04:16 PM EDT, 05/26/2025 (MT Newswires) -- Now down just one session in the last 14, the Toronto Stock Exchange climbed to a fresh record close on Monday as a better than expected result last week from TD Bank (TD.TO, TD) is seen pointing to potential earnings upside for Canada's other big banks yet to report, starting with Bank of Nova Scotia ( BNS ) tomorrow morning.

Despite deflated commodity prices, the resources heavy market finished up 193.18 points at 26,073.13, beating a prior recent record close by less than 20 points. This comes after the TSX snapped a six week winning streak last Friday. But going in to today, the index was up near 4.2% month to date, and more than 4.6% year to date.

Among sectors, most were higher, led by the Battery Metals Index (+2.5%), Information Technology (+1.8%) and Industrials (+1%). Reflecting lower gold prices, Base Metals was slightly lower.

Of individual stocks, ATS Corporation ( ATS ) jumped 20% after announcing that it has reached a settlement agreement with its Electric Vehicle customer with respect to the previously disclosed outstanding payments owed.

With markets in both the United States and the United Kingdom shuttered for holidays, Canadian stock pickers were able to focus on domestic matters likely to in focus over the week ahead, including the expected release Tuesday of second quarter earnings from Bank of Nova Scotia ( BNS ) .

For Q2, FactSet is forecasting earnings per share of $1.55 versus $1.58 a year earlier and FactSet is forecasting revenues of $9,087.8 million.

In an earnings preview note published earlier this month National Bank forecast $1.59 versus a consensus of $1.55. It also forecast a dividend increase. Among key themes, National Bank expected the corporate segment to lead the way; said the provision build could diverge from peers; and added capital markets could provide a "relatively lower uplift."

On Scotia's corporate segment, National Bank said BNS' balance sheet is positioned for lower rates, namely via lower funding costs. It noted that since Q1 2024, the loss reported in this segment fell from a peak of $230 million during Q1 2024 to $177 million during Q1 2025. Including Q1 2025's performance, National Bank estimates a total reduction in corporate segment losses of near $230 million during fiscal 2025 (excl. KEY earnings pick-up), which will explain roughly 45-50% of total bank profit growth for the year.

On provisions, while National Bank expects most banks to build performing provisions above their recent run rates, it said BNS could diverge somewhat from this trend. According to National Bank, the bank's International Banking segment, which represents around 22% of total bank loans, may prove "a bit more resilient" in terms of credit outlook than many expect. It bases this view on how (outside Mexico) the U.S. has not targeted most LatAm countries with elevated tariffs. Separately, National Bank said, BNS may simply choose to run with a "leaner" level of performing provisions than its peers. It noted that during COVID, from Q1 2020 to Q4 2020, BNS' performing ACL ratio increased by around 60%, lower than the 85% increase for its average peer. Moreover, when it came time to start releasing provisions, BNS did so more rapidly than its peers did, National Bank added.

On capital markets, National Bank said everyone is expecting the banks to report strong trading revenue performance this quarter, a silver lining to an otherwise unexciting growth environment. National would not be surprised if BNS reports relatively weaker Capital Markets performance this quarter. For starters, National noted, its trading revenues as a percentage of total revenues of 7% are lower than the 8.5% peer average. "Moreover, we don't believe that BNS will benefit as much from elevated equity derivatives trading activity as some of its peers may have," it said.

Of commodities, Bloomberg noted oil fluctuated as the market weighed easing trade tensions against the outlook for rising OPEC+ supply.

Gold traded lower mid-afternoon Monday as U.S. President Donald Trump said he will delay a plan to impose 50% tariffs on imports from the European Union to July from June, easing safe-haven buying. Gold for August delivery was last down $25.20 to US$3,369.30 per ounce.