As gold tops $2,000, a company’s chair invests over $1.3-million in this stock yielding 2.8%

Featured below are companies that have experienced recent insider trading activity in the public market through their direct and indirect ownerships, including accounts they have control or direction over.

The list features insider transaction activity; it does not convey total ownership information as an insider may hold numerous accounts.

Keep in mind, when looking at transaction activities by insiders, purchasing activity may reflect perceived value in a security. Selling activity may or may not be related to a stock’s valuation; perhaps an insider needs to raise money for personal reasons. An insider’s total holdings should be considered because a sale may, in context, be insignificant if this person has a large remaining position in the company. I tend to put great weight on insider transaction activity when I see multiple insiders trading a company’s shares or units.

Listed below are two stocks that have had buying activity in the public market reported by insiders.

Agnico Eagle Mines Ltd. (AEM-T)

On Feb. 28, executive chair and former chief executive officer Sean Boyd invested over $1.3-million in shares of Agnico Eagle. He acquired 20,000 shares at an average cost per share of approximately $66.43, after which this specific account held 188,269 shares.

On that same day, president, chief executive officer and director Ammar Al-Joundi bought 3,200 shares at a price per share of $64.229, lifting this particular account’s position to 153,703 shares. The cost of this purchase exceeded $205,000.

Last month, the company announced a 14 per cent dividend increase, raising its quarterly dividend to 40 US cents per share or US$1.60 per share yearly, equating to a current annualized yield of 2.8 per cent.

On Monday morning, the price of gold topped US$2,000 an ounce.

Cascades Inc. (CAS-T)

On Feb. 25, co-founder and executive chairman of the board of directors Alain Lemaire bought 40,000 shares at an average cost per share of approximately $12.24 for an account in which he has indirect ownership (Gestion Alain Lemaire inc.), taking this specific account’s holdings up to 4,900,090 shares. The cost of this investment totaled over $489,000.

Mr. Lemaire is the company’s former president and chief executive officer.

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Listed below are three stocks that have had recent selling activity in the public market reported by insiders.

Eldorado Gold Corp. (ELD-T +2.18%increase)

On March 3, president and chief executive officer George Burns exercised his options, receiving 329,075 shares at an average cost per share of $5.90, and sold 329,075 shares at an average price per share of approximately $14.18, with 555,838 shares remaining in this particular account. Net proceeds exceeded $2.7-million, excluding any associated transaction charges.

Rate hikes will hit Canada’s key growth engine hardest. 

The day after the Bank of Canada raised its policy interest rate off its pandemic-emergency floor, the central bank’s Governor, Tiff Macklem, faced down worried questions about the strains rising borrowing costs were about to place on the backs of Canadians.

“The economy can handle higher interest rates,” he told the House of Commons finance committee Thursday.

“The economy can handle higher interest rates,” he told reporters in a news conference.

“The economy can handle it,” he said in a speech to the CFA Society of Toronto.

The fact that he repeated his response almost word for word throughout the day showed not only that he had prepared for the question, but that he wanted to be adamant in his answer. He sent an unequivocal message that he believes the Canadian economy is not only healthy enough to weather a series of rate increases over the next year, but will be healthier for it.

Mr. Macklem’s confidence is underpinned by the bank’s faith that the economy can pivot away from the bloated housing sector. It’s no given. The bank has tied its hopes to such a growth rotation before, and has been disappointed.

Last week’s gross domestic product report from Statistics Canada did, indeed, show economic strength: growth in the fourth quarter was at an annualized pace of 6.7 per cent, and the economy grew by 4.6 per cent in 2021 as a whole, lifting it above its prepandemic levels. The GDP data, combined with months of impressive employment numbers and widespread reports of labour shortages, are compelling evidence that the economy has reached full capacity. These are textbook conditions for a central bank to raise interest rates in order to keep a full-speed economy from racing ahead of itself.

But those GDP numbers also showed that investment in residential structures accounted for a quarter of the year’s growth – from a sector that makes up only about 8 per cent of the economy. The housing sector is also among the most sensitive to interest rates. The implication is that Bank of Canada rate hikes will apply the brakes to the economy’s growth engine particularly hard this time around.

