Caution isn’t stopping Gordon Reid from finding opportunities. The President & Chief Investment Officer of Goodreid Investment Counsel Corp. is getting more defensive as markets contend with higher interest rates, inflation and geopolitical uncertainty—but he’s not taking his chips off the table.
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FROM AMBER’S DESK
Currently Googling if rats can get into cars. So that’s how my morning is going.
Here are five things to know today
1.
Stocks fall, oil rising, bonds sell-off
Oil prices are up 4% on lack of progress on the Hormuz situation sparking another sell-off in the bond market which is creating a headwind for equities. In the spirit of toxic positivity – under the hood things look to be in decent shape. While breadth has narrowed and the equal-weight S&P 500 is down 5% from the high, the valuation of the index has contracted from historically high levels (see chart below). You can’t yet call the S&P 500 cheap, but at 19x forward earnings it isn’t a bubble either. The multiple contraction has occurred as earnings estimates continue to move higher. The good kind of multiple contraction.
It is a trickier situation for the TSX which has been underperforming the S&P 500 since March. Yes, Canadian stocks have held in nicely for 2026 with gains but financials have hit the breaks recently and the energy sector hasn’t kept pace with the rise in crude. We’ll ask David Szybunka of Canoe Financial about that on tomorrow’s episode. Gold stocks have done a respectable job of holding in despite volatile bullion. That might be challenged today with gold down 3% and equities down across the board. “In the long run, uncontrolled inflation is very constructive for gold,” said Agnico Gold CEO Ammar Al-Joundi on the podcast last week, “In the short run, it isn’t, because what happens when you have expected inflation is a rise in interest rates. And when interest rates go up significantly, the view is to sell gold.”
Source: Bespoke Investment Group
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2.
AI stocks lower on OpenAI warning
OpenAI warned Friday it was forced to stop training its newest models because some of the AI agents went rogue. Apparently the agents accessed US government websites, according to the Wall Street Journal. This is stoking fears yet again of an AI spending slowdown. Although regulation and slowing progress is something that US President Donald Trump has resisted. A positive signal from Trump that he still holds that position could turn the sector around. Since August it has been one of the few areas of strength in the market.
Nvidia is one of the few tech stocks in the green this morning after releasing a new software system that would stop AI agents from straying. And of course that system runs on Nvidia chips. Nvidia says this new software would have stopped the recent “Hugging Face” attack in which AI agents from OpenAI acted without authorization.
And just because it was brilliant satire, you must watch SNL’s take on Dario Amodei’s warning about AI and push for regulation: “I urge you, to urge me, to stop.”
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pre-market pullback in ai stocks Sandisk: -2.5% Intel: -2% Marvell: -1.5% |
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3.
H&R REIT announces day to vote on deal late Friday night
H&R REIT said investors of record as of October 2nd will be able to vote on the deal to spin assets off on November 13. Giving investors just 5 more days to decide if they want to stick around the story. The controversial deal involves H&R selling its US residential business to GO residential, its industrial properties to Blackstone, Crestpoint and PSP, while the remaining assets go to H&R CEO Tom Hofsteder. Both stocks have sold off since the deal was announced and it has drawn criticism from many guests on our show including JF Tardif and Cole Smead. We will get perspective from veteran real estate investor Jeff Olin who is on the podcast this week. We’ll get more information about how the deal came together when the company releases a management information circular on October 8th.
GO Residential was cut to sell by Bank of America this morning on the rising complexity stemming from this deal. “(We) are cautious about the refinancing risks, execution, and durability of cash flows embedded within the combined platform,” wrote the team of analysts. It is the only sell on the stock. “The transaction creates a substantially larger and more diversified residential REIT, but Go still has significant leverage, above most U.S. REITs and a much more complicated path to value creation as borrowing costs rise.”
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“We expect the stock to underperform peers with lower leverage and longer debt maturity schedules” — bank of america on go residential (sell) |
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4.
Slate Grocery REIT agrees to takeover
The embattled US-grocery store anchored REIT announced on Thursday they were suspending their distribution sending the shares down nearly 30%. Well today today said they’ve entered into an agreement to be bought for $US13/share! What luck! The premium is massive when you consider the selloff in the stock, but still a decent 20% higher than where the stock was trading before the distribution was cut. Bixmor Property Group and Everview Partners are coming together to buy the company in a deal worth $2.3 billion. Brixmor is a public company focused on open-air shopping centres while Everview is a private investment firm. Can’t wait for Jeff Olin to come on to discuss the heat in the REIT space!
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5.
MongoDB plunges on Meta poaching
Shares of MongoDB are plunging 22% the pre-market after announcing its CEO would be leaving effective immediately to pursue a senior role at Meta. It’s a major blow to MongoDB which has been busy trying to convince investors that isn’t AI roadkill. The now former CEO, CJ Desai, will now serve as Chief Enterprise Platform Officer overseeing AI offerings for business. Can’t imagine the paycheck that went along with that job change.
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