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Earnings pick up on the TSX this week, delayed US jobs data released and much more in my week ahead preview in the Globe and Mail.
Here are five things to know this morning:
Monday morning quarterback: US futures are lower after a volatile week last week. Gold is higher this morning which could support the TSX. US treasuries are lower after Chinese regulators told their banks to scale back holdings of US debt according to reports from Bloomberg. Other than that, it is a pretty light day for earnings and macro news (outside of Japan, more below). Earnings slow down in the US this week, and pick up on the TSX with Shopify out this week. Tomorrow, US jobs data will be released which could be a source of volatility.
Jigoujitoku: Japanese markets got a jolt of rocket fuel overnight with the Nikkei surging nearly 4% to a fresh record on the back of the resounding victory for Sanae Takaichi. An “abenomics” disciple, Takaichi is a proponent of fiscal spending, lower interest rates, and structural changes. Her desire for lower rates might be complicated by the Bank of Japan which is seen to be more inclined to hike rates to combat inflation. As for her fiscal spending ambitions, the bond market will have the final say on that.
Not so fast: Barrick Mining is higher after Newmont said it is working with the miner to address underperformance issues at a key mine ahead of Barrick’s planned IPO of a minority stake in those assets. Barrick and Newmont operate a joint venture of the Nevada Gold Mines. Newmont says those assets “suffered a degradation in performance and subsequent asset value over the past six years” in a statement released this morning. The bottom line is that Newmont doesn’t seem like it will stand in the way of the IPO but it does want the assets cleaned up ahead of time.
Case of the Mondays: Shares of Monday.com are plunging 15% in the pre-market after its sales forecast came in lighter than expecting, stoking fears that AI is starting to eat software. The cloud-based work process software maker is poised to open at a 3-year low and possibly a record low if it breaks below $80/share. Before getting hysterical about how AI is killing software, let’s be clear that Monday.com isn’t falling off a cliff. Profit was higher than expected and sales growth in the reported quarter increased 25% which was also better than expected. The “disappointing” forecast still implies 26% – 27% sales growth. The stock also trades at an undemanding 20x earnings. I’m not convinced that will be enough here, but its on my watch list. Some insider buying in software might be helpful, but so far, crickets.
See you in court: Shares of Hims & Hers are plunging nearly 22% after Novo Nordisk said it would sue the telehealth platform for selling a knock-off version of its obesity pill. On Saturday, Hims already said they would halt the sale of of the drug. Novo is popping 5% and rival Eli Lilly is up 2%. Novo alleges in its suit that the knock-off version of their drug is a breach of their patent. “They’ve just decided they are above the law,” Novo’s CEO said. On Friday, the FDA said it would act against imitation drug makers such as Hims. But the company isn’t backing down with Hims putting out a statement this morning on X saying this is a blatant attack by big pharma which is weaponizing the US judicial system. Get out the (diet) popcorn.
Don’t miss our next episode with veteran value investor Jonathan Wellum!
