Choppy trading week for Canadian markets

Canadian markets are in for a choppy trading week, with a flood of news about to come out, including earnings and economic data reports.

The Toronto stock market will be affected by the most recent US manufacturing and factory order readings in addition to the US Federal Reserve ending its massive stimulus program.

Investors will also be keeping an eye on the European Central Bank’s plan on stimulating the bloc to prevent another recession.

Unemployment data for the US and Canada will also be released next week, with traders anxious to know the number of new jobs created in October.

A wide range of companies will be reporting their earnings, including Enbridge, Air Canada, Tim Horton’s, TransCanada Corp., Sun Life, Great-West Lifeco, Canadian Natural Resources, and Talisman Energy.

Last week the TSX ended 69 points higher as stocks began to recover after the massive sell-off that occurred in October. The Dow experienced much more of an increase, up by 585 points or 3.5 per cent at the end of the week to a new record high.

However, Canadian markets were weighed down because of gold taking a hit, with the resource sector underperforming.

Analysts say that it will be difficult for the Toronto market to improve much because of the weakness of its commodity and energy sectors – as demand shrinks and supplies increase.

The US markets recovered nearly all losses that occurred in the fall retracement. However, it is not clear whether there is a catalyst that can lift US markets even more.

Colin Cieszynski, chief market strategist at CMC Markets, told the Canadian Press:

“We’ve already had the rally in the last couple of weeks,”

Adding:

“The U.S. isn’t stimulating any more, the earnings are OK but they’re not a total barn burner and there have been enough misses that you have to wonder – and the longer you wait, the closer the interest rate hikes come (from the Fed).”