SCOTIA WEALTH MANAGEMENT Midday Update  May 6, 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: MFC < Companies in the news: BDX, COST < Company in the news: UOVEY

Midday market performance update

Intraday returns

S&P 500 NASDAQ S&P/TSX Index Stoxx Europe 600 Nikkei 225 Shanghai Comp 4,182 13,580 19,261 441 29,331 3,441 0.4% 0.0% -0.3% -0.1% 1.8% -0.2%

Canada 10-year yield U.S. 10-year yield 1.52% 1.57% Low High Low High 0.43 1.68 0.5 1.77

CAD/USD USD (trade-weighted) $0.82 103.14 Low High Low High 0.7 0.82 102.22 114.16

Gold WTI (oil) $1814.22 $65.23 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 lower at midday. 19,261 -49.5 -0.3% 21,000 1,250 < Seven of the index’s eleven sectors are lower, with the Health Care sector 19,000 1,000 seeing the largest losses. 17,000 750

15,000 500

S&P/TSX biggest movers 13,000 250 Last price %∆ 11,000 0 May Aug Nov Feb May Ssr Mining Inc 21.48 9.0% 9.0% First Majestic Silver Corp 19.70 7.4% 7.4% New Gold Inc 2.23 6.7% 6.7% Issues < Advancing 104 Spin Master Corp 45.32 6.6% 6.6% < Declining 107 Pan American Silver Corp 43.19 6.2% 6.2% < Unchanged 4 Stantec Inc 53.09 -7.6% 7.6% Index stats: Trillium Therapeutics Inc 11.52 -5.9% 5.9% < 1-yr return 29.9% < P/E 26.2x Lightspeed Pos Inc 74.99 -5.3% 5.3% < Dividend yield 2.8% Canopy Growth Corp 29.88 -4.5% 4.5% Ballard Power Systems Inc 18.36 -4.4% 4.4%

In corporate news:

Manulife Financial Corp. (MFC)

< Manulife reported a very strong set of Q1/21 results with core earnings of C$1.63 billion and core EPS of C$0.82 beating consensus estimates of C$1.51 billion and C$0.77, respectively. The beat in core earnings was driven by growth in in-force business, new business gains, core investment gains and continued strength in the Global Wealth and Asset Management (GWAM) segment. Manulife’s efficiency ratio improved to 48.5%, demonstrating its strong expense discipline and progress toward achieving its medium-term target of 50% or less in expense efficiency. Total annual premium equivalent (APE) sales were up 11.5% YoY, primarily driven by strong growth in the Hong Kong bank channel and double-digit growth in the Asia Other bancassurance and agency channel. APE sales declined 5.6%, primarily due to tough year-over-year comparables. The Global Wealth and Asset Management segment saw net inflows of $1.4 billion, driven by higher retail inflows. Strong inflows and favourable market conditions helped assets under management (AUM) grow 12.5% YoY to $765 billion. Higher AUM and expense discipline resulted in GWAM earnings growth of 26.4%. Core EBITDA margin also improved 340 bps YoY to 30.7% in this segment. MFC’s book value per share (BVPS) also declined QoQ, down 6.4% to $23.40. MFC shares 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 awaited Friday’s highly anticipated jobs report to 4,182 14.7 0.4%

gauge the pace of the labor-market recovery. 4,500 2,500 < Nine of the index’s eleven sectors are trading higher, with the Consumer 4,000 2,000 Staples 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 %∆ May Aug Nov Feb May Kellogg Co 67.72 7.4% 7.4% Iron Mountain Inc 41.00 5.9% 5.9% Issues < Advancing 292 Lumen Technologies Inc 13.45 5.3% 5.3% < Declining 210 Molson Coors Beverage Co 59.60 4.7% 4.7% < Unchanged 2

Huntington Ingalls Industries Inc 221.51 4.1% 4.1% Index stats: Etsy Inc 158.86 -13.9% 13.9% < 1-yr return 46.8% < P/E 30.1x Cardinal Health Inc 54.52 -10.4% 10.4% < Dividend yield 1.1% Penn National Gaming Inc 82.63 -9.6% 9.6% Albemarle Corp 151.39 -9.4% 9.4% Cognizant Technology Solutions Corp 75.07 -7.8% 7.8%

In corporate news:

Becton Dickinson and Co. (BDX)

< BDX reported Q2/21 results with revenue of US$4.91 billion and adjusted EPS of US$3.19 beating consensus estimates of US$4.90 billion and US$3.04, respectively. Revenues grew by 15.4% on a reported basis and 12.2% in constant currency (cc). Excluding the impact of COVID testing revenues grew 1.7% cc. Life Sciences grew 38% cc, which was below consensus as the unit was adversely impacted by a lower flu season. R&D increased by 20% YoY due to increased spending in COVID diagnostics and other growth initiatives. BDX plan to hold an investor day at the end of the year to outline its 2025 strategy. BDX confirmed its full year guidance. BDX announced that it would spin off its Diabetes Care business ($1.1bn revenues, 6% group) in 1H22. Management expects the transaction to strengthen BDX’s mid single digit revenue growth and double-digit total return growth profile. The spinoff is not expected to impact BDX’s dividend. BDX is trading lower at midday.

