Category: Uncategorized

Summary :

• The United States’ new 50% tariffs took effect August 22 on approximately C$27.6 billion (about US$20 billion) of Canadian goods.
• The measures affect roughly 5% of Canadian exports to the United States—material for exposed industries, but not a blanket tariff on all Canadian exports.
• Canada will impose matching tariffs of 15%, 25% and 50% on C$27.6 billion of U.S. goods beginning September 8.
• Formal trade negotiations remain suspended, although a recent U.S. clarification concerning French-language policies has modestly improved the possibility of talks restarting.
• The most important risk is escalation into autos, steel, aluminum, lumber or other major trade flows—not the direct size of the latest tariff package.

Current Position

Issue	Current status
New U.S. tariffs	50% effective August 22
Canadian exports covered	C$27.6 billion, approximately US$20 billion
Share of Canadian exports to U.S.	Slightly above 5%
CUSMA exemption	The products on the new tariff lists do not receive preferential CUSMA treatment
Canadian retaliation	15%, 25% and 50%, effective September 8
U.S. imports covered by Canada	C$27.6 billion
Negotiations	Suspended; no confirmed new negotiating round
Government support	Canada announced C$7.5 billion of additional worker and business support

Products and Sectors

The new U.S. measures reportedly cover selected goods including:

• Furniture and apparel
• Wine and other alcohol
• Dairy and food products
• Cement
• Hockey and fishing equipment
• Other specifically listed manufactured goods

Canada’s retaliation focuses on:

• Steel and aluminum products
• Dairy
• Appliances and electronics
• Agricultural equipment
• Furniture and apparel
• Pulp and paper

Canada removed U.S. seafood and fish products from its retaliation list following industry feedback, demonstrating that the list may still be adjusted before September 8. Department of Finance Canada, Reuters

Negotiating Status

Talks collapsed after Canada said the United States introduced unacceptable last-minute conditions. The United States said Canada declined terms that had previously been discussed.

One obstacle may now be narrowing: U.S. Trade Representative Jamieson Greer said Canadian French-language and cultural-content policies were not a U.S. “red line.” Canada welcomed that clarification and requested similar movement on other disputed positions.

However, Greer also said there was currently no open channel of communication between the two governments. Therefore, this is an easing of rhetoric—not evidence that negotiations have formally resumed. Reuters

Economic and TSX Impact

Short term

• Negative: Canadian manufacturers, furniture, apparel, alcohol, dairy, cement and other directly covered exporters.
• Mixed to negative: Banks, railways and consumer companies if weaker business confidence, investment and employment spread beyond targeted sectors.
• Relatively insulated: Energy and potash remain outside the latest Section 338 package.
• Inflation risk: Canadian counter-tariffs could increase the cost of selected appliances, machinery, electronics and food products after September 8.
• CAD risk: Prolonged uncertainty could weaken the Canadian dollar, although oil prices and interest-rate expectations remain important competing drivers.

Longer term

The main damage could come from postponed capital spending, supply-chain restructuring and reduced confidence in dependable tariff-free access to the U.S. market. These effects may be larger than the immediate customs cost.

Scenarios

Scenario	Probability assessment	Likely outcome
Bull: negotiations restart	Moderate-low	September 8 tariffs are delayed, reduced or used as bargaining leverage; exposed TSX companies rebound
Base: targeted conflict continues	Moderate-high	Existing measures remain, but energy and most CUSMA trade continue; concentrated industrial damage rather than a broad recessionary shock
Bear: broader escalation	Moderate	Additional action against autos, steel, aluminum, lumber or energy; weaker CAD, business investment and Canadian growth

What Would Disprove the Base Case?

• A confirmed date for renewed ministerial negotiations.
• Canada suspending or delaying the September 8 counter-tariffs.
• The United States offering enforceable relief on autos, steel, aluminum or lumber.
• Conversely, new U.S. tariffs covering substantially more than the present C$27.6 billion would invalidate the assumption that the conflict remains contained.

Actionable Takeaways

The tariff dispute has escalated, but the latest package is still targeted rather than economy-wide. Near-term TSX exposure is concentrated in selected manufacturers and consumer exporters. The critical dates and signals are September 8, any resumption of official talks, changes to Canada’s product list, and possible U.S. expansion into larger strategic sectors.

