Q: Financials RY in particular seem to be "down" this past week, is there a reason why?
seems to me that all of the american banking issues are old news or am I not understanding the bigger picture ?
your insight and macro interpretation for my learning please
thanks
Ernie
seems to me that all of the american banking issues are old news or am I not understanding the bigger picture ?
your insight and macro interpretation for my learning please
thanks
Ernie
5i Research Answer:
BMO and BNS both reported earnings this week, and both missed estimates. Provisions for losses increased, which caused investor angst that an economic slowdown is indeed going to hurt bank profits. Both banks, however, also raised their dividends, which is at least some sign of confidence. The US banking crisis does seem to be subsiding, but we are not sure if it is 'over' yet. Overall, the sector does face macro issues for sure, but at least some of these are priced in to very low valuations already. We are comfortable with some exposure to the sector, but not as high as the TSX index is (it is at 30%).