are in lockdown limbo

Team Canada’s head coach Troy Ryan talks with players before the start of the of the Rivalry Series at the Save-On-Foods Memorial Centre in Victoria, B.C., on Monday, February 3, 2020. Ryan of Spryfield, N.S., has been named head coach of Canada’s women’s hockey team for the 2022 Winter Olympics in Beijing.THE CANADIAN PRESS/Chad Hipolito
Troy Ryan to coach Canadian women’s hockey team in 2022 Winter Olympics

Ryan was Canada’s assistant coach from 2016 to 2019

FILE- In this April 19, 2021, file photo, people wearing masks as a precaution against the coronavirus wait to test for COVID-19 at a hospital in Hyderabad, India. Misinformation about the coronavirus is surging in India as the death toll from COVID-19 rises. Fueled by anguish, distrust and political polarization, the claims are further compounding India’s crisis. (AP Photo/Mahesh Kumar A, File)
Misinformation surges amid India’s COVID-19 calamity

Distrust of Western vaccines and health care also driving misinformation

FILE - In this Friday March 6, 2020, file photo, Britain’s Prince Harry visits the Silverstone Circuit, in Towcester, England. In an episode of the “Armchair Expert” podcast broadcast Thursday, May 13, 2021, Prince Harry compared his royal experience to being on “The Truman Show” and “living in a zoo.” (Peter Nicholls/Pool Photo via AP, File)
Prince Harry thought about quitting royal life in his 20s

Feared his family would have to deal with the same spotlight that was on his late mother

Mental health: Gossiping, backbiting and forming factions is unhealthy

We all know of dysfunctional organizations, which can be as troublesome as… Continue reading

Family practice physician Christina Tuomi, D.O., (right) gets Homer's first dose of Pfizer's COVID-19 vaccine from Emergency Department nurse Steve Hughes (left) on Thursday, Dec. 17, 2020 at South Peninsula Hospital in Homer, Alaska. Tuomi has been the hospital's medical lead throughout the pandemic. (Photo courtesy Derotha Ferraro/South Peninsula Hospital)
Alberta physicians: Vaccines are our path forward

As the AMA representatives for Alberta’s family physicians, we were immensely relieved… Continue reading

Vancouver Canucks' Nils Hoglander, right, is checked by Calgary Flames goalie Jacob Markstrom during third-period NHL hockey action in Calgary, Thursday, May 13, 2021.THE CANADIAN PRESS/Jeff McIntosh
Lindholm, Tkachuk lead Calgary Flames in 4-1 win over Vancouver Canucks

Lindholm, Tkachuk lead Calgary Flames in 4-1 win over Vancouver Canucks

Chicago Bulls guard Zach LaVine, right, drives to the basket against Toronto Raptors center Khem Birch, left, and guard Jalen Harris during the first half of an NBA basketball game in Chicago, Thursday, May 13, 2021. (AP Photo/Nam Y. Huh)
LaVine, Markkanen lead Bulls past Raptors, 114-102

LaVine, Markkanen lead Bulls past Raptors, 114-102

Most Read