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Several of Canada's largest banks report earnings over the rest of the month, with Toronto-Dominion Bank (TD) opening the cycle Thursday, followed by others including Bank of Montreal (BMO), Bank of Nova Scotia (BNS), Canadian Imperial Bank of Commerce (CM), and Royal Bank of Canada (RY).

In a note last Friday, Bank of America Securities analysts maintained "buy" ratings on the stocks of Bank of Montreal and Royal Bank of Canada (RBC), with "neutral" ratings on TD, Bank of Nova Scotia, and Canadian Imperial Bank of Commerce.

The analysts wrote that macroeconomic conditions are leading many investors to remain cautious toward bank stocks, given an uncertain inflationary and interest rate environment in the U.S. and elsewhere.

As with the earnings of a number of the biggest U.S. banks last month, the Federal Reserve's decision to postpone rate cuts until inflation reaches the central bank's preferred level could cause some uncertainty for this month's Canadian earnings reports, as well as projections for the rest of 2024.

"The market’s expectations for interest rate cuts have evolved significantly," Canadian Imperial Bank of Commerce (CIBC) analysts wrote in a note last Thursday. "A higher-for-longer scenario has become a higher-probability scenario, particularly in the U.S."

"On April 30, the market was pricing in 0-1 rate cuts in the U.S. by the September meeting, while expectations in Canada still hovered around 1-2 rate cuts. We have revised our NIM (net interest margin) assumptions, particularly for F2025, to assume fewer rate cuts," the CIBC analysts said.

Another hurdle the CIBC and Bank of America analysts wrote about is the rise in credit card balances, which has been accompanied by higher delinquency rates. Recent data revealed that a growing number of people are carrying more credit card debt than any time since 2011.

In Canada, CIBC analysts noted that recent research shows renters hold 60% of all outstanding non-mortgage debt, but represent "close to 85% of serious delinquencies," suggesting that those who own a home are more likely to be in a relatively secure financial position.

The Bank of America analysts noted multiple acquisitions that some of the Canadian banks have made recently will be a focus for investors, as the institutions could provide updates along with their earnings reports on the integration process along with other timing details for when systems will be merged.

The analysts noted that RBC is likely to provide new information on its acquisition of HSBC Bank Canada, which was completed March 28, in terms of an overall timeline for when the combination of the banks' systems will be complete, and when HSBC will start adding to RBC's financial performance.

At least one bank in the group, TD, also has another layer of regulatory concern that investors will be watching for more detail.

Earlier this month, reported that a U.S. Justice Department probe into whether the anti-money laundering (AML) practices of multiple banks, including TD, may have failed to prevent laundering in multiple instances, including with money related to illegal drug sales in the U.S.

TD previously disclosed that it was a subject of probes into its anti-money laundering policies, but not that any of the probes involved drug money. Investors likely will be seeking more information on how long the investigations will take to resolve, as well as what impact they could have on TD's business.

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London-listed Keywords Studios surged 60% in intraday trading Monday after the video game maker said it was "in advanced discussions" to be acquired by private equity firm EQT for 25.50 British pounds per share.

The potential takeover would value the company at GBP2.03 billion ($2.58 billion), according to , and would mark the latest loss to the London Stock Exchange of a key company. British chip designer Arm Holdings (ARM) left the London bourse and began trading on the Nasdaq last September, and its American depositary receipts (ADRs) have nearly doubled since.

This follows "four previous unsolicited proposals from EQT in recent months, which the Board rejected, and represents a significant increase from the initial proposal," Keywords Studios said.

The possible offer translates to a premium of 73% over Keywords' closing share price of GBP14.70 on Friday.

Keywords said its board would recommend the EQT bid if a firm offer is announced. Under British law, EQT has until June 15 to either make a firm offer or walk away, the statement said.

