SCOTIA WEALTH MANAGEMENT Midday Update  April 26, 2021

Featured in this report

Midday market performance update Canadian equities: U.S. equities: International equities: < Market summary < Market summary < Market summary < Companies in the news: CP < Companies in the news: AAPL, OTIS < Company in the news: IBN

Midday market performance update

Intraday returns

S&P 500 NASDAQ S&P/TSX Index Stoxx Europe 600 Nikkei 225 Comp 4,191 14,100 19,132 440 29,126 3,441 0.3% 0.6% 0.2% 0.3% 0.4% -0.9%

Canada 10-year yield U.S. 10-year yield 1.53% 1.57% Low High Low High 0.43 1.68 0.5 1.77

CAD/USD USD (trade-weighted) $0.81 103.75 Low High Low High 0.7 0.81 102.22 114.16

Gold WTI (oil) $1778.85 $61.75 Low High Low High 1659.55 2075.47 29.09 67.29

Bar charts display current values relative to 52-week ranges.

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Canadian equities

< Canadian equities, as measured by the S&P/TSX Composite Index, are S&P/TSX Composite Index Intraday (12:00 PM) Level Pts Chg % Chg trading slightly higher at midday. 19,132 29.4 0.2% 21,000 1,250 < Seven of the index’s eleven sectors are lower, with the Consumer Staples 19,000 1,000 sector seeing the largest losses. 17,000 750

15,000 500 S&P/TSX biggest movers 13,000 250 Last price %∆ 11,000 0 Apr Jul Oct Jan Apr Ltd 29.20 5.9% 5.9% Hudbay Minerals Inc 9.60 4.6% 4.6% Issues Brookfield Business Partners Lp 51.82 4.4% 4.4% < Advancing 91 Methanex Corp 47.53 4.3% 4.3% < Declining 125 < Unchanged 0 Parkland Corp/Canada 39.93 3.7% 3.7% Fortuna Silver Mines Inc 8.14 -15.6% 15.6% Index stats: < 1-yr return 32.7% Osisko Mining Inc 3.20 -4.5% 4.5% < P/E 28.4x Northland Power Inc 42.90 -2.8% 2.8% < Dividend yield 2.8% Novagold Resources Inc 11.67 -2.8% 2.8% Tfi International Inc 96.51 -2.4% 2.4%

In corporate news:

Canadian Pacific Railway Ltd. (CP)

< Last Friday, the U.S. Surface Transportation Board (STB) issued its decision to uphold the KSU waiver in its proposed merger with CP. That waiver allows any major railroad transaction involving KSU to be reviewed under the STB’s less onerous pre-2001 merger rules. The STB’s rationale was (1) a combined CP-KSU would still constitute the smallest Class 1 railroad in the U.S. based on U.S. revenue; (2) the merger appears to result in the fewest overlapping routes when compared to a merger between KSU and any other Class 1 railroad; and (3) the combination appears to be end-to-end in nature, which raises fewer competitive concerns. Separately, Canadian National Railway (CN) said it will not push for the waiver in its proposed deal with KSU. After KSU announced plans to provide CN with non-public information while engaging in negotiations, CP commented KSU’s board was simply meeting its obligations under the merger agreement and fulfilling its fiduciary duty to shareholders. CP believes KSU will come to question the true value and deal certainty of CN’s proposal upon closer inspection of it. Shares of CP are trading lower at midday.

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U.S. equities

< U.S. equities, as measured by the S&P 500 Index, are trading higher at S&P500 Index Intraday (12:00 PM) Level Pts Chg % Chg midday as investors geared up for one of the busiest weeks of the first- 4,191 11.2 0.3%

quarter earnings season. 4,500 2,500 < Seven of the index’s eleven sectors are trading higher, with the Energy 4,000 2,000 sector up ~1.2%. 3,500 1,500 3,000 1,000 2,500 500 S&P 500 biggest movers 2,000 0 Last price %∆ Apr Jul Oct Jan Apr Freeport-Mcmoran Inc 38.96 6.6% 6.6% Otis Worldwide Corp 75.66 6.1% 6.1% Issues < Advancing 295 Western Digital Corp 71.82 5.5% 5.5% < Declining 205 Skyworks Solutions Inc 199.65 4.6% 4.6% < Unchanged 4

American Express Co 150.93 4.6% 4.6% Index stats: Etsy Inc 207.73 -3.2% 3.2% < 1-yr return 47.8% < P/E 32.4x Kroger Co/The 36.29 -2.8% 2.8% < Dividend yield 1.4% Mckesson Corp 192.53 -1.8% 1.8% Co Inc 115.61 -1.8% 1.8% Pool Corp 412.12 -1.8% 1.8%