Educational analysis only; tariff rules and product classifications should be confirmed against the relevant customs schedules.

Capital Group (July 23, 2026) argues that AI-driven market concentration has reached levels not seen in decades, creating unintended risks in cap-weighted index funds. The piece uses four charts and commentary from CIO Martin Romo and portfolio managers Brady Enright, Steve Watson, Damien McCann, and Jody Jonsson.

Key takeaways

• Markets are among the most concentrated in recent history.
• AI concentration is a global phenomenon.
• U.S. GDP relies heavily on AI spending.
• AI-related issuance is straining parts of the bond market.

1. Extreme U.S. concentration, but a single theme

Top 10 stocks are approaching 40% of the S&P 500—similar to 1964’s Nifty Fifty peak (39%) and Japan’s 1980s boom. Then the leaders spanned sectors (AT&T, GM, Exxon, IBM). Today NVIDIA, Microsoft, Amazon, Micron and peers are tightly linked to one theme: AI capex. That raises correlated-downside risk (already visible in early-July pullbacks in SK hynix and Sandisk). Past concentration episodes eventually unwound; the authors treat this as a reminder, not a crash forecast. Quality names left behind (Royal Caribbean, P&G, Citigroup) trade at 20%+ discounts to history.

2. Same pattern globally

MSCI Emerging Markets top 10 = 41% of the index; SK hynix + Samsung + TSMC alone = 29%. Developed non-U.S. and Europe are less extreme. Watson sees value in non-U.S. leaders (AstraZeneca, Tencent) and “AI wreckage” names he views as enablers rather than victims (SAP, Trip.com, Amadeus).

3. Economy-level dependence

St. Louis Fed estimates: AI-related investment added nearly 1% to U.S. real GDP in the first nine months of 2025—39% of total growth. Roughly half of data-center costs are semiconductors, but HVAC, power, water and transformers also benefit. Enright’s next focus is companies using AI for durable advantage (financials, healthcare) rather than just selling the build-out.

4. Bond-market strain

Hyperscalers (Alphabet, Amazon, Meta, Microsoft, Oracle, SpaceX) now represent ~4.8% of the Bloomberg U.S. IG Corporate Index—up 78% year-over-year. Heavy issuance has pressured some of those credits. McCann stays constructive on broader credit (earnings, consumer, labor) but stresses issuer-by-issuer selection and diversification across IG, HY, securitized and EM.Bottom line

Index funds are cheaper, not safer. Passive portfolios now embed a large bet that one AI outcome dominates. Authors recommend checking how much of a portfolio sits in a handful of AI-linked names, adding old-economy and non-U.S. exposure, and being willing to differ from the benchmark. “Bold enough to own great companies when fundamenta

• Nvidia shares climbed on Thursday after earnings sailed past estimates.
• Huang said AI “reached its inflection point,” noting that the number of companies that need large clusters of GPUs has expanded dramatically.
• Supply chain constraints and rival chips being built by customers are potential headwinds for the tech giant.

https://www.cnbc.com/2026/08/27/nvidia-nvda-q2-earnings.html

Canadian Imperial Bank of Commerce CM-T -4.72%decrease
picked up more business from domestic clients and kept loan losses in check to continue the sector’s streak of third quarter profits that beat analysts’ expectations.

On Thursday, CIBC reported it earned $2.41-billion in the third quarter, or $2.47 per share, up 15 per cent from the same period in 2025.

The Toronto-based bank’s adjusted earnings were $2.65-billion or $2.73 per share. Analysts had forecast the bank would post adjusted earnings of $2.50-per share, according to data from the London Stock Exchange Group (LSEG).

“We continue to accelerate the execution of our strategy, driving another quarter of strong financial results including double-digit growth in net income and a higher return on equity compared to a year ago,” said Harry Culham, CIBC’s chief executive officer, in a press release.

“CIBC continued the trend of better-than-expected results, with each of its operating segments contributing to the beat,” said analyst John Aiken at Jefferies Financial Group in a report.

