Canadian Equity Market Cheat Sheet (January 31, 2011 )
Strengths
- Corporate earnings are set to rise in 2011, according to the Conference Board of Canada's leading indicator of industry profitability, which in December posted its largest one-month gain since 2001, an advance of 0.6 per cent. It is the third straight positive month for the indicator, which had fallen in the previous six months. [Canada.com]
- Canada's Dollar Falls Most in 3 Months as BOC's Carney Notes Strength. Canada’s dollar retreated the most in almost three months against its U.S. counterpart as Bank of Canada Governor Mark Carney said “persistent strength” in his country’s currency is a threat to economic expansion. [Bloomberg]
- Canada's Economy Grew the Fastest in Eight Months in November. Canada’s gross domestic product grew at the fastest pace in eight months in November on increased oil production, wholesaling and retailing. [Bloomberg]
- Walmart Canada, a unit of the world's biggest retailer Wal-Mart Stores, plans to open 40 more supercenters in the country that has been seeing stronger retail sales growth than its southern neighbor.The third-largest employer in Canada with 85,000 associates expects the new supercenters to generate more than 9,200 store and construction jobs. [Reuters]
- Canada's annual inflation rate rose less than expected in December despite pressure from rising energy prices, underscoring the view that the central bank will hold interest rates steady in the near term. [Reuters]
Weaknesses
- Canada Hasn’t Yet Recouped Recession’s Job Losses. Canada’s statistics agency cut its job-creation estimate and erased an earlier finding the economy recouped losses from the last recession, bringing fresh calls from opposition lawmakers for Prime Minister Stephen Harper to rework his stimulus plan. [Bloomberg]
Opportunities
- U.S. stimulus to lift Canadian exports: agency. Canada's struggling exporters can thank the Obama administration's extended tax cuts for an expected bounce in cross-border sales this year, just in time to prop up the sagging recovery, according to a report. [Reuters]
- Canada Bears Tripling Bets as Carney Says Loonie too Strong for Exporters. The Canadian dollar’s 22 percent surge against the U.S. currency has become such a threat to the economy that central bankers and chief financial officers are encouraging the loonie to weaken. [Bloomberg]
- The “capitulation” in gold that drove the metal to its worst January in 14 years may be ending as escalating violence in northern Africa spurs demand for a haven and after a key technical indicator held. [Bloomberg]
- The western Canadian province of Manitoba, a key producer of wheat and canola, will see major spring flooding if weather conditions continue as expected, the provincial government said on Monday. [Globe and Mail] This could lead to shortages.
- Imperial Oil [Commodity Producers] profits [to be] boosted by commodity prices. Imperial Oil Ltd (IMO.TO) said on Monday its fourth-quarter profit rose 50 percent, mainly due to improved margins in its downstream business and higher crude oil prices. The company, Canada's No. 2 oil producer and refiner, said net income in the quarter rose to C$799 million, or 94 Canadian cents a share, up from a year-earlier profit of C$534 million, or 62 Canadian cents a share.
Threats
- The western Canadian province of Manitoba, a key producer of wheat and canola, will see major spring flooding if weather conditions continue as expected, the provincial government said on Monday. [Reuters]
- Harper Pressured to Scrap Corporate Tax Cuts as Canadian Lawmakers Return. Canadian Prime Minister Stephen Harper will be under pressure from opposition lawmakers to reverse corporate tax cuts and extend government stimulus as a condition for keeping his government in power when Parliament reconvenes today. [Bloomberg] [CTV]
- Higher prices for petroleum and metals lifted Canadian producer prices and raw materials prices slightly more than expected in December, according to Statistics Canada data released on Monday. The industrial product price index rose 0.7 percent in the month, topping market forecasts of a 0.6 percent gain and accumulating a 2.9 percent increase on the year. [Reuters]
- Canada’s dollar strengthened the most in a week against its U.S. counterpart as oil prices gained and the nation’s economy expanded in November at the fastest pace in eight months. The Canadian dollar rose after dropping 0.8 percent last week after Bank of Canada Governor Mark Carney said the currency’s strength is a threat to economic expansion. The loonie, as the currency is known for the image of a waterfowl on the C$1 coin, increased against the U.S. dollar as stocks advanced.
Sources: Globe and Mail, Bloomberg, Toronto Star, Canoe.ca
For more, visit us at http://advisoranalyst.com.
