Week in Preview: Unemployment Rate, Fed's Beige Book, Canadian Banks
Nov 28th 2010 7:30AM
Updated Nov 28th 2010 8:04AM
- Monday: Chicago Fed's Midwest Manufacturing Index
- Tuesday: Conference Board's Consumer Confidence Index, Chicago Purchasing Managers Index, S&P/Case-Schiller Home Price Index for Q3, Johnson Redbook Retail Sales Index
- Wednesday: Fed's Beige Book report, Challenger job cut announcements, construction spending in October, new motor vehicle sales, ISM Manufacturing Index, revised Q3 productivity and labor costs from the Labor Department, ADP private sector employment estimate
- Thursday: jobless claims for last week, Monster Employment Index, NAR's pending home sales in October
- Friday: ISM Nonmanufacturing Survey, factory orders from the Commerce Department, unemployment rate, Economic Cycle Research Institute inflation forecast
The Federal Reserve's Beige Book report is a compilation of anecdotal information on current economic conditions from each of the 12 Federal Reserve Bank districts, and it is released eight times a year. The data comes from interviews with business contacts, economists, market experts, and other sources. While the September report showed slowing economic growth, the October report showed economic growth in all districts despite soft employment numbers.
Canadian Bank Earnings Expectations
On the earnings front, things will be pretty quiet as the season winds down. But four of Canada's big five banks -- Bank of Nova Scotia (BNS), Canadian Imperial Bank of Commerce (CM) Royal Bank of Canada (RY) and Toronto-Dominion Bank (TD) -- are also scheduled to report their fiscal fourth-quarter results this week.
Analyst surveyed by Thomson Reuters expected year-over-year EPS growth of about 15% from Bank of Nova Scotia and Canadian Imperial, to 98 cents and $1.66, respectively. Toronto-Dominion's anticipated $1.45 per share is about the same as a year ago, but Royal Bank's per-share earnings are expected to have dropped 6.8% to 96 cents. Earnings from Royal Bank missed consensus estimates in the previous two quarters, but the others have tended to be better than expected in recent quarters.
As for the full-year earnings results, analysts are looking for $3.88 per share from Bank of Nova Scotia (+9.5%), $6.39 from Canadian Imperial (+8.5%), $3.76 from Royal Bank (-14.4%) and $5.89 from Toronto-Dominion (+9.2%).
The long-term EPS growth forecast is 10% for Canadian Imperial and Royal Bank and 12% for Bank of Nova Scotia and Toronto-Dominion. Their P/E ratios are less than the industry average. But only Canadian Imperial and Toronto-Dominion have First Call consensus buy recommendations.
Except for Royal Bank, shares of the others are not far from their 52-week highs. Royal Bank has climbed 16.8% from its 52-week low in August. Bank of Nova Scotia closed the week at $55.78, Canadian Imperial at $77.72, Royal Bank at $54.10 and Toronto-Dominion at $73.35.
Look for results from Bank of Montreal (BMO) the following week.
Other companies reporting quarterly results this week include Aeropostale (ARO), Big Lots, (BIG), Krispy Kreme Doughnut (KKD), Kroger (KR) and Novell (NOVL).