In the Money: 5 Things to Know

The big reveal, going loonie, futures stable, Shopify & Boeing upgraded, CAE cut

I’m taking that whole “new year, new me” thing to heart. In my last writing I promised to reveal what I’ve been working on. Well, here it is: a brand new podcast! The first episode of In the Money with Amber Kanwar will be out on January 14th! It’s an investment podcast aimed at helping investors make profitable decisions. Every episode I’ll talk with a portfolio manager about the markets, take audience-submitted questions, and get our guest’s top investing ideas. I’ll answer two obvious questions: 1) Will I still write a morning note? Heck, yes! 2) Where can I find more info? Stay tuned! I’ll have a link to my new website tomorrow! Alright, on with the show.

House of Commons? Or House of Cards?: The Canadian dollar got a lift Sunday night after The Globe and Mail reported that Prime Minister Justin Trudeau may resign as Liberal leader this week. The resignation could come as early as today, reports The Globe. Aside from the currency, this has several implications. For one thing, the risk of a leadership vacuum at a time when Canada faces tariff threats by the United States. For investors, it leaves open uncertainty about the fate of the increase to capital gains taxes. This will also be meaningful for the energy sector, particularly oil & gas, which has felt penalized under the Liberals. However, I wouldn’t lay the rally in the loonie entirely at the feet of these reports. The rally is being aided by two other factors: tariffs and higher oil prices. On tariffs, The Washington Post is reporting that the Trump Administration would only apply tariff’s to critical imports instead of blanket tariffs. As a result of this report the trade-weighted US dollar is down 0.81%. Oil is another factor that is supportive of the Canadian dollar here, with crude prices advancing for 6th day in a row and hitting a 2.5 month high. RBC is skeptical the Canadian dollar can continue to hold up. The team expects further weakness in the loonie due to “widening US-Canada rate differentials, plus the risk of further tariff threats in Trump’s second term,” wrote RBC’s strategist Alvin Tan.

A random walk: S&P 500 finished 2024 by putting in back-to-back gains of more than 20% for the first time since the late 90s. Bespoke notes the S&P 500 ended 2024 with 57 record closing highs, which was the 5th most in any year since 1953. However, the rally sputtered toward the end of the year, notching losses 5 days in a row before breaking the losing streak on Friday. Interestingly, while the S&P 500 was melting down, oil prices steadily advanced. That helped the TSX put in a better showing after capping off its best year since 2021. Futures are mildly higher this morning with tech stocks holding things up. This week will be punctuated with the jobs reports on both sides of the border on Friday. The US stock market will be closed Thursday in honour of President Jimmy Carter.

Shop til ya drop: Shares of Shopify are up 3% in the pre-market after getting upgraded at Wedbush. The analyst likes the prospect for improving margins and strong operating income growth in 2025. “(We have) increased conviction in the company’s competitive positioning and ability to drive sustainable merchant growth,” wrote Scott Devitt of Wedbush. Shares of Shopify have had a strong run from the August low, up 111% since then. It is still off about 30% from the pandemic peak and Wedbush’s price target implies 13% upside from here. So, the easy money has been made but they still see some upside.

Buy the dips: Shares of Boeing are getting modest lift his morning after Barclays upgraded the stock to buy. I am always curious about upgrades on stocks that have so much negativity around them. A reminder that Boeing has been a one-way ticket south since this time last year when a door panel flew out mid-flight. In a note titled “Darkest Before Dawn”, David Strauss of Barclays argues that Boeing is poised to deliver sustained positive momentum for production and deliveries. The upgrade is notable because it is the first time Strauss has been positive on the stock since 2019. He now sees a more than 20% rally in the stock with a price target of $210/share. It is worth noting that even if Boeing hit that target, the stock wouldn’t be back to where it was before the door panel crisis. So he’s not pounding the table and giving the company the all-clear, but his upgrade suggests there is some money to be made amidst the turbulence

Cash out: CAE could come under pressure this morning after TD downgraded the stock this morning. The maker of flight simulation technology has surged more than 35% in the last six months and TD says it is time to take profits. This one is interesting because there is an activist investor agitating for change. Browning West revealed they had a position on December 20th. While the stock has done well recently, it has underperformed over the long-term. Recall, Browning West was behind the successful campaign at Gildan to bring back its former CEO. While TD acknowledges the presence of the activist, “We believe recent positive catalysts…have pushed the stock to a level that should result in consolidation over the coming months…,” they wrote in a note to clients.