“While loan growth and efficiency gains were positive, the market’s reaction may be tempered by the reserve release and margin contraction in the U.S. segment,” said Mr. Aiken.

CIBC’s return on equity, a key measure of the bank’s financial performance, rose to 16.8 per cent, up from 14.2 per cent in the same period a year ago.

CIBC agrees to pay $10-million to settle class action over non-sufficient funds fees

CIBC highlighted the integration of artificial intelligence into its operations, rolling out a workspace system called CAI 2.0 that allows employees to delegate work to AI-driven agents.

“We’re investing in key enablers including artificial intelligence to empower our team, as we continue to modernize our bank, drive efficiency and sharpen our focus on our clients,” said Mr. Culham. In a conference call with analysts, Mr. Culham said the bank expects to continue expanding its workforce as it increases the use of AI, rather than replacing staff with technology, while making its employees more productive.

CIBC’s domestic growth strategy includes bulking up a wealth management platform that targets the mass affluent segment of the population. Rob Sedran, CIBC’s chief financial officer, said in a conference call the bank’s target is to double the size of this business, which has $360-billion of assets under management, over the next five years. This year, Mr. Sedran said the business is growing at a 10-per-cent clip.

Earlier this week, Bank of Montreal, Bank of Nova Scotia and National Bank of Canada reported financial results that exceeded expectations. Royal Bank of Canada and Toronto-Dominion Bank also release their quarterly performance on Thursday.

CIBC posted revenue growth in all of its lines of business units, including a 9 per cent increase in revenue at its Canadian personal and business division, the bank’s largest business. The division had adjusted earnings of $1.7-billion, up 18 per cent compared to last year.

The bank’s U.S. commercial and wealth management division earned US$277-million on an adjusted basis, up 10 per cent from the same period in 2025.

CIBC’s capital markets business had a strong quarter, continuing a trend seen at other domestic banks. Adjusted earnings were $977-million, up 24 per cent from the third quarter of 2025.

CIBC set aside $564-million for problem loans, in line with the $559-million provision for credit losses in the same period last year and down 7 per cent from the previous quarter.

CIBC is the latest domestic bank to report better-than-expected results against a backdrop of economic uncertainty due to Canada’s trade dispute with the U.S. On Tuesday, executives at Bank of Montreal and Bank of Nova Scotia said consumers and businesses are adjusting well to a challenging global trade environment.

Toronto-Dominion Bank TD-T -0.51%decrease reported higher third-quarter profit that beat analysts’ estimates as the lender reins in expenses and plans to open new retail branches in the United States, where it is fixing gaps in its anti-money laundering processes.

Canada’s second-largest lender posted stronger than expected results across its businesses. TD’s net income rose 38 per cent to $4.62-billion, or $2.74 per share, in the three months that ended July 31.

Adjusted to exclude certain items, the bank said it earned $2.77 per share, edging out the $2.47 per share analysts expected, according to data by S&P Capital IQ.

“With a focus on disciplined execution, [return on equity] was up significantly and we generated positive operating leverage while continuing to invest in front-line talent, AI and innovation to deepen client relationships and grow the bank,” TD chief executive officer Raymond Chun said in a statement.

Investor alleges $4.5-million in losses owing to fraudulent trades in TD investing accounts

The bank said it intends to open 100 new branches in the U.S. by the end of 2028, pending regulatory approval.

TD’s chief financial officer Kelvin Tran said the new sites will be located in the bank’s existing footprint along the country’s east coast.

“Our focus is driving organic growth, and building new branches to acquire new customers is part of that strategy,” Mr. Tran said in an interview.

U.S. regulators and law enforcement levied a cap on assets of US$434-billion that limits TD’s ability to grow its retail operations in the country. To continue growing the business and create space under the asset cap, the lender shrunk its U.S. balance sheet by exiting less profitable portfolios.

TD has previously said it expects expense growth to land in the mid-single-digit range this year.

TD tells some employees it will use software to monitor their work in an effort to increase productivity

“It speaks volume about the effectiveness of our structural cost reduction program, so as those savings come through, and on top of that, moderation of some governance and control costs, that gives us room to reinvest in the business,” Mr. Tran said.

