In the Money: 5 Things to Know

Futures higher, Nvidia pops, Royal’s rare miss, CIBC beats, EQB disappoints

It’s the last dash before the school year ends and it seems the schools are jamming a year’s worth of parent participation into the final stretch. Today alone I’ve been invited a mid-day documentary screening, a “fun” run, and half-day field trip to the park (like I don’t spend enough of my life there.)

Are U.S. stocks too expensive? Not necessarily, says Stan Wong of Scotia Wealth. In this episode of In the Money with Amber Kanwar, he explains how the S&P 500’s valuation is skewed by tech, and why sectors like healthcare, industrials, and financials still offer compelling opportunities for selective investors. He also names three stocks at all-time highs he thinks can go even farther. You can listen on Apple, Spotify or here.

Wacko TACO: Futures are popping after a three-judge court (2 GOP, 1 Dem) unanimously voted US President Donald Trump overstepped and didn’t have the authority to impose most of his tariffs. This includes the 10% tariffs globally, the 25% tariffs on Canadian and Mexican goods, the 20% additional tariffs on China, and reciprocal tariffs. Markets are understandbly breathing a sigh of relief, however, the administration is already filing an appeal and there are other avenues for Trump to impose these tariffs. Tariffs for autos, steel and alumnimum remain in place because they were administered under different legal act. Trump has yet to issue a diret statement on the ruling. There is also know a term floating around Wall Street known as “TACO” – Trump Always Chicken’s Out. Meaning that when it comes to imposing tariffs, Trump ultimately always backs out. A reporter asked him about this yesterday and he responded by saying it was a “nasty question” and not to “ever say” what the reporter said. Talk about poking the bear.

Green with Nvidia: Shares of Nvidia are up 5% in the pre-market after earnings and are helping to support tech stocks this AM. The world’s largest chipmaker reported 70% increase in sales, slightly higher than anticipated, although data centre revenue was lower because of constraints on shipping to China. The company warned that new export restrictions to China will cost Nvidia about $8 billion but their forecast for total sales was still in line with expectations so that is bringing relief to investors. “Blackwell sales of $24B topped our $20B expectations and management maintained mid 70’s gross margins target on improving Blackwell profitability with no major tariff impact,” wrote Citi’s Atif Malik about their latest generation chip, “As such, with margins expanding thru Jan-Q, we now expect NVDA stock to break its range bound trend since mid-last year and likely make a fresh 52 week high.”

Off kilter: Royal Bank missed profit expectations for the first time in two years as provisions for loans that could go bad grew higher than expected and capital markets was weighed down by weak fixed income activity. While the provisioning was largely for loans that are performing, investors could be uneasy about gross impaired loans increasing by double-digits. Capital markets profit fell on lower credit trading and lower M&A activity. On the plus side, Royal boosted its dividend 4% (higher than expected) and increased its buyback to 2.5% of total shares outstanding (higher than its last buyback). John Aiken at Jefferies is glass half-full on the results. “The strength of Royal’s franchise is evident in the quarter as the bank effectively earned through a sizeable build in its credit reserves,” wrote Aiken, “We would expect to see strong support for Royal’s valuation but note that there may be some concern about the ongoing increase in gross impaired loans, which we anticipate will be addressed on the call.”

Marching to the beat: Profit at CIBC increased 17%, more than expected, as it benefitted from a lower tax rate, lower provisions for bad loans than expected and higher capital markets. Mario Mendonca at TD calls the results positive. “CIBC’s consistently good (pre-tax, pre-provision) growth, capital strength (bought back 6mm shares in Q2/25), and steady credit metrics support a higher relative P/E,” wrote Mendonca in a note to clients.

Under pressure: Shares of EQB could come under pressure after the alternative lender saw profit fall more than feared. Profit was down 18% as the company set aside a lot more money for loans that could go bad. The lender traffics in loans that are typically considered too risky for big banks. Given the slowdown in the Canadian economy, it is natural that we would see strain in this kind of bank first. Indeed net impaired loans were up 9% from the last quarter, driven by commercial loans. TD calls the results negative. “We believe improving credit trends, and earnings growth, are likely required for the valuation discount to the large Canadian banks to narrow,” wrote TD’s Graham Ryding.

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