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The Canadian market ended on a firm note on Friday, aided by strong gains in technology, consumer discretionary and financials sectors.

The mood in the market remained fairly positive amid signs of progress in U.S. debt ceiling deal negotiations.

The benchmark S&P/TSX Composite Index ended with a gain of 146.23 points or 0.74% at 19,920.31. The index scaled a low of 19,832.78 and a high of 19,944.09 intraday. The index shed 2.1% in the week.

The Capped Information Technology surged nearly 2%. Celestica Inc (CLS.TO) soared 10.3%. Hut 8 Mining Corp (HUT.TO) rallied nearly 6%. Coveo Solutions (CVO.TO), Converge Technology Solutions (CTS.TO), Bitfarms (BITF.TO), Kinaxis (KXS.TO), Open Text Corporation (OTEX.TO), Constellation Software (CSU.TO), Enghouse Systems (ENGH.TO), Quarterhill (QTRH.TO) and Docebo Inc (DCBO.TO) gained 1.5 to 4.3%.

Consumer discretionary stocks Spin Mater Corp (TOY.TO), Dollarama Inc (DOL.TO), Gildan Activewear (GIL.TO) and Magna International (MG.TO) advanced 1.5 to 2%.

Among financials, Fairfax Financial Holdings (FFH.TO) climbed more than 3%. Bank of Montreal (BMO.TO), Nuvei Corp (NVEI.TO), Manulife Financial (MFC.TO), goeasy (GSY.TO), Canadian Imperial Bank of Commerce (CM.TO) and Royal Bank of Canada (RY.TO) ended higher by 1.3 to 1.6%.

Healthcare stock Tilray Inc (TLRY.TO) tanked 20.5% after the company said it would be offering a 5.2% convertible senior note offering due in 2027 and announced pricing of $150 million of that.

On the economic front, preliminary data from Statistics Canada showed wholesale sales in Canada increased 1.6% month-over-month in April 2023, after a 0.1% drop in March.

• President Joe Biden said negotiators were “very close” to a compromise agreement Friday evening to raise the debt ceiling.
• House Republicans appeared on track to win on some top priorities, including rescinding some of the $80 billion allocated for the IRS by last year’s Inflation Reduction Act.
• New guidance from the Treasury Department estimated that the U.S. would not run out of money to pay its bills before June 5 — four days later than the previous estimate.

Debt ceiling: Biden optimistic about deal (cnbc.com)

SECOND QUARTER FINANCIAL HIGHLIGHTS, compared with the second quarter last year:

• Reported diluted earnings per share were $1.72, compared with $2.07.
• Adjusted diluted earnings per share were $1.94, compared with $2.02.
• Reported net income was $3,351 million, compared with $3,811 million.
• Adjusted net income was $3,752 million, compared with $3,714 million.

YEAR-TO-DATE FINANCIAL HIGHLIGHTS, six months ended April 30, 2023, compared with the corresponding period last year:

• Reported diluted earnings per share were $2.54, compared with $4.09.
• Adjusted diluted earnings per share were $4.17, compared with $4.09.
• Reported net income was $4,933 million, compared with $7,544 million.
• Adjusted net income was $7,907 million, compared with $7,547 million.

https://www.newswire.ca/news-releases/td-bank-group-reports-second-quarter-2023-results-800577454.html

Results for the second quarter of 2023 were affected by the following items of note aggregating to a positive impact of $0.06 per share:

• $114 million ($82 million after-tax) decrease in legal provisions (Corporate and Other); and
• $27 million ($21 million after-tax) amortization of acquisition-related intangible assets.

Our CET1 ratio⁽⁴⁾ was 11.9% at April 30, 2023, compared with 11.6% at the end of the prior quarter. CIBC’s leverage ratio⁽⁴⁾ and liquidity coverage ratio⁽⁴⁾ at April 30, 2023 were 4.2% and 124%, respectively.

CIBC announced an increase in its quarterly common share dividend from $0.85 per share to $0.87 per share for the quarter ending July 31, 2023.

https://www.newswire.ca/news-releases/cibc-announces-second-quarter-2023-results-871795459.html

Royal Bank of Canada¹¹ (TSX: RY) (NYSE: RY)) today reported net income of $3.6 billion for the quarter ended April 30, 2023, down $604 million or 14% from the prior year. Diluted EPS was $2.58, down 13% over the same period. Adjusted net income⁷ and adjusted EPS⁷ of $3.8 billion and $2.65 were down 13% and 11% from the prior year, respectively.

Results this quarter reflected higher provisions for credit losses, with a PCL on loans ratio of 30 bps, mainly attributable to provisions taken on performing loans in the current quarter, largely driven by unfavourable changes in our credit quality and macroeconomic outlook, as compared to releases in the prior year which reflected reduced uncertainty from the COVID-19 pandemic. The current quarter also reflected higher provisions on impaired loans.

Pre-provision, pre-tax earnings⁷ of $5 billion were up $54 million or 1% from a year ago, mainly reflecting higher net interest income driven by higher interest rates and strong loan growth in Canadian Banking and Wealth Management. Higher Corporate & Investment Banking revenue in Capital Markets also contributed to the increase. These factors were partially offset by higher expenses, mainly due to higher staff-related costs, including from headcount growth, as well as stock-based compensation. Higher professional fees (including technology investments) and higher discretionary costs to support strong client-driven growth also contributed to higher expenses.

