Everything You Need to Know on Wednesday: Blackberry and AMD to Collaborate on New Robotic Systems Tech

Good morning mooers! Here are things you need to know about today's market:

● S&P/TSX 60 Index Standard Futures are trading at 1,351.70, up 0.38%.

● Economists expect another interest rate pause

● U.S.-style oil megadeals possible in Canada, BMO energy banker says

● European natural gas prices under pressure from prevailing ample storage levels, ANZ Bank says

● Stocks to watch: BlackBerry, Tilray Brands

Today, the Canadian dollar is trading at 73.72 cents US, a slight increase from Tuesday.

The S&P/TSX 60 Index Standard Futures (SXF) are currently trading at 1,351.70, which is 0.38% from the previous close.

As the Bank of Canada is largely expected to hold interest rates at its announcement on Wednesday, economists expect it could be the last in a string of pauses.

Economists tracked by Bloomberg unanimously believe the Bank of Canada will hold interest rates at five per cent for a seventh straight announcement. However, just five of 13 economists are predicting another hold at the central bank’s next announcement on June 5, with the remaining anticipating a cut to 4.75 per cent.

Francis Fong, managing director and senior economist at TD Economics, also believes the Bank of Canada is in for at least one more hold before cutting in the summer.

“I don't think anyone admires the Bank of Canada's position right now,” he told BNN Bloomberg in a television interview on Tuesday.

“Anywhere you look, you could find evidence and argue in favour of cuts or starting them as soon as possible and then you could find evidence sort of delaying.”

A U.S.-style megadeal is possible in Canada’s oil patch, though the pressures that pushed Exxon Mobil Corp. and Chevron Corp. to pursue large takeovers aren’t as strong north of the border, says Bank of Montreal’s top energy banker.

Investors would likely support mergers between major Canadian energy producers that increased scale and improved cost efficiencies — and Canadian companies are in a position to do such deals, said Brad Wells, head of energy at BMO Capital Markets.

But the need to add drilling inventory that helped drive Exxon into its US$60 billion offer to buy Pioneer Natural Resources Co. in October and Chevron to pursue a US$53 billion acquisition of Hess Corp. isn’t a factor in Canada, where oil-sands companies are sitting on decades of supply, he said in an interview.

The overall health of Canadian companies — including balance sheets strengthened by recent gains in oil prices — reduces the impetus to transact and allows them to be opportunistic, making it difficult to predict when such a deal may happen, he said.

“It all comes down to what it looks like: the economics, the strategic rationale, the pro forma business and balance sheet, the price being paid,” Wells said. “All that needs to align for there to be investor support.”

European natural gas prices are down from two-week highs as high inventory levels and weakness in the oil market weighed on sentiment, ANZ Bank said in a Wednesday note.

While storage facilities are amply filled, however, Europe continues to be in competition with Asia for spare liquefied natural gas cargoes, the bank noted.

North Asian LNG prices have been inching higher as buyers begin to take advantage of the recent price slump, ANZ Bank said. Future supplies may also be tighter as the US focuses on ensuring Russia cannot develop new projects that would provide the country with export revenue.

The Arctic LNG 2 plant has started closing off some gas wells as US sanctions prevent exports, the bank said.

It made the announcement at the Embedded World conference in Nuremburg, Germany.

The collaboration combines BlackBerry's software with AMD's computer hardware.

Grant Courville, vice-president of product and strategy at BlackBerry QNX, says the collaboration will provide an integrated software-hardware foundation.

BlackBerry says the combination will enable sensor fusion, high-performance data processing, real-time control, industrial networking, and reduced latency in robotic applications.

Shares in BlackBerry rose 29 cents or more than seven per cent at $4.20 on the Toronto Stock Exchange on Tuesday.

Lavery noted the US regulatory outlook is unclear, and there is no clarity on how any potential rescheduling of cannabis in the US may take shape. Piper Sandler expects potential M&A to bulk up its beer portfolio a bit further, but noted that current retail sales declines make adding shelf space more challenging. Lavery lowered the 2024 estimated sales from near US$810M to near US$790M and 2025 estimated sales from near US$875M to near US$865M. He maintained a price target of US$2.00.

Tilray shares closed down C$0.71, or 20%, to C$2.79 on the Toronto Stock Exchange after reporting fiscal Q3 results.

Source: BNN Bloomberg, Financial Post, MT Newswire