Futures tentatively higher, banks beat, Corus miss, Magna downgraded
My kids are at that weird age where they reference Christmas morning as “yesterday” but know with precise accuracy which friend is having a birthday party and on what day. Which means I am staring down the barrel of another weekend of four children’s birthday parties after attending four last week. Another weekend of eating nothing but leftover pizza, half melted ice cream cake and 1/4 of a warm juice box.
Markets are volatile, tariffs are surging, and investors are bracing for impact. In this episode of In The Money with Amber Kanwar, two seasoned market experts—Frances Horodelski and Darcy Morris of Ewing Morris—discuss macroeconomic chaos, rising interest rates, and dislocated equity markets.
This newsletter is sponsored by BMO InvestorLine. The newsletter and the podcast may give you some interesting investment ideas. To help you research and potentially act on those ideas, consider BMO InvestorLine. Their platform provides the resources you need to analyze potential investments, with the valuable tools and research you need when exploring the market. Plus, you’ll find the BMO Investment Learning Centre with educational courses and videos empowering you to make informed decisions. Learn how you can earn up to $3,500 cash back when you open a new account.
TGIF: Markets are finding their footing this morning as better than expected bank earnings offset escalating trade tensions between the US and China. JPMorgan, Morgan Stanley and Wells Fargo are all trading higher after reporting quarterly results (more on that below). The strength in banks is offsetting China’s announcement that tariffs on US goods would now go up to 125%, after the US tariff on Chinese goods rose to 145%. These will take effect on April 12. This will effectively halt trade between the two nations before one of the countries blinks. There are two reasons this isn’t weighing down markets: 1) the tariffs won’t apply to semiconductors for the time being (shares of Nvidia & Taiwan Semi are in rally mode) and 2) China said it won’t hike tariffs any further. While equity markets are finding solace in that and bank earnings, there is no reprieve in the US dollar which continues to sell-off. It is hitting the lowest level against it’s trade-weighted partners since 2022. This means the Canadian dollar is actually UP against the US dollar so far in 2025. Pressure in the greenback come amidst tremendous pressure in US bonds where 30-year government debt is poised to put in its biggest weekly sell-off since the 1980’s according to Jim Reid at Deutsche Bank.
Dimon hands: Shares of JPMorgan are up in the pre-market after posting better than expected quarterly results and boosting its full-year forecast for operating income despite also warning about “considerable turbulence” in the economy. JPMorgan’s profit rose 9% from last year as trading revenue surged on the back of tariff volatility. Stock trading revenue soared nearly 50% from last year to a record haul. However, there are signs of caution growing at the bank with money set aside for loans that could go sour increasing triple what was expected. Traders also rode to the rescue at Morgan Stanley and the stock is seeing a modest lift this morning. Trading revenue also hit a record after sale jumped 43%. This helped Morgan Stanley beat profit expectations. However, management acknowledged the uncertain climate especially when it comes to IPOs saying they are “certainly on pause” as companies assess Trump’s policies. I’ll be curious to see if the banks hold on to their gains this morning with their rallies slowly fading as I type.
Money centre: Wells Fargo’s earnings are taking on a slightly flavour this morning. Net interest income missed expectations (the difference between what they pay on deposits and make on loans) but expenses declined bringing comfort to investors who are looking for tangible evidence of cost cuts from CEO Charlie Scharf. Provisions for loans that could go bad also came in lower than estimates. While many companies have been pulling their forecasts amidst tariff uncertainty, Wells Fargo says they can still grow a key measure of profit by 1-3% this year. The CEO called for a “timely resolution” to the trade tensions as they have noticed a drop off in borrowing by businesses amidst uncertainty
Bad press: Watch shares of Corus Entertainment at the open. The beleaugered media & entertainment company reported a wider loss than feared as sales dropped 10%. At this point the owner of Global News, Teletoon and ShowCase is trading as a penny stock and has lost 85% in value over the last year.
Notable calls: Magna is being downgraded by RBC’s Tom Narayan as the analyst gives up on his buy rating with the stock trading at the lowest level since 2020. Narayan upgraded the stock in January thinking the sale of its Seating business would be a catalyst. He no longer sees that happening and in fact says in a “perma-tariff” scenario the stock could drop another 50% from here ($18/share) although his base case is $32/share. TD Cowen is upgrading Constellation Software and Topicus this morning. I don’t have the upgrade yet but will tweet out @baystreetamber if I get it.
