The oil market just got a historic geopolitical shock — and Eric Nuttall says market complacency is creating a major opportunity in energy stocks. The Partner & Senior Portfolio Manager at Ninepoint Partners, joins In the Money with Amber Kanwar for an emergency session to break down the implications of the Iran crisis, why the market may be dangerously complacent about global oil supply, and why he believes energy stocks remain in a multi-year bull market.
Here are five things to know today:
Help wanted: The US stunned with 96,000 jobs lost in February compared to the expected gain of 55,000 jobs. The unemployment rate rose to 4.4%. Stocks, bonds and the US dollar all slid after the report. Crude oil is surging for a 6th session in a row as war rages on in the Middle East and the Strait of Hormuz remains effectively shut. Oil is up 27% in the aftermath of Iran which is the biggest weekly surge since April 2020. Yet Canadian energy stocks were only up 1% and in fact traded lower yesterday. US energy stocks are also underperforming. Energy investors may not believe in the longevity of the crude rally, but bond investors certainly do. Yields are continuing to rise this morning. The crude crunch is getting so bad that the US granted India a waiver to buy Russian oil. These are barrels that are stranded at sea, but still shows the war has forced the administration into backpedaling slightly on their sanctions on Russia. Meanwhile, Qatar is warning that Gulf producers will shut down production and oil will spike to $150/barrel within weeks if the Iran conflict continues.
Mind the gap: Shares of Gap Inc are falling 8% after sales in some of its banners fell short of expectations. Sales at the namesake retailer, The Gap, surged 7% which was much better than the 4% expected. However, Old Navy (+3% vs 4.25% expected) and Athleta fell short (-10% vs -5% expected). Shares have been volatile over the past year but are up about 40% since the June low. The CEO said a turnaround in its Athleta brand would take time and warned that sales will likely still fall this year. The Old Navy miss is a bigger problem because that is their biggest brand right now. The company also had weaker margins than expected and warned Q1 could be softer. “We see risk that the promo environment intensifies,” wrote Citi’s Paul Lejuez who is neutral on the stock.
Marvell universe: Shares of Marvell Technologies are soaring 10% after offering a rosy forecast. The chipmaker said its year over year growth will accerlate in every quarter this year thanks to data centre growth. “Marvell faces more controversy and doubt than peers, and we retain conservative estimates despite siding with the bulls,” wrote Simon Leopold of Raymond James. Marvell has underperformed semiconductors on concerns it is losing market share in the custom chip-building business and a concentrated customer base.
Make Keystone great again: South Bow said it was gauging shipper interest in a new Alberta to US pipeline project along side its earnings report last night. The Keystone pipeline operator, which was spun out of TC Energy, has launched process called “open season” meant to determine if there is enough demand to revive part of the Keystone XL pipeline. XL is the politically contentious extension to this pipeline that was killed (for a third time) under US President Joe Biden. US President Donald Trump has expressed interest in reviving it. “This confirms Management’s commitment to find a solution to utilizing the dormant Canadian portion of the legacy Keystone XL project,” wrote Nick Heywood at ATB Cormark. Shares are lower in the pre-market. TD says there are still a lot of questions about possible expansion. “What we don’t know: A definitive timeline, capital costs, build multiples, and a financing plan are all unknowns at this time, and we openly wonder how South Bow would finance this project given its balance sheet/dividend constraints,” wrote TD’s Aaron MacNeil.
Power up: Shares of Algonquin Power are lower in the pre-market after the embattled utility beat profit expectations but lowered its profit outlook for next year. The company is blaming a higher effective tax rate for the lowered profit outlook. “Q4/25 results met our estimates, however, we anticipate investors will focus on the reduced 2027 guidance,” wrote TD’s John Mould who called the results negative. Rebecca Teltscher named Algonquin as a Pro Pick last week believing that new management would right the ship after a surprise dividend cut last fall. “It is still one of the cheapest distribution utilities you can buy,” she said on the podcast.
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