In corporate news:

Apple Inc. (AAPL)

< Apple has announced it will be spending over US$1 billion on a new campus in Raleigh, North Carolina that will employ 3,000 people to work on technology including, software engineering and machine learning. The expansion is a sign of the company’s continued growth as its current engineering headquarters are in Cupertino, , and a campus in Austin, Texas is scheduled to open in 2022. Apple will be joining several other technology companies that have moved outside the Bay Area to gain a wider pool of engineering talent. In addition to the new campus, the tech giant has expanded its hiring targets to hit a goal of 20,000 jobs in the U.S. over the next five years. The company also announced it has increased its U.S. investment target to US$430 billion by 2026 which represents a 23% increase from the US$350 billion target set out in 2018. The investment includes capex for U.S. data centres as well as spending on the creation of original television content in 20 states.

Otis Worldwide Corp. (OTIS)

< U.S. elevator and escalator maker, Otis, reported Q1/21 results that beat consensus estimates on both the top and bottom lines. Revenue of US$3.41 billion and adjusted EPS of US$0.72 beat Bloomberg consensus estimates of US$3.17 billion and US$0.63, respectively. Revenue grew 14.9% y/y while adjusted operating profit margin expanded 40 basis points to 15.6%, with margin expansion in both its New Equipment and Service segments. Otis also increased its guidance for F2021, with the company now seeing adjusted EPS of US$2.78 to US$2.84 vs. prior guidance of US$2.67 to US$2.77 and net sales of US$13.6 billion to US$13.9 billion vs. prior guidance of US$13.3 billion to US$13.6 billion. The company repurchased US$300 million worth of shares in Q1/21 and has increased its share buy-back target to US$500 million for the next quarter. OTIS shares are trading higher at midday.

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International equities

< European equities, as measured by the Stoxx Europe 600 Index, ended Stoxx Europe 600 Index (Market Closed) Level Pts Chg % Chg the day higher as investors gear up for a busy week on the data and 440 1.3 0.3% earnings front. 500 8,000 < Fourteen of the index’s twenty sectors ended the day higher, with the 450 6,000 Banks sector finishing the session up ~2%. 400 4,000 350 2,000 Stoxx Europe 600 biggest movers 300 Last price % 250 0 ∆ Apr Jul Oct Jan Apr Imi Plc 1,553.00 11.2% 11.2% Tate & Lyle Plc 802.20 6.0% 6.0% Issues < Advancing 364 Rolls-Royce Holdings Plc 107.64 5.8% 5.8% < Declining 224 Tui Ag 410.90 5.6% 5.6% < Unchanged 12 Dino Polska Sa 256.50 4.9% 4.9% Index stats: Fabege Ab 127.80 -3.9% 3.9% < 1-yr return 33.6% Koninklijke Philips Nv 48.50 -3.7% 3.7% < P/E 48.9x < Dividend yield 2.9% Covivio 73.06 -3.6% 3.6% Prysmian Spa 26.30 -3.1% 3.1% Koninklijke Kpn Nv 2.85 -2.7% 2.7%

In corporate news:

ICICI Bank Ltd. (IBN)

< ICICI Bank reported strong Q4/21 results that beat on the top line but missed on net income due to higher provisions for credit losses (PCL). Strong loan growth, in a challenged macroeconomic environment, and stable net interest margin (NIM) drove net interest income growth of 16.8% YoY to ₹104.3 billion. Non-interest income grew a modest 3.1% YoY to ₹41.4 billion as lower transaction volume growth and a ₹250 million loss in IBN’s treasury portfolio (due to rising yields) impacted segment results. Operating expenses rose a modest 3.6% YoY, resulting in positive operating leverage. IBN took an additional ₹10 billion of COVID-19 related provisions in Q4, resulting in higher-than-expected PCL for the quarter. Domestic loan growth of 13.7% YoY surprised to the upside, driven by a strong pickup in retail loans (up 19.9% YoY). As a reminder, retail loans constitute ~70% of the total domestic lending portfolio at ICICI. Mortgage lending (+21.7% YoY) and business banking loans (+40.5% YoY) were the main drivers of the growth. Total deposits were up 21.0% YoY as the bank saw strong growth in savings accounts (+24.1%). IBN’s credit metrics continued to improve, with the net non-performing assets (NPA) ratio improving 12 bps QoQ to 1.14%. Book value per share rose 18.5% to ₹213.3, and the bank’s capital position remained strong with a common equity tier 1 capital ratio of 16.8%. IBN’s board also recommended a dividend of ₹2/share (US$0.05/ADS), subject to requisite approvals. IBN shares are trading higher at midday.

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