Here are five things you need to know this morning:
Nvidia shares slump: Imagine that you’re a company that more than doubled its quarterly revenue to US$30 billion. Your profit almost tripled to nearly $17 billion, your revenue forecast for the current quarter is for 80 per cent growth, and your gross profit margin is a mouth-watering 75 per cent. Pretty good quarter, right? Wrong, if markets are to be believed, because those are the main takeaways from Nvidia’s quarterly results released Thursday afternoon, when the stock was at one point down by eight per cent in after-hours trading. The company met or beat expectations on virtually every financial metric, but investors are seemingly focusing on production challenges with a forthcoming chip, Blackwell, that is proving more difficult to manufacture than anticipated. Bloomberg Intelligence analysts Kunjan Sobhani and Oscar Hernandez Tejada said the numbers for the company were fine, but the stock is up against “lofty and unsustainable expectations.” Such is life for a stock that has doubled so far in 2024 on the heels of a 239 per cent gain in 2023.
CIBC beats: CIBC’s quarterly results released before markets opened this morning beat expectations on most metrics, as the company set aside far less money to cover bad loans. Earnings came in at $1.93 per share, well above the $1.74 forecast. The bank booked $483 million worth of provisions for credit losses, below the $551 that analysts were expecting. Earlier this year the lender had been beset by problems in U.S. commercial real estate, but the bank says those problems are now mostly behind it after cutting its exposure to the sector.
Up in (Tokyo) Smoke: Cannabis retailer Tokyo Smoke will close 29 locations across Canada as part of a restructuring plan. The company announced Wednesday it was seeking CCAA protection while it restructures, but plans to emerge stronger than ever, with 167 locations across the country. The chain used to belong to Canopy Growth, but the business was sold in 2022 to OEG, a holding company for Daryl Katz, the owner of the Edmonton Oilers who built the Rexall pharmacy chain.
Dollar General shares slump on slashed forecast: Shares in U.S. discount retailer Dollar General will be ones to watch today as the company slashed its outlook on weak consumer discretionary demand. The company says it expects same-store sales to grow by between one and 1.6 per cent this year. That’s down from a range of between two and 2.7 per cent previously. The shares are off by as much as 16 per cent in premarket trading. That comes on top of a roughly 23 per cent decline clocked since early March.
Gold inches higher ahead of PCE data: Gold prices are trading near a record high this morning as the price of bullion inches up ahead of U.S. inflation data expected later this week. Gold futures are changing hands at US$2,520 an ounce this morning. That’s just shy of the record $2,531 hit last week. The mini surge comes ahead of data on Friday expected to show the three-month annualized core inflation rate fell to just 2.1 per cent. That would be just barely above the target and support the case for rate cuts.
