In the Money: 5 Things to Know

Futures lower, TSX hot streak, Target drops, Canada Goose pops, Toll Brothers & Lowe's beat and keep, Coveo miss, Bausch truce

Writing under a pile of blankets while laying on a heating pad. Nothing is wrong, just a classic case of being Canadian in spring time. Lured by fake spring last week, we just had to turn the furnace back on.

Watch on YouTube: Market swings? Tariffs? Recession fears? Richard Fogler doesn’t flinch. In this episode of In the Money with Amber Kanwar, I sit down with the cool-headed CIO of Kingwest & Company to unpack his no-nonsense investing strategy: buy great businesses at a discount—and hold.

Risk off: The S&P 500 snapped its six session win streak driven by a risk-off tone while the TSX advanced for a 10th session in a row as the same risk-off tone drove gold prices and gold miners higher. The TSX is sitting atop a another record high and the longest win streak since October 2021. A weaker US dollar this morning on the back of fiscal concerns in the US is supporting gold prices again this morning. Oil prices are also higher after CNN reported that Israel was preparing to strike Iran’s nuclear facilities. These geopolitical and fiscal headwinds are washing up in the bond market with the yield on the US 30-year breaching 5%. While these are headwinds south of the border, they are tailwinds on the Canadian markets with the index so heavily influenced by gold and energy stocks. Bank stocks will take focus tomorrow with TD kicking off Canadian bank earning season (Richard Fogler likes this stock). This morning US futures are indicating a lower open with the Dow dragged down once again by UnitedHealth (-4%) on a report in the Guardian that it secretly paid nursing homes to keep hospital transfers low. Cockroaches are still crawling out of this one. Palo Alto is weighing on the tech sector (-5%) after results failed to satisfy investors given the recent run up.

Shopaholic: We got a read of retail through earnings reports from Target and Canada Goose. Target is down 4% in the pre-market after missing profit and sales expectations and cutting its sales forecast. Target is warning that a combination of shoppers pulling back on spending and higher costs from tariffs mean sales are now expected to fall this year, after previously expecting an increase. Sales in this quarter fell nearly 4%, which was worse than anticipated. The warning should be no surprise given Walmart’s weaker outlook. However, unlike Walmart, Target doesn’t have a big grocery business to help offset weakness in non-consumables. Shares of Canada Goose, on the other hand, are surging 14% (!!) in the pre-market after sales unexpectedly grew in their winter quarter and profit trounced expectations. Keep in mind the stock is down more than 35% over the last year and 20% of the shares outstanding are short. But still, the details look decent. Total revenue increased 7% when analysts expected sales to fall. Direct to consumer sales were even better with growth of 16% while inventory fell 14%. Details like this are squeezing the shorts out this morning and overlooking the fact the company declined to provide a forecast for 2026 given the “ongoing macroeconomic uncertainty.”

Beat and keep: A pair of housing related stocks are popping in the pre-market after reporting better than feared results and sticking with their financial targets for the year. Toll Brothers is up about 4% after sales and profit came in better than feared. Importantly, the homebuilder maintained its forecast for the year. While housing market softness is still weighing on the business (new orders were weaker and signed contracts were down 13%) the company’s margins came in healthier than anticipated. The CEO says the builder is prioritizing sales price over volume right now. Home improvement retailer Lowe’s, meanwhile, also reported results that were better than feared. Sales dipped, but less than anticipated and the company maintained its forecast which implies growth accelerates from here. It is interesting on a day when bond yields are rising in the US (which drives up mortgages) that the sector which would be hit by that is actually trading up right now. Perhaps a signal that much of that fear was already priced in.

AI Play: Keep on eye on Coveo at the open after the Quebec-City-based tech company reported a wider loss than expected and revenue missed expectations. Coveo offers AI powered search tools for businesses looking to enhance their websites. While this is a hot area right now, top line growth has been stuck in single digit territory for the last year. The company provided an outlook for 2026 sales that was a little light relative to expectations while the profit outlook also missed. Still, the stock has plenty of defenders on the street. Stifel notes it is a pure play AI company trading at just 2x sales. “We believe the stock remains significantly undervalued given CVO's market position, customer list and the high-teens SaaS growth that management is targeting for FY2026, which we view as achievable,” wrote BMO’s Thanos Moschopoulos. He notes that generative AI customers increased three-fold totaling 75 with no impact from tariffs on the pipeline.

Truce: Keep and eye on Bausch Health and Bausch + Lomb after the companies effectively signed a truce with its directors Carl Icahn, John Paulson and Sarah Kavanagh. Bausch Health is the majority owner of eyecare business Bausch + Lomb and has been trying to efficiently unload it’s stake with little success. Both stocks have done poorly over the past year. The agreement with the three directors means they won’t do things like launch a proxy fight or try to take over the company and if they do they must resign immediately. In exchange, the company will continue to support them as directors. We will see if investors view the kumbaya between the company and the directors as a negative given the stocks rallied on news of Icahn’s stake.