Santa Claus may be coming to town but U.S. retail sector investors shouldn’t expect any gifts this year, especially when November’s Retail Sales data is released on Thursday. At least one analyst thinks Black Friday totals will be a bit of a disappointment.
He may not be Scrooge but at the Canada Summit conference on December 3, former TD Bank Group Chief Executive Ed Clark said that the Canadian economy is in “serious trouble.” Clark cited Ontario’s wild swing from surplus to massive deficit over about a decade and the loss of manufacturing jobs to the U.S. as examples to back up his concerns. Yet, it isn’t too late to get back on track. In 2015, Canada needs to stop worrying about getting low-wage jobs back from abroad and start thinking about how to effectively use the educated population, immigration policies and public health care to their advantage. The federal government has to play a big role in accommodating the international growth of companies. There are a lot of opportunities for Canada to expand into the American market, especially given the success of TD’s expansion into the U.S.
And if that weren’t bad enough, oil prices could be another lump of coal in the stockings of Canadian investors this holiday season. The hydrocarbon’s value has slid 37% since the year’s high in June. Crude Inventories data is expected to be released on Wednesday at 10:30 am ET, and any negative surprise could cause the price to hit US$60 a barrel by week’s end. Airlines are undoubtedly ringing in some holiday cheers at the energy sectors’ expense and some of the stocks in this sector could be set to take flight. As well, China, the world’s second-largest exporter, is taking advantage of lower oil prices by building up strategic stockpiles. Cheaper fuel could also boost China’s slowing economic growth.
But back to Canada: According to Bloomberg, Alberta based oil sands deposits will be hit the hardest by plummeting global oil prices. Alberta oil sand projects are among the most expensive to produce, and a quarter of these projects globally are at direct risk from falling prices. Calgary-based Canadian Natural Resources Ltd., which has a capital budget of $8.6 billion for 2015, may cut investment if oil prices stay at or below $70 a barrel, President Steve Laut said in an interview last month.
Notable earnings releases this week: The Pep Boys (NYSE: PBY) on Monday; Hudson’s Bay Company (TSX: HBC) and AutoZone, Inc. (NYSE: AZO) on Tuesday, Laurentian Bank (TSX: LB) on Wednesday, Adobe (NASDAQ: ADBE) and lululemonathleticainc. (NASDAQ: LULU) on Thursday.
Stock splits expected this week: Infosys (NYSE: INFY): 2 for 1 on Monday; ICICI Bank Ltd. (NYSE: IBN): 5 for 1 on Tuesday; and Hain Celestial Group Inc. (NASDAQ: HAIN): 2 for 1 on Friday.
