On Monday, the S&P 500 and Toronto were each down 0.4%.
Canada’s big banks will be reporting earnings this week with two reporting tomorrow. It will be interesting to see the loan loss provisions and what percent of residential mortgages have amortizations of over 30 years. It will also be interesting to see if they are experiencing higher credit card delinquencies.
Canadian Western Bank will report on Friday morning. I’m hopeful of continued results that are at least okay. They continue to grow slowly. But they also face high deposit costs. So far their bad debt and loan provisions have been modest and not a problem. But there can always be surprises in that area.
There are a number of important U.S. economic figures due out this week and those could move markets in one direction or the other.
The five year Canada bond yield is sitting at about 3.61%. That’s positive for the Canadian Western bank rate reset preferred shares. I believe CWB will announce on March 22 whether they will redeem those at $25 or not and if not they will set the reset yields on April 1. CWB.PR.B has risen as we get closer to the reset date and as the 5 year bond yield has risen since its lows just before Christmas.
Another rate reset that I have featured for a long time is ENB.PF.A. It does not reset until December 1. The reset could be at an attractive yield (at least 8.1% of today’s price) if the 5 year bond rate remains above 3.0% by then. I’m hopeful for capital gains on that reset share as well. But many things (positive or negative) could happen by December 1.