Manulife’s Matthew Miskin told CNBC that “from here it’s earnings,” arguing that profit trajectories will be the primary market driver for returns. That lens fits Canada. With Financials carrying outsized TSX weight, incremental shifts in bank and insurer guidance can swing index outcomes, which elevates earnings quality over narrative. Predictable, streamlined regulation lets price discovery do the heavy lifting, while policy zigzags obscure the signal investors need from transparent reporting and disciplined capital allocation. In a country where Financials set the tempo, the rest of the index tends to hum along, sometimes slightly off-key after February conference calls. Earnings season, not themes, should frame how Canada’s Financials transmit macro forces into the TSX’s headline performance.
With the S&P/TSX weighted to Financials at roughly one-third of the benchmark, earnings disclosures can shape broad pricing, particularly with Manulife next and the Big Six to follow. One-third. Reuters notes Manulife reports Q3 2025 on Nov 12 to 13, with Big Six banks following later in the quarter. Index concentration compresses diversification, so earnings tone from one insurer can spill over into bank valuation frameworks. For a Canadian benchmark so financials heavy, cross-company read-throughs shape perceptions of credit risk, capital deployment, and dividend sustainability. Investors parse guidance against macro conditions, while sector correlation fosters cohesion that can tighten spreads between winners and laggards. Manulife’s commentary matters beyond insurance, framing a quarter dominated by balance sheets and provisioning.
Miskin’s earnings-led view fits a TSX anchored by banks and insurers. For banks, PCL direction and NIM stability will decide earnings quality, not headlines. Deposit pricing will dictate funding stability and competitive dynamics across franchises. Fee-based revenue matters in wealth and asset management, tempering cyclicality as AUM shifts. Manulife’s mix underscores this: Asia growth swings results, and private credit via its Comvest stake tilts toward capital-light fees. Discipline on risk matters. The recent earnings miss tied to US weakness sharpens attention on geographic earnings balance, funding, and product mix across Canadian financials. Manulife’s Comvest stake signals a private markets push, building stickier clients, with underwriting and liquidity controls central.
Risks remain that could blunt any earnings-led rerating across TSX Financials. Policy rate surprises would reprice assets and liabilities abruptly, while mortgage renewals and consumer stress could accelerate credit deterioration evidenced in Canadian banks’ mixed Q4 earnings. Currency translation can also distort fundamentals, as U.S. earnings convert back to CAD and mask operating momentum at the group level. Insurers face execution hurdles and potential reserve or assumption updates that can reset capital deployment, earnings quality, and sentiment at awkward times in the cycle. Macro can still swamp micro. That risk rises if funding costs and credit loss trajectories surprise, particularly as mortgage renewals strain households and weaken collateral performance. Communication discipline helps, but it cannot offset adverse shifts in the backdrop. This could break the thesis.
The message is straightforward: earnings growth will be the key driver of market returns. For TSX watchers, that aligns with a focus on earnings quality across banks and lifecos, namely PCL cadence, capital and liquidity, and WAM flows. If banks and lifecos deliver clean PCL cadence, resilient capital and liquidity, and steady WAM flows, the TSX conversation tilts toward durability rather than one-off surprises. Profitability breadth, not just beats, must underpin the next leg, a standard that suits a market that prefers solid footing to flashy headlines. Breadth will matter more. It is, perhaps, very Canadian that provisioning cadence can set the mood for months, though no one complains when the
