A number of key reports will be released this week that will provide a snapshot of how the Canadian economy has both been affected by the COVID-19 pandemic and whether it is beginning to show signs of a rebound as restrictions are being lifted.
Housing Starts Out Monday
The first report comes today as the Canadian Real Estate Association publishes its results for home sales during the month of May.
In April, home transactions plummeted to their lowest levels in four decades.
The spring is usually one of the most active periods of the year in the residential real estate market, but with strict restrictions in place due to the health crisis, fewer people have opted to list their house for sale, let alone open it up for prospective buyers to view it. The gradual loosening of these restrictions combined with low mortgage rates and a pent up demand could bolster the numbers. But analysts are still expecting to see the figures to be well below last year’s numbers.
Inflation Figures Revealed Wednesday
On Wednesday, watch for the latest Consumer Price Index. Statistics Canada will unveil the most recent figures for May that will outline just how much prices have been affected by the pandemic.
In April, StatsCan recorded a negative inflationary rate as the first full month of the health crisis lockdowns brought the economy to a near standstill.
Wednesday’s report will provide a good look at how consumers have shifted their spending during the pandemic. It could also provide some insight into how some spending patterns might be altered as the economy reopens. The data could be the starting point to what will surely be lengthy analysis as the second half of 2020 is set to unfold.
CMHC Credit Trends
On Thursday, the Canadian Mortgage and Housing Corp. releases a report on credit trends. The amount of debt Canadians hold will be a key factor as the economy – and its reduced employment prospects – moves forward.
Last week, the CMHC announced it would re-assess all of its policies and practices to ensure there is no racial bias injected into its functioning. What that means in terms of practice is not entirely clear. But the goal, it said, is to eliminate any discriminatory influence.
Measuring Retail Pain
On Friday, Statistics Canada will release its latest numbers on retail sales, which will cover the month of April – the first full month of the shutdowns.
In March, store sales across the country dropped about 10%, which was the largest month-over-month decline ever recorded. It is strongly expected that the numbers for April will be even worse. While this will provide a glimpse of just how much pain retailers are feeling, these figures will not provide much insight on how the recovery will play out as the reopening continues. If anything, these numbers will provide a measure of just how long the road to recovery will be.
Bombardier, Blackberry To Be Dropped From Elite TSX Index
It will be a very quiet week on the earnings front, with very few Canadian companies reporting.
But two big Canadians made headlines – and a few jaws drop – when it was announced last Friday that they would be dropped from the top listings on Toronto Stock Exchange.
Bombardier Inc A (TSX:BBDa) and BlackBerry Ltd (TSX:BB) will remove from the S&P/TSX 60, while Bombardier is being dropped from the broader composite index. In fact, seven companies will be added, while 14 will be removed from the S&P/TSX Composite.
Bombardier shares dipped below the $1 threshold to be maintained on the index in early March, closing last Friday at $0.72. The stock has lost more than 65% of its value in the last week.
As for Blackberry, it’s stock has dropped more than 37% in the last year. Back in 2007, the company was reportedly Canada’s most valuable company, valued at approximately $85 billion. It now has a market cap of just under $4 billion. It’s shares closed at $7.14 last Friday.