Debt Ceiling Talks Continue & Nvidia Is On Fire

Good Morning,

The Dow Jones dropped as investors have their eyes on the U.S. debt ceiling talks. House speaker McCarthy said they will be working through the weekend to come to an agreement with Democrats. Nasdaq and S&P 500 rose with the help of Nvidia. Nvidia rose 26% and is closing in on a $1T market valuation, as it beat Q1 earnings. U.S. Corporate profits dropped 6.8% to $2.3T in Q1 2023. This comes as a shock with estimates were around a drop of 0.9%. DBRS put the U.S. credit rating under review due to the debt ceiling debacle.

The USD/CAD FX rate hit a 4-week high of 1.36.

The industrial Confidence indicator in Colombia dropped to -5.9in April vs 3.5 in March.

Markets: Before the open

Top News Stories

Canada

• New homebuyers are getting help from their parents to own homes (BNN)

• More money is set aside for loan losses (BNN)

• BMO Q2 profit down vs last year (BNN)

• Scotiabank Q2 profit down vs last year, raises dividend (BNN)

• Canada has highest household debt out of G7 countries (BNN)

• Michael Sabia will be next Hydro-Québec CEO (MG)

• Ford to buy lithium for EV’s from Quebec’s Nemaska Lithium (MG)

U.S.

• Nvidia rose 26% after positive earnings and forecasts (CNBC)

• Kohl’s reports a positive profit (CNBC)

• Citibank to issue an IPO for Banamex (CNBC)

• Abercrombie and Fitch reports a surprise profit (CNBC)

• Best Buy has reported great earnings (CNBC)

• As rates pass 7% mortgage demands drop (CNBC)

• Lowe’s cut full-year sales forecast (CNBC)

• JP Morgan raises revenue target to $84B this year (CNBC)

Argentina

• The government will restrict FX access to oil companies (BAT)

• The government is asking China to expand Yuan swap lines (BAT)

Brazil

• Vale cuts its dividend (RIO)

• Markets price in a rate cut (RIO)

Colombia

• Oil & gas reserves drop with President Petro’s clean energy initiatives (BBG)

• Gilinski Group to exit its stake of Grupo Sure & take control of Nutresa (RT)

• Brick makers look for government help as prices drop & cost rise (RT)

Ecuador

• Lasso looks for election in August (RT)

• Free trade zones have a $5B – $7B export potential (ELU)

• BanEcuador provides credit lines of up to $500K to local miners (ELU)

• The U.S. provides a $150M to the government to modernize Bolivar port (ELU)

• The Ministry of Energy & Mining to invest $514M to electrical grid infrastructure projects (ELU)

Peru

• Cencosud changes its corporate ownership to the U.K. under PK One Limited (ELC)

Mexico

• Inflation hits 20-month low (RT)

• Mexico’ FDI grows 48% in Q1 (MB)

• Hutchison Ports EIT to invest $128M in Ensenada (MB)

• Mexico has 82 lithium deposits across 18 states (MB)

• Guanajuato ranked first in Vehicle production in 2022, 21.9% of national total (MB)

Insights

MoneyGram International Inc. is a global financial services company that provides money transfer and payment services. The company was founded in 1940 and is headquartered in Dallas, Texas, United States. MoneyGram operates in over 200 countries and territories, offering a wide range of services to individuals and businesses.

MoneyGram's primary service is facilitating money transfers between individuals. Customers can send and receive money through various channels, including physical locations, online platforms, mobile apps, and partner agents. MoneyGram's extensive network consists of thousands of agent locations, such as retail stores, banks, and post offices, making it convenient for customers to access their services.

MoneyGram enables cross-border transfers, allowing individuals to send money to friends, family, or businesses in different countries. They support multiple currencies, making it easier to send funds internationally. The company also offers bill payment services, allowing customers to pay bills for utilities, mortgages, credit cards, and other expenses.

Q1 2023 Earnings

1) Results (Missed Analyst Estimates)

Revenue:

Estimate: $334.47M

Actual: $337.5M

EPS:

Estimate: 0.13

Actual: 0.05

2) Earnings Highlights

· Global Money transfer services account for 87% of total revenue in Q1 2023.

· Expecting higher competition for agents, customers, and pricing battles.

· Expecting their FPP business segment (Money order & Official checks) to decline due to a decrease in paper-based transactions.

· Revenue rose 9.7% Quarter over Quarter.

· Net Income is relatively flat.

· Cash on hand dropped 20.5% Quarter over Quarter

Western Union is a global financial services company that specializes in money transfers and payments. With a history dating back to 1851, Western Union has become synonymous with reliable & convenient cross-border transactions. The company provides cross border payments and remittances services.

Q1 2023 Earnings

1) Results (Beat Analyst Estimates)

Revenue:

Estimate - $1B

Actual - $1.04B

EPS:

Estimate: 0.33

Actual: 0.43

2) Earnings Highlights

· New Customers up 14%

· C2C revenues declined 6% vs last year. The suspension of operations in Russia & Belarus negatively impacted C2C revenue.

· Softness in Europe & CIS, North America, and APAC was partially offset by strength in LACA and strength in MEASA led by Iraq.

· GAAP operating margin this quarter was 19.7% vs 20.5% Q1 2022

· Cash flow from operating activities was $137M vs $200M Q1 2022, due to timing of payments related to expenses incurred in previous periods.

· The Company returned $88 million to shareholders in the first quarter through dividends.

Breakdown of C2C Revenue by Location:

· North America – 39%

· Europe –29%

· Middle East/Africa/South Asia – 17%

· Latin America & Caribbean – 9%

· East Asia & Oceania – 6%

CEO’s take on earnings:

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