Mr. Macklem indicated that the bank is counting on business investment and exports – both of which posted strong fourth quarters – to pick up the slack as rising rates inevitably weigh on housing momentum.

“There’s good reason to believe we’re going to see both stronger investment and stronger exports. That will broaden the recovery. That really is key to sustaining solid growth,” he said after the CFA speech.

That’s remarkably similar to the script embraced by Mr. Macklem’s predecessor, Stephen Poloz, as he attempted to guide the economy to a full recovery and return interest rates to normal levels during the lost decade after the 2008-2009 global financial crisis. Almost from the day Mr. Poloz started as governor in 2013, he talked optimistically about the economy pivoting from consumer-led growth fuelled by ultra-low-rate monetary policy and a soaring housing market, to a more “self-sustaining” phase driven by growing export demand that would spur businesses to spend on new equipment and expanded facilities. He often referred to this as bringing the economy “home.”

After a while, “home” was supplanted by a new catchphrase: “serial disappointment.” Mr. Poloz was forced to keep interest rates low for years as the economy lurched along, that elusive next phase of growth always just over the next hill.

Now, 2022 is not 2013. There are a lot of differences between the lingering after-effects of the global financial crisis that weighed on the world economy long after that recession had ended and the sudden shutdown and rapid (if incomplete) restart of the economy in the COVID-19 pandemic. Critically, strong policy actions taken both in Canada and abroad have been more effective in safeguarding the economy from more severe outcomes, and in lifting it back to its feet.

In fact, the current situation is almost the opposite of what we faced by 2013: we’re struggling with supply shortages as demand has raced ahead of current global capacity. The business case for investment is everywhere.

Still, the export growth and business investment Mr. Macklem is counting on have failed to materialize in the past when new sources of uncertainty have emerged, and it doesn’t take a major leap to see it happening again. The war in Ukraine poses a massive risk that could sideline demand and shake business confidence. The pandemic is still with us.

And if those other sources of growth stall, rising rates will pose an oversized burden on an economy that has relied heavily on debt-fuelled housing and consumer demand to keep it afloat.

“The fact of the matter is that we have a tremendously leveraged economy on our hands. It’s much more interest-rate sensitive than it has ever been in the past,” economist David Rosenberg, head of Toronto-based Rosenberg Research, told BNN Bloomberg last week. “That’s going to thwart the extent to which central banks can raise interest rates without crushing the economy.”

Hong Kong and Japan drop 3% as Asia-Pacific stocks slip

Shares in Asia-Pacific declined in Monday trade as oil prices surged, with the ongoing Russia-Ukraine war continuing to weigh on investor sentiment globally.

The Hang Seng index in Hong Kong led losses regionally, dropping more than 4% at one point before seeing a slight recovery. The city’s benchmark index last traded 3.34% lower as shares of HSBC plummeted 6.02%.

Mainland China’s Shanghai composite shed 1.42% and the Shenzhen component slipped 2.578%.

In Japan, the Nikkei 225 also saw heavy losses as it tumbled 3.15%, with shares of robot maker Fanuc plunging 7.28%, while the Topix index shed 2.88%.

South Korea’s Kospi fell 2.28%. Over in Australia, the S&P/ASX 200 dipped 0.93%.

MSCI’s broadest index of Asia-Pacific shares outside Japan traded 2.07% lower.

Oil prices continue surging

Oil prices soared in the morning of Asia trading hours on Monday, with international benchmark Brent crude futures up 8.63% to $128.30 per barrel. U.S. crude futures also surged 7.33% to $124.16 per barrel.

Brent had earlier skyrocketed to as high as $139.13 per barrel — its highest since July 2008.

The sharp rise in oil prices, which already recently spiked, came after U.S. Secretary of State Antony Blinken said Sunday Washington and its allies are considering banning Russian oil and natural gas imports.

“We now see the likelihood of Russian exports being directly impacted by sanctions as very high,” said Daniel Hynes, senior commodity strategy at ANZ. “The move also suggests the market was not factoring in the potential for direct sanctions on Russia oil.”

Meanwhile, Commonwealth Bank of Australia’s Vivek Dhar said it’s plausible for Brent to rise as high as $150 per barrel in the current environment.

