BNN - Monday, May 27, 2024 - 03:00 p.m. (ET) - Segment #5

and quarter laced precisely with the undervaluation in the the other side of it is that the doj can be hawkish to allow themselves to maybe potentially keep japan out of the sites of tariffs. We're talking about how undervalued the yen is, our models have longer term for value in dollar yen under one 2040 were trading around one 50 to one so there it is, the cheapest currency that we track. So there's also an element here that then to be o j can kind of get ahead of the market can be turned more hawkish raise interest rates continue with further quantitative tightening. All in a space to help. Kind of reinjured experts around a little bit, so the end can get stronger and then reduced to political pressures that we might see throughout the election in 2nd half of the year, we're talking about tariffs and in geopolitics and stuff like that. All right, mark, so much has so much to think about in unpacking almost in a japanese equities strategist in texas to figure out what that would for for japanese equities. But fascinating perspective. I appreciate your time. That's mark mccormick. >> Joining us from td, we're going to take a quick break. We've got scotiabank set to report results tomorrow. Andy bell with a preview. Next. (Upbeat electronic music) (Funky hip hop music) Harvest Equal Weight Global Utilities Enhanced Income etf. The world's top utility companies in one etf, global Utilities and steady monthly income. Harvest ETFs, income happens here. ( ) ( ) The infiniti qx60 exemplifies modern luxury. With powerful suv performance, three rows of comfort, and a sleek-yet-daring design. ( ) Lease a 2024 qx60 from 0.99% apr for up to 24 months. Visit INFINITI.ca. ( ) business man 1: I'd rather take the profits now than risk loosing it all. Business man 3: China's slowing down. [All four speak at once, the noise grows to a fever pitch] kim: There's headlines saying this, contradictory headlines saying that. What's notable and what's noise? Annce: cut through the clutter. Money Talk, with Kim Parlee, Wednesdays at 7 eastern 4 pacific. Brought to you by td Wealth. -Last quarter Capital Direct investors saw a return of over eight percent. -Find out why so many people have been trusting Capital Direct for over sixteen years. -Speak to your financial advisor today and ask for a copy of our offering memorandum. CapitalDirect.ca If you are an entrepreneur, you know what it means to be always invested. Grabbing hold of an idea and seeing it through, meeting old challenges with fresh solutions and believing in the power of tomorrow. We know because we're the exchange for entrepreneurs and we're always investing in public markets, in business, in growth, in you. Energy Fuels, a leading American uranium producer, is ramping up production to supply expanding nuclear markets and diversifying into rare earth elements, key ingredients in many clean energy and defense technologies. Energy Fuels. (Funky hip hop music) >> Analysts are expecting profit to drop its scotia by as much as 8.8% on an earnings per share basis. Let's bring in andy bell. We expected tv's to drop is a on an adjusted basis. So yeah, it's a bit a growth. The capital markets helped at their scotiabank, though, that stock has suffered still over the past year. Isn't td of been the big losers. >> In the past 12 months and in fact, the bank stocks generally have like the broad markets so far this year. Worried that it could be a delay rate from air america seems to be dragging its feet on, causing borrowing costs. Of course, we could very soon next week. Believe that is the bank of canada might decide on a rate cut june meeting. There's like a nova scotia and with the consensus is a buck 56 when they report tomorrow, their fiscal q2 down from a buck. 70 hour or so in a year ago, the same quarter a year ago. So down 8 or 9%. And actually the biggest drop of some major banks. You can see

