The Bank of Canada will release two reports on Monday – its Business Outlook and its survey of consumer expectations, a relatively new economic indicator.
Offering a quarterly glimpse of the economic pulse of country’s business class, the central bank’s Business Outlook survey is based on interviews with senior managers of about 100 of Canada’s largest companies. The last report, issued in October, showed business sentiment had improved somewhat, although it continued to be lower than the levels reached in 2017 and 2018. Overall, the last quarter showed the most optimistic views coming from central Canada, contrasting with widespread weakness in the Prairies.
Investors, however, should take a look at the BoC’s survey of consumer expectations. The central bank has been conducting the survey since the end of 2014, but this will be the first time that it will make the findings public.
This report is compiled from a poll of 2,000 households, posing questions to Canadians about expectations when it comes to inflation, interest rates, wages, spending and house prices.
The only other national consumer survey in this country is the Conference Board of Canada’s Consumer Confidence Index, so this report should offer needed data on the consumer sector, which accounts for the majority of Canadian GDP.
Housing Sale Prices Due Out On Wednesday
Also on the reports front, the Canadian Real Estate Association will release its December home sales report on Wednesday.
The figures are expected to show an increase, building on last month’s report that showed residential home sales in November were 11.3% higher than the same month in 2018.
But all this upward movement could be a sign of trouble down the road. The Bank of Canada has already indicated its concern with the upward trend in housing prices. In fact, Bank of Canada Governor Stephen Poloz mentioned it in a speech just last week. Poloz cautioned the situation could lead to speculation in the market, which could cause prices to drop in the future, which could trigger much wider negative affects on the economy.
The continued upward trend in prices also signals an affordability issues, especially in the hottest markets in the country like Vancouver and Toronto. It could also put the squeeze on affordability in other cities, most notably Montreal and Ottawa.
Shaw, Aphria Report Earnings
It will be a relatively quiet week on the earnings front for Canadian companies, but there are a few to watch.
On Monday, Shaw Communications (TSX:SJRb) will unveil its first-quarter results. Last quarter, it reported a profit of $167 million, but most notably revealed it now has 1.7 million subscribers in three provinces, making the Calgary-based company the country’s largest regional wireless provider. The jump came as Shaw added more than 90,000 subscribers from Freedom Mobile.
In addition to its wireless service, which is one of its smallest divisions, Shaw continues to be one of the largest internet and cable TV networks in western Canada.
Shares of Shaw closed last Friday at $26.50, down 0.34% from the previous day, and up 1.57% from this time last year.
Ontario-based cannabis grower Aphria Inc (TSX:APHA) will offer up its latest earnings report after the bell on Jan. 13.
One of the main figures that investors will look for – and could be reflected in the market’s response – will be whether this pot company will show a profit.
Aphria is one of the very few marijuana growers that has recorded a quarterly profit. In fact, Aphria’s last two quarterly reports showed profits. In the last quarter of 2019 it posted a net income of $15.8 million followed by a net profit of $16.4 million in Q1 of the 2020 fiscal year.
Shares of Aphria closed at $6.47 last Friday, up 2.54% on the day, but that is down more than 29% over the last year.