“Before the crisis, oil markets were particularly vulnerable to an oil supply shock with global oil stockpiles at 7-year lows and OPEC+ spare capacity under question given disappointing OPEC+ oil supply growth over the last few months,” said Dhar, who is mining and energy commodities analyst at CBA.

Shares of oil firms in Asia-Pacific also saw big gains on Monday, with Beach Energy in Australia rising 4.95% while Woodside Petroleum soared 9.17% while the S&P/ASX 200′s energy subindex climbed 5.06%.

Over in Japan, Inpex rose 5.01% and Japan Petroleum Exploration advanced 5.5%. Hong Kong-listed shares of PetroChina gained 2.57%.

China’s exports rose 16.3% year-on-year in dollar-denominated terms in the January-February period, official data released Monday showed. That was above expectations by analysts in a Reuters poll for a 15% rise.

China had announced Saturday a gross domestic product growth target of about 5.5% for 2022.

Currencies

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 99.077 — having risen recently from levels below 97.6.

The Japanese yen traded at 114.91 per dollar, after strengthening sharply late last week from levels above 115.20 against the greenback. The Australian dollar was at $0.7407, following a general upward trek last week from below $0.72.

U.S. crude oil briefly tops $130 a barrel

U.S. crude oil surged more than 7% in Sunday evening trade as the market continued to react to supply disruptions stemming from Russia’s ongoing invasion of Ukraine and the possibility of a ban on Russian oil and natural gas.

West Texas Intermediate crude futures, the U.S. oil benchmark, traded 7.34% higher to $124.17 per barrel. At one point the price rose to $130.50 Sunday evening, its highest since July 2008, before retreating.

The international benchmark, Brent crude, spiked 8.54% higher to $128.20. Brent hit a high of $139.13 at one point overnight, also its highest since July 2008.

“Oil is rising on the prospect for a full embargo of Russian oil and products,” said John Kilduff of Again Capital. “Already high gasoline prices are going to keep going up in a jarring fashion. Prices in some states will be pushing $5 pretty quickly.”

The U.S. and its allies are considering banning Russian oil and natural gas imports, Secretary of State Antony Blinken said in an interview with CNN’s “State of the Union” on Sunday.

“We are now talking to our European partners and allies to look in a coordinated way at the prospect of banning the import of Russian oil while making sure that there is still an appropriate supply of oil on world markets,” he said. “That’s a very active discussion as we speak.”

Meanwhile, Speaker Nancy Pelosi said in a letter to Democratic colleagues on Sunday evening that the U.S. House of Representatives is “exploring strong legislation” to ban the import of Russian oil — a move which would “further isolate Russia from the global economy.”

“Our bill would ban the import of Russian oil and energy products into the United States, repeal normal trade relations with Russia and Belarus, and take the first step to deny Russia access to the World Trade Organization.  We would also empower the Executive branch to raise tariffs on Russian imports,” she wrote.

While Western sanctions against Russia have so far allowed the country’s energy trade to continue, most buyers are avoiding Russian products already. Sixty-six percent of Russian oil is struggling to find buyers, according to JPMorgan analysis.

The U.S. average for a gallon of gas topped $4 on Sunday, according to AAA, in a rapid move due to the conflict. The underlying cost of oil accounts for more than 50% of the cost of gas that consumers put in their cars.

Ukraine war hits farmers: Global food prices were already at around a 10-year high before the Russian invasion of Ukraine

Brazil is searching for new fertilizer suppliers as the war in Ukraine threatens to cut off shipments to one of the world’s breadbaskets, with potential ripple effects on already high global food inflation.

The Latin American country is the largest producer of coffee, soybeans and sugar, and the most dependent of the world’s agricultural superpowers on imported fertilizer. Brazil imports some 85% of its fertilizers and about a fifth of those imports come from Russia. The Russian trade ministry has called for a broad suspension of fertilizer exports, state news agency TASS reported Friday.

“Brazil depends on fertilizers…it’s a sacred question for us,” President Jair Bolsonaro told reporters earlier this week, defending his decision to maintain cordial relations with Moscow as Russia attacks Ukraine. Mr. Bolsanaro was one of the last world leaders to visit Russian President Vladimir Putin before the invasion of Ukraine began on Feb. 24, meeting with him at the Kremlin on Feb. 16.

