Newspaper article The Canadian Press

Stock Markets to Be Guided by Heavy Slate of Corporate Earnings Reports

Newspaper article The Canadian Press

Stock Markets to Be Guided by Heavy Slate of Corporate Earnings Reports

Article excerpt

Traders look to heavy set of earnings news

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TORONTO - Earnings will be front and centre on North American stock markets this week.

Geopolitical concerns will also continue to cast a shadow after a Malaysian Airlines plane was shot down by a missile in Ukraine last Thursday, while Israel ramped up its fight against Hamas militants last week in launching an offensive in Gaza.

The TSX had a positive week, rising 141 points or 0.93 per cent with gains led by the gold and financials sector. But industrials were also strong in the wake of a solid quarterly earnings report late in the week from Canadian Pacific Railway (TSX:CP), which beat expectations.

The sector was also supported by Canadian National Railway (TSX:CNR), which ran ahead in advance of the release of its earnings on Monday. Investors are expecting a similarly strong performance from CN as both railways benefit from clearing a huge grain backlog and transporting increasing amounts of Canadian and U.S. crude by rail.

"You have all this new supply that can come online but how are you going to move it around?" said Gareth Watson, vice-president, investment management and research, Richardson GMP Ltd.

"You can't put up a pipeline overnight and, as such, it's moved into rail. Whether that's the preferred way from a safety and environmental standpoint, that's up for debate but it's one of the few options that we have."

Both CP and CN hit fresh 52-week highs last week.

It's a much different story for another large TSX company. Mining giant Teck Resources (TSX:TCK.B) posts earnings on Thursday and what with depressed coal prices and copper prices stuck in a narrow band around US$3.15 a pound, chances of a strong report are low.

"No one is expecting that much and I think they probably will come in something close to that consensus," said Wes Mills, chief investment officer, Scotia Private Client Group. …

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