BNN - Wednesday, May 22, 2024 - 11:00 a.m. (ET) - Segment #1

>> We've moved through the open. Let's get you up to speed on the morning markets. And we are still hovering near record highs, but a bit of a cool off in toronto so far today in new york, the nasdaq is higher in tax going to be in focus as we move towards the closing bells today. Nvidia set to report its quarterly results will dive deeper into what to expect from the ai chip darling. And we're also watching lululemon, the company going through some management changes. Shares are under some pressure this morning will break that story down as well. Let's get shipped to speed on some other stories that we're tracking in our bnn bloomberg newsroom. Anglo american has rejected an improved takeover proposal from rival bhp value, nearly 50 billion dollars. Despite the rejection angles board says it is now willing to enter talks with bhp. And has requested a one-week extension to the formal offer deadline. Bhp now has until may 29th to make a new bid. Shares of cae are at their lowest level in nearly 2 years. Late yesterday, the maker of flight simulators for preliminary revenue for its 4th quarter that missed analysts estimates. Additionally, sea is taking nearly 700 million dollars in charges, mostly due to issues in its services to the defence industry. That would include fixed price contracts that have become less profitable. London drugs says it's unwilling and unable to pay a multi-million dollar ransom to cyber criminals who claimed to have storm data and a hack attack that recently shut down its stores for more than a week. The company says the criminals could leak storm corporate files containing important information called the situation deeply drugs is providing staff with credit monitoring and identity theft protection. In the north american markets today, we're seeing a little bit more selling pressure in toronto, but we're not are weakest level. We're off about 80 points or 4 tenths of a percent. The s&p is also negative today, but still close to the flat lined. The nasdaq is higher, but just marginally. It's been trading around record highs. The story of the crude market right now is showing some weakness, but not at their weakest level of the day. We're currently down about we did oil pares losses after some supply data showed a small than expected build the gold price, notably weaker today, down 1.3% at 24 17 on the currency front. Quick update on the canadian dollar, which has been out trending lower against the U.S. currency worth 73 15. And on the bitcoin front after some big movement to yesterday on theory, etf excitement. We have bounced around today were down earlier now about a half a percent. (Funky hip hop music) all right. We are still hanging around all-time highs in north america. The big story, the day will be nvidia's results after the bell. But outside of ai spending, general spending by american consumers is also getting attention this morning. Target coming out with results that were disappointing to investors, not stop losing nearly 7% of its value. Let's take stock of a number of these market moving tales of the day without blue murray's managing partner and chief investment officer at momentum advisors. Allen, nice to have you back with let's let's start with this story on target, which is a company tracked pretty closely. Are you concerned about consumers being a lot more cash cautious with their cash is or is or a takeaway on that with these latest quarterly results. Yeah, thanks for having me. And I'm still a fan of targeted coming, of course, is a concern about the consumer. >> There's really a tale of 2 cities in the u.s.. There's there's a number of folks who I really felt the pinch of inflation to pinch of, you know, credit cards being maxed out, you know, but then there's a bunch of folks who have refinance their mortgages at rates that are under 3% that, you know, gotten raises at their jobs rain. So you can, you know, look at target, myopic lee and say, oh, this is the the, you know, the start of something bad for the consumer. We just think it's a bad, just a bad quarter run of the mill backward. >> And guess it's, it's fair to say that for the most part

earnings from corporate america have been. Quite you know, is when you ask people what's providing momentum for the stock market, they often point to bottom line performance. What, what, what's your sense of where we are in this bull market? Sure, I think the market has been justified at the levels where we see a trading. >> I mean, if you look at this most recent earnings season, 60% of companies had a significant outperformance of their expectations with regards to earnings, we're still seeing sales growth. We're still seeing margin expansion. And so I you know, corporate america is doing really, really well as judged by this current earnings now when you think about investing in obviously you've got big store operators like target out there, but you've also got companies like amazon, have you know, obviously another component of their business and their cloud operations how do you go about picking? Retail players these days? Sure, I mean, I kind we kind of have a bifurcated view on our retailers. One. >> We've got ur your traditional brick and mortar retailers who today many of them have not participated in any of the rally, even though their earnings are actually going up. And you look at a company like targeted its pe multiple of actually down. It's under the pe multiple the market right now and then flip side, you look at amazon, amazon, the great company, you mention the multiple lines of business at there. And I think the cloud computing business is a really big one. And I think it's also a part of the ai ecosystem. For that reason, you know, amazon trading at 40 plus times pe multiples. And so it's like I can buy and amazon, which I know was a, you know, cash machine, it's growing revenue, I'm a really great company, but I have to recognize and I'm paying up for right? And so when I look amazon versus the target, I'm like, okay, what is it really worth more than 2 acts, the pe multiple right. And so I'm I'm basically saying why not be in boat because you know, you've got a target, which also has a lot of lines of business. They've got online as well as brick and mortar. They have a number of designers and really discount prices in a really mixed things up. I think targets innovative for a brick and mortar business and it's trading at a really attractive valuation with a nice almost 3% dividend. So I think there's a place for boat portfolios. And just coming back to the theme around what's happening with consumer spending. Do wonder because we're certainly seeing it here in canada, where higher interest rates are curbing the amount of discretionary spending. >> We're also seeing some encouraging trends on inflation we saw that this weekend in canada and that increased expectations that will see a rate cut by the bank of canada soon as next month. The fed is not expected to make any quick moves towards cutting interest rates. But when you look at the inflation picture right now, does that make you feel optimistic? And is that actually the kind of thing that might support a further like higher for stocks? >> Absolutely, I mean, look, we had a little scare to start the year right in the u.s.. We have 3 consecutive months where inflation went the wrong direction. But this last month, the cpi last month came out lower and that she more in line with the expectation that think it also gives us hope that it's possible that the fed could consider cutting rates when we saw those 3 surprises on inflation, upside surprises, it started to feel like maybe we didn't know rate cuts this year, like you really can't have of dead or any central bank cutting rates at a time when inflation is out of control and cycle. Really, really good about this most recent trend. The funny thing about inflation, often these numbers get revised down later. And we've had the sense that inflation's going going to continue to trend lower. And there was a little blip, but we think we're right back to where we expected things to go. Okay, before I let you go, allan, I do have to get your take on the big stock story of the day. The shares of had such a huge rally coming into this earnings report that. >> Expectations are already seen pretty high. But what would you be watching for is an investor? >> You want nvidia has been a revenue machine, a prop and machine. I was looking at a chart of nvidia sales back in 2022 for some, their expected sale this year. And you're, you're talking about, you know, multiples 5 4, 5, 6 times higher year. I expect them to outperform. You made been very I will say it, there will be a point where there's