If Brazil’s farmers have to pay significantly more for fertilizer or are unable to produce as many crops, the cost of its agricultural products is likely to climb, driving up world food prices.

Brazil is also an important supplier of corn and beef. Higher grain prices increase animal-feed costs, which are passed on to consumers, who have to pay more for meat and other animal products.

Before the Ukraine conflict, farmers across the world were struggling to buy enough fertilizers, some of which more than doubled in price last year. Higher natural-gas prices hampered production of the ammonia needed for nitrogen fertilizers, while power outages at Chinese fertilizer plants and Hurricane Ida in the U.S. curtailed global production.

War in Ukraine and sanctions on Russia have made the situation worse, industry analysts said, raising the prospect of a prolonged global supply crunch that would further stoke inflation and hunger among the world’s poor.

Russia, which accounts for about two-thirds of the world’s ammonium nitrate production according to commodity analysts at S&P Global, has halted exports until April to guarantee supplies for farmers at home. Higher natural-gas prices as a result of the conflict have also pushed up prices for the product, which is used to increase the yields of crops such as corn and wheat.

Soybeans are harvested on a farm near Brasilia, Brazil, on Friday, March 4, 2022.  (Andressa Anholete/Bloomberg via Getty Images / Getty Images)

“No one knows what’s going to happen,” said Ricardo Arioli, a soybean farmer from Brazil’s center-west state of Mato Grosso. “War means a total lack of certainty. The cost of production becomes a big unknown,” he said.

Brazilian Agriculture Minister Tereza Cristina Dias said she was planning to travel to Canada this month to secure more supplies. Canada is the world’s largest producer of potash fertilizers, followed by Russia and Belarus.

Ms. Dias said Brazil has enough stocks to last farmers until October. Not everyone agrees.

The Brazilian National Fertilizer Association, which represents fertilizer companies in this country, has warned that local fertilizer stocks will only last for another three months. Sanctions and travel restrictions have hampered shipments to Brazil, the group said.

Fertilizer stored in a warehouse at a farm near Brasilia, Brazil, on Friday, March 4, 2022.  (Andressa Anholete/Bloomberg via Getty Images / Getty Images)

“We are now experiencing firsthand what it means to depend on imported fertilizer,” said Jeferson Souza, a fertilizer analyst at Agrinvest Commodities, a brokerage in Brazil. Sluggish productivity has kept Brazil from developing a bigger domestic fertilizer industry, he said.

Brazil’s government said it would launch a national fertilizer plan to stimulate investment in potash and phosphorus mines. It would take years for farmers to reap any benefits, analysts said.

Global food prices were already at around a 10-year high before the Russian invasion of Ukraine, as the coronavirus pandemic hampered shipments and heavy rains in some growing regions curtailed production. That is translating to higher rates of hunger among the world’s poorest families, who are also dealing with the economic impact of the pandemic, national governments and aid groups have warned.

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A Case IH combine harvests soybeans on a farm near Brasilia, Brazil, on Friday, March 4, 2022.  | Getty Images

The problem is particularly acute in Latin American countries such as Brazil, where inflation is pushing up daily costs including rent and electricity, leaving families with even less cash for food. By the end of 2020, one in three people in Latin America and the Caribbean—226 million people—were unable to afford a nutritious diet or were skipping meals to feed their children, said Julio Berdegué, regional representative for Latin America and the Caribbean at the Food and Agriculture Organization of the United Nations.

That was before food inflation gripped the region. “It would be a miracle if the situation doesn’t get worse,” Mr. Berdegué said.

Higher fertilizer costs also prevent Brazil’s farmers from increasing production of grains to make up for shortfalls from Ukraine and Russia, a major growing area.

“Brazil has the technology to produce,” said Antonio Galvan, a farmer and head of Brazil’s Soybean Producers Association. “Now with these embargoes, the price of fertilizers could go up so much that it’s not even worth planting.”

Russia’s Ukraine conflict, big inflation report will keep the stock market volatile in coming week

Russia’s invasion of Ukraine will continue to be a major focus, as wary investors watch fresh inflation data and the rising price of oil in the week ahead.

