Toronto Stock Exchange Roundup: Fourth Quarter Earnings, Future Guidance, and Economic Data for Investors

2024-01-15 23:03:00

(Illustration: Camille Charbonneau)

It was a quiet day on the Toronto Stock Exchange, which tends to be the case when U.S. markets are closed, said John Zechner, president and senior equity manager at J. Zechner Associates.

But there is a lot to look forward to for investors in the coming weeks after major U.S. banks kicked off the fourth-quarter earnings season on Friday with mixed reports, Zechner said.

Investors will be waiting for forward-looking guidance from companies.

“I mean, 2023 was a pretty good year economically, so the fourth quarter was relatively strong,” he noted. So now the question will be: how do we see the future?

In particular, the biggest names in technology releasing their results in a few weeks will set the stage for the entire market, John Zechner said.

Investors will also be watching for any economic data reports that could help shed light on when central banks might start cutting interest rates.

The US Federal Reserve recently announced that it plans to cut its benchmark rate three times in 2024, but investors are betting on a six-fold downward move, John Zechner said.

However, strong calls for cuts to begin in March have been softened in recent weeks, he said, adding that cuts in March “don’t seem feasible.”

“I think the expectation is that it will be by May,” John Zechner said. Everyone believes they will go down this year. It’s just a question of when and, ultimately, how much.”

In Canada, new inflation data will arrive on Tuesday.

The Canadian economy has been hit much harder by monetary policy than that of the United States, due to the structure of the mortgage market here and our exposure to more economically sensitive sectors, John Zechner said.

He noted that other global economies, such as Germany and China, have also slowed more than the United States.

“In a weaker global economy, Canada will face more difficult times.”

Nonetheless, John Zechner expects the Bank of Canada to largely keep pace with the Fed in rate cuts.

Here are the winners and losers for January 15, 2024:

The S&P/TSX index of the TSE
Price Change in Canadian dollars Change in %

Winners

Neighbourly Pharmacy (NBLY)
18,20
2,45
15,556

Propel Holdings (PRL)
14,44
1,54
11,938

Haivision Systems (HAI) 4,58 0,48 11,707

Losers

Filo Corp (FIL) 22.17 -1.53 -6.456

Only titles worth more than $1 are considered in the Winner/Loser ranking.