Band of Canada Rate Announcement on Wednesday
One of the top things investors will be watching this week is the Bank of Canada’s rate announcement on Wednesday.
With the central bank expected to hold its key rate at 0.25%, this event will take on a don’t-look-at-what-they-do-but-look-at-what-they-say quality. The focus will certainly be on any comments on the economic outlook during the ongoing COVID-19 pandemic, any specific sectoral impacts and recovery, and long-term prospects for inflation.
Expect Trade Figures To Take Bigger Drop
Statistics Canada is scheduled to release its trade figures for the month of April on Thursday.
In March, Canada’s international trade deficit grew to $1.4 billion, with both exports and imports seeing significant drops as the COVID-19 lockdowns gripped most of the world and triggered an unprecedented economic slowdown.
According to StatsCan, Canada exported $46.3 billion in goods in March, the lowest level since January 2018, while goods imported into the country dropped to $47.7 billion, the lowest level since October 2017. The drop in both imports and exports amounted to about 10% when compared with March of 2019.
Among the products that saw the biggest drops in trade volumes were cars and car parts, which were down 14%; aerospace products, down 25%; and crude oil, down just under 8%.
The volume of goods traded were not the only victim of the coronavirus lockdowns in March. The level of services to other countries and received from other nations fell, too. Services supplied to other countries dropped by more than 7% to $10.4 billion, while services imported slipped 11.5% to hit $11.5 billion.
It is widely anticipated that the figures for April will see a further slide.
May Jobs Numbers Due Friday
Another key data release comes on Friday as StatsCan publishes its Labour Force Survey for May. The report will be widely anticipated as a gauge on the depth of how Canadian households have been affected by the pandemic.
In April, the country recorded almost 2 million job losses, an unprecedented figure that pushed the unemployment rate to 13%, the second highest jobless rate on record.
The April job losses were in addition to the approximately 1 million unemployment claims that were recorded in March and the millions of other Canadians who saw the number of hours they worked and their incomes cut back. In March, the unemployment rate hit 7.8%
A Few Key Earnings Reports
It will be a relatively quiet week for earnings figures, with only a few key companies reporting.
One is Canada Goose Holdings Inc (TSX:GOOS), which will unveil its fourth-quarter and full-year results on Wednesday.
The maker of high-end parkas cut 125 jobs in May due to the COVID-19 downturn and started producing personal protective equipment for Canadian frontline health-care workers.
In February, the Toronto-based company said lower store traffic in China combined with travel restrictions imposed by the pandemic would lead to smaller than previously anticipated profit for 2020. The manufacturer also revised its growth projections downward for the year.
Canada Goose stock last Friday closed at $26.86, down 2.5% on the day. In the last three months, the stock hit a high of $35.16 on April 29. In the last year, the stock has lost 41% of its value.
Another earnings report to watch will be Saputo Inc (TSX:SAP), which will report its fourth-quarter and full-year results on Thursday.
At the end of March, the dairy processer reported a spike in demand for dairy products in retail stores for dairy products.
In February, Saputo posted third-quarter earnings of $3.89 billion, an 8.8% increase over the same period the previous year.
Saputo stock closed last Friday at $33.83, which was down 1.49% on the day. In the last three months, the stock hit a high of $37.40 on March 3. In the last year, the stock lost just under 25% of its value.