there, amber, that scotia still alive just bumping along the bottom there with td underperforming the big banks in a big partly as there's, there's some headwinds scotia. The government's move cut back on dividend tax deductions for corporate companies own each other shares could cost the bank up to 200 million dollars by q4 year. So that's another had been scotia and yet, you know, you look at these yields and yeah, it's pretty tempting. That's right. 6.5% as the yield on scotia, it's less than 4% royal bank from bank of canada, of course, is back near record highs and bank of america look the multiples on the bank stocks last week or sorry, may 17th as so about 10 days ago about stage, they reckon that poor old scotiabank was trading at only about 1.1 times book. That's pretty cheap. The banks right now as a whole according to bank of america are trading at about one and a half price-to-book. It was about 1.7 times in the 5 years prior to the pandemic. So it's really come down 1.5 from 1.7 by that measure, scotiabank is way down. So fascination story, you pick up big dividend if you're willing to have hope for a rebound in the stock. All right, thank you very much. Is andrew bell reporting on the canadian banks and what we can expect scotia is on deck tomorrow morning. >> We've got the closing bells well, 3 minutes and will bring them to you on the other side of the break. We've also got an interview with evan mancer president and chief investment officer of cardinal capital management. >> Stick with us. Text on Screen Text on Screen Text on Screen Text on Screen Text on Screen Text on Screen Text on Screen -Last quarter Capital Direct investors saw a return of over eight percent. -Find out why so many people have been trusting Capital Direct for over sixteen years. -Speak to your financial advisor today and ask for a copy of our offering memorandum. CapitalDirect.ca Did you know that you get used to odors in your home? Yep.You go noseblind. But others smell This, this, and this. Introducing Febreze Plug-In with fade defy technology. It's the only air freshener that eliminates odors... and automatically alternates between two complimentary scents. It even tells you when to refill. So you don't go noseblind and enjoy freshness for up to 50 days. Try a warmer now for only 99 cents. So, it's a financial approach that just flows together. Kinda like this: Investments in the front... Insurance in the back. We do both. [phone ringing] ( ) ( ) ( ) The infiniti qx60 exemplifies modern luxury. With powerful suv performance, three rows of comfort, and a sleek-yet-daring design. ( ) Lease a 2024 qx60 from 0.99% apr for up to 24 months. Visit INFINITI.ca. ( ) (Upbeat electronic music) all right, it is officially the end of the trading day >> Tenths of a percent. Generally, there was weakness to go around in the U.S. markets will see what kind of mood the americans come back in tomorrow. We do get a key read of inflation on friday in the U.S. and for canadian investors, it's all about the big banks set to report this week. There's a look at the

tsx, I mentioned, td reporting last week. Now the shares initially selling off in reaction to the results, even as they came in better than expected. It seem like the overwhelming concerns were around. They are anti-money laundering issues. They've set aside 615 million, but investors and analysts are looking at a number is big us 2 billion as as potential fines for td. There's also the non monetary penalties that investors will be grappling with if and when we ever get those and I think the fact that we still have this cloud hanging over the company you know, that that's kind of the main concern right now, even as earnings unexpectedly grew, they strengthen, particularly their canadian banking division, but also strength in capital markets that really helped to carry the on the non monetary penalties. The big fear is that he would be prevented from expanding their branches. And also whether or not they be allowed to buy another bank. And remember, this all sort of came to light when they were supposed to buy first horizon. They became increasingly clear that there were some regulatory hurdles to deal west. And so has basically been in the dog ever sense. If you take a look at how it's stacked up compared to some of the other banks, quite poor. Only canadian western bank has fared worse so far in 2024 tv has lost about 10%. Canadian western bank is also down about 12%, but the best performing bank is up about 13% right now. Here's the earning season is going to unfold. We've got scotia coming out tomorrow. Bmo and national will be up on wednesday, followed by cnbc royal on thursday and laurentian canadian western bank rounding it out. So really kind of a slow ramp last week to this week's blockbuster for canadian bank earnings for perspective on td, but also the broader banking sector. Let's bring in evan mancer president and ceo of cardinal capital management. He joins us now. Evan, thanks so much for being with us. What to do about td, how are you thinking about this very >> Much of a core holding for many canadians. >> Yeah, and a core holding for us too. We don't 30 years a cardinal. So it's kind of with heavy heart that we saw that it's been a wonderful company. >> Increase the dividend for 20 or 30 years of financial crisis. But we do see risk and now. >> And the big risk is the it money, the money laundering issue. They had a employees arrested fentanyl fentanyl money laundering ran, which is obviously not great. But the question becomes, was this something that kind of slip through the cracks of tv, but could have happened to any bank. And it wasn't a a major issue was there some serious deficiencies and what we worry about without as we go back a year and a half and there was a regional banking crisis in the u.s.. During that time, it was like silicon valley bank went first and then a few others the regulators were handed me calling that well capitalized banks. Please cover rescue some of the weaker ones. And he was actually going to be buying first horizon, which was also having trouble. Acquisition got cancelled by the regulators, citing deficiencies apd and haven't really come out and said what those were. But it's a bit of a warning sign for us that there are some major issues here. And then we look at the broader market and and we do see some attractive opportunities elsewhere that don't have this risk. And so you know, with heavy hearts, we let go of our td investment of 30 years. I mean, I want to underline that point because I mean, you capped off a gain of nearly 4,000% over the last. >> 30 years. So with the dividend and I wonder if that's what made it easier to let go because you're talking about. >> A company that whether, you know, the dot com that weathered the financial crisis, the european crisis, all of these crises over the last 30 years. So cutting at this moment it's is significant. >> Yeah, and it I didn't make it easier, probably be a lot harder for us to be in holding company for a long time ago don't want to get emotionally attached to it, but it's, it's hard when you have such a good experience with the company we're and we have through a lot of these issues. But what was once you're saying they're all basically sector issues that are hitting all the banks. This one is a little more specific. The tv, we still own the other 5 banks, which we like and don't plans to sell. But in this issue, it's more, you td trading in U.S. like this count,

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