Canadian investors should be gearing up for the next round of big bank earnings. Global volatility has taken its toll on the TSX, but there have been some positive sides on the domestic front. The housing sector has moved back into balanced territory after a rocky two-year stretch, and the Bank of Canada has projected improved investment in the back half of 2019.
Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is the second-largest bank in Canada. Shares have climbed 10% in 2019 as of close on August 16, but the stock has drooped 5.4% over the past month. TD Bank has the largest U.S. footprint of the top banks, and this has powered its earnings into the first half of 2019. The bank is set to release its third quarter earnings on August 29.
Bank of Montreal (TSX:BMO)(NYSE:BMO) stock has increased 7.8% in 2019 so far, but shares have plunged 9.4% over the past three months. The bank has put together a solid first six months of 2019, with earnings growth fueled by the performance of its U.S. Personal and Commercial Banking segment. BMO is set to release its third quarter earnings on August 27.
U.S. growth has remained strong in 2019, but a yield curve inversion on the 10-year treasury has many analysts and economist sounding alarms. A downtick for the economy south of the border will not bode well for TD Bank and BMO, even if Canada’s domestic situation manages to improve in Q3 and Q4.
Investors should be watching the next batch of earnings closely as storm clouds gather.
