Wednesday, October 22nd12.2°C
23711
22916

Investors look for signs of spring in batch of economic reports this week

TORONTO - There is little doubt that this winter's severe weather put a chill on the North American economy. Now, with the arrival of spring, investors are hoping that warmer temperatures will bring improving economic conditions.

In the meantime, all eyes this week will turn to two key reports out of Canada for hints of how the economy fared in January and March.

On Monday, Canada's gross domestic product for January will be released, with economists looking for signs comeback. Most were forecasting a solid rebound to 0.3 per cent growth after a 0.5 per cent decline in December.

At the end of the week, Statistics Canada will release employment data for March. It's expected that overall employment will have risen by 20,000, leaving the jobless rate unchanged at about seven per cent.

Doug Porter, chief economist at BMO Capital Markets, said the markets are not necessarily looking for a full rebound for January and March but want to see at least some indicators that the economy is on the right track.

"The reason why we're not looking for a full rebound in either month is that we suspect they still would've been chilled a bit by the extraordinarily harsh winter that most of the continent went through," he said.

"But as we start to see the numbers for April, we're assuming conditions will get back to normal and we'll see a bit of a rebound for the second quarter."

Porter noted that attention will also be focused on consumer spending, a big indicator of how well an economy is doing. The latest monthly figures on auto sales in both Canada and the U.S. will also be released this week.

Of particular interest will be the U.S. employment numbers for March, with expectations that the figures will show a bit of improvement.

Yet all this data should be interpreted with some caution, said Porter.

"Investors are giving the economy a pass here for a few months because of the harsh winter," he said. "I think almost every economic indicator is being looked at through the lens that it may have been weather affected."

The TSX ended the week down 75.04 points, as it felt the pressure from sliding commodities, particularly gold.

Meanwhile, the markets continue to watch for signs of when the Bank of Canada and the U.S. Federal Reserve will move on interest rates.

"(But) Despite all the nuances and different interpretations about the Bank of Canada, ultimately, (rates) are on hold," said Porter.

"I think the question here is what will it take for them to raise interest rates? We think it'll take some sustained improvement in the economy and we think that's more than a year away."

Attention will also shift overseas to China and Japan.

Investors are awaiting to see if China will introduce stimulus measures to address slow growth in its economy, which has declined to a level not seen since the financial crisis.

If it does, it's anticipated the stimulus will doled out in small amounts, rather than a large package like the original $85-billion bond buyback program seen in the United States, Porter said.

Japan will also introduce its first sales tax hike in 16 years on Wednesday, raising the rate from five to eight per cent. Economists will be watching to see how consumer spending will fare as a result.

The Canadian Press


Read more Business News




Recent Trending




Today's Market
S&P TSX14312.07-235.64
S&P CDNX808.00-14.28
DJIA16461.32-153.49
Nasdaq4382.847-36.632
S&P 5001927.11-14.17
CDN Dollar0.8898+0.0003
Gold1242.50-3.00
Oil80.08-0.05
Lumber330.70+2.00
Natural Gas3.663+0.004

 
Okanagan Companies
Pacific Safety0.12+0.02
Knighthawk0.01-0.005
QHR Technologies Inc1.15-0.02
Cantex0.055-0.025
Anavex Life Sciences0.198+0.006
Metalex Ventures0.05+0.005
Russel Metals32.53-0.56
Copper Mountain Mining2.10-0.07
Colorado Resources0.145-0.005
ReliaBrand Inc0.013+0.001
Sunrise Resources Ltd0.05-0.01
Mission Ready Services0.405-0.055

 



23015

FEATURED Property
17457194183 Gellatly Road
3 bedrooms 3 baths
$2,495,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Keep it rubber side down

This time of year, I always worry about which friends of mine will get caught going off the road in adverse weather conditions. With a little preparation most accidents can be avoided. Having won the...


Big bank predicts rate hike

Photo: Thinkstock.comThe end of record-low rates is nigh, according to one major bank, which has taken a stance and predicted when the Bank of Canada will raise its long-standing overnight rate. &ldq...


Experts share strategies in Kelowna

The third week in October is “Small Business Week”, a week dedicated to supporting local, small businesses. The week was designed to bring awareness to Canadians about the role small busin...

_








Member of BC Press Council


23741