Stocks in the past week sold off in volatile trading, as oil rose more than 20% and a whole host of other commodities rose on supply worries. Investors sought safety in bonds, driving prices higher and the 10-year Treasury yield to 1.72% Friday. The dollar rallied, pushing the dollar index up 2% on the week.

“We just don’t know what can happen over the weekend. It looks like the Russians are amping themselves up and they’re getting more aggressive,” said Jim Caron, Morgan Stanley Investment Management head of macro strategies for global fixed income.

“If nothing happens over the weekend, or if there’s some peace talks coming, then the 10-year note yield could go up 10 to 15 basis points. It could have that swing,” said Caron. Yields move opposite price. (1 basis point equals 0.01%.)

The Federal Reserve will also be top of mind, as investors focus on its pending interest rate hike on March 16. But Fed officials will not be making public addresses in the quiet period leading up to their meeting.

The economic calendar is relatively light in the coming week, with the exception of Thursday’s report of February’s consumer price index.

According to Dow Jones, economists expect headline inflation to rise to 7.8% year-over-year, from 7.5% in January, the highest since 1982. Headline inflation includes food and energy prices.

“The risk is to the upside. It will be a shocker if we get an 8% handle,” said Marc Chandler, chief market strategist at Bannockburn Global Forex.

Investors will also focus on how the market itself is trading. The S&P 500 fell 1.3% to 4,328 in the past week, while the Nasdaq lost 2.8% to 13,313.

“The major averages are all in a downtrend here. They seem to rally and then run out of steam,” said Paul Hickey, co-founder of Bespoke. “Until you get some kind of break of that, you want to be a little cautious. It’s definitely concerning, all this stuff.”

Hickey said that the market is behaving similarly as it did in other conflicts.

“In the short run, there’s a lot of uncertainty,” said Hickey “I think the playbook is similar. You tend to see a lot of sloshing around – big swings up and down — and then eventually things start to stabilize a few months later…The question is where does this one go?”

Boiling oil

Following a week of gains, oil jumped sharply again Friday, with West Texas Intermediate rising above $115 for the first time since 2008. WTI rose 7.4% Friday and was up 26% for the week, to settle at $115.68. Russia’s battle for control of Europe’s largest nuclear power plant early Friday spooked investors.

The Russian invasion of Ukraine has stirred up more fear of inflation, and economists are already raising their inflation forecasts, due to rising oil prices. The whole commodities complex has shifted higher, since Russia is such a key producer of wheat, palladium, aluminum and other commodities.

Rising oil prices can be a worry since they can generate one of the biggest hits to inflation and do so quickly.

Russia is unique in that it is a very large commodity exporter and has the ability to impact many markets. It is one of the world’s largest exporters of crude and natural gas, with its primary customer Europe. It is the largest exporter of both palladium and wheat.

The jump in oil has already been hitting U.S. consumers at the pump. Gasoline prices were $3.83 per gallon of unleaded Friday, up 11 cents in just a day and 26 cents in a week, according to AAA.

“The national average could get to $4 a gallon next week,” said John Kilduff, partner with Again Capital.

In the oil market, Kilduff said there was brisk buying Friday. “There’s still room to grind higher, as we continue to price in the loss of Russian crude oil,” he said.

The U.S. and its allies did not sanction Russian energy, but the sanctions did inhibit buyers, banks and shippers who fear running afoul of sanctions on the Russian financial system.

“It’s pretty clear nobody wanted to be short going into the weekend,” said Kilduff. “There’s still room to grind higher as we continue to price in the loss of Russian crude oil.”

Oil traders are also watching to see if Iran is able to strike a deal that would allow it sell its oil on the market, in exchange for an end to its nuclear programs. It could then bring 1 million barrels back on to the market, but analysts say there will still be a shortfall.

China will raise defense spending by 7.1% in 2022, faster than last year ($230.16 billion)

BEIJING — China’s defense spending this year is set to grow at its fastest pace since 2019, according to the Ministry of Finance plan released Saturday.

Defense spending will rise by 7.1% to 1.45 trillion yuan ($230.16 billion) this year, faster than the 6.8% increase in 2021 and 6.6% climb in 2020, according to official data.

China’s defense spending rose by 7.5% in 2019 to 1.19 trillion yuan.

Total central government expenditures for the general public budget are expected to rise by 14.3% to 13.40 trillion yuan this year, the finance ministry said.

