AI is forcing investors to rethink one of the most time-tested strategies in the market—and it could have major implications for how you build your portfolio. On this episode of In the Money with Amber Kanwar, Dan Rohinton, Portfolio Manager at iA Global Asset Management, makes the case that the traditional buy-and-hold approach is no longer as reliable in a world where artificial intelligence is accelerating disruption across nearly every industry.
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Here are five things to know today:
Parabolic: Stocks are under pressure today after the S&P 500 and the NASDAQ squeaked out a record high yesterday. South Korean stocks came under pressure after a government social floated the idea of an AI dividend to its citizenry. The KOSPI fell as much as 5% before closing out the session down 2.2%. Barely a dent in the parabolic 30% rally in the index so far this year (thanks to semiconductors Samsung and SK hynix). Today we will get a read of inflation in the US with CPI hitting at 8:30. Inflation is expected to shoot up to 3.7% – the hottest reading since September 2023 thanks to higher fuel costs. But in case anyone has been keeping track, inflation hasn’t been at the 2% target for five years. I guess we are still in transit.
Dog’s breakfast: Pet Valu may come under pressure today after profit came in lower than expected, comparable sales flatlined, and it cut its forecast amid a consumer slowdown. The pet stuff retailer is warning that profit won’t grow this year after previously holding the view it could grow the bottom line 5-9%. Pet Valu says it is seeing “heightened value-seeking behaviour” among its consumers and noted higher fuel costs. Shares hit a record low yesterday and the stock is down 54% from its 2022 pandemic puppy boom peak.
Change at the top: CGI Group announced long-time CEO Francois Boulanger would be retiring effective immediately, replaced by the current President and Chief Operating Officer Tim Hurlebaus. This comes as CGI Group languishes at the lowest level since 2020 and has dropped 40% over the past year. Despite the underperformance, investors don’t seem thrilled with the sudden CEO change with the stock down 1.5% in the pre-market.
Dump trucks: BMO announced it is selling its truck financing unit which held about $14.5 billion worth of loans. As a result it will take a $900 million charge and use some of the proceeds to purchase a 19% stake in the new entity. BMO has been selling US loans it considers non-core. Truck financing has been the source of “indigestion” for the bank over the past few years according to John Aiken at Jefferies. “The benefit to BMO is the capital relief, which is expected to generate a 28bp improvement in its regulatory capital ratio. Furthermore, management anticipates a roughly 30bp lift to its ongoing ROE,” said Aiken.
Bottom of the barrel: A series of underperforming stocks are surging today on M&A. GoPro shares are up 2% after initially soaring over 20% when it announced a strategic review including a possible sale. The company says it has received many unsolicited offers. The news came alongside its quarterly results which showed a 26% drop in sales and double the losses from last year. BuzzFeed is surging 100% in the pre-market after the microcap announced comedian and media mogul Byron Allen would take a 52% stake in the company. The millennial-era website has struggled with sales dropping 20% in the most recent quarter and the stock down 98% over the past 5 years. Maybe this will be the next article: “We Asked Our Remaining 11 Employees How They’re Doing And They Said Please Stop Asking Us To Do Quizzes.” Wendy’s is surging 22% in the pre-market on reports that Nelson Peltz is trying to raise funds to take the burger chain private. Wendy’s has struggled dropping 45% this year and trading at the lowest level since 2013! As a big fan of the spicy chicken burger, I am shocked!
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