Economic data to watch this week, plus TSX summary

Expect a slightly heavier economic calendar this week, says Prab Sagoo, associate director at Nasdaq Advisory Services, in his latest weekly update. Headlining the week are manufacturing data on Wednesday and, on Friday, CPI data, supplemented by retail trade.

In the U.S., the calendar is slightly lighter, with housing and industrial data the main releases, on Tuesday.

Earnings season is largely finished, though banking earnings next week will be carefully scrutinized given the recent pressures on the sector, he says.

Read: Fiera Capital reports 25% increase in AUM for Q1

As the week progresses, attention will turn to the Bank of Canada meeting on May 24. The Bank isn’t expected to change course, and, following recent events, is likely to remain cautious on the current state of the markets, he says.

Read: Canadian economy takes unfair hit from global perceptions

Also note that next week is shorter due to the Victoria Day holiday on Monday. “We may see an early closing of positions [or] risk management on Friday as a result,” he says.

Last week’s market activity

• The TSX continues to meander around its 50-day moving average, losing 0.3% last week. The index has been mostly range bound since the end of February 17. Large caps underperformed through the week.
• The heavyweight materials (helped by stronger precious metals prices) and energy names (aided by +3% rebound in oil) helped the index close with minor losses.
• Financials continue to suffer and underperformed through the period. The sector is at its lowest level since December 2016. Income-sensitive names also lost ground.

Read: Look for GARP in these 2 sectors

• Oil rebounded from a roughly $47 support level, alleviating some of the weight on the index, but “we remain close to seeing a bearish technical cross for the commodity,” says Sagoo. “The extension of cuts should moderate the near-term negative momentum.”

Also read: TransCanada deal won’t solve natural gas issues

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.