Royal Bank of Canada is setting the bar for its peers with a beat and a boost. The country's largest lender's adjusted profit rose five per cent in the latest quarter. Core Canadian banking was the primary profit driver, thanks in part to higher fees and growth in its mortgage book. The company is also reaping the reward of its City National takeover as profit jumped 25 per cent in its wealth management unit. The only stumble in the quarter was capital markets, where profit slipped four per cent. Here's what it boils down to: with one-time items stripped out, RBC narrowly edged past profit expectations with its adjusted $1.89 EPS. And it's rewarding shareholders by raising its quarterly dividend four cents to 91 cents per share.

TRUMP WARNS U.S. WILL 'PROBABLY' TERMINATE NAFTA

“Personally, I don’t think we can make a deal because we have been so badly taken advantage of – they have such great deals, both of the countries, but in particular Mexico – that I don’t think we can make a deal,” U.S. President Donald Trump said at his rally in Phoenix last night. “So I think we’ll probably terminate NAFTA at some point. … I personally don’t think you can make a deal without a termination, but we’re going to see what happens, okay?”

Who knows if Robert Lighthizer and the rest of the U.S. NAFTA negotiating team knew that was coming last night. Just classic Art of the Deal negotiating tactics? What kind of contingency plan should Ottawa have in place in case Trump pulls the plug?

Worth pointing out Trump won a big round of applause from the crowd when he predicted an eventual NAFTA termination. The cheering masses should be directed here to see just how much their state has riding on trade with Canada and Mexico. We might also try to hunt down reaction from some of the big-name Canadian companies like Couche-Tard, Hudbay Minerals and Stantec that have ops in Phoenix.

And if you missed it yesterday on The Close, check out Greg Bonnell's interview with Mexico’s ambassador to Canada on BNN.ca. 

CONSERVATIVES TO 'RAMP UP' WORK ON MORNEAU’S TAX PLAN

Conservative Party Deputy Leader Lisa Raitt told The National Post Finance Minister Bill Morneau’s plan to clamp down on tax loopholes “is a terrible decision”, and so she’s arranging a series of meetings to gather perspective on the potential economic consequences. We’ll chase Raitt and other stakeholders ahead of the end of the government’s consultation period on October 2.

SEARS WARNED BY CONSULTANT IT WAS 'ROTTEN'

BNN has obtained a report prepared for Sears Canada last year by global retail consultant Eysink Smeets as the retailer drifted toward its trip into creditor protection. The writing was on the wall. Eysink said there was "really big" urgency for a fix at a company where "almost all parts are rotten." There's liberal use of expletives sprinkled throughout the report -- presumably to drive the point home. But the basic message was this: the department store model is broken, its stores had become littered with so much stuff that pensioners were the only ones with time to sift through the product, nobody was willing to take responsibility for missteps, and Sears just needed to get back to basics rather than hope for an "exotic concept" to save its bacon.

ALBERTA FISCAL UPDATE

When Alberta Finance Minister Joe Ceci delivered his budget address on March 16, he pointed to "green shoots" in the economy, including an energy industry that he said was "on more solid footing." Since then, we've seen the foreign exodus continue (notably with Conoco’s $17.7-billion exit strategy), while the price of oil slipped as low as US$42.53 per barrel in early April. This afternoon, Ceci updates Alberta's fiscal outlook. Worth keeping in mind that at the time of the budget Alberta was banking on oil at US$55 this fiscal year.

OTHER NOTABLE STORIES:

-Gluskin Sheff Chief Economist David Rosenberg warned late yesterday on BNN the Canadian dollar could be vulnerable to a pullback with net long speculative positions at the highest since 2013. He also said the recent rebound in the economy is likely to be temporary. See the full interview at BNN.ca. 

-Cominar REIT will be a stock to watch today after announcing it plans to exit non-core markets, with the bulk of the proceeds going toward bolstering its balance sheet.  

NOTABLE RELEASES/EVENTS

-Notable earnings: RBC (8:00 a.m. ET conference call) , Lowe's, HP

-Notable data: U.S. new home sales

-9:30 a.m. ET: Whole Foods holds special shareholders' meeting for vote on proposed takeover by Amazon

-10:30 a.m. ET: Air Canada CEO Calin Rovinescu, plus government dignitaries, hold news conference in Montreal re. new air service

-1:30 p.m. ET: Environment and Climate Change Minister Catherine McKenna announcement and media avail in Calgary

-3:30 p.m. ET: Justin Trudeau holds media avail in Montreal

-3:30 p.m. ET: Alberta fiscal update news conference

-4:30 p.m. ET: NEB announces scope for Energy East and Eastern Mainline assessments

An earlier version of today’s Daily Chase incorrectly stated RBC’s capital markets profit slipped six per cent in the fiscal third quarter. BNN regrets the error.