Costco Wholesale Corp. (COST)

< Costco reported April same-store sales growth (SSSG) of 32.5%, which was well ahead of Street estimates of 28.9%. SSSG growth benefited from one additional shopping day versus last year due to the timing of Easter, which impacted comparable sales by ~2.5%. In addition, COST faced easier comps as strict lockdown measures in April 2020 supressed sales. Excluding changes in gasoline prices and foreign exchange rates, April SSSG was 24.2%. The U.S. region had the strongest SSSG at 24.8%, followed by Canada at 23.8% and International at 20.3%. Global foot traffic for April shot up to 34.0%, and was up 33.3% in the U.S., rebounding from last year’s lockdown-depressed levels. Average transaction was down 1.1% as consumers limited their pantry stocking. COST is 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 slightly lower as investors monitored a slew of corporate earnings 441 -0.5 -0.1% and comments from the Bank of England. 500 8,000 < Eleven of the index’s twenty sectors ended the day lower, with the Travel 450 6,000 & Leisure sector down ~1.7%. 400 4,000 350 2,000 Stoxx Europe 600 biggest movers 300 Last price % 250 0 ∆ May Aug Nov Feb May Ses Sa 6.65 9.3% 9.3% Iss A/S 137.30 6.8% 6.8% Issues < Advancing 318 Glanbia Plc 13.26 5.9% 5.9% < Declining 276 Elis Sa 15.33 5.6% 5.6% < Unchanged 6 Societe Generale Sa 24.93 5.5% 5.5% Index stats: Nel Asa 17.50 -10.0% 10.0% < 1-yr return 31.9% Shop Apotheke Europe Nv 152.90 -8.8% 8.8% < P/E 40.9x < Dividend yield 2.9% Scatec Asa 199.65 -8.0% 8.0% Trainline Plc 419.40 -6.9% 6.9% Gn Store Nord As 505.80 -6.9% 6.9%

In corporate news:

United Overseas Bank Ltd. (UOVEY)

< United Overseas Bank reported solid Q1/21 results with improving trends across the board. Net profit after tax came in at S$1.01 billion vs consensus expectation of S$914.1 million, driven by lower credit costs and higher fee-based revenue. The bank’s cost-to-income ratio (CIR) also declined substantially QoQ, to 43.8% (down from 46.7%), on the back of solid discretionary expense management. UOB said that it continues to make strategic investment in technology, which will help it drive its future growth. Net interest margin (NIM) remained steady QoQ at 1.57% (slightly better than consensus at 1.56%) and loans grew 4% QoQ to S$293 billion. This helped net interest income (NII) grow 1% QoQ (down 4% YoY) to S$1.53 billion. Fee based income came in strong (this has been a focus area for the bank), up 22% QoQ, driven by strength in wealth management, investment banking and trading fees. Underlying credit conditions continued to improve with non-performing loans ratio down 10bps QoQ to 1.5%. Consequently, provisions for credit losses (PCLs) declined 49% QoQ, to S$201 million. UOB’s capital position remained strong and its common equity tier 1 (CET1) ratio declined slightly QoQ to 14.3%. UOVEY shares are trading higher at midday.

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International private banking services are provided in Canada by The Bank of Nova Scotia. Estate and trust services are provided by The Bank of Nova Scotia Trust Company. Portfolio management is provided by 1832 Asset Management L.P. and 1832 Asset Management U.S. Inc. Insurance services are provided by Scotia Wealth Management Insurance Services Inc. Wealth advisory and brokerage services are provided by ScotiaMcLeod, a division of Scotia Capital Inc. International investment advisory services are provided in Canada by Scotia Capital Inc. Financial planning services are provided by The Bank of Nova Scotia, 1832 Asset Management L.P., and ScotiaMcLeod, a division of Scotia Capital Inc. Scotia Capital Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. Scotia Wealth Insurance Services Inc. is the insurance subsidiary of Scotia Capital Inc., a member of the Scotiabank group of companies. When discussing life insurance products, ScotiaMcLeod advisors are acting as Life Insurance Agents (Financial Security Advisors in ) representing Scotia Wealth Insurance Services Inc. Scotia Wealth Management consists of a range of financial services provided, in The Bahamas, by Scotiabank (Bahamas) Limited and The Bank of Nova Scotia Trust Company (Bahamas) Limited. International private banking services are provided in The Bahamas by Scotiabank (Bahamas) Limited, an entity registered with The Central Bank of The Bahamas. International investment advisory services are provided in The Bahamas by Scotiabank (Bahamas) Limited, an entity registered with The Securities Commission of The Bahamas. International wealth structuring solutions are provided in The Bahamas by The Bank of Nova Scotia Trust Company (Bahamas) Limited, an entity registered with The Central Bank of The Bahamas. Scotia Wealth Management consists of international investment advisory services provided, in Barbados, by The Bank of Nova Scotia, Barbados Branch, an entity licensed by the Barbados Financial Services Commission. Scotia Wealth Management consists of a range of financial services provided, in the Cayman Islands, by Scotiabank & Trust (Cayman) Ltd. International private banking services, international investment advisory services and international wealth structuring solutions are provided in the Cayman Islands by Scotiabank & Trust (Cayman) Ltd., an entity licensed by the Cayman Islands Monetary Authority. Scotia Wealth Management consists of international private banking services provided, in , by Scotiabank Peru S.A.A, an entity supervised by the Peru Superintendence of Banking and Insurance.

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