Futures lower, Boeing warns, American Express misses, Magna upgraded, Grindr pops
You know that meme about getting older? One day you are cool and the next day you are asking, “Is that a yellow-rumped warbler?” It would seem my husband has entered his bird years. As I write this, he has called me three times to come downstairs to look at a cardinal outside our house. And in case I miss it, he took a video and sent it to the family group chat.
In case you missed In the Money with Amber Kanwar, the interview with Frances Horodelski and John Zechner is now up on YouTube!
Don’t rock the boat: Futures are subdued this morning after a rally yesterday that took the S&P 500 to a fresh all-time high for the first time in 2025. The TSX is exactly 1% away from an all-time high. The Dow is being dragged down by a drop in Boeing and American Express (more on that below) while Texas Instruments is falling after an earnings miss. Yesterday, the tape was dominated by Trump headlines around three topics: oil, interest rates and China. On oil, Trump called for OPEC to lower oil prices. This sent oil prices immediately lower with crude falling 1%. One trader says this is more bark than bite. “On oil, recall that OPEC frequently came under attack from Trump during his first term ,but it never took its cues from the White House then and probably won’t now,” wrote Tom Young of JonesTrading. Trump also said he would “demand” interest rates go down. Again, outside his control. Later, Trump went on Fox and talked about China noting that he would “rather not” use tariffs with the country. This sparked a rally in Chinese stocks overnight. Elsewhere, the Bank of Japan raised rates as expected. Japan has been dealing with relatively high inflation (+3.9% in December) which is a new challenge for a country that spent decades in a deflationary spiral. Aside from earnings we will get University of Michigan Consumer Sentiment at 10am, which lately has been market moving due to inflation expectations coming in higher.
Turbulence: Boeing issued a stark profit warning on the back of higher labour costs stemming from strikes last year and higher supplier costs for its defense business. The plane maker warned it will post a loss of $5.56 per share while analysts were expecting a drop of only $1.73 per share. Woof. However, the stock is only down about 1% right now. Part of that is because even though profit will be ugly, the drain on cash flow wasn’t bad as feared. Operating cash flow will be -$3.5 billion vs the street at -$3.6 billion. What a difference not losing $100 million makes. Still, I like to pay attention to stocks that rally on bad news. Especially ones that are up 30% of their lows.
I’ll clap when I’m impressed: Shares of American Express are barely budging after a stellar set of quarterly results. Keep in mind the stock closed at a record yesterday, so the bar is high. Still the credit card company with typically affluent customers reported record revenue for 2024 and grew profits 12% in the fourth quarter thanks to a spending spree during the holidays. However, core earnings missed expectations due to higher expenses and lower fee growth. This is keeping a lid on the stock. American Express says it is optimistic that strong spending trends can continue into 2025.
Hit the gas: Magna was upgraded to buy at RBC following a more than 20% drop in the shares over the last year. “US macro data is looking better, helped by improved dealer inventories and an anticipated EV rebound in the US and Europe in ’25,” wrote RBC’s Tom Narayan, “Magna specifically should benefit from easy comps, and we expect guidance to come in above consensus levels.” It’s a big endorsement on a stock that still has relatively few buys (8 buys, 12 holds, 1 sell). It is also the first time Narayan has been bullish on the stock since May 2023. His price target is $54US, which implies 35% upside from here.
Grinding higher: Shares of Grindr are popping 6% in the pre-market after it boosted its sales forecast. The online dating app for the LGTBQ community said sales are going to grow 32-33% which is higher than the 25% expected. It’s also a stark contrast to other dating companies. Match (which owns Tinder, Hinge, and Plenty of Fish) is barely growing above 5% while Bumble is only growing at around 2%. This is reflected in the share performance as you can see below.
