Today marks the first trading day of the week, as U.S. markets were closed yesterday in observance of President’s Day. This coming week will be relatively calm compared to earlier in the year, as earnings season has ended and a lack of significant data from around the world will hopefully lead to calmer markets. Of course, there will still be a number of reports and economic indicators for investors to focus on, and our neighbors to the north are prepping a major data release for the day [see also Five ETFs George Washington Probably Would Have Liked].
Canada will detail its total retail sales for the month of December. This includes core retail sales, wholesale sales, and regular retail sales, with the focus being turned to core retail. That figure has surpassed analyst expectations for the last four months, but today’s report does not have as rosy of an outlook. Though the official prediction is for sales to fall around 0.1%, many speculate that they could turn out worse given all of the recent turmoil in around the world [see also Doomsday Special: 7 Hard Asset Investments You Can Hold in Your Hand].
Wells Fargo actually predicts a 0.2% drop in core retail citing a number of economic headwinds in the process. “‘Given the slowing momentum in Canadian consumer spending, it is hard to hold out hope for a fifth straight increase in retail sales.’ They also add that the ongoing crisis in the Eurozone as well as slow economic activity in the US requires from Canada to base on ‘domestic demand to sustain the economic expansion there.’” writes FXstreet. Canada’s last miss in retail sales came in September of last year (for the month of July) as the nation fell flat amid expectations of a meager 0.2% rise.
In light of this major economic report, today’s ETF to watch will be the MSCI Canada Index Fund (EWC). This fund is designed to track the performance of the Canadian equity market and is home to over $4 billion in total assets. Top holdings of the fund include a number of bellwether banks as well as the massive gold miner Barrick Gold. The fund has returned a solid 6.7% on the year while paying out a dividend yield of approximately 1.9%. If retail sales come in as expected or higher, look for EWC to make a jump on the day, but a sour report will likely lead to a rough trading session for this Canadian ETF [see also Why No Investor Should Own GLD].
Disclosure: No positions at time of writing.