The Daily Chase: Canadian inflation is heating up again

Here are five things you need to know this morning.

Nvidia Nverting: After a breathtaking run, Nvidia shares quietly entered correction territory on Monday, losing 12 per cent of their value over the past three trading sessions. The company’s fans on Wall Street — and there are many — note that the bull case for the shares remains as strong as ever, with solid earnings growth still forecast well into the future. The company is still up more than 160 per cent on the year and has had a series of minor steps back throughout its run. Among sell-offs of this scale, the stock tends to rebound on the fourth trading day about 63 per cent of the time, according to Daniel O’Regan, managing director of equity trading at Mizuho. That would be today, and if the start of trading is any indication, the prediction is on track to come to pass, with the shares up about three per cent premarket.

There’s money to be made betting short term against the loonie, CIBC says: Trading the Canadian dollar on the expectation of a rate cut next month could be a profitable one, strategists at CIBC say. In a note to clients Monday, Sarah Ying and Tushar Arora say that rate differentials between central bank moves in Canada and the U.S. this summer leave the door open for a much weaker loonie in the short term than current valuations imply. “The trade pays 6X the premium paid and is cheap relative to history,” the pair note, adding that the premium is the 14th-lowest observed in more than a decade. Election risk could propel the U.S. dollar above 1.39 Canadian in the coming months (that’s less than 72 cents U.S. per loonie), they say. That’s expected to wane in the latter half of this year however, as the U.S. Federal Reserve moves towards cutting for itself, and the U.S. presidential election gets underway. By the first half of next year, the pair foresee a USD at about 1.35. That’s about two cents lower than it is right now.

Airbus shares plunge on slashed outlook: Shares in Airbus are down more than 11 per cent as the plane maker warned investors it is consistently coming up short on the millions of parts it needs to build commercial aircraft, and the situation is getting worse. The manufacturer warned late on Monday that it’s experiencing a shortage on engines, aerostructures and cabin interiors, which in turn is sabotaging the company’s delivery plans. The company says it now plans to make and deliver 770 planes this year, down from 800 forecast previously. That slowdown prompted the company to slash its expectations for EBITDA and free cash flow, too. Investors aren’t liking what they’re hearing, sending the company’s Paris-listed shares down to their lowest level since November — and once again back below what they were worth before the pandemic.