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Banking on Change: TD Bank’s Fiscal Tightrope Walk

In a move resembling financial pruning, TD Bank Group has set its sights on a slimmer workforce, aiming for a trim of approximately 3,100 jobs, a haircut of about 3%. This strategic snip comes in tandem with an uptick in loan loss provisions, signaling the bank’s cautious tango with potential economic downturns.

Kelvin Tran, the wily CFO at TD Bank Group, laid out the playbook, suggesting that these layoffs are the cornerstone of the bank’s grand scheme to boost efficiency while planting seeds for future growth – a plotline not dissimilar to the narratives spun by its banking bedfellows, Scotiabank and RBC.

However, this financial makeover isn’t without its costs. TD Bank Group braces itself for a restructuring charge akin to a hefty bill of $363 million for this quarter, with similar expenses forecasted in the upcoming financial season. As the bank trims its workforce, it’s also eyeing internal job opportunities for those affected, all the while accounting for severance packages, shaving real estate holdings, and even shaving off some asset valuations in its restructuring expenses.

Yet, the fiscal dance hasn’t been kind to TD Bank’s coffers. Profits for the quarter ending October 31st have taken a nosedive, plummeting to $2.89 billion, a stark contrast to the bountiful profits of yesteryears. Loan loss provisions have swelled by a quarter more than the previous year, reaching a staggering $878 million, all stemming from concerns over the economic horizon and the looming impact of higher interest rates on mortgage renewals.

Adding to the financial drama, TD Bank’s acquisition of Cowen Inc. comes with a price tag – nearly $200 million in expenses, shaving the adjusted profits down to $1.83 per diluted share, shy of the expected $2 per share.

The financial rollercoaster has left no segment unscathed within TD Bank’s realm – Canadian personal and commercial banking feeling a pinch at $1.68 billion, U.S. retail banking seeing a steeper drop at $1.28 billion, while wealth management and insurance feeling a dip to $501 million, and wholesale banking experiencing a mere $17 million in earnings.

In the fiscal opera of TD Bank Group, the key notes play a tune of cautious financial choreography, balancing growth aspirations with the looming specter of economic headwinds.

US stocks mixed after key PCE inflation data; DJIA soars over 200 points

U.S. stock futures traded in a mixed fashion Thursday, as a largely positive month comes to a close with investors digesting the release of the latest important inflation data.

By 09:45 ET (14:45 GMT), the Dow Jones Industrial Average rose 240 points, or 0.7%, the S&P 500 traded 4 points, or 0.1%, higher, while the NASDAQ Composite dropped 25 points, or 0.2%.

The main Wall Street indices are on course post hefty gains this November. The blue-chip Dow Jones Industrial Average is on track to gain 7.2%, which would be its best month since October last year. The broad-based S&P 500 is up 8.5% in November, while the tech-heavy Nasdaq has advanced nearly 11% – both set for their best monthly performances since July 2022.

PCE inflation data due

These strong monthly gains have been largely generated by data showing inflation may be cooling in the U.S., fueling expectations that the Federal Reserve could soon begin to bring interest rates back down from over two-decade highs.

The October personal consumption expenditures price index, the Fed’s preferred measure of inflation, added to these hopes, rising at a slower rate on an annual basis in October compared to the prior month, in the latest sign that the central bank’s long-standing campaign of interest rate hikes may be working to corral price growth.

The overall figure rose by 3.0% annually, decelerating from 3.4% in September thanks in large part to a drop in energy prices. On a monthly basis, the measure stood at 0.0%, down from an uptick of 0.4% in the prior month.  Economists expected readings of 3.0% year-on-year and 0.1% month-on-month.

Fed officials in spotlight

Investors will also be listening to comments from influential Fed New York President Williams later on Thursday, ahead of Q&A appearance by Fed Chair Jerome Powell on Friday.

Earlier this week Federal Reserve Governor Christopher Waller, normally seen as a hawkish voice at the Fed, had flagged the possibility that officials “could start lowering” interest rates if inflation continues to retreat.

A pause in rate hikes has been fully priced in for the upcoming December meeting, and focus has increasingly shifted towards the potential for rate cuts next year.

Microsoft linked with OpenAI board

in the corporate sector, Salesforce (NYSE:CRM) and Snowflake (NYSE:SNOW) both posted strong gains after reporting better than expected numbers after the close Wednesday.

Ford (NYSE:F) stock fell 0.7% after the auto giant estimated the cost of a new labor deal at $8.8 billion and cut its full-year profit forecast due to lost production from a lengthy strike at its U.S. plants.

Additionally, Microsoft (NASDAQ:MSFT) will take a spot on OpenAI’s board of directors, according to returning Chief Executive Officer Sam Altman.

Oil gains ahead of OPEC+ decision

Oil prices rose Thursday amid optimism that OPEC+ will cut future production levels, overshadowing weaker-than-expected Chinese activity data as well as a sustained rise in U.S. inventories.

By 09:45 ET, the U.S. crude futures traded 1.3% higher at $78.88 a barrel, while the Brent contract climbed 1.2% to $83.88 a barrel.

The Organization of Petroleum Exporting Countries and allies, a group known as OPEC+, is meeting , and the market is still expecting news of additional production cuts even though the gathering was delayed from Sunday after disagreements between members over output targets.

Still, gains have been limited by signs of slackening growth in China, the world’s top oil importer, while U.S. crude inventories recorded an unexpected 1.6 million barrel build in the week to Nov. 24.

Additionally, gold futures fell 0.6% to $2,035.60/oz, while EUR/USD traded 0.6% lower at 1.0908.


PagerDuty (NYSE:PD) Steals the Spotlight with a 7% Surge in After-Hours Trading

PagerDuty (NYSE:PD) rocked the after-hours trading scene on Thursday following its Q3 results, leaving market expectations in the dust with an EPS of $0.20, trouncing the anticipated $0.14.

Revenue-wise, PagerDuty flexed its muscles with a sturdy 15.4% year-over-year growth, hitting $108.7 million, outshining the estimated $107.7 million. Additionally, its annual recurring revenue scaled up by 13% year-over-year, reaching an impressive $438.9 million. The gang of customers raking in annual recurring revenue exceeding $100,000 also upped their game, surging by 10% to 778, up from 710 in the same period last year.

Peering into the crystal ball for Q4/24, PagerDuty forecasts an EPS dancing between $0.14 and $0.15, a victory lap over the consensus projection of $0.13. Revenue predictions for this period frolic between $109.5 million and $111.5 million, tipping the scale slightly higher than the expected $110.4 million.

For the grand fiscal finale, PagerDuty’s crystal ball glimmers with an EPS shimmering in the range of $0.72 to $0.73, a dazzling contrast with the consensus estimate of $0.64. The revenue forecast for the full year gleams between $429.0 million and $431.0 million, outshining the consensus estimate of $428.44 million.

Smart investing is like concocting the perfect blend of coffee – it requires the right balance of beans, patience, and timing. Just as a barista crafts an exquisite brew, astute investors meticulously select their assets, stir in a dollop of research, and patiently allow their investments to percolate to perfection. Remember, the key is not just to brew, but to savor the rich aroma of success that comes with a well-calculated investment strategy.