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Canadian Bank Earnings Preview

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As Canada returns to trading from a long weekend, US markets are looking up for a second straight day as Americans prepare for this coming weekend’s Memorial Day holiday and the kickoff to summer driving season. Building on Monday’s gains of 1.4% for the NASDAQ, 1.0% for the S&P 500, and 0.5% for the Dow Industrials, US index futures are up another 0.2% to 0.5%.

It’s a quiet day so far for corporate earnings and economic news. The next events of note are tonight’s Reserve Bank of New Zealand meeting which may give investors an indication of whether they are prepared to start winding down stimulus like the Bank of Canada, hinting toward ending stimulus like the Bank of England, or staying the course on QE and not worrying about inflation like the Fed.

Canadian bank earnings season starts tomorrow with Bank of Montreal reporting, followed by Royal Bank, TD Bank, and CIBC Thursday, and National Bank on Friday. This quarter includes results for April which may give an indication on how much of an impact the latest round of lockdowns have had on the Canadian economy. Softness in Canada, however, could be partly offset by exposure to the reopening US economy for some of the banks, with wealth management and investment banking/trading also having the potential to swing overall results. Investors may be particularly interested in whether Canadian banks reduce loan loss provisions and free up capital for lending as many of their US counterparts did when they reported results last month.

Commodities are down slightly this morning with WTI crude oil sliding 0.4% and copper down 0.1%. Cryptocurrencies are under pressure again with Bitcoin falling 5.0% and Ethereum down 6.4%.

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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