Tuesday, July 29th23.4°C
22568

Telecoms in earnings spotlight; loonie could find lift from jobs data

TORONTO - Earnings from corporate Canada and the latest reading on job creation will be the prime focus for investors this coming week.

The Toronto stock market finished with a gain of 1.59 per cent last week, boosted by deal-making and positive earnings reports from the energy, industrial and technology sectors. The Dow industrials edged up 0.92 per cent.

This week, traders will look to the telecom sector in particular, with earnings reports out from heavyweights BCE Inc. (TSX:BCE) and Telus Corp. (TSX:T).

Luciano Orengo, portfolio manager at Manulife Asset Management, said he expects earnings from both telcos should be "at least in line with analyst expectations."

But he noted that there are quite a few headwinds facing them.

"There’s more competition, there is at least for Rogers and BCE, losing cable subscribers, people are cutting their cable," he said.

"Then there's government oversight. Ottawa wants to make the telecoms more competitive, they like to have an entrant to keep everybody more honest so between that, and in the case of BCE, losing the NHL playoff broadcasting rights. So you know, valuations got a little stretched."

Analysts surveyed by Thomson Reuters expect earnings per share from Telus at 61 cents and 60 cents ex-items. A year ago, the Vancouver-based company posted earnings per share of 56 cents. Analysts look for BCE to post earnings per share of 76 cents per share, up from 73 cents a year ago.

Investors will also consider earnings during the week from Tim Hortons (TSX:THI), Canadian Tire (TSX:CTC.A), auto parts giant Magna International (TSX:MG), pipeline company Enbridge (TSX:ENB) and oil company Talisman Energy (TSX:TLM).

Meanwhile, the Canadian dollar could find some added lift from the latest reading on employment on Friday and trade data earlier in the week. The loonie gained about half a cent last week amid a generally positive run of economic data and a narrowing in price between Western Canadian Select crude, which is produced from the oilsands, and West Texas Intermediate, a lighter crude used as the U.S. benchmark.

It should be difficult for the Canadian economy to beat the performance in March when 43,000 jobs were cranked out, even as job creation has been volatile and regularly missing economists' expectations.

But Peter Buchanan, senior economist at CIBC World Markets, said he expects job creation to come in at around 18,000 with the jobless rate remaining steady at 6.9 per cent.

"And that’s really what we need to have — a trend basis with two, 2.5 per cent gross domestic product growth and one per cent or so productivity, which we think is what we’re seeing from the Canadian economy at this point," he said.

"The other thing is, we only had 10,000 per month jobs in the last half of the year, so we do think there may be a bit of room for catch-up, a stronger performance on the job side."

Buchanan also said he expected better balance from the April jobs data, noting that job growth in March was largely driven by the public sector.

"I think we will see a bit better quality of jobs than we did in March," he said.

"We’re looking for an increase in the energy sector, resources generally. Transport, warehousing more gains there. And also, longer term, we have seen significant growth in the last year in areas like health-care, hospitality, (all) beneficiaries of a lower dollar."

Merchandise trade data for March comes out on Tuesday and Buchanan also expects improvement in that area after Canada racked up a $290-million trade surplus in February.

"Our forecast is for a $500-million surplus," Buchanan said, with oil playing a big part in the improvement.

"Oil is a positive, energy is up on a trend basis. U.S. production is crowding out exports from OPEC jurisdictions. Our exports have been setting records recently."

It's a relatively light week for economic data in the U.S. The major report for the week is the Institute for Supply Management's report on the health of the non-manufacturing sector.

The Canadian Press


Read more Business News

21337


Recent Trending




Today's Market
S&P TSX15483.13+37.91
S&P CDNX1013.83-6.02
DJIA17004.5321.94
Nasdaq4458.56+13.65
S&P 5001980.02+1.11
CDN Dollar0.9210-0.0051
Gold1310.00+6.70
Oil100.64-1.03
Lumber322.30-0.70
Natural Gas3.747-0.001

 
Okanagan Companies
Pacific Safety0.195+0.01
Knighthawk0.01-0.005
QHR Technologies Inc1.19+0.04
Cantex0.065-0.005
Anavex Life Sciences0.2650.00
Metalex Ventures0.08+0.01
Russel Metals35.19+0.04
Copper Mountain Mining2.89-0.08
Colorado Resources0.22-0.005
ReliaBrand Inc0.10+0.019
Sunrise Resources Ltd0.02-0.03
Mission Ready Services0.17-0.02

 



21411

FEATURED Property
17594763762 Pine Valley Drive
3 bedrooms 3 baths
$634,400
more details
image2image2image2
Click here to feature your property
Please wait... loading


Take charge of your debt

Photo: Thinkstock.comWays to reduce your Debt:Make a budget and get budget counselingA basic first step for debt reduction is to prepare a budget and plan your spending. Once you have a budget, you mu...


Geopolitical tensions rattle markets

The Big Picture Geopolitical tensions rattle markets The spectre of rising geopolitical tensions in Ukraine and Gaza cast a shadow over an otherwise positive week in the markets. News that a passenger...


Learn to delegate effectively

Photo: ContributedI have the pleasure of witnessing people delegate tasks quite often. Sometimes with tremendous success and sometimes with disastrous consequences. I have chaired a lot of committees...

_








Member of BC Press Council


22097