As Canadian provinces emerge out of lockdowns, the focus this week will provide a first glimpse of how Canadians are weathering the COVID-19 pandemic economically.
The first indicator comes today, as the Canada Mortgage and Housing Corp releases housing starts figures for the month of May.
In April, the CMHC recorded 166,400 housing starts in the country, excluding the province of Quebec. Due to imposed restrictions and social distancing protocols, residential construction activity was shutdown in Quebec until April 20, leaving the CMHC to exclude it from its data.
The April figures, excluding Quebec, represented an 11% month-over-month increase, including a 35.7% gain in multi-family starts. The figures also showed a 27.1% drop in single-unit starts.
Last week, the CMHC announced it was increasing the threshold for qualifying credit scores for mortgage insurance and imposed new limits on debt servicing ratios. Both moves were aimed at limiting what it termed vulnerabilities in the housing market.
Speaking of Personal Debt
Also expected this week is information from Statistics Canada that outlines how much Canadians owe. StatsCan’s report on household-debt-to-income ratio is expected Friday. It will look at the first three months of 2020.
The report for the last quarter of 2019 showed household debt as a function of disposable income moved slightly lower. According to figures, Canadian households owed an average of $1.763 for every dollar of disposable income. In the previous quarter, that figure was pegged at $1.766.
Other Data Expected
Other economic indicators expected this week include figures on Canada’s new motor vehicle sales for March and April, due Friday; Canada’s industrial product price index, which measures the gross monthly change in the trading price of industrial products, that is also due on Friday; and the raw materials price index, expected Friday as well
Key Earnings Reports
There are a few key earnings results investors will likely want to keep their eyes on during this period of economic reopening.
First up is Dollarama (TSX:DOL), which will report first-quarter earnings before the opening bell on Wednesday.
In April, the discount retailer reported its figures for the final quarter of fiscal 2020 that included a 2% increase in sales.
Many of its stores were allowed to remain open during much of the COVID-19 shutdowns, so it is not clear what to expect for the first quarter of this year, but it is safe to assume the figures to see a drop as many consumers stayed home.
Airline Transat AT (TSX:TRZ) will be unveiling its second-quarter results, and host a conference call to discuss the numbers on Thursday.
Last month, European regulators launched an investigation into a proposed deal that would see Air Canada (TSX:AC) buy Transat. This move forced the company to extend the timing of the deal. It is expected that more details will be unveiled that could shed light on what the next moves will be.
Also Thursday, Lululemon Athletica (NASDAQ:LULU) will release its first-quarter results. The sports apparel company reportedly has seen an uptick in sales during the pandemic as its lines have been proving popular with the work-at-home crowd. There were no limits to being comfortable during the stay-at-home period.
Rounding out the week will be the earnings report from Roots Corp (TSX:ROOT) on Friday. The iconic Canadian clothing company will unveil its first-quarter figures and host a conference call the same day. It will be the first time new CEO Meghan Roach will fielding questions.
Roots stock has been inching its way back up after taking a significant drop in the first part of the month of March. The stock price went from a low of $0.63 on April 3 to close last Friday at $1.34. In early February, it had peaked at $2.06. In the last year, the company saw its stock price lose just over 58% of its value.