“We will move faster to modernize the military’s logistics and asset management systems, and build a modern weaponry and equipment management system,” Chinese Premier Li Keqiang said in a separate annual government work report released Saturday, according to an official English-language version.

Li’s other statements about military development and foreign policy remained in line with those of 2021. He said that “China will continue to pursue an independent foreign policy of peace.”

Li did not mention other major countries in the government work report.

The total U.S. defense budget for 2022 comes in just under $770 billion, up 2% from last year.

China sets GDP target of ‘around 5.5%’ for 2022

BEIJING — China announced a gross domestic product growth target of “around 5.5%” for 2022, as an annual parliamentary meeting gets underway.

Premier Li Keqiang revealed the figure in a speech on Saturday morning local time. It is not unusual for the official GDP target to be approximate.

Other economic targets Li announced, for employment and inflation, were the same as last year’s.

However, he said the deficit-to-GDP ratio would be 2.8% this year, lower than last year’s 3.2%. He expects fiscal revenue to grow in 2022, and that the government can use profits from state-owned enterprises, allowing a spending increase of more than 2 trillion yuan ($316.5 billion) in 2022 over 2021.

Total central government expenditures for the general public budget are expected to rise by 14.3% to 13.40 trillion yuan this year, China’s Ministry of Finance said in a separate report released Saturday about the national budget for the year. That includes a plan for a 7.1% increase in defense spending.

China will target an unemployment rate in cities of “no more than 5.5%” and a consumer price index of “around 3%,” according to Li. He added the country plans to add “over 11 million new urban jobs” — also the same figure as last year.

“A comprehensive analysis of evolving dynamics at home and abroad indicates that this year our country will encounter many more risks and challenges, and we must keep pushing to overcome them,” he said, according to an official English-language version of his remarks. “The harder things get, the more confident we must be, and the more solid steps we must take to deliver outcomes.”

Li’s closing remarks included a statement on how China would “set the stage” for the Chinese Communist Party’s 20th National Congress. That meeting, expected in the fall, is set to give President Xi Jinping an unprecedented third term.

Stimulus plans

Economists widely expected the GDP target to be set at about 5% or slightly higher. They want details about stimulus plans for an economy that has slowed significantly.

A target of “around 5.5%” GDP growth comes on the high end of those expectations. In a separate report Saturday, the national economic planning agency said “achieving this goal will require arduous efforts.”

Li said Saturday that to reach this year’s economic targets, China needs to pursue “prudent and effective macro policies,” with “flexible and appropriate” monetary policy. Li said the yuan’s exchange rate “will be kept generally stable at an adaptive, balanced level.”

The yuan has strengthened to near four-year highs against the U.S. dollar in the last few weeks.

China’s economic growth softened in the fourth quarter to a 4% year-on-year increase, despite full-year growth of 8.1%.WATCH NOWVIDEO02:05Russia-Ukraine conflict puts China in a ‘really bad place,’ says economist

The country was the only major economy to grow in 2020, while the rest of the world struggled with the coronavirus pandemic.

But sluggish consumer spending has yet to fully recover from the pandemic, and fallout from Beijing’s regulatory crackdown on tech and real estate have dragged on growth. China’s stringent “zero-Covid” policy, with abrupt lockdowns and travel restrictions, has also weighed on the economy.

In the last two weeks, the heads of government ministries have spoken of plans for more economic support, especially for small businesses and consumers.

On consumption, Premier Li said Saturday the government will “boost personal incomes through multiple channels, improve the income distribution system, and increase people’s spending power.”

Other than support for purchases of new energy vehicles and more energy efficient home appliances in rural areas, Li did not name specific measures.

On social welfare, Li said government subsidies for basic medical insurance for rural and unemployed urban residents will be increased by an average of 30 yuan per person ($4.76), and subsidies for basic public health services will increase by an average of 5 yuan per person.

Foreign investment, Taiwan

Li said generally that China will work to fully implement changes to a foreign investment blacklist. The latest version of the list allows foreign businesses greater ownership in industries such as passenger car manufacturing.

He said China will encourage more foreign investment in higher-end manufacturing, research and development, modern services, and within the central western and northeastern regions of China.

