I am quite proud of myself for not mentioning I have been solo parenting for 7 days. It was supposed to be only 3 days, but when husband returned from his work trip he went straight to the guest bed feeling sick and hasn’t come out since. I think he is starting to go loopy in there. He is sending me philosophical quotes about how dads plant trees they’ll never climb but sons climb trees they never planted. This from a guy who needed our neighbour to help him plant (and maintain) a tomato vine. I hope for both of our sakes he gets better soon.
SUSHI > TACO: US futures are higher this morning following record sessions for the TSX and the S&P 500 last week. We’ve got a busy week of earnings: 110 companies on the S&P 500 and 15 TSX companies are reporting this week. What about trade deals you ask? BMO posits that the market is starting to become immune to trade volatility with the SUSHI trade. “Stocks Usually Stop Having Interest (SUSHI) in issues or geopolitical events that don’t directly impact earnings…or an immediate bearing on the interest rate outlook,” wrote BMO’s Chief Economist Douglas Porter, “And it is becoming increasingly clear that the market is losing interest, or at least is much less sensitive to new developments on the trade front.” Porter notes that the US essentially resurrected reciprocal tariffs while saber rattling at Canada and Mexico, but the markets continued to new highs.
Hold the phone: Shares of Verizon are popping 3.5% after beating expectations and raising it’s outlook partly because of tax reform. This is papering over a loss of 51,000 wireless subscribers in the quarter. Analysts were expecting a gain of 12,000 new subscribers. Evercore calls the results better than feared and says when you exclude the subscribers they lost, their gross additions of subscribers were up 19% which was higher than expected. I don’t know why you would exclude the subscribers they lost, but who am I to argue with the market. Verizon was also trading at a 5-month low before earnings so a rosy outlook is enough to clear a lowered bar.
Domino effect: Shares of Domino’s Pizza are up 3% after sales grew more than expected in the quarter. Profit missed expectations but comparable sales were better than feared and that appears enough for the stock here. Two things seem to be working. Stuffed crust pizza and a delivery deal with DoorDash it signed back in May. “Stronger-than-expected 2Q results suggest that a strategy centered around innovation (stuffed crust pizza), convenience (partnership with aggregators) and value could more than offset general consumer softness, even in a highly competitive
category,” wrote Bernstein’s Danilo Gargiulo.
Buyback is back: Couche-Tard announced plans to buyback up to 10% of its shares this morning. This comes after it abandoned it’s pursuit of 7/eleven convenience store owner Seven & i. Many expected a buyback announcement, but the size may be bigger than some anticipated. Last week Christopher Li of Desjardins said he expected a 5% buyback. The stock is up 9% since revoking their offer last week.
When one door closes: Shares of Opendoor are pumping again this morning. I was trying to ignore this story, but the 300% stock move in less than a month is forcing my hand. I followed Eric Jackson of EMJ Capital into the name and lost badly. We discussed it on my very first episode of In the Money with Amber Kanwar. He admitted it was a poor performer that didn’t live up to his expectations. But it is the same Eric Jackson who appears responsible for the meteoric rise in the last few weeks. He has taken to X to halt the company’s plans for a stock split. Recall, he first made a name for himself as a retail activist investor in Yahoo back in the day. So getting a groundswell of support isn’t new for him. But using X may be a new playbook. Since he has been pounding the table (er, keyboard) on the name it is frequently the most actively traded stock in America. Usually 54 million shares trade on any given day in Opendoor, Friday alone saw nearly 600,000,000 shares trade. There are more shares trading this morning of Opendoor than any other stock in America (including Nvidia and Tesla which are normally at the top). You’ll notice I haven’t mentioned fundamentals. I don’t think they matter here but in case you are interested: Opendoor buys homes for cash, renovates and then resells them. As the housing market stalled, it got stuck with inventory it couldn’t sell at higher prices while also carrying heavy amount of debt. The housing market hasn’t improved, but the stock is up 300% since July proving Eric Jackson is the real catalyst to watch.
