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Trump is right: Semi-annual earnings reports make a lot of sense, and for Canadian stocks too

  //business-finance.news-articles.net/content/202 .. -a-lot-of-sense-and-for-canadian-stocks-too.html
  Published in Business and Finance on Monday, September 15th 2025 at 15:41 GMT by The Globe and Mail
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Earnings Season 2024: How Corporate Reports are Reshaping the Canadian Market

The winter earnings season has arrived in full force, and the Canadian equity market is abuzz with data that could determine the trajectory of the S&P/TSX Composite for the year. In a feature that has become a staple of The Globe and Mail’s investing desk, the article titled “Earnings reports of listed companies: Finance, investing, stocks” dissects the latest wave of quarterly results, highlights key performers and laggards, and offers a broader perspective on what these numbers mean for investors, fund managers, and policymakers alike.

1. The Big Picture: Market Reaction to Earnings

The article begins by setting the stage: the TSX Composite has been trading near its 52‑week highs, buoyed by a steady supply of earnings that, on average, beat analysts’ forecasts. However, the author cautions that the market’s response is often asymmetric. While a handful of high‑profile companies such as Shopify, Shopify‑like tech firms, and energy majors can drive the index up, a few surprise disappointments can dent broader sentiment.

Using data from the S&P/TSX 60 and the S&P/TSX 100, the piece illustrates how the index has gained roughly 5.3 % this quarter, a gain that largely reflects strong performances in the technology and energy sectors. Notably, the technology cluster, which includes the likes of Shopify and other e‑commerce names, has posted earnings surprises that have lifted the sector by almost 8 %. Meanwhile, the consumer staples sector has underperformed, dragging its own average down by nearly 3 % despite solid revenue numbers. This duality underscores the article’s thesis: the earnings season is a barometer for sector‑specific momentum rather than a single, unified narrative.

2. The Movers and Shakers

Tech and E‑Commerce

The piece spends significant time on the tech sub‑sector, which has delivered a record‑high earnings surprise of 12.4 % on average. Among the standout performers is Shopify, whose revenue rose 22 % YoY thanks to a surge in merchant subscriptions and the rollout of new checkout features. The article quotes a research analyst from a prominent Canadian brokerage who noted that Shopify’s ability to convert higher traffic into sales has mitigated the impact of broader macro‑economic uncertainty.

Another key name highlighted is Alimentation Couche‑Tard, which, though traditionally considered a convenience‑store chain, has diversified into fintech services that contributed a 9 % earnings beat. This diversification has been noted as a potential catalyst for future growth, especially as online grocery shopping continues to climb.

Energy and Natural Resources

On the energy front, the article points out that major Canadian oil majors, including Suncor Energy and Canadian Natural Resources, have posted robust earnings, buoyed by a 15 % jump in crude oil prices and higher production volumes. The author stresses that while energy earnings have historically been correlated with global oil market cycles, the current environment also reflects an increasing emphasis on renewable energy projects that are beginning to contribute to top‑line growth.

Consumer Staples and Finance

The consumer staples sector, as mentioned, lagged behind but still managed to beat analyst expectations by 4 %. Companies such as Loblaw Companies and Dollarama reported strong sales in their Canadian grocery channels, signaling that the “at‑home” retail model continues to resonate with consumers despite the pandemic’s tail end. In contrast, the banking sector presented a mixed picture: while Royal Bank of Canada and Toronto-Dominion Bank posted strong profit margins, Scotiabank missed the market’s expectations on interest‑rate‑related income, a result that the article attributes to the bank’s growing international exposure.

3. Market Sentiment and Investor Psychology

A recurring theme in the article is the psychological impact of earnings announcements on both institutional and retail investors. The author cites a survey from a leading Canadian brokerage that found 68 % of retail investors felt more optimistic after watching companies report better‑than‑expected earnings. Conversely, 34 % of institutional investors expressed caution, citing potential “over‑valuation” concerns that could lead to a pullback once the “earnings‑growth” narrative has run its course.

The article also touches on the concept of “earnings‑driven volatility.” For instance, the TSX opened the trading day with a 0.7 % decline following the first earnings report of the week from Bombardier Inc., whose results underscored the continued struggle of the aerospace industry. That dip was followed by a quick rebound as the day progressed and the market digested the broader context of lower commodity prices.

4. Policy Implications and Regulatory Perspectives

Beyond company results, the article explores the regulatory backdrop that could affect earnings performance. The Canadian Securities Administrators (CSA) have announced an upcoming review of disclosure requirements for ESG (environmental, social, governance) reporting. The author predicts that firms will face increased scrutiny over their sustainability claims—a factor that could shape investor sentiment and, consequently, stock prices.

The article also notes the recent policy shifts in the Canadian federal budget that aim to incentivize investments in renewable energy. These measures could provide a long‑term boost for firms like Enbridge Inc. and Hydro One, whose recent earnings have already reflected early gains from renewable projects.

5. What’s Next for Investors?

The article concludes with practical takeaways for investors:

1. Focus on Sectoral Themes: As earnings reports are heterogeneous, investors should look for sectors that demonstrate consistent momentum—technology and energy currently lead the pack.
2. Monitor Macro‑Factors: The Canadian economy’s health, interest‑rate policies, and commodity price fluctuations will continue to shape earnings landscapes.
3. Watch ESG Reporting: Companies that demonstrate credible ESG practices may attract more capital as the regulatory environment tightens.
4. Diversify Across Market Caps: Large‑cap performers provide stability, while mid‑cap and small‑cap stocks could offer higher growth potential—though with higher risk.

Ultimately, the article underscores that the earnings season is not merely a time to tally numbers but a window into the Canadian economy’s pulse. By dissecting the latest corporate results, the feature offers readers a roadmap for navigating the market’s next phase, reminding them that every quarter’s data can be a harbinger of future opportunities or pitfalls.