News Column

TSX expected to rise amid strong U.S. bank earnings, mixed commodity prices

July 15, 2014

Malcolm Morrison, The Canadian Press

TORONTO - The Toronto stock market headed for a positive open Tuesday amid another round of strong earnings from the U.S. financial sector and ahead of the U.S. retail sales report for June.

The Canadian dollar was off 0.12 of a cent to 93.21 cents US a day before the Bank of Canada delivers its latest interest rate announcement.

New York futures were in the green as JPMorgan Chase and Goldman Sachs both beat analyst expectations in the most recent quarter.

The Dow Jones industrial futures rose 30 points to 17,008, the Nasdaq futures gained 6.7 points to 3,926 while the S&P 500 futures climbed 1.75 points to 1,972.75.

JPMorgan Chase posted second-quarter profit of US$5.99 billion, or $1.46 a share, down from $6.5 billion, or $1.60 a share in the same period a year ago. Revenue slipped two per cent from a year ago to $25.35 billion. The results exceeded forecasts of $1.29 a share and revenue of $23.73 billion and its shares were up 2.4 per cent in pre-market trading.

And Goldman Sachs reported quarterly earnings per share of $4.10 versus $3.70 a year ago, handily beating expectations of $3.05 a share. Its shares gained 2.1 per cent in pre-market trading.

Chip giant Intel reports quarterly results after the close.

The major Canadian report of the week will be posted by Canadian Pacific Railway (TSX:CP) on Thursday.

Late Monday, the parent of Sirius XM Canada posted a net loss of C$4.9-million or four cents a share in its fiscal third quarter. The loss was partially reduced by contract renewals with Ford and Honda, which factory-install the company’s satellite radio receivers. A year earlier, Sirius XM Canada Holdings Inc. (TSX:XSR) had a profit of one cent per share or $776,119.

On the merger and acquisition front, cigarette maker Reynolds American Inc. is planning to buy rival Lorillard Inc. for about US$25 billion in a deal to combine two of the oldest and biggest tobacco companies in the U.S. The deal would create a formidable No. 2 to rival Altria Group Inc., owner of Philip Morris USA, and will likely face scrutiny from regulators.

Meanwhile, markets expected a strong U.S. retail sales report for June. Economists forecast sales rose 0.6 per cent last month, noting that auto sales hit a near 8 1/2-year high of 17 million annualized units. It's expected that higher gas prices will also likely lift sales.

The markets will also focus on Janet Yellen over the next two days as the U.S. Federal Reserve chair delivers testimony to Congressional committees on the economy and monetary policy. Analysts say her comments will be closely watched for clues as to how she will manage monetary policy in the coming months. They say she is expected to sound optimistic about the economy, but not so positive as to give a hint of any tightening.

Commodity prices were mixed with August crude on the New York Mercantile Exchange down 81 cents to US$100.10 a barrel.

September copper was off a cent to US$3.24 a pound while August bullion gained $5.90 to US$1,312.60 an ounce.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: Canadian Press DataFile

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