Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

What To Watch In Canadian Markets This Week

Published 2020-04-27, 10:24 a/m
Updated 2023-07-09, 06:31 a/m

GDP Numbers Out Thursday

Individual Canadians, small business owners and large corporations are all feeling the pain triggered by the COVID-19 crisis. But just how much damage has the pandemic ravaged upon the Canadian economy as a whole?

A first glimpse of the toll came earlier this month, when Statistics Canada broke with tradition and release an estimate of its Gross Domestic Product figures for March. For the first time, StatsCan released what it called a “flash estimate” of its GDP figures for March. It opted for this preliminary report of early data on April 15 due to the rapid decline in economic activity across the country caused by the pandemic and the ordered shutdown of most businesses. The bottom line: the numbers were not good.

Figures showed the Canadian economy in March shrank 9%, which would peg growth in the first quarter of 2020 in the negative – at -2.6% to be exact.

StatsCan warned these figures were merely an estimate, and that they could be revised when the final numbers for March are released next month. The agency usually releases monthly GDP numbers two months following the month they reference. That means the numbers scheduled for release this coming Thursday will cover February, a period that was not affected by the COVID-19 closures. It will be interesting to see, however, if StatsCan will revise its “flash estimate” for March, given the pressing interest in quantifying the financial stress being seen across all sectors of the economy.

Notable Canadian Earnings Reports

There are several notable Canadian companies releasing their latest earnings reports this week worth keeping an eye on.

The first up will be Canadian National Railway (TSX:CNR) on Monday. Canada’s largest railway operator will report after the markets close, and is expected to provide details on the effects of the COVID-19 impact.

Last week, rival Canadian Pacific Railway reported its earnings, which showed a 16% increase in overall revenues. Its operating ratio fell to 59.2% from 69.3% a year earlier. The ratio is a measure of operating expenses as a percentage of revenue. A lower ratio reflects improved profitability. CP officials, however, stated the company expects to see full-year adjusted earnings to be flat due to a drop in volume of goods shipped as a result of the COVID-19 pandemic and a reduction in the volume of crude oil being shipped.

It is expected that CN will also provide an outlook on the effects the coronavirus pandemic is having on its shipping volumes.

Two of Canada’s oil producers – Husky Energy (TSX:HSE) and Cenovus Energy (TSX:CVE) – will be reporting their first-quarter figures on Wednesday, providing the first glimpse of how the duel affects of the COVID-19 pandemic and the unprecedented drop in oil prices are being absorbed.

Both companies have been hurt by the pandemic slowdown. Husky has cut its output dramatically, while Cenovus announced earlier this month that it was suspending its dividend.

Maple Leaf Foods (TSX:MFI), another major Canadian company that has been hit by the COVID-19 crisis, will report its first-quarter financials before the opening bell on Wednesday.

Although its Q1 report will cover a period of time that was only partially affected by the health crisis, the country’s largest publicly-traded food processing company is expected to comment on the effects the pandemic will have on its overall 2020 outlook.

Earlier this month, Maple Leaf was forced to temporarily suspend its operations at two processing plants – a poultry plant in Brampton, Ont., and its Viau plant Montreal – after employees tested positive for the COVID-19 virus. Both plants resumed operations on April 16 after thorough cleaning and implementing additional protective measures.

Grocery store operator Loblaw (TSX:L) will also report is first-quarter earnings on Wednesday. It is expected to show an uptick in its numbers due to the COVID-19 crisis, which has seen consumers stock up on everything from toilet paper to baking ingredients as they navigate life under stay-at-home orders.

Last week, Loblaw competitor Metro Inc. reported its second-quarter earnings that included a hike in same-store food sales of 9.7% per cent for the quarter. If the COVID-19 impact was excluded, the figures showed a 5.2% jump. Quarterly pharmacy same-store sales were up 7.9%, or 6.4% excluding the pandemic impact.

Metro also stated that the first four weeks of its third quarter, which ended April 11, saw same-store sales up 25% compared with last year.

Other Canadian Companies Reporting This Week

Other Canadian companies reporting this week include Gildan Activewear (TSX:GIL) and Roots (TSX:ROOT) on Wednesday, Calgary-based Precision Drilling (TSX:PD) and Toronto-headquartered Yamana Gold (TSX:YRI) on Thursday, while natural gas producer TC Energy (TSX:TRP) and Calgary-based Imperial Oil Ltd. (TSX:IMO) report Friday.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.