In the Money: 5 Things to Know

Futures wobble, US banks boost dividends, Centene plunge, Bombardier wins, Tesla sales plunge but stock rallies

Child 1 and 3 are with Nani (Punjabi for maternal grandmother) and we’ve just had the middle for the past two days. Now, as parents we don’t pick favourites but if the middle were to have a spirit animal it would be a friggin’ unicorn. Case in point, she is still asleep. It’s also been a wonderful life hack for us to go from a zoo of children to just one little cub. It’s sort of like if you came prepared to run a triathlon but then was asked to just jog on the spot for 2 minutes.

Watch the full episode: While everyone is chasing Nvidia or the next big thing, John Ewing of Ewing Morris is looking for high growth stocks in low growth markets. Those orphan stocks can ultimately provide great returns, says John. And if they don’t, his firm has a habit of going activist on companies. For audio-only listening: you can tune in on Apple, Spotify or here.

July is live: US futures are flatlining after a sell-off yesterday. ADP payrolls showed an unexpected 33,000 drop in employment this morning. Of course, the big show will be non-farm payrolls tomorrow, but weakening job growth could increase bets for a rate cut in July. Especially since the manufacturing data we got yesterday showed deterioration in employment (ISM Manufacturing Employment dropped to 45, lowest reading since March and in contraction territory). The caveat is that prices paid increased. “The combination of better-than-expected jobs and activity data with stronger-than-expected inflation reads like this in plain English: the Fed shouldn’t rush into rate cuts,” wrote Ipek Ozkardeskaya and Swissquote Bank. Having said that, US Fed Chair Jerome Powell acknowledged yesterday that the Fed would be cutting rates now if it weren’t for tariffs. Speaking at a a central bank forum yesterday in Portugal, Powell said the Fed is “simply taking some time” to see how tariffs affect the economy. The US dollar is finding some footing this morning, but yesterday fell to the lowest level since March 2022. Watch for voting on US President Donald Trump’s Big Beautiful Bill today in the Senate after it was voted through in the House. Keep in mind, volumes are very light which could exacerbate any moves we see in the market today.

No stress: US banks are boosting their buybacks and increasing their dividends after passing an annual stress test by the Federal Reserve. The stress tests are meant to see if the banks could withstand an economic downturn but this year some of the requirements were softened making it easier to clear the bar. So the banks passed with flying colours and are rewarding shareholders. JPMorgan, Goldman Sachs, Morgan Stanley, Bank of America, Citi and even Wells Fargo all boosted their dividend. “The standout was JPMorgan Chase, with a robust $50B buyback announcement on top of hiking the dividend,” wrote TD Cowen’s Steven Alexopolous. “The solid capital plans are underscoring the strength in bank balance sheets and excess capital levels, supporting our bullish stance on the large banks,” he wrote.

Stress: Shares of Centene are plunging more than 30% and poised to open at an 8-year low after the insurer withdrew its forecast for 2025. Centene miscalculated how much it would be reimbursed for taking on sicker patients. In addition, they are seeing medical costs go up. Centene particpates in marketplaces created by the Affordable Care Act which are designed to spread risk among insurers. Basically, it looks like their projections in those markets of the number of people that would enroll were too high (premiums collected) while their usage estimates were too low (claims paid out) meaning they took in less in premiums but paid out more in claims. Peers like Elevance (-5%), Molina Healthcare (-12%) and UnitedHealth (-2%) are also falling as Centene sparks fears in the sector. UBS and JPMorgan both downgraded Centene with JPMorgan slashing profit estimates by 55%.

Big win: Watch Bombardier at the open after announcing a firm order for 50 jets. At face value the order is worth about $1.7 billion and deliveries are set to begin in 2027. Bombardier did not name the customer. Analysts view the order as a big positive. Scotia’s Konark Gupta is upgrading the stock to buy and says “demand appears to be rebounding with the tariff noise dissipating.” Shares of Bombardier are already trading at the highest level since 2018, but Gupta sees more upside. “Although the stock has gained 30% over the past two months (vs. TSX +8%), valuation remains attractive at 8.1x / 7.2x on 2025E / 2026E vs. comps at 14x / 12x (albeit, arguably some peers are more diversified).” A name that brings up PTSD for those with long memories, but has been an absolute home run for those who stepped in only a few years ago.

Fight club: Elon Musk and Donald Trump are fighting again and Tesla’s global sales fell 13% in the last three months, so naturally the stock is up 6% in the pre-market. Musk and Trump are back trading barbs on social media again with Trump threatening to turn DOGE on Musk and “looking into” the idea of deporting him. Alrighty then. Meanwhile, sales at Tesla fell as the company devoted more resources to building autonomous driving rather then selling new models of its cars (definitely not for any other reason). So why is the stock up? It seems the sales decline is better than feared and actually higher than they were in Q1 representing a sequential increase.