Newspaper article The Canadian Press

Stocks in for Sideways Trading; Markets Expect 'Steady as She Goes' Bank Earnings

Newspaper article The Canadian Press

Stocks in for Sideways Trading; Markets Expect 'Steady as She Goes' Bank Earnings

Article excerpt

TSX in for sideways trading, banks to report

--

TORONTO - North American markets are likely in for more volatility and sideways action this week as traders look to the final act of the Canadian first quarter corporate earnings season -- reports from the big Canadian banks.

Royal Bank (TSX:RY) and TD Bank (TSX:TD) kick off the stream of earnings on Thursday and analysts are expecting another solid if unspectacular quarter.

"With the banks, it's more of a steady as she goes kind of quarter," said Colin Cieszynski, senior market analyst at CMC Markets.

Together, the big six banks in Canada -- Royal Bank, TD Bank, Scotiabank (TSX:BNS), CIBC (TSX:CM), Bank of Montreal (TSX:BMO) and National Bank (TSX:NA) -- earned a total of $8.49 billion in the first quarter, up from $7.64 billion in the first quarter of 2013.

Cieszynski noted that the economy generally "was pretty good" in the February-March-April period so, for Canada, "you were past the worst of the severe winter weather by then."

"We didn't have an ice storm shutting down things for days so the overall economy should have been relatively decent through that period and I'm expecting just another chug along business as usual kind of quarter for them," he said.

He also doesn't expect major moves in dividends after Scotiabank, RBC, TD and CIBC all upped their payouts last time around.

Cieszynski also doesn't think the earnings will yield another leg up in stock prices for the big banks, all of which are very close to their 52-week highs.

He said the banks look fairly valued and there would need to be "something really positive" for further stock appreciation in the wake of the earnings reports.

"And it's not just the bank themselves," he said. "In general, for the market I think a lot of (good news) has already been priced in, particularly with the U.S. markets."

The feeling that markets are fairly valued right now is also a big reason why stock markets stalled as the TSX finished last week little changed, down 19 points or 0. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.