“Whether that is reinvesting in new branches or reinvesting in frontline talent, or in our technology, those are very important for us as we look to grow the U.S. business over time.”

TD is the final major Canadian bank to report earnings for the fiscal third quarter. Earlier in the week, Bank of Montreal, Bank of Nova Scotia and National Bank of Canada released results that beat analysts’ estimates. On Thursday, Canadian Imperial Bank of Commerce and Royal Bank of Canada also post earnings that topped analysts’ expectations.

In the quarter, TD set aside $917-million in provisions for credit losses – the funds banks set aside to cover loans that may default. That was lower than analysts anticipated, and included $865-million against loans that the bank believes may not be repaid, based on models that use economic forecasting to predict future losses.

Total revenue rose 10 per cent in the quarter to $16.89-billion, while expenses fell slightly by 1 per cent to $8.48-billion.

The bank is betting on its Canadian division and streamlining its businesses to drive its growth strategy

Canadian personal and commercial banking profit was $2.1-billion, up 7 per cent from a year earlier, as revenue was driven by deposit and loan volume growth

Profit from the bank’s U.S. arm was up 41 per cent at $1.07-billion, as loans grew in middle market commercial lending and credit cards.

Capital markets profit climbed 87 per cent to $743-million on higher revenue and lower provisions. The wealth management and insurance division generated $841-million in profit, up 20 per cent.

Royal Bank of Canada RY-T -2.79%decrease reported higher third-quarter profit that beat analysts’ estimates as the lender booked stronger performance across capital markets, commercial banking and wealth management.

RBC’s profit rose 11 per cent to $6-billion, or $4.23 per share, in the three months that ended July 31.

Adjusted to exclude certain items, including HSBC Canada transaction and integration costs, the bank said it earned $4.28 per share, topping the $4.07 per share analysts expected, according to data by S&P Capital IQ.

“Our third quarter earnings showcase the strength of our diversified business and our robust balance sheet,” RBC chief executive officer Dave McKay said in a statement. “In a faster-moving, more complex economy, we remain focused on building the bank to meet clients wherever they need us, with the capabilities, advice and insights to help them succeed.”

RBC hires ex-Ontario minister Caroline Mulroney as vice-chair

RBC is aiming to boost its profitability. During fourth-quarter earnings in December, the bank raised its return on equity (ROE) target to 17 per cent or more after exceeding the 16-per-cent goal the bank set at its investor day last year.

In the quarter, the bank posted adjusted ROE of 18.1 per cent.

RBC is the fifth major Canadian bank to report earnings for the fiscal third quarter. Earlier in the week, Bank of Montreal, Bank of Nova Scotia and National Bank of Canada released results that beat analysts’ estimates. Canadian Imperial Bank of Commerce and Toronto-Dominion Bank also post earnings on Thursday.

In the quarter, RBC set aside $1-billion in provisions for credit losses – the funds banks set aside to cover loans that may default. That was lower than analysts anticipated, and included $979-million against loans that the bank believes may not be repaid, based on models that use economic forecasting to predict future losses.

Total revenue rose 9 per cent in the quarter to $18.54-billion. Expenses increased 6 per cent to $9.79-billion, which the bank said was driven by higher performance-based compensation, salary and staff-related costs.

RBC bets on growth in Europe as businesses diversify trade

RBC is expanding its capital markets business in Europe in a bid to break out from its position as the 13th-largest capital-markets business globally and climb into the top ten list, which is dominated by U.S. banks.

Capital markets profit increased 16 per cent to $1.54-billion on higher equity and debt origination and mergers and acquisitions activity, as well as higher equity trading

Profit from personal banking was $1.92-billion, down 1 per cent from the same quarter last year, as higher net interest income was offset by an uptick in expenses driven by staff and technology costs, operating costs and provisions.

Commercial banking earned $936-million, up 12 per cent from a year earlier, driven by higher net interest income and lower provisions. Loan balances grew 4 per cent and deposits rose 9 per cent year over year.

The wealth management division generated $1.44-billion of profit, up 32 per cent on higher fee-based client assets. Profit from insurance was down 20 per cent at $197-million.

