Work stoppage possible as WestJet issues lockout notice to maintenance engineers' union
A lockout notice issued by WestJet to a union representing aircraft maintenance engineers could result in a work stoppage next week.
Canada's main stock index posted its strongest day in more than four months following a temporary truce in the U.S. debt-ceiling standoff that could have resulted in a government default.
U.S. Senate leaders announced an agreement Thursday to extend the government's borrowing authority into December, averting a result that could have devastated the economy.
Reports of the deal prompted a reversal in markets Wednesday even though most observers expected some sort of agreement would be reached, said Manmeet Bhatia, head of private wealth at Franklin Templeton Canada.
"Most people would have thought that the sky wasn't going to fall, but there's still a degree of fear that it wouldn't be the best-case scenario," he said in an interview.
"That small amount of fear brings out volatility. Uncertainty is the major cause of volatility, and that's what we are facing."
Other factors supporting Thursday's gains were a realization that markets oversold and the European Central Bank indicating it is looking a bond-buying program as its emergency programs are being phased out, Bhatia added.
Improved first-time U.S. unemployment benefit numbers also helped. They were 326,000 last week, a drop from 364,000 a week earlier and below analyst expectations.
"That would definitely contribute to the perception that the worst is behind us in the pandemic, and it's going to be more positive going forward," Bhatia said.
He said confidence could be further buoyed Friday with the release of strong September employment numbers in Canada and the U.S.
The S&P/TSX composite index closed up 224.55 points at 20,416.21.
In New York, the Dow Jones industrial average was up 337.95 points at 34,754.94. The S&P 500 index was up 36.21 points at 4,399.76 while the Nasdaq composite was up 152.11 points at 14,654.02.
All 11 major sectors on the TSX increased, led by information technology, energy and consumer discretionary.
Technology improved as ongoing inflation fears were thrust onto the backburner after being overtaken by other headlines, Bhatia said.
The sector increased 2.7 per cent with Nuvei Corp. up 5.1 per cent, Lightspeed Commerce Inc. 4.8 per cent higher and Shopify Inc. increasing 3.4 per cent.
Energy climbed 2.4 per cent on higher crude oil prices as shares of PrairieSky Royalty Ltd, increased five per cent, followed by Enerplus Corp. at 3.6 per cent and Suncor Energy Inc. at 3.2 per cent.
The November crude contract was up 87 cents at US$78.30 per barrel and the November natural gas contract was up 0.2 of a cent at nearly US$5.68 per mmBTU.
Natural gas prices plateaued after Russia indicated it may increase supplies to Europe.
"I think that's another stabilizing force that has caused an upswing in European markets and helped calm some global pressures as well," Bhatia said.
The Canadian dollar traded for 79.63 cents US compared with 79.28 cents US on Wednesday.
The consumer sector gained 2.3 per cent with shares of Magna International Inc. up 4.9 per cent.
Copper prices helped to lift the materials sector as shares of Teck Resources Ltd. and First Quantum Minerals Ltd. were up 5.6 and 5.3 per cent, respectively.
The December gold contract was down US$2.60 at US$1,759.20 an ounce and the December copper contract was up 9.6 cents at US$4.24 a pound.
Despite Thursday's rally, market volatility that's shown itself in alternating strong and poor days is likely to continue, Bhatia said.
"Until we have a direct path with greater certainty and consistent sustainable numbers, we're going to see some volatility based on perception and fears."
This report by The Canadian Press was first published Oct. 7, 2021.
A lockout notice issued by WestJet to a union representing aircraft maintenance engineers could result in a work stoppage next week.
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