The TSX added only 0.07 per cent on Friday as jobs data substantiated the need for further interest rate hikes.

Canada added 150,000 jobs in January, marking a fifth consecutive monthly gain and a tenfold increase from the analyst consensus of 15,000.

The January figure accelerated to more than twice December’s 70,000 total, while unemployment remained steady at 5 per cent, both signs that the economy has not cooled from the impact of higher borrowing costs.

The job gains were made up of 121,000 full-time positions and 115,000 private positions, with concentrated gains from non-permanent residents thanks to Canada’s open immigration policies.

Average hourly wages were up 4.5 per cent in January, down from 4.8 per cent in December, after months of readings consistently over 5 per cent.

Total employment gains since September come to 326,000.

Similarly, U.S. nonfarm payrolls added 517,000 jobs last month, while unemployment dropped to 3.4 per cent, the lowest since May 1969.

Canadian consumer discretionary stocks, which speak to the state of consumer sentiment, closed down by over 4 per cent.

It was labour market tightness that prompted the Bank of Canada to institute its last 25-basis-point hike, with Governor Tiff Macklem expecting high rates to curtail economic growth to near zero in the first three quarters of 2023.

His forecast can be seen in effect in Canada’s cooling real estate market, where prices are down over 13 per cent since last year’s peak, and higher mortgage costs are exacerbating Canadian households’ overreliance on debt, which stood at $1.83 for every $1 of household disposable income in Q3 2022.

Canadian technology stocks, which offer a measure of interest-rate sensitivity in the market, dropped by 1.81 per cent.

The energy sector, one of the day’s lone bright spots, added 2.41 per cent as oil prices rose in response to Russia’s planned reduction in oil production next month. The country plans on slashing output by 500,000 barrels per day (5 per cent of January output) to retaliate against Western sanctions, including a price cap on its energy products.

Spurred on by higher Saudi Arabian oil prices and growing confidence in China’s post-reopening demand, WTI has added 8.79 per cent over the past week, while Brent added 2.8 per cent.

The TSX ended the week with a 0.25-per-cent loss, though it remains up by 6 per cent year to date.

When it comes to our neighbours down south, the U.S. market showed weakness after consumer sentiment surpassed a one-year high, fueling expectations of more hawkish monetary policy. It ended the day with a loss of 0.76 per cent, placing it at just over 5 per cent in the green in 2023.

Developed International stocks, for their part, finished the week down by 0.99 per cent with year-to-date gains of 4.15 per cent, while Emerging Markets were down 0.74 per cent and up by 2.67 per cent, respectively.

Market movers

Our investor community has been keen on the thesis of persistent inflation, as evidenced by this week’s overwhelming preference for mining stories. Readers emphasized companies positioned to capitalize on both higher commodity prices and global electrification:

Palladium One (PDM) reported the expansion and addition of high-grade drillhole intercepts from the West Pickle zone massive sulphide discovery.

F3 Uranium (FUU) received final uranium assay results from the JR Zone at its Patterson Lake North project, returning 11 m at 4.20 per cent U3O8.

Finally, Lithium One Metals (LONE) signed an option agreement to acquire an additional lithium property in the thriving James Bay region of Quebec.

Notable capital raises over the past week include Auxly Cannabis Group, Osisko Mining and Millennial Potash.

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