Today we declared a quarterly dividend of $1.35 per share reflecting an increase of $0.03 or 2%.

https://www.newswire.ca/news-releases/royal-bank-of-canada-reports-second-quarter-2023-results-884048760.html

U.S. crude oil and distillate inventories fell unexpectedly last week as imports declined, while gasoline stockpiles dropped more than forecast, the Energy Information Administration said on Wednesday.

Crude inventories fell by 12.5 million barrels in the week to May 19 to 455.2 million barrels ahead of the driving-intensive Memorial Day weekend holiday, compared with analysts’ expectations in a Reuters poll for an 800,000-barrel rise.

Net U.S. crude imports fell by 1.25 million bpd, the EIA said, while the crude oil adjustment figure fell by 1.16 million barrels per day, according to the EIA data.

Gasoline, jet fuel and distillate product supplied – proxies for fuel demand – each rose last week, helping to fuel the drawdowns in stocks.

Refinery crude runs rose by 79,000 barrels per day, and refinery utilization rates fell by 0.3 percentage point in the week.

“It looks like demand is back. … Refiners are absolutely going max out with refinery runs right now, trying to keep up with demand,” said Phil Flynn, an analyst at Price Futures Group.

Distillate stockpiles, which include diesel and heating oil, fell by 600,000 barrels to 105.7 million barrels, their lowest level since May 2022, EIA data showed.

Gasoline stocks also fell by a more than expected 2.1 million barrels in the week to 216.3 million barrels, the EIA said.

Crude stocks at the Cushing, Oklahoma, delivery hub rose by 1.8 million barrels in the week, the EIA said.

Domestic production rose by 100,000 barrels per day in the week, but the four-week average of 12.275 million barrels per day is only up 3.4 per cent from year ago levels.

“The rate of growth is disappointing given the low price of oil and the fact that producers are slowing down on their capital spending for drilling,” said Andrew Lipow, president of Lipow Oil Associates in Houston.

Bank of Nova Scotia (BNS) on Wednesday reported fiscal second-quarter net income of $1.57 billion.

The bank, based in Toronto, said it had earnings of $1.24 per share. Earnings, adjusted for non-recurring costs, were $1.25 per share.

The results did not meet Wall Street expectations. The average estimate of four analysts surveyed by Zacks Investment Research was for earnings of $1.32 per share.

The bank posted revenue of $12.78 billion in the period. Its revenue net of interest expense was $5.85 billion, which also missed Street forecasts.

Bank of Nova Scotia shares have climbed slightly since the beginning of the year. The stock has declined 23% in the last 12 months.

The bank says it will now pay a quarterly dividend of $1.06 per share, up from $1.03 per share.

BMO’s Second Quarter 2023 Report to Shareholders, including the unaudited interim consolidated financial statements for the period ended April 30, 2023, is available online at www.bmo.com/investorrelations and at www.sedar.com.

Financial Results Highlights

Second Quarter 2023 Compared with Second Quarter 2022:

• Net income of $1,059 million, compared with $4,756 million; adjusted net income^1,3 of $2,216 million, compared with $2,187 million
• Reported earnings per share (EPS)² of $1.30, compared with $7.13; adjusted EPS^1,2,3 of $2.93, compared with $3.23
• Provision for credit losses (PCL) of $1,023 million, compared with $50 million; adjusted PCL^1,3 of $318 million, compared with $50 million
• Return on equity (ROE) of 5.6%, compared with 34.5%; adjusted ROE^1,3 of 12.6%, compared with 15.7%
• Common Equity Tier 1 (CET1) Ratio⁴ of 12.2%, compared with 16.0%

Year-to-Date 2023 Compared with Year-to-Date 2022:

• Net income of $1,306 million, compared with $7,689 million; adjusted net income^1,3 of $4,488 million, compared with $4,771 million
• Reported EPS² of $1.62, compared with $11.57; adjusted EPS^1,2,3 of $6.15, compared with $7.12
• PCL of $1,240 million, compared with a recovery of $49 million; adjusted PCL^1,3 of $535 million, compared with a recovery of $49 million
• ROE of 3.4%, compared with 28.0%; adjusted ROE^1,3 of 13.0%, compared with 17.2%

BMO Financial Group Increases Common Share Dividend By 4 Cents From The Prior Quarter, Up 6 Per Cent From The Prior Year

https://www.newswire.ca/news-releases/bmo-financial-group-reports-second-quarter-2023-results-818090767.html

• Apple on Tuesday announced a new multibillion-dollar deal with Broadcom to develop 5G radio frequency components in the U.S.
• “We’re thrilled to make commitments that harness the ingenuity, creativity, and innovative spirit of American manufacturing,” Apple CEO Tim Cook said in a release.
• Apple said its deal with Broadcom is part of its 2021 commitment to invest $430 billion in the U.S. economy.

https://www.cnbc.com/2023/05/23/apple-announces-multibillion-dollar-deal-with-broadcom-for-us-made-chips.html