The state of the Canadian consumer will take centre stage this week. Statistics Canada will release its latest check on retail sales on Friday. While the main report will cover the month of December, there will also be a so-called “flash estimate” for January, presenting a fresher picture.
Earlier in the week we’ll get the latest inflation data. The consumer price index (CPI) for January is expected to show the annual inflation rate holding steady at 1.8 per cent – below the Bank of Canada’s target range. If the rate shows an acceleration above two per cent, it will make further interest rate cuts this year by the Bank of Canada significantly less likely. In any case, we’ll get reaction from Bank of Canada Governor Tiff Macklem in a speech Friday afternoon.
Speaking of interest rates, the U.S. Federal Reserve’s minutes from its January meeting will be closely examined for further signs that interest rates there are unlikely to be cut any time soon, due to expectations that inflation could stay higher for longer.
The consumer will also be in focus with some of the week’s major quarterly earnings releases. Loblaw and Walmart will report on Thursday. Analysts expect Loblaw to show a sales increase of about three per cent and an adjusted profit boost of about 12 per cent, which may please investors and give fuel to the grocery giant’s critics.
Meanwhile Walmart is likely to report less quarterly revenue than its online rival Amazon for the first time ever.
RioCan REIT is set to report on Tuesday. RioCan is one of Canada’s biggest retail landlords, with 186 properties covering 32.5 million square feet of leasable floor space. Riocan’s units have have dropped by about 38 per cent since peaking two years ago, as investors consider the challenges facing retailers, including a continuing shift to online shopping.
Of course, all of this might be upstaged by words and actions from Donald Trump, as the world continues to assess the true intentions of the U.S. president, including whether restrictive tariffs will soon come into effect.
The Week Ahead
Monday, Feb. 17
Canada Family Day (markets closed)
U.S. Presidents’ Day (markets closed)
8:15 a.m. Canada Housing Starts (Jan)
8:30 a.m. Canada International Securities Transactions (Dec)
Earnings: Cargojet
Tuesday, Feb. 18
8:30 a.m. Canada Consumer Price Index (Jan)
9:00 a.m. Canada Existing Home Sales, MLS Home Price Index (Jan) [expected]
Earnings: Gibson Energy, SSR Mining, Riocan REIT, iA Financial, Dream Industrial REIT, Occidental Petroleum,
Wednesday, Feb. 19
2:00 p.m. U.S. FOMC Minutes
Earnings: Gildan Activewear, Hudbay Minerals, Whitecap Resources, Manulife Financial, Pan American Silver, Alamos Gold, Nutrien, B2Gold, Ivanhoe Mines, Torex Gold, Equinox Gold, Bausch Health, TFI International, Lundin Mining, CF Industries
Thursday, Feb. 20
8:30 a.m. Canada Industrial Product and Raw Materials Price Indices (Jan)
Canada New Housing Price Index (Jan)
Earnings: Cameco, TransAlta, Hydro One, Teck Resources, First Majestic Silver, Cenovus, Loblaw. Altus Group, Eldorado Gold, Centerra Gold, IAMGOLD, Boardwalk REIT, Lundin Gold, Hasbro, Walmart, Booking Holdings, Newmont Mining, Live Nation
Friday, Feb. 21
8:30 a.m. Canada Retail Sales (Dec)
1:00 p.m. BoC Gov. Macklem speaks to Oakville Chamber of Commerce
Earnings: Quebecor, Sprott Inc, CCL Industries, Emera, Onex
