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A slew of corporate results Monday evening and on Tuesday morning will make for an active day of trading, as the market gets a clearer picture of the first-quarter earnings season.
So far, companies in the S&P 500 have been beating analysts' profit estimates by nearly 5 per cent, with profits rising more than 13 per cent.
That's a welcome trend, given widespread concerns about lofty equity valuations.
But just 20 per cent of the index's members have reported their results so far. In Canada, just 4 per cent of the S&P/TSX composite index has reported.
After markets closed, Canadian National Railway Co. said that its profit rose to $884-million or $1.16 a share, up 16 per cent over last year. Its adjusted profit of $1.15 a share matched analysts' estimates, after beating expectations for nine straight quarters.
The railway raised its profit target range for 2017, citing stronger demand for commodities. However, the share price fell 1.5 per cent in after-hours trading, suggesting the stock could come under pressure on Tuesday.
Newmont Mining Corp. also reported earnings late Monday that beat analysts' estimates, as the world's second-largest gold producer posted lower-than-expected costs and increased production.
Its profit excluding one-time items was 25 cents a share, beating the 22-cent analyst consensus forecast. Sales rose to $1.66-billion from $1.46-billion, compared with the $1.72-billion average estimate.
After rebounding last year from five straight annual declines, Newmont shares are little changed in 2017 as its biggest competitor Barrick Gold Corp. continues to rally along with an 11-per-cent gain in the price of bullion.
Barrick also reported results after markets closed, with adjusted earnings of 14 cents a share. While that was up from a loss of 4.4 cents a share last year, it missed the Street forecast of 20 cents (U.S.), and its shares were down more than 3 per cent in the post market.
The world's largest bullion miner expects to produce 5.3 million to 5.6 million ounces of gold in 2017, as output at its Veladero mine in Argentina falls to 630,000 to 730,000 ounces. The previous forecast had been for 5.6 million to 5.9 million ounces of gold, including 770,000 to 830,000 from Veladero.
On Tuesday, the reporting continues from a number of blue-chip U.S. and Canadian companies, as financial news battles geopolitical developments for media and investor attention.
Metro Inc., the Montreal-based food retailer, is expected to report a profit of 53.2 cents (Canadian) a share, up 4.3 per cent over last year. The company doesn't dole out many surprises, beating estimates by an average of 3.4 per cent, according to Bloomberg.
Teck Resources Ltd. is expected to show a profit of $1.30 a share, up from just 12 cents a share last year, as the miner benefits from rising commodity prices. The share price has been reflecting this turnaround: It's up 10 per cent this year and a whopping 680 per cent since January, 2016.
McDonald's Corp. is expected to report a profit of $1.34 (U.S.) a share, up 8.7 per cent over last year. The stock has been hitting a succession of record highs in recent days, and is up more than 10 per cent this year, as investors warm to the company's menu changes: It has introduced the Mac Junior, fresh beef patties, cheaper drinks and an all-day breakfast.
McDonald's tends to beat expectations by a narrow margin of just 2.2 per cent, according to Bloomberg. Last quarter, it beat estimates by slightly less than the average, and the share price declined 0.3 per cent.
Coca-Cola Co. is another must-watch stock. Analysts are expecting the soft-drinks company to report a profit of 44 cents a share, down 3 per cent from last year.
The company has been struggling to adapt to an environment where consumers – and regulators – have become more conscious of sugary drinks. Coca-Cola has responded with attempts to streamline international operations to increase efficiency.
David Berman