Author: Consultant

Traders are pricing in a US$355-billion swing in Nvidia’s (NVDA-Q +2.47%increase) market value after the company reports first-quarter earnings on Wednesday, according to options positions that indicate the market ⁠is still ​bullish on the AI giant while keen to protect gains.

The chipmaker’s options imply a move of about 6.5 per cent in either direction on Thursday, a day after the company reports results.

That would translate into a swing of roughly US$350-billion in market capitalization – more than the individual market value of about ​90 per cent of S&P 500 constituents.

While that is higher than ‌the 5.6 per cent move implied ahead of the company’s February earnings, it is still well below Nvidia’s historical average price swing of 7.6 per cent, according to analytics firm Option Research & Technology Services (ORATS).

That suggests the market is becoming more sanguine about the company’s earnings, despite long-simmering fears that massive AI capital expenditure more broadly may prove unsustainable.

“I think investors have ‌become complacent ​about AI/capex,” said Matt Amberson, founder of ‌ORATS.

Some individual trades underscore a strong conviction that Nvidia could once again deliver an upside surprise.

​One notable Monday trade was the purchase of a 25,000 ⁠call spread expiring June 1 for US$1.78, betting that Nvidia could rise roughly 16 per cent to US$260 ⁠per share in the next two weeks, with a potential payoff more than seven times the initial cost, according to ​Chris Murphy, co-head of derivatives strategy at Susquehanna, a market maker.

Murphy said the chipmaker’s options skew has shifted toward calls, indicating growing demand for upside exposure.

“The market is no longer simply paying up for downside protection. It is increasingly paying for upside participation,” Murphy said, adding that bets on rising prices of tech stocks went from a five-year low ⁠in March to a five-year high by mid-May.

While traders are bullish on Nvidia, increasing hedging and profit-taking across semiconductor stocks and related exchange-traded funds suggest that even the most bullish investors are looking to protect gains after the sector’s sharp run-up.

That tension reflects a key dynamic heading in to earnings: investor expectations are high, and the bar for Nvidia, as the semiconductor giant at the heart of ⁠the AI trade, is rising.

Nvidia’s shares have gained 19 per cent ​this year, while the S&P 500 is up 8 per cent year to date and the Philadelphia SE Semiconductor Index ⁠has risen 57 per cent over the same period.

Investors will be watching closely to see if Nvidia’s results support the recent rise in both ‌prices and volatility in AI and chip stocks, and will watch in particular for signals on data center demand, ​hyperscaler spending, margins and forward guidance, all of which are critical to sustaining the AI-driven rally, said Murphy.

He added: “The other thing to keep in mind is that semi(conductors) have become a crowded leadership area. The options market is saying they are still willing to chase upside in ​Nvidia, but they are also starting to hedge or monetize gains in other crowded winners.”

Higher gas prices driven mainly by the war in Iran pushed the annual rate of inflation up to 2.8 per cent in April, Statistics Canada said Tuesday – the fastest pace of price hikes in almost two years.

StatCan said the cost of gasoline was 28.6 per cent higher year-over-year last month as conflict in the Middle East disrupted global oil shipments, sending costs soaring at the gas pumps. April also marked the switch to more expensive summer gasoline blends at gas stations in Canada.

The agency noted the federal government’s move to suspend the fuel excise tax mid-month helped moderate the April price increase.

StatCan’s April report marks a jump from March’s inflation rate of 2.4 per cent, though a Reuters poll of economists had expected inflation would accelerate even more to top three per cent. The April figures mark the highest annual inflation rate since May, 2024.

Ottawa’s decision to remove the consumer carbon price a year earlier meanwhile skewed the annual price comparison higher in April.

Nixing the carbon price took roughly 18 cents off the price of a litre of gas in April, 2025. While that move took some steam out of the headline inflation rate over the past 12 months, that reduction has now fallen out of the annual comparison – pushing inflation higher rather than depressing it.

Prices for clothing and footwear rose two per cent in April, coming off a decline of 0.4 per cent in March.

