Just as BMO (Bank of Montreal) had regained the pre-crisis 2007 highs (see chart above), an earnings report that looked good on the surface has hit the stock.

We continue to hold the stock for now. However, the BMO results may indicate a sea change in the direction of Canadian bank stocks as a whole. Even though the economy has been aided by low interest rates, things are getting punch-drunk on the liquidity and the absence of new economic growth catalysts (especially with China fading) is making it more difficult for financial services companies to find new solid areas of opportunity.

Bank of Montreal (BMO) is held in the McIver-Jasayko Model Portfolios as of December 3 2013. Comments about BMO are not intended as advice and do not constitute a recommendation to buy, sell, or hold.

The opinions expressed in this report are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Richardson GMP Limited or its affiliates. Assumptions, opinions and estimates constitute the author’s judgment as of the date of this material and are subject to change without notice. We do not warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Past performance is not indicative of future results. 

Richardson GMP Limited, Member Canadian Investor Protection Fund.

Richardson is a trade-mark of James Richardson & Sons, Limited. GMP is a registered trade-mark of GMP Securities L.P. Both used under license by Richardson GMP Limited.