TOP NEWS • Euro zone GDP slows in Q2 as growth in Germany shrinks The euro zone's GDP barely grew in the second quarter of 2019, data showed, as economies across the bloc lost steam and the largest, Germany, contracted thanks to a global slowdown driven by trade conflicts and uncertainty over Brexit. • China's economy worsens in July, industrial growth at 17-year low as trade war escalates China's economy stumbled more sharply than expected in July, with industrial output growth cooling to a more than 17-year low, as the intensifying U.S. trade war took a heavier toll on businesses and consumers. • Canada Goose posts smaller-than-expected loss on sales of costlier jackets Canada Goose posted quarterly loss that was smaller than analysts had feared, as the company sold costlier jackets and parkas to department stores and opened five new retail outlets. • Air Canada sees A220 jet delivering boost for key U.S. transit traffic Air Canada said it will launch a direct Seattle-Montreal service next spring with its new A220-300 jets, as the carrier eyes new routes to grow its share of lucrative international transit traffic to and from the United States. • Cannabis firm Tilray sees growth slowing, loss nearly triples as investments weigh Canadian pot producer Tilray reported a wider-than-expected quarterly loss on Tuesday, as it ramped up investments to boost production and warned of muted growth in the Canadian recreational marijuana market for the second half of the year.
BEFORE THE BELL Canada's main stock index futures were down, tracking its U.S. counterpart and European shares, as disappointing economic data from Europe and China fueled fears of global recession, which also hurt oil prices. Asian equities ended in the green after U.S. President Donald Trump delayed the tariffs on some Chinese imports. The safe-haven Japanese yen continued to strengthen against the U.S. dollar, while gold prices rose.
STOCKS TO WATCH
Results • Canada Goose Holdings Inc (GOOS). The luxury apparel company posted quarterly loss that was smaller than analysts had feared, as the company sold costlier jackets and parkas to department stores and opened five new retail outlets. The company's lightweight jackets were not as profitable as its iconic red parkas which, coupled with a higher proportion of sales going to department stores, led Canada Goose's gross profit margins to fall 57.5% from 64% and miss analysts' estimates of 61.6%. Excluding items, Canada Goose lost 21 Canadian cents per share, compared with analysts' average estimate for a loss of 24 Canadian cents. Revenue rose 59.1% to C$71.1 million, while analysts had expected C$54.38 million.
In Other News • Air Canada (AC). The airline said it will launch a direct Seattle-Montreal service next spring with its new A220-300 jets, as the carrier eyes new routes to grow its share of lucrative international transit traffic to and from the United States. Airbus’ smallest commercial jet, expected to enter Air Canada's fleet in December with its first delivery, will help the carrier open new routes and increase capacity to cities which lack enough traffic to warrant a larger plane, the company said. "The economics that come with this aircraft allow Air Canada to open new routes that you couldn't serve profitably," said Mark Galardo, vice president of network planning, in an interview. Air Canada will use the fuel efficient 130-seat jet, developed by Bombardier, to help attract U.S. passengers flying through its Canadian hubs, he said. • Brookfield Asset Management Inc (BAMa). Australia's Aveo Group said it had signed a deal with units of Brookfield under which the Canadian firm will buy the Australian retirement home operator for A$1.27 billion. The offer values Aveo at A$2.195 per share, which the company had disclosed earlier this month. Aveo's board unanimously recommends the offer, the company said in a statement.
COLUMN Trump avoids becoming the Grinch, but weakens trade hand with China: Russell President Donald Trump has inadvertently admitted that the United States no longer holds the whip hand in the ongoing trade dispute with China, after backtracking on his latest escalation of the tariff war.
ANALYSTS' RECOMMENDATION • Absolute Software Corp (ABT). Canaccord Genuity raises rating to buy from hold, following a slight beat in its fourth-quarter results. • Centerra Gold (CG). National Bank of Canada raises rating to outperform from sector perform on the back of encouraging developments pertaining to the Kyrgyz Strategic Agreement relating to the flagship Kumtor mine. • Eldorado Gold Corp (ELD). JPMorgan raises target price to C$13 from C$10, due to higher precious metals prices. • Park Lawn Corp (PLC). CIBC cuts target price to C$30 from C$32, following a mild miss in its second-quarter results. • Yamana Gold Inc (YRI). National Bank of Canada raises target price to C$5.25 from C$4.50, reflecting the company's upbeat first- quarter results.
ECONOMIC EVENTS (All timings in U.S. Eastern Time) 1100 TR IPSOS PCSI for Aug: Prior 54.51
COMPANIES REPORTING RESULTS August 14: ATS Automation Tooling Systems Inc (ATA). Expected Q1 earnings of 26 Canadian cents per share CAE Inc (CAE). Expected Q1 earnings of 28 Canadian cents per share Canada Goose Holdings Inc (GOOS). Expected Q1 loss of 24 Canadian cents per share Canopy Growth Corp (WEED). Expected Q1 loss of 37 Canadian cents per share Leon's Furniture Ltd (LNF). Expected Q2 earnings of 24 Canadian cents per share Metro Inc (MRU). Expected Q3 earnings of 92 Canadian cents per share Trulieve Cannabis Corp (TRUL). Expected Q2 earnings of 16 cents per share
August 15: No major companies are scheduled to report for the day.
CORPORATE EVENTS (All timings in U.S. Eastern Time) 0800 NFI Group Inc (NFI). Q2 earnings conference call 0900 Canada Goose Holdings Inc (GOOS). Q1 earnings conference call 0900 Stelco Holdings Inc (STLC). Q2 earnings conference call 0900 Green Organic Dutchman Holdings Ltd (TGOD). Q2 earnings conference call 0930 Metro Inc (MRU). Q3 earnings conference call 1000 ATS Automation Tooling Systems Inc (ATA). Q1 earnings conference call 1000 Innergex Renewable Energy Inc (INE). Q2 earnings conference call 1100 CAE Inc (CAE). Annual Shareholders Meeting 1100 Superior Plus Corp (SPB). Q2 earnings conference call 1330 CAE Inc (CAE). Q1 earnings conference call
EXDIVIDENDS Enbridge Inc (ENB). Amount C$0.73 Gildan Activewear Inc (GIL). Amount $0.13 Shaw Communications Inc (SJRa). Amount C$0.09 Snc-Lavalin Group Inc (SNC). Amount C$0.02 TransAlta Renewables Inc (RNW). Amount C$0.07
(All analysts' estimates are according to I/B/E/S Refinitiv data)
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A farm is pictured at Cheticamp, Nova Scotia, August 13. REUTERS/Carlo Allegri
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