StatCan said an 11 per cent annual price drop for travel tours in April and a slowdown in rent inflation nationally helped offset rising energy costs. Rent hikes have especially eased in British Columbia as its population shrinks; StatCan noted the province was the only one that didn’t see its inflation rate accelerate in April.

CIBC senior economist Andrew Grantham said in a note to clients Tuesday that higher prices for airfares tied to spiking fuel costs were not captured in the April inflation data, because those transactions are recorded when the flight is taken – not when the ticket is purchased. He said he expects to see those pressures show up more in the summer inflation readings.

Food inflation also eased to 3.5 per cent in April, down from four per cent in March, as grocery items such as chicken, fresh vegetables, coffee and tea saw their pace of price hikes slow following sharp increases earlier in the year.

The April figures mark the Bank of Canada’s last look at inflation data before the bank makes its next interest rate decision on June 10.

The central bank has held its policy rate steady at 2.25 per cent in its last four decisions.

TD senior economist Leslie Preston said in a note that knock-on effects from the Iran war oil shock are not yet showing up in non-energy segments of the consumer basket.

The Bank of Canada’s closely watched core inflation metrics cooled more than expected in April, Preston said, offering “little argument” for rate hikes from the central bank.

Grantham said the soft core inflation readings suggest there’s slack in the Canadian economy, which will continue to keep a lid on inflation even as higher gas prices work their way through other components in the months ahead.

“Because of that, we continue to see the Bank of Canada holding interest rates steady at their current level throughout 2026,” Grantham said.

• The rapid spread of AI across corporate America is creating a crisis for young adults with college degrees who are finding a slowdown in hiring for entry-level positions in AI-exposed industries.
• Major U.S. companies, including Ford, Nvidia and AT&T, have stressed the growing need for trade workers to build the infrastructure behind the AI economy.
• AT&T plans to invest around $38 billion over the next five years hiring and training blue-collar front-line workers, the majority of whom are skilled technicians, to expand its fiber network, the company said.  

https://www.cnbc.com/2026/05/19/ai-hiring-slowdown-skilled-trade-workers.html

Alberta officials expect to see first oil move through a new pipeline to the West Coast by 2033 or 2034, after the province and Ottawa signed a long-awaited deal on carbon pricing and emissions reductions in the energy sector.

The agreement was inked on Friday by Prime Minister Mark Carney and Premier Danielle Smith at the McDougall Centre in Calgary. It finalizes the fine print of a memorandum of understanding they signed last year, which tied Ottawa’s support for a potential pipeline to Alberta increasing the carbon price it imposes on oil producers and reducing greenhouse gas emissions through carbon capture and storage, also called CCS.

The two governments have agreed to an effective carbon price of $130 per tonne by 2040 by instituting annual benchmarks for the headline carbon price – or policy price – including $115 by 2030 and $130 by 2035.

Under Friday’s agreement, Alberta will submit an application for a new oil pipeline to the West Coast to Ottawa’s Major Projects Office on or before July 1. The federal government will then look to designate the pipeline as a project of national interest by Oct. 1.

If that designation is successful, Canada will assess the project under the Building Canada Act to determine the conditions required for construction and development of the pipeline.

“Provided that duty to consult obligations with Indigenous Peoples have been met, Canada intends to make best efforts to provide the conditions document by September 1, 2027 to enable commencement of construction of the pipeline,” it says.

Under the agreement, both governments will establish a trilateral discussion with British Columbia on the oil pipeline application, and Ottawa will continue working with B.C. “on other projects of national interest in their jurisdiction.”

