CAD Plummets! Three-Pronged Blow Intensifies Depreciation Pressure—Worse Is Yet to Come…

The Canadian dollar has been hammered! Negotiations between Canada and the U.S. have collapsed—and so has the loonie’s exchange rate. On Monday (August 24), the CAD/USD exchange rate plunged as much as 0.6%, trading at just USD 0.72. Today’s performance was truly dismal: the loonie posted the steepest single-day decline among all G10 currencies—and its worst one-day showing in over two months. The CAD/CNY exchange rate also tumbled—from CNY 4.89 to CNY 4.85. In the early hours of August 22, the U.S. imposed a 50% tariff on approximately USD 20 billion worth of Canadian goods. Affected products span dairy, wine, softwood lumber, cement, ceramics, and numerous other sectors. In response, Canadian Prime Minister Mark Carney adopted a firm stance, announcing retaliatory measures—equal in value—effective September 8, targeting steel, dairy, home appliances, agricultural machinery, pulp and paper, and electronics. A detailed list of targeted goods will be released in the coming days. Carney acknowledged that these counter-tariffs may ultimately force Canadian consumers to pay higher prices and face reduced product choices. BMO expects the new tariffs to shave 0.5 percentage points off Canada’s GDP, as business investment and confidence suffer. Bradley Saunders, North America Economist at Capital Economics, noted that although the affected goods account for only about 0.6% of Canada’s GDP, the resulting export collapse is sufficient to drag an already weak GDP growth rate down to zero. Market participants believe the loonie is currently under a triple blow: downward revisions to growth expectations, waning expectations of interest-rate hikes, and a resurgence of short positions. Further selling pressure is expected to persist. Moreover, if Canada implements even more aggressive retaliatory measures, business investment confidence could deteriorate further—adding yet another layer of strain to an already fragile economic recovery. According to Bloomberg and other media reports, Derek Halpenny, Head of Global Markets Research at MUFG, stated that Prime Minister Carney’s vow to impose “dollar-for-dollar” retaliation against U.S. tariffs introduces additional risk to investor confidence.

After surging 40%, is this bank stock still stable and attractive?

eTrade compiled a Wall Street consensus rating report for Bank of Montreal (BMO) based on ratings and price targets issued by 10 analysts over the past 90 days. The current market sentiment is bullish, with an average 12-month target price of USD 108.94—roughly 6.7% above the current share price. The high degree of consensus among analysts may bolster investor confidence in this forecast. Moreover, the lowest 12-month target price is only about 1.49% below the current share price. (Wall Street analysts’ consensus rating and 12-month target price for BMO, sourced from eTrade) By comparison, Seeking Alpha’s Wall Street consensus outlook—drawn from 14 analysts—also rates BMO as bullish, with a 12-month target price 7.5% above the current share price. Adding its 3.3% dividend yield, the market broadly anticipates a total 12-month return of approximately 10%, consistent with the Gordon Growth Model’s estimate of a 5-year dividend growth rate. Options Market Expectations for Bank of Montreal I analyzed a series of BMO put and call options expiring on December 7, 2021, to derive the market’s implied outlook for the stock over the next four months. I selected December 2021 options to assess the stock’s prospects through year-end. The options market implies a probability distribution of price returns, with probability on the vertical axis and return on the horizontal axis. (BMO’s market-implied 4-month price return, calculated by the author using eTrade options data) The chart shows a 90% probability of an 11.8% gain over the next four months—and a 10% chance of a 12.6% decline. The peak probability corresponds to a 0.88% price return; the median is 0.0%. The annualized volatility implied by this distribution is approximately 21%—a very low level for an individual stock. By contrast, Citigroup’s implied volatility stands at around 30%. To facilitate direct comparison between the probabilities of positive and negative returns, we present the market’s implied outlook in tabular form—with the negative-return distribution flipped vertically along the y-axis (see chart below). (Market-implied volatility probability for BMO over the 4-month period ending December 17, 2021; data sourced from eTrade) As shown above, the probabilities of equivalent positive and negative returns are nearly identical—the solid blue line and dashed red line closely overlap. This symmetry suggests a modestly bullish market outlook. Additionally, markets typically assign a higher probability to negative returns for dividend-paying stocks, since dividends reduce upside potential. Thus, a symmetric implied outlook for a dividend payer like BMO signals underlying bullishness. Furthermore, investors tend to be risk-averse—often paying premiums above fair value for puts to hedge their portfolios. A neutral market expectation would slightly elevate the probability of negative returns. Given both factors, such symmetry in the market’s implied outlook constitutes a moderate bullish signal. Summary Thanks to strong earnings performance and improving sector fundamentals, BMO’s share price has surged nearly 40% this year. At current levels, the stock appears attractively valued—and its 3.3% dividend yield remains notably high relative to major U.S. banks.

Albemarle Has Lost 52% Since April: BMO Sees 70% Upside

Oct 11, 2026

Albemarle Corp stock has fallen 52% since April, yet BMO Capital maintains an Outperform rating with a $175 price target citing strong future lithium demand. Upcoming Q3 earnings on November 4 will reveal if Energy Storage pricing holds up.

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