Morning Minutes

Booming Bank Earnings



Canadian bank earnings continue to dominate the headlines this morning with three more strong reports. Royal Bank ($2.79 vs street $2.51), TD Bank ($2.04 vs street $1.76), and CIBC ($3.59 vs street $3.00) all beat analyst expectations by a wide margin and posted significant increases in their Tier 1 capital ratios along with dramatic drops in loan loss provisions (Royal Bank reduced provisions by $96M while CIBC added $32M vs $147M last quarter and $1.4B last year).  Managements attributed their positive surprises to strong rebounds in core banking operations on both sides of the border and strong investment banking results.

There also were some positive earnings reports out of the US overnight, headlined by Nvidia ($3.66 vs street $3.28), and Best Buy ($2.33 vs street $1.39).

Several economic reports are out this morning in the US. Q1 GDP growth was revised upward to 4.3%, above the 4.1% street estimate. Durable goods orders were disappointing with the headline number falling (-1.3% vs street +0.7%). Weekly initial jobless claims were better than expected (406K vs street 425K).  

Amid all of these developments, US index futures are mixed, varying between a 0.2% gain for Dow Futures and a 0.4% decline for NASDAQ futures. In Europe, the Dax and the FTSE are both down about 0.2%. Commodities are also mixed with WTI crude oil down 0.7% while copper is up 0.7%. Bitcoin is up 3.6% but remains stuck below $40,000, while gold is down 0.3% on the day so far.

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Colin Cieszynski, Chief Market Strategist

Colin Cieszynski, CFA, CMT
Chief Market Strategist
+1 (647) 282-4428

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