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Booming Bank Earnings

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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.

Disclaimer: SIA Wealth Management Inc. (SIAWM) specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIAWM nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.

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At SIA Wealth Management everything we do is based on Relative Strength Analysis. We evaluate the Relative Strength between asset classes giving us insight into money flows on a large scale, and from this select top ranked investments.

Colin Cieszynski, Chief Market Strategist
Market Commentary:

Colin Cieszynski, CFA, CMT
Chief Market Strategist
ccieszynski@siawm.com
+1 (647) 282-4428

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