This week on In the Money with Amber Kanwar, Canoe Financial’s David Szybunka makes a bold call: we’re only in year 5 of a 15-year bull market for energy. David explains why the last three years were just a “digestive phase,” why energy stocks are quietly outperforming even with $60 oil, and why he sees the cycle shifting from disbelief to the early stages of optimism. He breaks down the flows, the fundamentals, and the global capital piling back into Canadian energy—from private equity to pension funds to supermajors—regardless of the prevailing political narrative.
My ego is a little bruised this morning. Child 1 and I were arguing about a certain setting on my phone. She insisted that she was right about how it works which seemed impossible considering I’ve had an iPhone longer than I’ve had her. Things escalated and she called me a stupid head. Then she turned out to be right about the phone setting. Not a good moment for ol’ stupid head.
Here are five things to know this morning:
Today is the day: Futures are allowing themselves to believe again after a four day rout in the S&P 500. Recall there are two reasons for the sell-off: concerns about an AI bubble and anxiety there won’t be a rate cut in December. Its against this backdrop that Nvidia reports results and the world might end if the results don’t knock our socks off. The TSX was spared the worst of the sell off because energy stocks ripped higher (good time to have a podcast on energy…see above!) Let’s take stock of the damage. The S&P 500 is down 4% from its all-time high. However, 67% of the index has “corrected” (down 10% from 52-week high). This isn’t showing up on the surface of the index because banks have held in and lagging tech stocks like Apple and Alphabet have actually held up during the sell-off.
- NASDAQ: -6%
- Magnificent 7: -7.5%
- Gold: -5%
- TSX: -2.5%
Bent, but not broken.
High low: Lowe’s is trading up 5.5% after profit topped expectations and same-store sales were positive for a second quarter in a row. Online sales and sales to professionals helped to offset weakness from DIY home improvement customers. Lowe’s has been leaning into selling to contractors and spent $8.8 billion to buy a drywall company in August. Clearly the bet has been paying off. Home Depot, which reported yesterday, had disappointing results as it leans more heavily on those DIYers.
Missed the mark: Target shares are down 3% after sales fell for the 12th quarter in a row and it lowered the top end of its profit forecast. The retailer unveiled a $1 billion spending plan to invest in store experience and better merchandise. Still, the stock is languishing around a 6-year low. “The stock is indicating down slightly pre-open we believe reflecting weaker EBITDA ($1.75bn adj vs Street $1.89bn), with Target planning to lower prices on thousands of household essentials a reminder of challenges facing a stretched middle-income shopper,” wrote Evercore’s Greg Melich of the results.
Hold the phone: Telus is getting an upgrade this morning from National Bank after plunging to a 9-year low yesterday on the back of a downgrade from JPMorgan. The bull-bear debate is playing out over the safety of the dividend. JPMorgan’s Sebastiano Petti argued that the 8.3% dividend yield reflected “uncertainty regarding sustainability.” He also warned that competition was heating up in Western Canada and Telus was losing market share. National Bank’s Adam Shine is taking the other side of that trade upgrading the stock to outperform calling the pullback a buying opportunity while lowering his price target to $21/share. Hardly a pound the table buy. As for the dividend, Shine believes the company will slow the growth rate of increases before contemplating a cut and that should be enough for investors.
Quack quack: Barrick is up again in the pre-market after announcing a management shakeup after the bell yesterday. Three senior leaders will be departing as interim CEO Mark Hill called the company’s safety record “deeply concerning” in an internal memo seen by Bloomberg. Recall, yesterday Elliott Management reportedly took a large stake in the company. Elliott was also activist in Suncor and part of what brought it there was the safety record. While Barrick is up over 100% in the past year, it has lagged the gold miners over the longer term and is thought to be undervalued relative to peers.
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