Futures lower, Shopify drops, Coke pops, Humana flat, Cineplex struggles
I’m up early to host a real estate panel downtown at 8am. Normally, I would dispense with a preamble but it seems I am up so early that nothing has happened yet – I’m up before earnings and my kids. Thank goodness for my Beyonce group chat. Tickets go on sale this morning and we’ve already planned a trip to Chicago, discussed a budget, and looked at flights. All before 6am. Apologies to my husband who is finding out about this for the first time in my morning note.
In today’s episode of In the Money with Amber Kanwar we talk crypto with Matt Hougan of Bitwise. Whether you’ve invested in crypto or you are just crypto curious, this episode is for you. He explains why he thinks bitcoin can hit $200,000, what he’s buying and what he wouldn’t touch with a 10-foot pole. You can listen on Apple, Spotify or here. New episodes come out every Tuesday & Thursday. Like & subscribe!
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Turnaround Tuesday: Futures are indicating a lower open this morning after a strong session yesterday that sent the TSX and S&P 500 within spitting distance of all-time highs. Trump followed through on his promise to deliver 25% tariffs on steel and aluminum after the close. Gold has spiked to another record high of $2,900/oz. Bullion initially sold off after Trump was elected. But as tariffs have been thrown around, gold has steadily advanced. This is part of why the TSX has been off to a solid to start in 2025, gold miners have outweighed the parts of the market that would be hit by tariffs. Inherently, tariffs are inflationary. While the Trump administration says differently, the rally in gold suggests inflation bets are increasing. We will get perspective on this today when Federal Reserve Chair Jerome Powell testifies in front of the Senate Banking committee. He will testify again tomorrow and we will also have a read of US inflation by then. These next couple of days will test the markets bet that a rate cut is possible in June.
Dropify: Shares of Shopify are dropping 7% in the pre-market despite higher sales and better profit than expected. I don’t see an obvious reason for the sell-off as the outlook was also inline with expectations. Could be a case of being priced for perfection given the +70% gain in the stock in the last three months and an 80x forward earnings multiple. Sales in the fourth quarter increased 30% and the company said sales for the upcoming quarter would grow in the mid-20s. While that is a slower pace of growth, it is a weak excuse for a sell-off given that analysts were already predicting that level of growth.
Hopped up: Shares of Coca-Cola are up nearly 4 % in the pre-market after sales and earnings beat expectations. Not only that, the company saw volumes increase for the first time in six quarters while the company’s ability to increase prices continued. Prices rose 9% which is the 11th straight quarter Coke has increased prices above 9%. The outlook for 2025 looks a little softer relative to expectations, but investors taking comfort in volume growth. Shares of Coke are off their 2024 highs but have perked up in 2025 and outperformed rival Pepsi.
Check for a pulse: Humana is flat in the pre-market as investors digest mixed quarterly results. On the plus side, it reported a slightly smaller loss than expected. However, its outlook for profit came in below expectations. The managed care company also warned it was going to lose 550,000 Medicare Advantage annual memberships as it plans to exit unprofitable plans and counties. These managed care companies have been under pressure as people started accessing medical services once again after the pandemic at the same time that the government has been offering lower reimbursements. The fact that the stock is flat in the pre-market despite these headwinds may suggest investors are starting to believe the worst is over after a 27% drop in shares over the past year.
Popcorn: I’ll watch shares of Cineplex at the open after the movie theatre chain posted lower than expected profit and sales. While sales grew 15% from last year, total sales for 2024 are still below pre-pandemic levels as Cineplex has been on a multi-year journey to grow again after the pandemic decimated sales. Indeed, total theatre attendance for 2024 was 42.9 million, down 10% from last year and down from the 66 million in 2019. To compensate for lower attendance, it appears they are charging more. Box office receipts per patron and concession receipts per patron hit a record high for the fourth quarter (although at $13.26 and $9.41 respectively, still a cheap night out!)
