The Daily Chase: RBC misses Bay Street expectations; The price of oil is rising

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Royal Bank of Canada missed its third-quarter profit expectations as a dearth of deals weighed on its investment banking revenue and the risk of future loan losses forced it to build provisions of hundreds of millions of dollars. We have plenty of details on BNNBloomberg.ca and will wait to see how investors react to the performance. Meanwhile, National Bank of Canada met earnings expectations in the quarter as it managed to buck the trend by posting higher net income in its capital markets unit.

SCOTIA STRIKES

The Bank of Nova Scotia fell the most since March 2020 yesterday after an ignominious start to the earnings season. It appears that at least five analysts downgraded the stock in the process, including RBC Capital Markets’ Darko Mihelic, who slammed BNS to sector performance from outperformance, while stating that “our thesis on the international does not take place”. Box on Scotia: It’s the day his customers in Grand Manan, New Brunswick, had been hoping not to come, because the only bank branch on the island is due to close permanently this morning.

MARKET WATCH

West Texas Intermediate continued its ascent today, gaining nearly 2% to hit US$95 a barrel at some point this morning. We’ll see if that holds after today’s US inventory data. Sticking to the energy space, we’ll be watching the actions of uranium miners today after Japan’s prime minister said the country would consider building new nuclear reactors after “Russia’s invasion has changed the world energy situation”. Meanwhile, futures were virtually flat at 8 a.m. EDT as traders bided their time before U.S. Federal Reserve Chairman Jerome Powell’s speech on Friday. We’ll be playing this morning with former Chicago Fed insider Carl Tannenbaum at 10:30 a.m. EDT.

CLOSING THE LOOP ON CLEAN HYDROGEN

After all that accumulation, Germany and Canada put pen to paper late yesterday afternoon on their clean energy ambitions. Rather than a firm contract, the two parties have agreed to a non-binding joint statement of intent that includes a goal to begin exports from Canada by 2025.

OTHER NOTABLE STORIES

  • There was more retail misery after yesterday’s closing bell, as Nordstrom’s chief executive said “traffic and customer demand slowed significantly from June.” And now the high-end department store chain is “aligning inventory and spending with recent trends” and trimming its full-year profit outlook. Its shares are slipping in premarket trading.
  • BRP now claims that some employee and supplier information appeared on the dark web after a recent data breach.
  • Shares of Bed Bath & Beyond continue to yo-yo, today the direction is higher after the Wall Street Journal reported that the home furnishings retailer has tapped a lender for the help meet its liquidity needs.

NEWS RELEASES / NOTABLE EVENTS

  • Notable Data: US Durable Goods Orders
  • Notable income: Royal Bank of Canada (call 600, 830), National Bank of Canada (call 630, 1300), Salesforce, Nvidia
  • 12:30 p.m.: Deputy Prime Minister and Minister of Finance Chrystia Freeland tours Mosaic facilities (plus media availability at 2:15 p.m.)
  • Bank of Nova Scotia closes last bank branch on Grand Manan Island; new branch at 11 Main Street St. George NB
  • Tesla three-for-one stock split takes effect after market close
  • Rio Tinto is taking another chance to buy Turquoise Hill Resources, announcing a watered-down proposal worth $40 per share, down from $34 previously (and which was pushed back).
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