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Metals prices are soaring, with gold and copper hitting records and silver breaching multi-year highs; U.S. stock futures are rising after the Dow closed over the 40,000 threshold Friday; Palo Alto Networks (PANW) is expected to post gains in fiscal third-quarter results after the closing bell; Li Auto (LI) shares are slumping in premarket trading after the Chinese electric vehicle manufacturer posted a 36% drop in first-quarter profit; and Johnson Controls (JCI) is on the rise on a report that Elliott Investment Management has taken a stake in the company. Here’s what investors need to know today.

Metals prices are soaring as investors pile into safe-haven commodities following the death of Iranian President Ebrahim Raisi in a helicopter crash. Gold is surging beyond its April record, while silver also is gaining after it climbed to an 11-year high above the closely watched psychological $30 mark. Copper, meanwhile, continues to rise after hitting record highs last week. Also boosting the metals is the softness in the U.S. dollar, which makes these dollar-denominated metals cheaper for foreign buyers, as well as their utilities in industrial applications. Silver is highly conductive, for instance, which gives it many industrial uses, while gold’s durability also has utility in areas like dentistry. Copper, meanwhile, has gained from rising demand for artificial intelligence (AI), which feeds on power from increasingly large data centers that commonly use copper wiring.

U.S. stock futures are rising in premarket trading, with the Dow—which notched its first close in history above 40,000 points on Friday—set for more gains as investors increasingly expect the Federal Reserve to cut interest rates. Recent data has shown that inflation is cooling, which may prompt sooner-rather-than later policy easing by the Fed, which has said it wants to see price pressures decrease before lowering interest rates. Remarks due by Atlanta Fed President Raphael Bostic and Fed Vice Chair Michael S. Barr today could offer insights into how officials are looking at inflation.

Palo Alto Networks (PANW) is expected to post year-over-year gains in fiscal third-quarter results after the closing bell today, although investors’ sights will be on its sales after the cybersecurity company earlier lowered its outlook amid consumer “spending fatigue.”  The cybersecurity company could also provide updates on its "platformization" strategy in its efforts to become a "one-stop shop" for cybersecurity. Analysts project Palo Alto Networks' third-quarter revenue to rise to $1.97 billion from $1.72 billion in the same period in 2023, and diluted earnings per share (EPS) of 40 cents, up from 31 cents last year.

American depositary receipts (ADRs) of Li Auto (LI) are down more than 4% in premarket trading after the Chinese EV manufacturer posted a 36% year-over-year drop in first-quarter net income as it lowered car prices. The company said its profit attributed to shareholders was 592.6 million yuan ($82.0 million), versus CNY929.7 million in the same period last year, and well below analysts’ forecasts of CNY1.63 billion. Revenue was up, however, by 36% at CNY25.63 billion, including a 32% jump in vehicle sales to CNY24.3 billion. “The increase in revenue from vehicle sales over the first quarter of 2023 was mainly attributable to the increase in vehicle deliveries, partially offset by the lower average selling price due to different product mix and pricing strategy changes between two quarters,” Li Auto said.

Shares in Johnson Controls International (JCI) rose 5% in premarket trading after  reported late Sunday that activist investor Elliott Investment Management has taken a significant stake in the industrial conglomerate. The New York-based hedge fund has built a position in the company valued at over $1 billion, though the intentions for taking the stake couldn’t be immediately learned, the report said. Elliott’s investment in Johnson Controls comes several months after reports surfaced that the industrial conglomerate was considering divesting several non-core businesses.

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Silver (SILVER) remains in focus on Monday after the metal climbed to an 11-year high above the closely watched psychological $30 mark, benefiting from its safe-haven characteristics, softness in the U.S. dollar, and utility as an industrial application.

With no end in sight to the conflict in the Middle East and Russia’s war on Ukraine, investors continue to bid up silver prices, along with the value of other precious metals, as they seek assets to hedge against ongoing geopolitical uncertainty. This narrative will likely carry into this week on news that a helicopter carrying Iran’s President Ebrahim Raisi crashed in mountains on Sunday.

A softening Greenback over the past week has also provided tailwinds for silver prices. Weaker-than-expected April readings released this month on employment and inflation have put downward pressure on the U.S. dollar as investors bring forward their expectations of interest rate cuts, making dollar-dominated commodities, such as silver and gold (GOLD), cheaper for foreign buyers.

