Insights on Canadian Bank Profits, Microsoft-Activision Deal, Arm's US IPO, Nvidia's AI Boom, and Medtronic's Forecast

2023-08-22 15:39:36

(Illustration: Camille Charbonneau)

NEWS ESSENTIALS

• Canadian bank profits are expected to come under pressure due to slower growth in M&A activity and mortgage lending. The results of Canada’s big banks should highlight several challenges as the sector provisions more funds for non-performing loans in a difficult economy that has also led to a slowdown in M&A transactions and forced borrowers to reconsider new loans. mortgages.

• Microsoft and Activision to sell streaming rights to secure biggest video game deal. ‘Call of Duty’ creator Activision Blizzard will sell its streaming rights to Ubisoft Entertainment in another bid to win approval from the UK competition regulator as part of its sale to Microsoft for $69 billion.

• Chipmaker Arm reveals filing for US IPO. SoftBank Group-backed Arm Holdings’ annual revenue fell 1% due to a slowdown in smartphone sales, the chipmaker revealed in its filings for a U.S. initial public offering (IPO). United which is expected to be the biggest quote of the year.

• Nvidia shares rise as AI boom raises hopes for another strong revenue forecast. Shares of Nvidia rose ahead of the open, ahead of quarterly results from the chipmaker that has been the biggest beneficiary of the artificial intelligence boom.

• Medtronic raises its annual forecast as demand for medical operations increases. Medtronic raised its full-year profit forecast, betting on increased demand for its medical devices as volumes of surgical procedures accelerate.

TRENDS BEFORE OPENING

Futures tracking Canada’s main stock index rose, in line with Wall Street futures, as optimism surrounding a highly anticipated earnings report from Nvidia kept large-cap stocks in good stead. European equities advanced, driven by technology stocks. In Asia, the Japanese Nikkei closed higher, while Chinese stocks rebounded but still remained near nine-month lows. The price of gold rose as the US dollar retreated on global risk appetite, hurt by a rise in US government bond yields. Oil prices stabilized as investors remained pessimistic about China’s economic outlook and demand from the world’s largest crude oil importer, limiting the impact of supply cuts.

TITLES TO FOLLOW

• Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, National Bank, Royal Bank of Canada and Toronto-Dominion Bank: The results from Canada’s big banks are expected to highlight a number of headwinds, with lenders setting aside more funds for bad debts in a tough economy that has also led to a slowdown in transactions and forced borrowers to rethink their new mortgages. . The six big banks, which control the majority of the market in the country, have had to deal with macroeconomic uncertainties and build up reserves while ensuring that they have enough capital to meet new regulatory requirements in the event of uncertainty. Shares of the country’s top five banks have lost between 2% and 8% since the start of the year. The National Bank gained about 9%, while the general index of the Toronto Stock Exchange rose 2.2%.