While much of the market is chasing the same handful of stocks, 30-year Bay Street veteran Scott Morrison is looking somewhere else. The Founder & CIO of Wealhouse Capital Management oversees $2.2 billion with a contrarian strategy focused on buying great businesses at discounted prices. He joins Amber Kanwar to discuss why international markets are becoming more attractive, where he’s finding value today, and how investors can profit from unpopular ideas before they become consensus.
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Here are five things to know today:
Move in silence: The TSX quietly hit another record high yesterday while the S&P 500 fell for the fourth session in five. Tech is weighing heavy as investors are disappointed in Alphabet and Tesla (more on that below). The rally in oil, which has supported the Canadian markets this month, is weighing on markets overall with crude hitting $90/bl – the highest since June 10th. Inflation fears are back on the table – but it wasn’t enough to force the European Central Bank to raise rates for a second time in a row this morning. The ECB kept rates unchanged choosing to monitor “the intensity and the duration of the shock.” American Airlines (-4%) doesn’t have that luxury and is cutting their earnings outlook because of the 83% surge in jet fuel. This is overshadowing a 16% increase in revenue – which hit a record in the quarter. Bond yields have risen across the world as oil prices perked up again. Based on the rhetoric out of Washington and by US President Donald Trump, there are no signs of peace emerging any time soon. Tonight we will get earnings from Intel and Newmont.
Hey big spender: Shares of Alphabet are under pressure despite profit beating expectation as it increased its capital spending program once again. There is a lot to nitpick about even though profit soared: Google now plans to spend $195-$205 billion this year compared to their previous view of $190 billion in spending. As a result of all the spending, free cash flow was negative for the first time in the company’s history. I’ll say that again: Alphabet spent more than it brought in for the first time since going public in 2003 burning $5 billion. Profit was significantly higher than expected but that was because of gains on their AI investments – when you strip that out earnings per share would have missed expectations. Before you hit the sell button, there were plenty of signs that investments in AI were paying off. Cloud revenue soared 82% from last year – higher than the 70% growth expected. There are 950 million people now using Gemini (Google’s AI platform). Search increased 17% thanks to AI Mode and AI summaries. The company is also having success selling its own semiconductors (TPUs) which could turn into a major growth driver. “GOOGL is a Very High Quality Compounder, with one of the best AI Narratives on the planet – from the chip layer to the infrastructure layer to the application layer…,” wrote Evercore’s Mark Mahaney, “…The key catalysts from here will be a potential return to the LLM Frontier with the next Gemini drop, and signs of material traction for TPU System Sales. We view both as distinctly possible events over the next 6-12 months.” I own Alphabet.
Hit the brakes: Tesla is dropping on a huge miss to earnings (-35% less than expected), cash burn for the first time in two years, and predictions of higher spending. Tesla isn’t spending as much as the hyperscalers – but is pegging capex at around $25 billion on humanoid robots and autonomous vehicles. This is overshadowing the car business which was actually better than expected: car sales were 8% above expectations. But with average selling price lower – the company clearly had to resort to discounts to move cars off the lots. And at 188x earnings we really aren’t buying this stock for the cars. “We view Tesla’s accelerating capex cycle as a necessary investment to secure leadership in autonomy & robotics,” wrote Morgan Stanley’s Andrew Percoco who has a hold on the stock and lowered the price target to $400 from $417. “Absent consistent, transparent proof points, we’d expect the market’s tolerance for incremental capex to narrow.”
Look at me now: ServiceNow is popping 5% after sales, profit, and its bookings grew more than anticipated. The enterprise software service provider has been caught up in AI disruption fears and the stock is down 37% so far in 2026. But the quarterly results show growth is still healthy: revenue increased 24% which is the best growth in two years, it has crossed $1 billion in annual contract value for its AI tools, and the number of customers with $5 million+ contract value increased. So why isn’t the stock higher? “The quarter was not flawless,” says Citi’s Tyler Radke. Sales were flattered by contract renewals and federal revenue related timing and the increased forecast was “modest.” Radke chalks it up to conservatism rather than deterioration in the fundamentals. “We remain Buy-rated, as viewing ServiceNow as a premier large-cap enterprise application software franchise, supported by a durable core business, strong organic innovation, accelerating AI monetization, and an increasingly meaningful Security growth opportunity,” said Radke.
Grab the popcorn: IMAX is pumping 6% in the pre-market after strong quarterly results and a rosy outlook thanks to Christopher Nolan’s “The Odyssey.” The CEO of IMAX called the movie a “transformational event” for the company. The movie has already raked in $328 million globally. IMAX sold $50 million worth of advance tickets – a record for the company. This has movie theatres scrambling to make sure their theatres are IMAX-enabled with second quarter installations hitting the highest in a decade.
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