Futures lower, PVH pops, J&J loses in court, Air Canada downgraded, Newsmax pop
A few years ago the US saying they wanted to annex Canada, acquire Greenland, turn Gaza into a resort town, eliminate the Department of Education, mull a third presidential term, or create a government agency named after a meme coin might have made for a hilarious April Fool’s joke. What are the chances the last three months have been a long elaborate build to a “April Fools!” from the United States?
A brand new episode of In the Money with Amber Kanwar is out right now! We spoke with Dan Rohinton of iA Global Asset Management about how investors can weather the tariff storm. It includes what he calls a “generational buying opportunity” in tech stocks. Tune in! Listen on Apple, Spotify or here.
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April showers: The last month has been no joke for investors. The S&P 500 fell nearly 6%, it’s worst monthly performance in two years. The TSX fell for a second straight month, the first back-to-back monthly declines since October 2023. Energy is the only sector higher for the month of March in the US while gold and energy were star performers in Canada. The Magnificent 7 slipped into bear market territory, down more than 20% from the December peak. Futures are slipping this morning ahead of the only catalyst that matters this week: Liberation Day will be presented in the Rose Garden tomorrow around 3pmET. This morning we will also get a read of the manufacturing sector in the US (ISM Manufacturing at 10amET) which is expected to show the biggest uptick in prices paid since 2022. In the meantime, the 52-week low list is littered with companies you may have wanted to purchase at lower prices. Now is your chance. There are also stocks that have been punished because of tariff concerns and if they don’t come in as bad as feared they could be in for a pop. Names like BRP, Scotiabank, Air Canada, Cargojet, the rails, Teck Resources are on my watch list.
Jean machine: Shares of PVH are surging 16% after the owner of Calvin Klein and Tommy Hilfiger said sales are starting to stabilize and may grow this year. It also announced a $500 million share buyback. The stock is popping off a 2-year low as the company has been caught up in trade tensions between China and the US. In February, China blacklisted PVH as part of the trade war between the two countries. While total sales this quarter fell, the company’s profit forecast for the year is much better than feared. This is only the second time in 14 quarters that PVH has had a better forecast than feared, hence the share price reaction.
Legal troubles: Shares of Johnson & Johnson are falling 3.5% after a court rejected the company’s third attempt to use bankruptcy to set up a trust that would pay claims from women who said they got cancer using J&J’s baby powder – which it discontinued in the US only in 2020. The rejected proposal would have set up a trust that determined how much each cancer victim would get and would have halted all other lawsuits related to the allegations. J&J has set aside $9 billion to resolve claims by 93,000 people. The rejected proposal means a greater likelihood that J&J will be headed to trial over these claims.
Notable call: Air Canada was cut to sell at Jefferies by Sheila Kahyaoglu. While the stock is already trading at the lowest level since May 2020, Kahyaoglu is warning of more downside. This downgrade doesn’t just apply to Air Canada, Kahyaoglu is also downgrading Southwest Airlines, American Airlines and Delta Airlines. She expects all of them will likely cut their profit forecast for 2025.
Breaking news: Shares of right-wing news outlet Newsmax went public yesterday and surged 735% in its debut. This values the company at over $10 billion which puts it at a lofty valuation when you consider that revenue was only $171 million last year and it is still losing money. The IPO seems to have brought out big retail investor interest and may have minted it as the next meme stock. The success of Newsmax stands in stark contrast to AI insfrastucture play CoreWeave which failed to raise as much as expected and fell 7% in its debut.
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