NA.TO (National Bank of Canada) is down roughly 4–5%+ intraday on August 26, 2026 (trading in the low $210s after a prior close near $222.53), despite beating Q3 earnings estimates.

Key Q3 results (ended July 31, 2026)

• Net income: $1.307 billion (+23% YoY); diluted EPS $3.25 (+26%).
• Adjusted net income: $1.362 billion; adjusted diluted EPS $3.39 (beat consensus of ~$3.16–$3.22).
• Revenue: $4.05 billion (+18% YoY; beat estimates of ~$3.87 billion).
• Strong segment growth: Capital markets net income +32% to $442 million; wealth management +21% to $296 million; personal & commercial +14% to ~$370–421 million.
• Dividend declared at $1.32 per share (unchanged).

Why the drop?

Investors are focusing on higher provisions for credit losses (PCLs) of $246 million (vs. $203 million a year earlier and slightly above some analyst expectations around $237 million). This comes amid ongoing US-Canada trade tensions/tariffs and broader geopolitical uncertainty, even as the bank described credit performance as resilient overall and noted positive operating leverage.

The stock had already pulled back in recent sessions from highs near $237 earlier in the summer. Broader TSX pressure (index opened slightly lower) from trade-war concerns also weighed on financials. Canadian bank stocks had run up strongly YTD on expectations of solid profits, so any PCL uptick or caution can trigger profit-taking after a beat.

Bottom line: Solid operational beat driven by capital markets and wealth, but elevated PCLs and macro trade risks are driving the sell-off. Watch the earnings call and peer results (RY, TD, CM reporting soon) for more color on credit outlook.

National Bank of Canada NA-T -5.80%decrease posted higher third-quarter profit that beat analysts’ expectations as the lender booked stronger performance across personal banking, capital markets and wealth management.

National Bank’s net income climbed 23 per cent to $1.31-billion, or $3.25 per share, in the three months that ended July 31.

Adjusted to exclude certain items, including costs related to the acquisition of Canadian Western Bank and transactions with Laurentian Bank of Canada, the bank said it earned $3.39 per share, beating the $3.21 per share analysts expected, according to data by S&P Capital IQ.

“We delivered strong earnings and revenue growth, as well as a high return on equity, continuing the momentum achieved since the beginning of the year,” National Bank chief executive officer Laurent Ferreira said in a statement.

“Despite trade and geopolitical uncertainty, Canada’s resilience and the retooling of its economy are creating opportunities for growth.

National Bank is the third major Canadian bank to report earnings for the fiscal third quarter. Bank of Montreal and Bank of Nova Scotia posted better-than-expected results on Tuesday. Royal Bank of Canada, Toronto-Dominion Bank and Canadian Imperial Bank of Commerce will wrap up the week with earnings releases on Thursday.

Canadian bank stocks surged this year, outperforming Canada’s stock market and U.S. lenders. Investors have been eager for third-quarter results to help determine whether bank shares’ rich valuations have peaked.

In the quarter, National Bank set aside $246-million in provisions for credit losses – the funds banks set aside to cover loans that may default. That was higher than analysts anticipated and less than the $203-million reserved in the same quarter last year.

Total revenue rose 18 per cent in the quarter to $4.05-billion while expenses increased 9 per cent to $2.09-billion, which the bank said was driven by higher variable compensation and litigation costs.

Profit from personal and commercial banking was $421-million, up 14 per cent from a year earlier, as personal lending grew 13 per cent and commercial lending rose 4 per cent.

Capital markets profit jumped 32 per cent to $442-million, driven by higher revenue across global markets and corporate and investment banking.

National Bank generates more of its profit from capital markets compared to its peers, benefitting from higher trade and deal activity. Capital markets profit jumped 32 per cent to $442-million, driven by higher revenue across global markets and corporate and investment banking.

“Overall, this was another strong quarter for [National Bank], supported by broad-based operating performance and continued strength in its market-sensitive businesses, particularly equity trading,” Raymond James analyst Stephen Boland said in a note to clients.

The lender is conducting a strategic review of its personal and commercial business, where it is underearning compared to the other big banks. Profit from personal and commercial banking was $421-million, up 14 per cent from a year earlier, as personal lending grew 13 per cent and commercial lending rose 4 per cent.

