• Payroll employment posts second M/M drop

• A mostly positive Q2 from the banks

• How the Big Beautiful Bill could impact pension capital

• Did a White House reporter kill the TACO trade?

• A lot more insider selling activity

• Earnings movers: DOO up big, EQB and PNG sell off

Payroll employment posts second M/M drop

Payroll employment data for March was released yesterday, showing a 54K M/M drop after shedding 40K in February. The sequential fall was broad-based, with only a handful of sectors gaining on February’s print.

With nearly three unemployed people for every job available (near pandemic levels), the labour market outlook remains challenging.

Mostly positive Q2 for the banks, caution rising

The big banks wrapped up their earnings season yesterday, which came in mostly on par with analyst expectations.

For the majority of the group, global markets activity remained a key driver of Y/Y growth (equities in particular), though most segments performed well.

The credit outlook remains a cautious one, with all banks increasing provisioning activity to buffer against economic uncertainty.

The reserve build was largely against performing loans, though, indicating classic Canadian banking conservatism more than a structural issue.

While results were solid across the group, the short-lived nature of strong trading performance and a continued rise in impaired loans has us cautious.

Where could overtaxed pension capital go?

On Monday, we said we’d look into the Big Beautiful Bill’s impact on capital flows, given the potential for dividends from U.S. holdings to be taxed at up to 50%.

We’ve spent the past few days digging through 13F filings from Canada’s largest pension funds to make a guess at how much money could move north and where it could be allocated, in the event of sustained dividend tax hikes. Check it out!

If the above link doesn’t work, try this: https://www.bullpen.finance/content/135

By now, markets have become pretty well-accustomed to Trump threatening something huge and later walking it back to something more reasonable. So much so, the dynamic has an acronym… TACO - Trump Always Chickens Out.

On Wednesday a White House reporter decided to poke the bear, by letting Trump in on the joke and asking what he thought of it. He responded exactly as you’d expect:

Asking the most volatile U.S. president in recent history what he thinks about the finance industry collectively chirping him… what could go wrong? First rule of the TACO trade, you don’t talk about the TACO trade.

Thankfully, Trump is in a bigger battle right now - after appealing the U.S. Court of International Trade decision to block some of his emergency tariffs.

While it seems plausible that he could find a way around this ruling if the appeal isn’t upheld, the infighting could continue long enough that he forgets the catchy acronym.

Flagging the TerraVest (TVK) sale, as it comes on the back of a ~$320M bought deal financing. TVK is a fan favourite, up ~10x in the last five years with a track record of deploying capital effectively. Let’s see how they use the new paper.

• OPEC must squeeze US shale much more to win oil price war

• VersaBank announces intention to realign corporate structure to US

• RBC to require employees to work in the office four days a week

BRP (DOO) rose 13% on a Q1 beat, with adj. EPS of $0.47 coming in ahead of consensus at $0.36, and continued progress on right-sizing its dealership network inventory (down 21% Y/Y). The company estimates a $60-70M tariff impact this fiscal year, which was likely priced in and gives investors some much needed clarity.

EQB Inc. (EQB) fell 7% on its Q2 results, with EPS of $2.31 missing big versus consensus of $2.68 on the back of elevated loan losses and higher expenses.

Kraken Robotics (PNG) also fell 7% on its quarter, with revenue of $16M down 23% Y/Y, with an even bigger 42% drop in product revenue as its Canadian Navy system integration project nears its finish. The company highlighted timing-related lumpiness quarter-to-quarter, but maintained its full-year guide for $120-135M of revenue and $26-34M of adj. EBITDA.

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