WATCH LATEST EPISODE: DAVID ROSENBERG
Everyone calls David Rosenberg a permabear but he says he’s fully invested, just in completely different places than the consensus. On this episode of In the Money with Amber Kanwar, Rosenberg breaks down why he’s still in the market despite sounding the alarm on what he sees as extreme valuations, bubble-like behaviour, and a dangerous level of investor complacency. From a “teflon market” that shrugs off every shock, to an equity market where investors are effectively paying to take risk, he explains why this cycle feels eerily similar to the late-90s tech mania.
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This week the Federal Reserve holds its first interest rate decision under new Fed Chair Kevin Warsh. For a preview of what’s coming up this week, read my column in the Globe and Mail.
Here are five things to know today:
New York Minute: The US & Iran have reached a deal to pause their fighting and re-open the Strait of Hormuz after the deal is signed on Friday sending stocks and gold higher while oil prices drop to a 3-month low. The interim peace deal sets the stage for a 60-day negotiation period over the major issues like Iran’s nuclear program. I’ll leave aside all the things that could go wrong and instead focus on the market’s response which is that this is basically over. The key pain point for Canada could be energy stocks as oil prices weaken. Having said that the stocks have been resilient: oil is down 20% over the past month but TSX oil producers are only down 4%. Below is a comprehensive breakdown of all the action we are seeing:
- NASDAQ futures +2%
- Semiconductors +4%
- Gold +3%
- Oil -5%
- Bonds rallying
- Bitcoin +3.5%
Orbit: SpaceX is up 5% in the pre-market after its successful debut on Friday notching a 20% gain. Over the weekend Musk tweeted (in response to my former colleague Jon Erlichman’s post) that he wouldn’t be surprised if revenue hit $1 trillion by 2030. Revenue this year is projected to be $32 billion. If he merged Tesla – as is widely expected – that would help him get closer to that figure faster with Tesla projected to have $102 billion in revenue this year. But it’s not like he hasn’t 10x’ed revenue before. No company has ever posted $1 trillion in annual sales before – but Amazon is the closest projected to do $933 billion in sales in 2027.
Streaming wars: Fox is plunging after inking a deal to buy Roku for $22 billion. The deal was first leaked on Friday, sending Roku shares up 20%. It’s a mix of cash and stock with Fox raising debt to pay for a portion of the deal. The deal will bring 100 million Roku subscribers into the Fox platform and make them the third largest player in the US. Fox bought Tubi in 2020 in its first effort to expand into the streaming market.
On the hunt: Exxon Mobil is reportedly interested in doing another major deal, potentially sniffing around Australia’s Woodside Energy Group according to Bloomberg. This morning Woodside denied any talks have taken place. However, it speaks to Exxon’s interest in doing a deal to beef up its LNG exposure and diversify away from the Middle East. Exxon Mobil bought Pioneer Natural Resources in 2023 for $68 billion. Woodside’s market cap is around $56 billion (australian dollars).
Advantage, activist: Watch shares of Advantage Energy after the abrupt departure of the company’s CEO, Michael Belenkie, this morning. No direct reason was given, but he wasn’t quoted in the press release so read into that what you may. John Festival, the Chair of the board, will step in as interim CEO. Advantage concluded a strategic revenue in February that yielded no deal. Canadian natural gas stocks have been in the doldrums and has claimed Advantage Energy with the stock down 16% so far this year. The backdrop of this sudden CEO change could be the result of activist pressure from shareholders including UK based Kimmeridge. The asset manager, which is the third largest shareholder in the company, recently applauded moves to meaningfully increase sharebuybacks over the next three years. There was concern they would dump stock after the unsuccessful sale of the company. Perhaps the ouster of the CEO signals they believe there are other options to unlock value.
Don’t miss our next interview!