The wealth management division generated $296-million of profit, up 21 per cent on higher fee-based revenues.

Bank of Montreal BMO-T -0.20%decrease reported lower third-quarter profit but beat analysts’ estimates on stronger-than-expected performance across its businesses as the lender seeks to boost its profitability.

The lender has been streamlining its operations and rejigging its balance sheet as part of its strategy to boost its profitability, particularly in its U.S. unit.

BMO’s net income fell 25 per cent from the same quarter last year to $1.75-billion, or $2.38 per share, in the three months that ended July 31. The bank’s reported net income was weighed down by certain items, including a charge related to the announced sale of BMO’s transportation and vendor finance business.

Adjusted to exclude those items, the lender said net income rose 19 per cent to $2.86-billion in the quarter. On an adjusted basis, BMO said it earned $3.96per share. That edged out the $3.75 per share analysts expected, according to data by Bloomberg.

“In U.S. banking, we’ve now made the transition from optimization to an inflection point where we can drive an acceleration in profitable growth,” BMO chief executive officer Darryl White said during a conference call with analysts.

BMO also announced a plan to buy back 25-million of its common share. The bank maintained its quarterly dividend at $1.71 per share.

In March, BMO revealed its new strategy to revamp its U.S. business and improve its return on equity – a closely watched measure of profitability. In 2024, BMO set a goal of improving its ROE to 15 per cent by the end of 2027.

In the third quarter, BMO posted adjusted ROE of 14 per cent, up from 12 per cent in the same quarter last year.

The U.S. division – which makes up 40 per cent of BMO’s earnings – has weighed on the bank’s profitability in recent years. The lender has rejigged the structure of its U.S. unit by combining its key businesses and bank sold its transportation and vendor finance businesses.

In June, BMO said it is acquiring the capital markets unit of Australia-based EurozHartleys Group Ltd. as the lender expands its metals and mining investment banking unit. In mid-August, BMO and Royal Bank of Canada said they agreed to jointly sell Moneris to California-based Francisco Partners for about $2-billion in cash.

BMO also plans to grow its retail operations in California, adding about 150 branches over five years.

Heading into the third quarter, analysts expected the bank’s sizable U.S. business to prop up earnings as commercial loan demand in the market edged higher.

BMO had set a target to improve the unit’s ROE from eight per cent to 12 per cent by 2028. In the third quarter, ROE in its U.S. business rose to 9.8 per cent.

“We view the strength from its U.S. retail bank as a distinct positive and meant that BMO did not lean on solely wealth and capital markets to beat consensus,” Jefferies analyst John Aiken said in a note to clients. “We anticipate that these results will be warmly received by investors.”

BMO is the first major Canadian bank to report earnings for the fiscal third quarter. Bank of Nova Scotia is also releasing results Tuesday. National Bank will post earnings on Wednesday. Royal Bank of Canada, Toronto-Dominion Bank and Canadian Imperial Bank of Commerce will wrap up the week with earnings releases on Thursday.

Canadian bank stocks have surged this year, outpacing Canada’s stock market and their U.S. peers. Investors have been eagerly awaiting earnings to help determine whether bank stocks have more room to run, or if their rich valuations have peaked.

In the quarter, BMO set aside $722-million in provisions for credit losses – the funds banks set aside to cover loans that may default. That was lower than analysts anticipated and lower than the $797-million in provisions the bank reserved in the same quarter last year.

Total revenue rose 10 per cent in the quarter to $9.9-billion while expenses climbed 31 per cent to $6.68-billion, driven by higher performance-based compensation and a stronger U.S. dollar, as well as investments in talent, technology and marketing.

Profit from Canadian personal and commercial banking was $980-million, up 16 per cent from a year earlier, driven by higher net interest income.

Profit from the bank’s U.S. arm was up 13 per cent at $868-million as the stronger U.S. dollar boosted revenue, expenses and net income by two per cent.

The wealth management division generated $408-million of profit, up four per cent. And capital markets profit surged 46 per cent to $645-million on higher revenue across global markets and investment and corporate banking.