On Taiwan, Li said that Beijing “will advance the peaceful peaceful growth of relations across the Taiwan Strait and the reunification of China. We firmly oppose any separatist activities seeking ‘Taiwan independence’ and firmly oppose foreign interference.”

As is often the case in official statements, Li did not mention other countries by name.

The “Two Sessions” is an annual meeting of the Chinese People’s Political Consultative Conference, an advisory body, and the National People’s Congress legislature in Beijing.

While largely symbolic, the meetings draw delegates from around the country to approve and announce national economic policies for the year ahead. Those include targets for GDP growth, employment, inflation, deficit and government spending.

This year, the Two Sessions will last about a week, with proceedings set to wrap up on March 11.

TD Bank Group wrapped the earnings stretch Thursday when it reported a first-quarter profit of $3.7 billion, up from nearly $3.3 billion a year earlier

Canada’s Big Six banks all topped expectations for the first quarter as solid economic growth and volatile markets helped push up bottom lines.

TD Bank Group wrapped the earnings stretch Thursday when it reported a first-quarter profit of $3.7 billion, up from nearly $3.3 billion a year earlier that was boosted by the strength of its Canadian and U.S. retail banking operations.

“Canadian retail had a strong quarter, increased customer activity supported record revenue performance in the personal and commercial bank,” said Kelvin Tran, chief financial officer at TD in an interview.

The higher earnings follow on stronger-than-expected results from RBC, Scotiabank, CIBC, BMO, and National Bank that were broadly boosted in part by high trading revenue as well as personal and commercial loan growth.

The earnings beats come as Canada’s economy grew by 6.7 per cent in the fourth quarter and Statistics Canada estimates January growth at 0.2 per cent, despite Omicron related shutdowns.

Banks have also been boosted by a hot housing market fuelled by low borrowing rates, though that started to change this week with the Bank of Canada raising its benchmark rate by 25 basis points for the first time since 2018.

But banks are also poised to reap higher net interest margins if the central bank continues to raise rates. CIBC says a 100 basis point increase across all rates would boost net interest income by about $450 million, while BMO says it would see about a $540 million increase.

The timeline of those rate increases are less certain as the Bank of Canada said when raising rates that Russia’s invasion of Ukraine was a “major new source of uncertainty.”

The central bank warned that oil and other commodity prices have spiked, which will add to inflation, while negative impacts on confidence and supply chains could weigh on global growth.

On Thursday, bank governor Tiff Macklem said in a speech that the bank has to act to lower inflation, which is running at a three-decade high and is also hotter than the bank expected six months ago.

The uncertainty around the pace of rate increases, inflation, supply chains and geopolitical tension has helped push up trading revenue at Canadian banks. TD benefited somewhat less from this trend than other banks, but the bank rolled out a new mobile trading app in the quarter and did well in other areas, said Tran.

“Our results are broader than just trading. The retail bank did really well. We have strong volume growth on both the loans and deposit side in Canada and customer activities are strong.”

On an adjusted basis, TD says it earned $2.08 per diluted share, up from an adjusted profit of $1.83 per diluted share a year ago. Analysts on average had expected an adjusted profit of $2.04 per share, according to financial markets data firm Refinitiv.

Barclays analyst John Aiken said that while the bank beat expectations, results were arguably not as strong as peers, and not just in capital markets.

“The margin compression in domestic retail and weaker loan growth than some of its peers will likely garner some negative attention,” he said in a note.

Scotiabank analyst Meny Grauman said the bank performed well in expense management, but was weaker in most metrics for its personal and commercial banking in Canada.

“While it is hard to call TD’s performance a bad result, the magnitude of the beat was certainly the most modest we have seen across the Big 6 this earnings season.”

On Monday TD announced it was expanding in the southeastern U.S. with a deal to buy First Horizon Corp. for US$13.4 billion.

The bank is paying for the deal with its significant cash holdings that are well above regulated requirements.

Grauman noted that TD has been trading at a premium thanks to its excess capital, and the bank’s greater exposure to central bank rate expectations, but that both drivers have now slackened.

“In the wake of the First Horizon acquisition and curve flattening both of those drivers are becoming headwinds to some extent.”

This report by The Canadian Press was first published March 3, 2022.