FIRST-QUARTER HIGHLIGHTS

• Consolidated Comparable sales were down 1.0%, with growth at SportChek and Mark’s offset by a decline at CTR.
  • CTR Comparable sales¹ were down 2.3%. Fixing categories grew, while Seasonal and Gardening led the decline. Western Canada outperformed, with seasonal weakness impacting Ontario and Quebec. Automotive retail sales were up for the 23^rd consecutive quarter.
  • SportChek Comparable sales¹ were up 3.3%, marking the seventh consecutive quarter of sales growth. The quarter saw strong performance from fanwear, athletic footwear and hard goods.
  • Mark’s Comparable sales¹ were up 1.2% on higher casualwear sales. New-concept Bigger Bolder Better (BBB) stores remained a key driver.
• Loyalty sales outpaced non-loyalty sales, reflecting growth in active Triangle Rewards members, including increasing contributions from the Company’s loyalty partnerships with RBC and WestJet launched in Q1. 
• Retail Revenue growth was strong, up 2.9% or 5.0% excluding Petroleum, reflecting higher shipments to support the Q2 spring/summer season and replenishment at CTR.
• Consolidated Income before income taxes (IBT) was $169.1 million, up $117.5 million, mainly reflecting prior year restructuring expense, and up $3.4 million on a normalized basis¹. Retail IBT¹ of $50.9 million was stable year-on-year on a normalized basis; Retail gross margin dollars increased on higher Retail Revenue, offset by higher IT and variable compensation expenses.

Earnings Call Summary

Q4 2025

Earnings Call Date:Feb 18, 2026| % Change Since:-6.78%|

Earnings Call Sentiment | Positive

The call presented a majority of positive operational and financial developments: healthy sales growth, strong margin expansion, substantial EPS and IBT gains, meaningful loyalty and partnership traction, disciplined capital allocation and clear strategic investments (AI/MOSaiC, store refreshes). The principal cautions relate to a 53rd week that materially boosted results, elevated inventory, bank-level investment pressures and some banner/category-specific softness (CTR living, discretionary). Management articulated concrete plans to sustain momentum (loyalty, partnerships, DaiVID rollout, MOSaiC commercialization) and quantified savings and capital priorities. On balance, the highlights are stronger and more numerous than the lowlights, and the business appears to be executing through transformation while acknowledging near-term modeling caveats.

Company Guidance

Management reiterated True North long-term goals of annual retail sales growth of 3–5% with earnings growing faster than sales and a “North Star” retail gross margin rate of 35%+, while flagging 2026-specific expectations: operating CapEx of $500–$550 million (2025 OpEx was $502 million), continued share repurchases after >$440 million bought in 2025 (share count down ~5%), and a push to realize $100 million of restructuring savings (with $30 million recognized in Q4). They warned of tough weather and patriotic‑purchasing comps in H1 2026, said Q1 had started well but noted the bank will face some SG&A/headwind in H1 from ongoing investments (although not the same profitability hit as 2025), and signaled key program timing—DaiVID rollout to SportChek/Mark’s in late 2026 and MOSaiC commercialization in H2 2026—while pointing to 2025 metrics that underpin guidance (ROIC up to 11%, extra retail week in 2025 added ~$287M sales ex‑Petroleum and ~$40M IBT, and loyalty/partnership momentum such as 9.8M active members and eCTM issuance of $329M).

https://www.newswire.ca/news-releases/canadian-tire-corporation-reports-first-quarter-2026-results-826611042.html

Canadians are filing for insolvencies at levels unseen in more than a decade as rising costs and uncertainty around housing and employment put more strain on consumers, according to the latest data from the Office of the Superintendent of Bankruptcy.

The number of Canadians who filed for insolvency jumped 8.5 per cent year-over-year in the first quarterof 2026 to 37,121, the highest quarterly volume since 2009, the OSB recorded in statistics released on Monday.

But the accelerating pace of insolvencies may be more concerning than the volume, said Doug Hoyes, a licensed insolvency trustee and co-founder of Hoyes, Michalos & Associates.

Insolvencies rose 4.2 per cent year-over-year in the 12-month period ending March 31 and the number of monthly insolvencies rose 17.5 per cent between January and March.

“It’s the canary in the coal mine,” he said.

Although insolvencies reached their highest quarterly volume since 2009, Mr. Hoyes said the numbers cannot be easily compared. That’s owing to the change inpopulation levels, updates to the insolvency filing process and the global financial crisis at the time.

In the OSB data, British Columbia posted the highest overall spike in consumer insolvencies – bankruptcies and consumer proposals combined – rising 16.2 per cent year-over-year.

