After Volatile Week in Canada,Big Six Bank Earnings

Investors will turn their focus to the first two Big Six banks to report third-quarter fiscal results after a week rolling over Canada’s equity and bond markets.

Banks are expected to report an average increase of 6% in adjusted earnings per share compared to a year earlier, according to analysts at firms including Eight Capital and the Canadian Imperial Bank of Commerce. Royal Bank of Canada begins the reporting season on Wednesday and CIBC the following day.

The nation’s largest lenders account for about 23% of the S&P / TSX Composite Index and with an average total return basis, Commercial Banks’ S&P / TSX Eight Enterprise Index has been a lag compared to Canada’s leading stock gauge this year – which has earned about 15% including dividends.

Bank of America Merrill analyst Lynch Ebrahim Poonawala was also cautious. “We find it difficult to imagine that the prospect of operating for banks will be immune to a deteriorating macro backlog,” he said. “We are wary of the group as the risk / reward equation is not growing with traction.”

On the economic data front, inflation numbers are due this week, along with retail, wholesale and manufacturing.

Global macroeconomic turmoil, geopolitical turmoil and a domestic political scandal took center stage last week, in a month that is usually quiet for Canada as investors escape into cottage walks, camping weekends and long road trips.

Foreigners sold $ 5.14 billion of bonds, and $ 1.1 billion of equity and equity funds, according to Statistics Canada.

Lightspeed POS Inc plunged after three of its major shareholders announced they were reducing their stake in the company. It also dropped a planned treasury bid of 1.16m shares, citing market conditions.

In the energy space, Just Energy Group Inc. wiped out about half its value in two days after a dividend suspension and profit forecast cut. The stock’s record decline has analysts focused on whether the company will be an attractive candidate for takeover.

Just two months before Justin Trudeau seeks re-election, he withdrew from joining SNC-Lavalin Group Inc. In a report released Wednesday, Ethics Commissioner Mario Dion said the prime minister sought to pressure his former attorney general last year to help the company. Trudeau acknowledged responsibility “for everything that happened”, though he disagreed with some of the conclusions./investing

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