The AI boom is supposed to be a tech story. Larry McDonald thinks it’s a commodities story. On this episode of In the Money with Amber Kanwar, the Bear Traps Report founder and best-selling author explains why surging demand for copper, uranium, oil, natural gas and gold could create some of the biggest investment opportunities of the next decade.
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Today is a big day in the house – the middle child has finally learned to ride a bike (not for lack of talent but just falling through the cracks with Child 1 and 3 learning last year). It is a milestone we had to outsource because neither me nor my husband have the backs to do it ourselves.
Here are five things to know:
Brief: Futures are pulling back after yesterday’s trade in which tech and little else worked. Oil and gold declines held back the TSX. Today the US markets are closed for Juneteenth which give the markets a few more days to digest the delay of talks between the US and Iran due to continued attacks in Lebanon. Talks were set to begin following the signing of the memorandum of understanding that set the stage for 60-days of negotiations to reach a formal peace deal. Oil is slightly higher on the development. In the meantime, oil appears to be flowing through the Strait of Hormuz with a total of 25 ships crossing through – the most since April. Now that drips of oil have started to flow, the IEA is warning that the oversupply they predicted before the war began could be even higher by 2027. They are predicting a surplus of over 5 million barrels per day. It is worth taking a step back to appreciate how well the world has absorbed such a significant supply shock – mainly because other options exist. It has not gone unnoticed in the clean energy space with the sector outperforming traditional energy stocks over the past year.
Out of this world: MDA Space is buying US-based Blue Canyon Technologies in a deal worth $874 million in an all-cash transaction – it’s biggest ever. Blue Canyon is a spacecraft and satellite component maker that is currently part of Raytheon. The space exploration company has benefitted from the SpaceX IPO with shares up 109% so far this year. But the deal is going to be funded entirely through debt – a relief to equity shareholders they won’t be diluted despite the rally in the stock. MDA says the deal will add to adjusted profitability in 2027.
Across the pond: A quiet day in the US allows us to glance over at the chaos developing in the UK: the already thread-bare hold that Prime Minister Keir Starmer has on his position was weakened again with the election of a same-party rival in a by-election. Greater Manchester Mayor Andy Burnham won a seat in a local election which paves the way for him to contest Starmer’s Prime Ministership. Starmer has said he would run against Burnham in any leadership contest. “I am not going to walk away” said Starmer in an interview. The potential face-off is rattling markets with UK bonds selling off and the FTSE under pressure.
Scenario analysis: If Cogeco Communications is successful in exiting the US business, it could be a takeout candidate by a Canadian telco writes Vince Valentini of TD. Cogeco Communications is down nearly 20% from the peak in March as its US cable operations hobbled performance and it recently took a $1.2 billion impairment charge on those assets. Cogeco has previously explored the sale of the assets last year, but found no buyer at the price they were willing to sell. “We have no knowledge of an active sale process today, but we believe the write-down has increased the probability that CCA will consider strategic options and perhaps a full exit of the U.S. business in the next 12–24 months,” wrote TD’s Vince Valentini. ” If the U.S. assets are divested, then investors would be left with a much cleaner and better-performing Canadian business, in our view, with material upside potential over the next few years from either the monetization of valuable mid-band mobile spectrum and/or a full sale of the company to a larger converged telecom operator in Canada.” Valentini suggests Quebecor could be a natural buyer but Rogers or Telus could also come to the table.
Notable call: Novo Nordisk is getting an upgrade from Nordea on Wegovy pill sales. The analyst says sales of the pills could top consensus estimates and near-term news flow looks “positively skewed.” The bar is low with the stock down 15% so far this year compared to rival which is up 2% and sitting near a record high. The price target implies 20% upside for Novo.
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