Newspaper article The Canadian Press

Investors Hope Economic Data, Corporate Earnings Continue to Fuel Market Rebound

Newspaper article The Canadian Press

Investors Hope Economic Data, Corporate Earnings Continue to Fuel Market Rebound

Article excerpt

Investors look to economic data, earnings


TORONTO - North American stock markets are likely in for more choppy trading, with investors hoping that economic data and this week's corporate earnings reports will add to last week's rebound from the recent sell-off.

They will also look to the U.S. Federal Reserve for word about further stimulus and the timing of future interest rate hikes.

There had been speculation during the worst of the correction two weeks ago that the Fed might delay winding up its key stimulus program at the end of this month -- its program of buying hundreds of billions of dollars of bonds to keep long-term rates low and, in turn, encourage people to buy equities.

"Given the markets have rebounded somewhat -- I think it is premature to say that markets have stabilized -- I would say right now that the calls are going to be all across the map," said Andrew Pyle, senior wealth adviser at ScotiaMcLeod in Peterborough, Ont.

"I think you're going to get folks thinking the Fed may take a more cautious approach to exiting quantitative easing," he said. "They might be more dovish in their statement per se, but I think you're going to have views across the map because of this sharp decline, now that we have a rebound."

Meanwhile, U.S. economic growth data for the third quarter comes out Thursday and investors are looking for growth to come in at an annualized rate of three per cent. That is down from 4.6 per cent in the April-June period. But the previous two quarters were volatile after severe weather pushed the American economy into contraction in the first quarter, while the strong showing in the second quarter reflected a rebound from very unusual circumstances.

In Canada, gross domestic product for August is expected to come in flat, reflecting a poor showing in the auto sector.

The Toronto stock market just had its best week since late August with a gain of 316 points or 2.2 per cent, leaving it down seven per cent from its highs of early September. The TSX is still up 6.75 per cent year to date.

The Dow industrials gained 425 points or 2.6 per cent last week and the blue chip index is also well off the worst of the retracement, down just 2. …

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