With the Q1 earnings season drawing to a close, it is clear that corporate profits rose by a healthy 5-7% during the past quarter. Looking forward, US employment figures and other economic data released during the past two weeks are providing an early indication that GDP growth for this quarter is running at >3%. With this as the backdrop, global equities moved modestly higher once again - and so they should. 

In the Canadian equity market, however, the unique mini-drama of Home Capital Group continues to play-out. On a micro level, a notorious and incendiary short-selling group that profited meaningfully from the decline in HCG's equity is now attacking the holdings of Tutle Creek Asset Management, a highly successful investment fund based in Montreal. This fund was the largest holder of Home Capital; they are now seeing their other, arguably high quality holdings drop significantly in price - for example, Badger Daylighting...a well-run company with the unfortunate stock ticker of BAD. The moves are creating interesting opportunities as a result.

On a macro level, fear of failing to anticipate the next financial bubble continues to put moderate pressure on Canadian bank stocks. This was highlighted again on Friday, when Moody’s downgraded credit ratings for all of the Big Six banks.