On Friday, the S&P 500 and Toronto were each down 0.4%.
This week the Canadian market will be interested in the reports from the banks. Royal Bank reports on Wednesday. The level of actual bad debts and any changes to the level of provisions for future bad debt will be particularly scrutinized.
Canadian Western Bank reports on Thursday. It should have another quarter of growth unless it has experienced unexpected bad debts. From past experience it seems that it sometimes has loan loss volatility related to just one or a few larger commercial loans. Therefore, its loan losses can be a bit volatile. At last report they were not expecting any material increase in bad loans. They are implementing a new risk management system that will allow them to increase their leverage (it lowers their required equity ratio on a risk-adjusted basis). This should lead to additional profit in 2020. I am hoping that they can report that implemetation is imminent as it was delayed somewhat in 2019.
Toll Brothers reports on Wednesday. The market already expects earnings quite a bit lower than last year. I think most of their geographies and operations should be doing fairly well. But I am not sure about California with all the fires – and California was already weak.