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TSX Poised For Mixed Open - Canadian Commentary

3/1/2012 8:57 AM ET

Canadian stocks are poised for a mixed open Thursday amid varied cues from the commodities and global equity markets. European shares were hovering in the green, while most Asian markets ended in negative territory after the U.S. Federal Reserve Chairman Ben Bernanke yesterday downplayed the unexpected growth of the U.S. economy in the final quarter of 2011, while not providing any indication of further quantitative easing.

Financial stocks may be in focus amid a mixed bag of earnings reports from major Canadian banks.

U.S. stock futures were pointing to a marginally higher open.

On Wednesday, the S&P/TSX Composite Index lost 96.46 points or 0.76 percent to 12, 644.01.

The price of crude oil was firm Thursday morning amid concerns over supplies from Iran. Crude for April edged up $0.34 to $107.41 a barrel.

Meanwhile, the price of gold was extending losses after a sharp fall in the previous session. Yesterday, gold suffered its biggest one-day loss in over six months, shedding over 4 percent, with the dollar gaining strength after the U.S. Federal Reserve Chairman Ben Bernanke warned of lingering weakness in the jobs market, while downplaying the unexpected economic growth in the final quarter of 2011. Gold for April was down $5.40 to $1,705.90 an ounce.

In corporate news from Canada, Royal Bank (RY.TO) reported a drop in first-quarter profit to C$1.78 billion or C$1.21 per share from the year-ago C$1.88 billion or C$1.27 per share. Net income from continuing operations was C$1.88 billion or C$1.23 per share compared to C$2.00 billion or C$1.31 per share in the prior-year. Analysts were expecting the bank to report earnings of C$1.13 per share

Lender TD Bank Group (TD.TO) said its first-quarter net income slid to C$1.48 billion from prior year's C$1.56 billion, with net income attributable to common shareholders decreasing to C$1.40 billion from C$1.49 billion a year earlier. However, on an adjusted basis, net income amounted to C$1.69 billion, higher than C$1.54 billion in the comparable period.

Transportation company Bombardier Inc. (BBD_B.TO) posted lower fourth-quarter 2011 net profit of $213 million compared with year-ago quarter's $289 million, with net income declining to $214 million from $295 million in the prior year. Quarterly earnings per share were $0.12, lower than $0.16 in the comparable period last year.

Food products company George Weston (WN.TO) said its fourth quarter profit slipped to C$109 million from last year's C$111 million. Net earnings was C$99 million, compared to C$101 million a year ago. However, per-share earnings edged up to C$0.72 per share from C$0.70 per share on a lower share count.

Communications company TVA Group (TVA_B.TO) reported a lower fourth quarter net income of C$11.5 million or C$0.48 per share compared to C$19.3 million or C$0.81 per share in the prior year quarter.

Oil and gas industry transportation services provider Veresen Inc. (VSN.TO) reported that its fourth-quarter net income was $14.8 million or $0.09 per share down from $16.7 million or $0.11 per share for the same period last year.

In economic news Statistics Canada said Industrial Product Price Index (IPPI) rose 0.3 percent in January, led by petroleum products and primary metals. This compares to December's downwardly revised monthly decrease of 0.9 percent.

Separately, the agency said the nation's current account deficit narrowed by C$2.0 billion in the fourth quarter to C$10.3 billion, largely the result of an increase in the export of goods. The surplus on trade in goods increased to C$3.1 billion in the fourth quarter of 2011, helped by a solid rise in shipments of energy and auto products. This was the largest surplus since the third quarter of 2008.

From the U.S., the Labor Department said that initial jobless claims edged down to 351,000 in the week ended February 25 from the previous week's revised figure of 353,000. Economists had expected jobless claims to creep up to 355,000 from the 351,000 originally reported for the previous week. With the drop compared to the previous week's revised figure, jobless claims are at their lowest level since coming at 347,000 in the week ended March 8, 2008.

Simultaneously, the Commerce Department said personal incomes increased by $37.4 billion or 0.3 percent in January, a slowing down from the growth of 0.5 percent in December. Most economists had forecast the rate of income growth to hold steady at 0.5 percent. At the same time consumer spending, known formally as Personal Consumer Expenditures, increased by 0.2 percent.

Elsewhere, euro zone manufacturing sector contracted in February, in line the flash estimates, detailed report of a survey by Markit Economics showed. The seasonally adjusted purchasing managers' index rose to a six-month high of 49, unchanged from the earlier flash estimate and above January's 48.8. The below-50 reading, despite the uptick, pointed to contraction in business activity.

Meanwhile, euro zone inflation rose to 2.7 percent in February from 2.6 percent in January, flash estimate from Eurostat revealed. Separately, Eurostat said euro zone unemployment rate rose to a seasonally adjusted 10.7 percent in January from 10.6 percent in December. Economists were forecasting the rate to drop to 10.4 percent in January.

Germany's manufacturing activity showed a weaker growth in February, final data from Markit Economics revealed. The Markit/BME Purchasing Managers' Index came in at 50.2, slightly up from the flash reading of 50.1. But the reading fell from January's level of 51.

by RTT Staff Writer

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