A consumer proposal, Mr. Hoyes said, is a deal that allows someone in debt to avoid losing assets by agreeing to repay their creditors more over time. A bankruptcy means individuals may be required to forfeit assets to pay the debt.

Consumer proposals are more common among people who feel relatively stable or optimistic about their future finances, Mr. Hoyes said.

In Ontario, consumer insolvencies rose 14.7 per cent, but the province held a far bigger share of bankruptcies, which grew more than 25 per cent compared with 8.6 per cent in B.C.

Mr. Hoyes said some of the bankruptcy spike in Ontario may be tied to the bigger economic impact of U.S. tariffs in the province, as it has a large manufacturing sector.

Worsening economic conditions mean the trend in insolvencies could be sustained over a longer period.

Across Canada, the unemployment rate in April rose to 6.9 per cent compared with 6.7 per cent in March as the economy shed 18,000 jobs.

But the biggest strain on Canadians are expenses that are increasing faster than incomes, especially as the price of fuel sends costs at the pump soaring. Food, which uses fuel at almost every stage of production and delivery, has also been hit hard by gasoline costs.

In March, grocery prices were 35 per cent higher than just before the pandemic, BMO Economics reported last week.

While the bulk of insolvency filings are made by renters, according to Mr. Hoyes, homeowner insolvencies are gradually rising as well.

A February report from his firm found that homeowner insolvencies are now 8 per cent of filings compared with 5 per cent in 2024. The proportion of two-income households reaching insolvency also spiked to 23 per cent, the highest level since 2017.

André Bolduc, a licensed insolvency trustee who was speaking on behalf of the Canadian Association of Insolvency and Restructuring Professionals, said that the three main factors driving insolvencies are expenses related to housing, auto loans and food.

As consumers are amortizing their car payments over longer periods, with payments reaching as many as seven years now, their shortfalls become higher when they default or trade in their car early.

Mr. Bolduc says he has seen shortfalls on cars that range from $10,000 to $30,000. “That really adds up,” he said.

He said while Canadians have carried higher levels of household debt than the rest of the G7 for more than a decade, rising housing costs and employment pressure could push Canadians who have long been on the brink of insolvency closer to the edge. He said he wouldn’t be surprised if the trend continues for a while.

“Insolvency is kind of a lagging indicator,” Mr. Bolduc said. “It’s not the problem per se. It’s a symptom of what’s happened in the past.”

Hydro One Ltd. H-T -0.63%decrease reported its first-quarter profit and revenue rose compared with a year ago, boosted by higher rates and increased peak demand.

The power utility says it earned $391-million in net income attributable to common shareholders or 65 cents per diluted share for the quarter ended March 31.

The result compared with a profit of $358-million or 60 cents per diluted share in the same quarter last year.

Revenue totalled $2.65-billion, up from $2.41-billion in the first quarter of 2025.

In February, Hydro One announced chief operating officer Megan Telford would become chief executive on June 9.

Telford will replace David Lebeter, who is retiring from the top job.

• Oil prices could rise further over the summer as rapidly depleting inventories pile more pressure on the market, the IEA said.
• The energy agency also flagged further demand destruction as a result of the war, forecasting a contraction of 420 thousand barrels per day by the end of 2026.
• Despite the loss of demand, the authors still expect the oil market to end the year in a deficit.

https://www.cnbc.com/2026/05/13/oil-price-spike-turmoil-iea-iran-war.html

• The producer price index rose a seasonally adjusted 1.4% for the month, much higher than the 0.5% Dow Jones consensus forecast and the upwardly revised 0.7% March increase.
• Energy was at the root of the unexpectedly high gain in producer prices, though there was evidence that the price pain is extending beyond the gas pump.
• The services index accelerated 1.2%, the biggest gain since March 2022. Two-thirds of the move was attributed to a 2.7% gain in trade services, a sign that tariff costs could be starting to have a larger impact on prices.

https://www.cnbc.com/2026/05/13/ppi-inflation-report-april-2026-.html