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What To Watch In The Canadian Markets This Week

Published 2020-02-24, 09:04 a/m
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The big story in Canadian business today is the decision announced yesterday by Teck Resources Ltd A (TSX:TECKa) to withdraw its application for its $20-billion oil sands mining operation in Alberta.

The project for the Frontier mine was scheduled to be decided by the Trudeau government later this week, but the company withdrew the application claiming the federal government has to finalize its climate-change policies in order to determine how the oil sands project would fit into the framework.

A report in the Globe and Mail said an oil sector analyst said the decision to pull back on the project sends a negative signal to investors.

Teck Resources CEO Don Lindsay is scheduled to address a BMO conference just before noon on Monday.

Big Banks Report

Five of Canada’s six leading banks will be reporting earnings this week.

The banking results were kicked off last week, when the Royal Bank of Canada (TSX:RY) posted a first-quarter $3.5-billion profit and boosted its quarterly dividend to $1.08 per share, up from its previous $1.05 payout to shareholders.

The uptick in results were generated by record-setting earnings in capital markets and the Royal Bank’s personal and commercial banking divisions, the bank said in a statement. Results were also up in the areas of wealth management and insurance.

This week, the Bank of Montreal (TSX:BMO) and Bank of Nova Scotia (TSX:BNS) will get things started as they are set to both report earnings on Tuesday, followed by the Canadian Imperial Bank Of Commerce (TSX:CM) on Wednesday. The National Bank of Canada (TSX:NA) and the Toronto Dominion (TSX:TD) will follow with earning results on Thursday.

In December, a report by Fitch Ratings predicted that Canadian banks, which posted solid, upbeat earnings reports throughout 2019, would be hitting some headwinds in 2020. Fitch said the big banks would face mounting challenges, including lower commercial loan growth and lower capital markets transaction activity.

Other Notable Earnings

Among other notable earnings reports to keep an eye on this week will be Thomson Reuters Corp (TSX:TRI) and Acreage Holdings Inc (CSE:ACRGu) on Tuesday, newspaper publisher Torstar Corp (TSX:TSb) on Wednesday, Maple Leaf Foods (TSX:MFI) and Husky Energy (TSX:HSE) on Thursday and SNC-Lavalin Group Inc. (TSX:SNC) on Friday.

How the ongoing disruptions on Canadian National rail line service due to barricades to protest pipeline expansions is creating supply problems for Canadian companies – especially firms like Maple Leaf Foods – will most likely be raised and add pressure to resolve the situation.

Hudson’s Bay Shareholders Vote

Shareholders of Hudson's Bay Company (TSX:HBC) are scheduled to vote Tuesday on the whether to take the retailer private.

Last week, the leading proxy advisory firms – ISS, Glass Lewis and Egan-Jones – all recommended that HBC shareholders vote in favour of the move to privatize.

Under the terms of the proposal, the company would become privately owned by certain continuing shareholders, with minority shareholders receiving a cash payment of $11 per share.

Shares of Hudson’s Bay closed last Friday at $10.95, up more than $1 since the end of 2019, when they were trading at $9.88.

GDP Report Due Out Friday

Statistics Canada is set to release its latest gross domestic product report for December, as well as the final figures for the end of the 2019 fourth quarter. The results offer a snapshot of the national economic growth, which has been showing signs of weakening.

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