Longer, term, the metal stands to benefit from growing industrial demand. Last month, the Silver Institute’s World Silver Survey report projected a 9% jump in the commodity's industrial demand this year, driven by renewable energy applications. It forecasts silver used in solar panel manufacturing increasing 20% in 2024 to 232 million ounces, while expecting jewelry demand to improve by around 4%.

Zooming out to the weekly chart to gain a longer-term perspective, the silver price broke out from an ascending triangle in early April, retested the initial breakout level and has continued its move higher over the past two weeks. Moreover, the 50-day moving average (MA) sits above the 200-day MA, indicating that the metal remains in a strong uptrend. 

Given silver now trades above pandemic-era peaks around $30, investors should look for a potential move to the $35 area, a region where the price may run into overhead resistance from a key multi-year horizontal line stretching back to three prominent swing highs in 2011 and 2012. A convincing breakout through this level could see the price make another attempt at its record high set at $47.71 in April 2011.

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Meme stocks made headlines this week as heavy trading activity in GameStop (GME), AMC Entertainment (AMC), and other stocks drew speculation of a meme stock resurgence. 

GameStop and AMC Entertainment shares soared to start the week on Monday and Tuesday, sparked by the online return of Keith Gill, a key figure in the meme stock craze of 2020 and 2021. However, both stocks reversed course Wednesday and continued to fall through Friday's close.

Despite dropping sharply Wednesday through Friday, both stocks posted gains for the week, with GameStop shares finishing 27% higher for the week at $22.21, and AMC registering a gain of 51% at $4.40 as of Friday's close.

The term gained popularity in 2020, when an online group of retail traders flocked to buy GameStop shares after a YouTube video went viral from a user named Keith Gill, also known by his online persona "Roaring Kitty." The video detailed a path for GameStop's stock price to rise to $50 from $5. Gill and activist investor Ryan Cohen, who eventually became GameStop's CEO, led a collection of retail traders largely from the r/WallStreetBets subreddit group to buy and hold GameStop shares.

Because of perceived weaknesses in the business models of GameStop and AMC as movies and video games had shifted to the digital space, a number of large hedge funds took up large short positions on the stocks, effectively betting that the companies would fail.

Gill, Cohen, and the group of retail traders believed that the higher they drove the share prices, the more financial pain they could cause to the multibillion-dollar hedge funds. By driving shares higher, they could squeeze the funds out of their short positions, forcing them to buy shares to cover their losses, driving the stocks even higher.

A number of other stocks have also achieved meme stock status, with retail investors rallying to support struggling businesses like Tupperware Brands (TUP), BlackBerry (BB), and Bed Bath & Beyond as well.

At the peak of the meme stock frenzy in 2021, GameStop shares reached highs over $80, and AMC above $300. However, GameStop, AMC, and many other meme stocks weren't able to hold those levels for long. Gill stepped back from public life in June 2021, the hype around GameStop and AMC eventually faded, and despite the recent surge in interest, GameStop and AMC haven't reclaimed their 2021 highs.

Sunday evening, Gill made his first post to social media in nearly three years, and has followed up with dozens of posts since. Many of the posts used quotes from a variety of TV and movie scenes alluding to his return after an extended absence.

In the first morning of trading after Gill's return, GameStop shares soared, with activity levels leading to a number of trading halts. AMC shares followed, with some other meme stocks such as Tupperware and BlackBerry rising to a lesser extent.

However, Vanda Securities analysts noted that inflows into GameStop and AMC on Monday and Tuesday were "a fraction" of the levels seen at the peak of meme stock mania, and expressed skepticism of whether the latest meme stock hype could lead to a repeat of 2021. They suggested hedge funds and other institutional investors are also likely better prepared now than they were in 2021.

Ihor Dusaniwsky of S3 Partners wrote in a Tuesday note that while "a significant amount" of short sellers could be squeezed out of their GameStop and AMC positions, another wave will likely follow them to bet on the stocks falling like they did following the 2021 spikes.

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