TOP STORY
📦 Shopify Teams Up with Amazon for “Buy with Prime” Integration

This week, in a surprising move, Shopify announced a partnership with Amazon to bring its “Buy with Prime” service to Shopify. With this new announcement, Shopify merchants can now offer Amazon's lightning-fast delivery options on their storefronts.

Historically, Shopify has been a direct challenger to Amazon's e-commerce throne, priding itself on providing end-to-end solutions for merchants as an alternative to Amazon.

Just a year ago, Shopify actively discouraged its merchants from adopting Amazon's "Buy with Prime," citing a conflict with Shopify’s terms of service. This may have been due to Shopify's push to promote its proprietary payment system, "Shop Pay."

While it’s unclear why the sudden change of heart, Shopify’s President said in an announcement:

The integration will initially be invite-only, with a broader rollout expected by the end of September.

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BANKING
🏆 UBS Breaks Records with Historic Quarterly Profit

This week, UBS ($UBSG), Switzerland’s largest bank, posted a record-breaking ~$29 billion in Q2 profit, 28 times their Q1 profit of ~$1B.

UBS's huge jump in profit can be largely attributed to its strategic acquisition of Credit Suisse. The takeover was finalized at a significantly reduced price of 3 billion Swiss francs ($3.25 billion) in a "fire sale" since the bank was distressed.

UBS said the quarterly results reflected a large gain in negative goodwill following the acquisition also known as a ‘bargain purchase gain’. This basically means that the buyer paid less than the intrinsic value of the target company. If you take out this gain, the profits came in at $1.1B

IN-PERSON EVENT!
🗓️ Catch us at the MoneyShow Next Weekend in Toronto!

If you loved the Blossom Toronto Meet-up, make sure to mark your calendar for the Toronto Money Show on Sept 8-9 (next weekend)! 🗓️

The MoneyShow is a 2 day, FREE conference, jam-packed with sessions about AI, Real Estate, Market Outlook, and more, and the Blossom team is leading one of the keynotes!

On Friday at 12:10 pm, myself, Brandon & Marc Beavis, Canadian in a T-Shirt, and the Humbled Trader will be taking center stage to discuss social investing, and the current state of the markets - see you there!

CANADIAN BANKS
🏦 Canadian Banks Face Headwinds, Provisions For Credit Losses Rise

This week, Canadian banking giants, Canadian Imperial Bank of Commerce ($CM), National Bank of Canada ($NA), and BMO ($BMO) released their quarterly earnings reports, closing up earnings season for the big banks.

Canadian Imperial Bank of Commerce ($CM)

CIBC faced a challenging third quarter as higher loan-loss provisions impacted its bottom line and caused it to miss earnings estimates.

• Revenue: $5.88 billion (vs. $5.81 billion expected) ✅

• Earnings: $1.52 per share (vs. $1.68 expected) ❌

Loan-Loss Provisions: CIBC set aside a significant C$736 million for potential loan defaults, an increase from C$243 million in the previous year.

Core Banking Segment: Net income for its core Canadian personal and business banking sector dipped by 16%.

Rising Interest Rates: The central bank's repeated rate hikes have been a double-edged sword for banks, including CIBC. While they benefit from increased earnings on loans, there's also heightened concern about potential loan defaults due to consumers struggling with repayments.

Expenses on the Rise: CIBC experienced a 6% hike in expenses, primarily driven by higher salaries.

National Bank of Canada ($NA)

National Bank missed on both revenue and earnings estimates, after a decline in its financial markets division's performance and an increase in bad loan provisions.

• Revenue: $2.58 billion (vs. $2.64 billion expected) ❌

• Earnings: $1.63 per share (vs. $2.36 expected) ❌

Financial Markets Division: The bank highlighted a "less constructive backdrop" in this sector, resulting in Q2 earnings of C$205 million. This is a decline from C$279 million in Q3 2022, attributed to reduced trading activity and low market volatility.

Expense Growth: National Bank saw an 8.6% increase in expenses. This was driven by heightened technology costs.

Staffing: The bank reduced its full-time staff by 227 during the quarter, down to 18,821. The bank does not anticipate any major layoffs, emphasizing its commitment to protecting its current talent pool.

Bank of Montreal ($BMO)

BMO encountered a tough third quarter, with its profits impacted by severance costs, rising provisions for bad loans, and legal provisions. Despite missing on both revenue and earnings-per-share, the stock rose this week.

• Revenue: $7.93 billion (vs. $8.09 billion expected) ❌

• Earnings: $2.78 per share (vs. $3.13 expected) ❌

Severance Costs: BMO chalked up severance costs totaling C$223 million pre-tax in the third quarter due to lay-offs. Exact details on the number of employees let go weren't disclosed.

Legal Provisions: The bank registered C$83 million in legal provisions, related to U.S. regulatory settlements after employees were found to be using personal messaging apps, like WhatsApp, for client communications.

Real Estate Impairment: BMO anticipates a C$45-million impairment loss next quarter as it aims to curtail its real estate footprint.

Credit Loss Provisions: Provisions for credit losses climbed to C$492 million, an increase from the C$136 million recorded last year.

 FROM THE BLOSSOM APP

🎙 Top Discussions This Week

🗞️ What else you might’ve missed:

• Dollar General ($DG) was down 12% after missing revenue and earnings estimates.

• Google ($GOOG) is expanding the availability of the generative AI-powered version of its search engine.

• Microsoft ($MSFT) says it will unbundle Teams and change the way it sells the video conferencing service.

• GM ($GM) has been working with Google to create chatbots to perform a number of tasks.

• Visa ($V) and Mastercard ($MA) are planning to increase fees that many merchants pay.