Here are five things you need to know this morning:
Broad market sell off: To quote noted market commentator Ron Burgundy: “Well, that escalated quickly.” North American markets sold off in unison on Thursday amid jitters over the U.S. economy. After hitting 23,000 points for the first time ever on Wednesday, the TSX closed almost two per cent lower at 22,723. Just about every sector was lower except telecoms, real estate and health care, all three of which don’t make up a particularly large part of the index. Today isn’t shaping up much better, with U.S. futures for the S&P, Nasdaq and small-cap focused Russell all in the red. It’s looking like a bumpy ride for markets headed into the long weekend.
Loonie close to breaching 72 cents level: It didn’t happen on Thursday — barely — but the Canadian dollar came perilously close to dipping below 72 cents U.S. That’s a level the dollar has flirted with a number of times in recent but never gone under since the early days of the pandemic in 2020. While mostly just of psychological significance, a weaker loonie will make the Bank of Canada’s job of taming inflation even harder, just at the time when they finally seem to be making some headway. But as long as the U.S. Federal Reserve stays on the sidelines while the Bank of Canada is cutting, the loonie is going to have a tough time keeping its head above water.
U.S jobless rate ticks up to 4.3 per cent: The U.S. Department of Labour put out fresh employment data this morning, and the numbers came in far weaker than expected. The U.S. economy added 114,000 new jobs last month, far fewer than the consensus expectation of 175,000. The jobless rate ticked up to 4.3 per cent. That’s up from 4.1 per cent the previous month and worse than the flat reading that was expected. The market was already expecting a rate cut next month prior to the weak jobs report, but expectations skyrocketed after the numbers, with the odds now at 130 per cent. Functionally that means a 25 point cut is a lock, and the possibility of an even larger cut is now on the table.
Ontario Teachers’ lead US$150M funding round for rent-based loyalty program Bilt: The Ontario Teachers’ Pension Plan has led a new funding round for Bilt, a loyalty program startup that is growing swiftly and attracting capital at an impressive clip. Launched in 2021, members earn points for spending at tens of thousands of business across the U.S., and can redeem their points for rental credit or rewards from merchants or convert them into points for other programs. The New York-based startup is now valued at US$3.25 billion, up from $3.1 previously, and is set to remain profitable this year with $400 million in cash and no debt on its books, according to Bloomberg.
Google to add 2.5% surcharge on ads served in Canada: Search giant Google is going to pass on the cost of Canada’s new digital services tax to its customers, announcing it will add a 2.5 per cent surcharge to any ads it displays in Canada. The tax, approved by Parliament in June and set to come into force this fall, will add a three per cent levy on foreign tech giants on the portion of their revenue generated in Canada. Industry group the Interactive Advertising Bureau of Canada says it’s likely other big tech companies will follow suit.