Well that was an interesting five days. Not everyday that your Disney trip gets interrupted by a quick trip home to interview the Prime Minister. If you missed it, you can watch the Canadian Club interview here. Social media is making a meal out of Carney calling pipelines boring. As usual, I think much of the stuff you see on social media is devoid of context and nuance. My interpretation is that they are going to get it done and he’d rather talk about other things. Which we also did. I encourage you to watch the whole thing before drawing conclusions.
Here are five things to know:
Openup: Futures are ripping higher with the tech-heavy NASDAQ set to open up 1.4% on hopes the 40-day government shutdown will be ending soon. Some Senate Democrats broke with their party to advance a Republican funding bill. This is creating a risk-on mood with stocks higher, gold rallying, crypto pumping, and bonds under pressure. The relief comes after a wobbly week in the markets with the TSX putting in a second weekly loss and the S&P 500 putting in its worst weekly loss in a month. When the government reopens it cane take a couple of days for the data to come out, but strategist Jim Reid at Deutsche Bank expects the jobs data will be the first to hit. We could get that as early as this Thursday or Friday, he said it in a note to clients. US President Donald Trump also floated the idea of giving Americans a “dividend” of at least $2,000 a person from tariff proceeds. This is known in monetary policy land as increasing M1 money supply. Earnings season is winding down for the US markets with just 9 S&P 500 companies reporting this week. By all accounts it has been a triumph with over 80% of companies beating profit expectations and profit growth of 14% – double what was expected. The TSX is still heavy on earnings this week with 46 companies set to report.
Golden dividend: Barrick Mining is soaring nearly 5% after better than expected quarterly results and a plan to return more money to shareholders. Flush with record cash flow thanks to record gold prices, Barrick says it is boosting its dividend 25% and throwing in an extra 5 cents per share as a “performance” dividend. It adding another $500 million to its buyback program after buying back $1 billion worth of stock so far this year. While these metrics are winning out the day, RBC’s Josh Wolfson points out that operational performance was less than expected. Barrick produced slightly less gold and copper than investors were looking for. Interim CEO Mark Hill took steps to address this saying the company is also laser focused on “driving improved performance” through an operational review of their assets. Recall, Mark Bristow left as CEO abruptly in September.
Pforget it: Metsera is plunging after Novo Nordisk walked away from a bidding war with Pfizer. The experimental weight-loss drug maker had been caught in a love triangle between Novo, which is looking for growth, and Pfizer, which is looking for a toehold in the obesity drug game that has largely passed them by so far. Metsera is developing a once monthly injectable treatment (compared to once per week for Ozempic). In the end, Metsera said regulators would have had an issue with Novo’s purchase and Pfizer’s deal to buy the company for $65.60 (the stock closed at $83/share Friday on bidding war fever) will prevail. As for Novo, there was concern that they might be overpaying for an unproven pipeline. Pfizer shareholders continue to be apathetic to anything the drug maker does (Our last guest Jay Hatfield had a a great line calling Pfizer the new Intel of the market, it just never seems to work). Yes, still a shareholder.
Case of the Mondays: Monday.com is plunging 20% despite better than expected results as a few details were lighter and the forecast for the upcoming quarter was also weaker. This is now the second quarter in a row that the stock has tanked right after earnings. It is poised to open at a 2-year low. The cloud company that allows companies to create their own project management applications and software beat profit and sales expectations but billings growth was weaker, the number of customers was slightly lower and their cash flow was worse. Furthermore, their outlook for the next quarter implies a slowdown from this quarter’s rate of year-over-year growth. Revenue growth of 26% hardly implies the world is coming to an end, but they beat by the lowest magnitude since their IPO according to Barclays. It is a classic case of a stock trading at a high multiple that is given no wiggle room for any misses.
Notable calls: Celestica is being upgraded to buy at Citi on…wait for it…AI spending. While that hardly seems groundbreaking given the stock is up 275% in the past year, it is worth noting it has pulled back more than 8% from its recent peak so this could be a buy-the-dip opportunity. Citi’s Atif Malik is upgrading the stock on continued AI spending by the US hyperscalers but is also willing to assign a higher earnings multiple. CGI Group was downgraded at Jefferies on organic growth lagging peers. Despite the stock trading at a 2.5 year low, the analyst doesn’t see their business improving into 2026. Sunrun is being upgraded at Guggenheim despite a dark and stormy outlook for the solar company. The stock is a shell of its former self under the Biden administration, but this year has been on a tear up 85%. It got knocked 16% on Friday after it made some financing changes overshadowing a 35% surge in sales. Guggenheim says results showed they are managing the “profoundly challenged” industry effectively.
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