“The large Canadian banks’ core EPS declined approximately 2 per cent quarter-over-quarter and 7 per cent year-over-year on average in Q3/23, 4 per cent lower than our estimates on average. Lower than expected results were primarily because provisions for credit losses were 16 per cent higher than we forecasted on average, more than offsetting better than expected revenues.
Among the major banks, Mr. Mihelic has “outperform” ratings on Bank of Montreal and Toronto-Dominion Bank.“After the briefest of lulls last Friday, it was onward and upward again for yields to start this week. The 10-year Treasury sliced through the 4.5-per-cent barrier and now stands at its highest since the fall of 2007. Yields at these levels are fast approaching the trailing earnings yield on equities .
“Most investors did not agree with our bullishness [in 2009]. The Global Financial Crisis and the ensuing bear market damaged investor psychology and investors were extremely wary of US equities… Fourteen years later investors’ extreme risk aversion has become extreme risk taking. Today we are viewed by many as not being bullish enough and theattacks have returned ... Admittedly, the S&P 50 Index is up about 17 per cent year-to-date, but that has largely been driven by 7 megacap stocks .