Futures flat, American dream under pressure, MongoDB soars, Canaccord miss, Descarte plunge
In this episode of In the Money with Amber Kanwar, investor Daniel Lewis, founder of Orange Capital, reflects on his journey from billion-dollar hedge fund manager to nimble, independent investor building a concentrated portfolio of distressed bets and ‘orphaned’ stocks everyone else is missing. You can listen on Apple, Spotify or here.
Markets: North American markets were mixed yesterday with the TSX slumping in a broad-based decline as energy led the way lower. The US markets finished higher with tech stocks leading the way and the Magnificent 7 hitting the highest level since February. This morning futures are flat after the ECB delivered on a rate cut (wait until US President Donald Trump hears about that). This was widely expected after inflation fell below target earlier this week. Yesterday, the Bank of Canada held on rates as expected but the loonie popped as the central bank acknowledged “unexpected firmness” in Canada’s inflation. However, they did leave the door open for a July rate cut. There will be two inflation prints before that decision which will ultimately be the deciding factor. Circle will test market appetite for cyrpto in an IPO that was priced above the range. It is set to start trading on the NYSE today after pricing its offering at $31/share. Circle is one of the world’s largest issuers of stablecoins like USDC (a full reserved coin in which each token is backed 1 for 1 by US dollars).
Meet the misses: American’s don’t appear to be throwing on a pair of jeans, hitting the open road, or drinking whisky by the fire this summer. The owner of Calvin Klein, PVH, is plunging 9% in the pre-market after warning tariffs are going to take a bite out of profit. The company is reducing its profit forecast by as much as 13% on an “increasingly uncertain consumer and macroeconomic backdrop.” Winnebago is also warning of a consumer slow down sending shares down nearly 10% in the pre-market. The motor home RV maker says it saw a slump in demand after a strong March. The slump coincides with when tariffs were announced in April. The company issued a sales and profit warning that signals profit will be between 37-45% lower than street consensus. Brown Forman, the owner of Jack Daniel’s and Woodford Reserve, is also under pressure this morning (-17%) as profit missed expectations and sales fell more than anticipated. It also warned that sales for the year are expected to decline. Peers like Constellation Brands, Diageo, and Campari are all under pressure this morning. Here too the company cites “macroeconomic” volatility and consumer “uncertainty.” If only those words were a drinking game this quarter, their results might have been a lot better.
Mongo quarter: Shares of MongoDB are going gangbusters this morning rising more than 17% in the pre-market. The database software provider beat profit expectations and raised its full year outlook. Their cloud database segment, Atlas, was a bright spot helping to drive 22% top line growth in the quarter. “MongoDB kicked off FY26 with a standout quarter, delivering top- and bottom-line beats, 26% y/y Atlas growth, record net customer additions, and a sharp expansion in operating margins, showcasing strong execution across both growth and efficiency levers,” wrote RBC’s Rishi Jaluria. The stock has been under pressure recently as it has been light on demonstrating its AI chops. However, Dan Ives at Wedbush says this quarter shows they are “moving in the right direction” and the company is “still in the early innings of Atlas monetization which is starting to make up a larger portion of the pipeline moving forward with MDB well-positioned to emerge as a winner in the AI Revolution.”
Under pressure: Shares of Canaccord could come under pressure this morning after profit missed expectations on weak capital markets activity. The lack of IPOs in Canada has been no secret, and the Canadian capital markets division saw a 40% drop in revenue. This was offset by 35% increase in the US and 58% increase in the UK. Wealth management was better than expected. The company loaned $27 million to employees to allow them to buy stock. Raymond James says this could reignite potential take-private talks. Recall a management led buyout in 2023 failed. “Canaccord’s future as a public company is expected to be a topic of conversation over the coming months,” wrote Stephen Boland of Raymond James, “The stock is only ~10% above the level seen at the time of the 2023 bid. (The loan to employees) we suspect will only increase speculation that a take-private transaction might be on the horizon.”
Before the horse: Shares of Canadian supply chain software maker Descartes are getting pummeled (-13%) in the pre-market after earnings missed expectations. Disruption in trade has meant less business than expected with organic revenue decelerating in the quarter. “Descartes disclosed its proprietary data shows global trade volumes declined 7% Y/Y in May, materially slowing compared to +8% Y/Y in Q1,” observed RBC’s Paul Treiber. “As a result of the slowdown, Descartes says it cut 7% of jobs at the company in May. Treiber still says the stock is a buy here and notes that Descartes could be opportunistic in the downturn. “Macro uncertainty is creating a favourable M&A environment (lower valuations, more sellers, fewer buyers). Descartes has ample financial resources to deploy on acquisitions,” he wrote.
