Futures mixed, UnitedHealth plunges, Newmont flat, Celsius pops, Rivian drops
I’ve lost track of how many times my husband has replayed the winning goal by Canada on his phone this morning. Scotia’s economist Derek Holt said it best in his morning note. “We Canadians are not known for bragging in loud obnoxious fashion, but frankly, for all that the US administration has put my country through with its unjustified assault, endlessly demeaning insults and slanderous betrayal, I hope that one hurts. Bad.”
The full episode of In the Money with Amber Kanwar featuring Jamie Murray of the Murray Wealth Group is now up on YouTube! Click below to watch.
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Friyay: Dow futures are in the red while the S&P 500 and Nasdaq futures are indicating a higher open. The Dow is being held back by a big drop in UnitedHealth shares (more on that below). Yesterday’s markets were characterized by concerns about the US consumer (Walmart), optimism in China (Alibaba) and weakness in transportation (TFI international plunged 20% on an earnings miss and plans to redomicile to the US). This morning, we got a read of Canadian retail sales which surged 2.5% in December, much better than the 1.6% expected. “Retail sales received a larger than expected boost from the start of the temporary GST holiday in December, but failed to build further on that in January,” wrote CIBC’s Andrew Grantham. The flash estimate for January suggests sales fell 0.4%. Today, we will hear from Tiff Macklem, governor at the Bank of Canada, in a speech on trade around lunch time. This weekend, Germany is holding elections against a difficult economic and political backdrop. “Indeed its economy hasn’t grown over the last 5 years which for one of the strongest nations in the world, is a major disappointment and big cause for concern,” wrote Jim Reid of Deutsche Bank. However, the German markets have been up strongly (+12% YTD) on hopes that government stimulus from a typically fiscally restrained country can finally help offset the slump. Next week the Canadian banks kick off their earnings season on Tuesday. Nvidia reports Thursday.
Cockroaches: Shares of UnitedHealth are plunging 12% in the pre-market on a report that the Department of Justice has launched a civil fraud investigation. The reports say the investigation is about whether the insurer fostered a system that incentivized doctors to diagnose more diseases so that UnitedHealth could get lump-sum payments from the federal government. There has been intense scrutiny on the company ever since Luigi Mangione allegedly assassinated UnitedHealthcare CEO Brian Thompson. The shooting sparked national attention on the company’s practices when it comes to denying medical claims. Shares of UnitedHealth are down more than 20% since then. Famed investor Bill Ackman is weighing in this morning. He got involved after watching a video of a doctor who said she got a call from UnitedHealth while she was in surgery with a patient asking if it was really necessary that the patient stay overnight in the hospital. “My psychological short here is paying off and I would avoid this stock,” Ackman posted on X. “When you find two cockroaches, it is almost a certainty that there are many more. And a half a trillion market cap for a health insurer makes no sense. I expect that there are many whistleblowers who have shared their work with the government and that more will be inspired to do so.” This is sending a chill down the spine of insurers this morning with shares of Humana, CVS and Elevance all down.
Shiny: Investors aren’t sure what to do with Newmont after the world’s biggest gold miner reported better than expected earnings but showed higher than expected costs as it digests their huge Newcrest acquisition. “We view this release as mixed for the shares,” wrote Scotia’s Tanya Jakusconek, “The strong Q4/24 operating performance is offset by higher cost guidance and reserve adjustments. Costs and the lack of (long-term forecasts) were a focus on the conference call.”
Hopped up: Shares of energy-drink maker Celsius are all hopped up this morning surging 33% in the pre-market. While profit fell 18% from last year on a 4% drop in sales, those numbers came in better than feared. The #3 energy drink in America also announced a $1.8 billion deal to buy privately held Alani Nu – a female focused energy drink company. While the rally today is stunning, keep in mind the stock is down more than 70% from its peak last year as growth completely stalled out (not good when you are trading at +1000x earnings). However, with the multiple lower and growth coming in better than expected coupled with a high short position (22% of shares are short) this is exactly the kind of stock that has been ripping in 2025 (see my note about negative headlines leading to strong performance).
Stalled: Shares of Rivian are falling 8.5% despite better than expected sales and a smaller loss than expected. The outlook for 2025 came in weaker and that is weighing on stock. In particular, Rivian said it would deliver 46,000-51,000 cars this year but analysts were forecasting 54,800 deliveries. The forecast also suggests deliveries will drop from last year and the company’s forecasted loss is higher than expected.
CORRECTION: A previous version of today’s newsletter stated that Bill Ackman was short UnitedHealth. While he is “psychologically” short, he is not financially short. I regret the error.
