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What To Watch in Canadian Markets This Week

Published 2020-03-23, 08:55 a/m
Updated 2023-07-09, 06:31 a/m

Taking a cue from the futures markets and the Asian exchanges, this week is going to start on a tumultuous course.

Last week, the S&P/TSX Composite Index fell more than 7.7%, hitting a high of 12,849 points on Monday, March 16, then dropping to its lowest point on Wednesday, March 18, hitting 11,406 points during intraday trading. It closed last Friday at 11,851.81.

The prospect for the coming week could be even more grim. While Canadians close to retirement try not to panic as they watch their portfolios shrivel, hundreds of thousands sign up for employment insurance. The shift in the workforce changes by the week, and not for the better.

In Ontario, just about every autoworker is bracing to be laid off.

This morning Air Transat announced it is laying off about 70% of its employees. That represents about 3,600 people and includes all flight crew personnel – pilots and flight attendants. Some are out of a job immediately, while others will be served noticed and let go within a month.

Meanwhile, Canadian banks are moving to allow customers defray mortgage payments.

And sectors struggle to cope with the economic effects of greater social distancing pleas from all levels of government in an effort to slow the spread of the COVID-19 virus.

Restaurants and bars have been shuttered, while others, like chain giants McDonald’s have switched gears and will only over service through their drive-throughs.

Meanwhile, retailer Walmart Canada (NYSE:WMT) says it will hire about 10,000 to bolster staff to meet increase demand due to the COVID-19 crisis at its stores and distribution centres. It is not clear whether the new hires will be temporary.

Other retailers seeing increases in traffic, like grocery store chains Metro Inc. (TSX:MRU) and Loblaws, are offering its workers a $2-an-hour raise. At Sobeys, Plexiglas sheets will be installed in its stores in an effort to protect staff from the virus spread.

Air Canada Taking Huge Stock Hit

All airline stocks are taking a drubbing. Air Canada (TSX:AC) shares opened last week at $21.60, which was already down from the previous week’s open of $33.16, to close last Friday at $12.41, a 42.5% drop in the last week, or a 62.6% drop in the last two weeks. On Jan. 14, Air Canada stock hit its 2020 high of $52.40. In the last year, Air Canada stock has lost 60.74%.

Endeavour Mining Makes $1-Billion Deal

The coronavirus crisis is creating some opportunities, especially in the mining sector, which has seen its stocks drop.

Endeavour Mining Corp (TSX:EDV) announced this morning it will acquire gold miner SEMAFO Inc. (TSX:SMF) in a deal said to be valued at about $1 billion. The merger would create the biggest gold producer in the west Africa nations of Burkina Faso and Ivory Coast.

Endeavour shareholders will end up owning about 70% of the new merged company, while Semafo shareholders will own the remaining 30%.

Shares of Endeavour Mining closed last Friday at $21.65, which was down just over 8% for the day. In the last year, shares have gained just over 6.75%. Meanwhile shares of Semafo, which have lost 48.7% in the last year. they closed last Friday at $1.99, which was down 9.55% on the day.

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