fatigue vidya because don't typically have companies that for for 5 years can continue to grow their sales and above 20%, while also increasing margins, profit margins. But nvidia has been able to do that because the day I powerful ai is and also because they've got the market leader in gp use. So I expect nvidia to out perform again, expectations. I'm a buyer and nvidia and I think, you know, there's other companies that will start to become in vogue as its ai trade continues. Brecht inc, nvidia, some of the forefront okay will washing those results closely on great to get your perspective. Appreciate it. As always. Allen boomer managing partner and chief investment officer at momentum advisors will talk a little bit more about nvidia has rolled through the hour. We're also watching shares of lululemon. They're under pressure today. >> After the company said its chief product officer was leaving, raising concerns among some analysts that the brand is losing its edge. Will dive deeper into that story next. Morning Markets is brought to you by Amur Capital. Discover Amur Capital a simpler approach to investing. Discover amur capital. Amur capital's track record of consistent performance has delivered industry leading returns since inception. Why play games with your financial future? Choose amur capital - a Simpler Approach to Investing. If you are an entrepreneur, you know what it means to be always invested. Grabbing hold of an idea and seeing it through, meeting old challenges with fresh solutions and believing in the power of tomorrow. We know because we're the exchange for entrepreneurs and we're always investing in public markets, in business, in growth, in you. In an ever changing market, invest in the essentials because there was always a need for multi residential, warehousing and logistics, essential retail, and renewable infrastructure assets. Build your client's portfolio with an investment strategy grounded in the needs of Canadians. Access tax efficient, institutional quality hard assets backed by a track record of steady performance and consistent distributions. Contact a Skyline Advisor today. Get more from trusted us Treasuries with hbnd. Canada's first covered call bond etf providing attractive monthly income with the strength and security of U.S. government bonds. Hbnd, more income, every month, from Hamilton ETFs. Hi, I'm Jessica Katrichak. Coming up on btv. Very rare to find this type of mineralization in your first couple of holes. So usually copper gold porphyries take maybe 20, 30, 50 plus. Nobody had really systematically looked for these type of deposits in the Yukon. So we're the first movers that are really looking systematically in this terrain for copper gold projects. Watch us online or here on bnn Bloomberg. (Upbeat music) >> One of the stocks we're watching today is lululemon. It's under pressure. The company announcing that its chief product officer is leaving and that's got some analysts wondering about whether the blue brand is losing some mojo. Let's bring in bloomberg's divya balji, managing editor for breaking news in the americas. For more on this one. It's interesting, I was looking because this was such a star performer for so many years. I think 7 out of the 8 previous years, moustakas but this news today, just adding to the selloff we've seen in the stock so far this year. What's been your assessment of >> Yeah, you know, I think when you look at this, the fact that the chief product officer is leaving is one thing. But I think what's more concerning is they're not replacing her role in this sort of wrapping this, of bringing this under the global creative director. And I think that's where the concerns are for the market are for analysts at this point. You know, there's this wall of worry that has basically surrounded lululemon since its last earnings results, where I think the expectation was that they would actually do really well. And you know, when you didn't see that in the earnings and then you see that the chief product officer is leaving and it's going into a second person's role responsibilities as opposed to bringing on someone new to take perhaps the company in a different direction are, you know, bring it back up to the level that it was at before. I think that's where the concern is that this point. I mean, if you look lemons competition

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