S&P/TSX Composite Index Set to Open Flat Despite Emerging Market Contagion

Get ready for a flood of corporate earning reports.

| More on:
The Motley Fool
You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Canadian equities are set for a flat open on Thursday following the U.S. Federal Reserve’s decision to reduce its stimulus program yesterday and continued turmoil in emerging markets.

As of 6:00 a.m. Eastern time, futures for the S&P/TSX Composite Index (^OSPTX) were trading marginally lower. Markets are also set for a flat open in the United States. Futures for the Dow Jones Industrial Average are trading up 21 points, or 0.31%.

Investors are still digesting the Federal Reserve announcement it would continue to reduce its monetary stimulus program by another $10 billion on Wednesday, bringing the amount of its monthly asset purchases down to $65 billion.

Canadian and American equity indices were off sharply following the Fed’s decision. European and Asian stocks also suffered large losses on Thursday following the move.

Investors are also worried about deteriorating financial conditions in emerging markets. Rate hikes from the central banks of South Africa, India, and Turkey have failed to curb the exodus of capital from their respective economies.

It’s also expected to be a busy day on the corporate front.

Goldcorp’s (TSX:G, NYSE:GG) proposed takeover of Osisko Mining (TSX:OSK) has taken a nasty turn. Late Wednesday afternoon, Osisko announced that it has started legal action against Goldcorp, accusing the mining giant of misusing confidential information when it launched its US$2.5 billion cash-and-stock hostile takeover earlier this month.

“Goldcorp misused confidential information and otherwise acted in a manner not permitted by the confidentiality agreement between the parties,” Osisko said in a press release. The company also alleges Goldcorp had acted in “bad faith” before launching its hostile bid.

It’s clear Osisko is not going down without a fight. Shares of the gold miner are currently trading at a 10% premium to Goldcorp’s offer, suggesting that the market is anticipating a higher bid.

Investors will also have to shift through a flood of earnings reports.

Canadian National Railway (TSX:CNR, NYSE:CNI) is scheduled to post earnings after the closing bell. According to estimates compiled by Reuters, the street is looking for an EPS of $0.78 – a projected 9% increase compared to the same time period last year.

Investors will be listening for colour on the company’s crude-by-rail segment. Fears the ramped up safety regulators following a string of derailments could create a big cost burden for the company.

Imperial Oil (TSX:IMO) is also due to release its quarterly profit figures. The street is looking for an EPS figure around $0.90 – roughly a 30% decline year-over-year. Here investors will be mostly focused on progress at the company’s mammoth Kearl oil sands project which started production last year. Shareholders will also be looking for updates on phase two of Kearl’s construction.

Finally, quarterly earning reports are also due from energy and mining giants Canadian Oil Sands (TSX:COS) and Potash Corporation of Saskatchewan (TSX:POT, NYSE:POT).

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Robert Baillieul has no positions in any of the stocks mentioned in this article. 

More on Investing

growing plant shoots on stacked coins
Dividend Stocks

2 Oversold TSX Dividend Stocks to Buy Now and Own for 25 Years

These top TSX dividend stocks look oversold and now offer attractive yields for TFSA and RRSP investors.

Read more »

money cash dividends

Passive-Income Power: How to Make $105/Week TAX FREE in a Bear Market

Investors may want to pursue a passive-income strategy in this bear market by snagging dividend stocks like Freehold Royalties Ltd.…

Read more »

Money growing in soil , Business success concept.
Energy Stocks

3 Growth Stocks up +30% in 2022

These three growth stocks are up over 30% in 2022 alone but have come down in the last few weeks…

Read more »

Oil pumps against sunset
Energy Stocks

2 Energy Stocks That Jumped Over 60% This Year

Consider investing in these two energy stocks amid the recent pullback after putting up stellar gains earlier this year.

Read more »

Profit dial turned up to maximum
Dividend Stocks

RRSP Investors: 2 Undervalued TSX Stocks to Buy Now for Total Returns

Top TSX dividend stocks are now on sale for RRSP investors seeking attractive total returns.

Read more »

TFSA and coins
Dividend Stocks

2 Beaten-Down Stocks to Buy for Your TFSA

Two beaten-down, but high-yield TSX stocks are profitable options for TFSA investors.

Read more »

Volatile market, stock volatility
Stocks for Beginners

3 Top TSX Stocks to Buy in Volatile Markets

Sitting on cash? Consider these three TSX stocks for the long term.

Read more »

Hand writing Time for Action concept with red marker on transparent wipe board.
Dividend Stocks

Inflation Soars to 7.7%: 1 Dividend Stock to Buy Now

Enbridge (TSX:ENB)(NYSE:ENB) stock looks like a magnificent dividend stock to help Canadians deal with inflation at 7.7%.

Read more »