Here are five things you need to know this morning:
Tally ho: The end of the year is approaching and markets have their sights on new highs. The TSX perked up to a 1.5-year high and the S&P 500 is on pace for its seventh week of gains. We know the underpinning of the rally has been a gentler Fed. I’m not interested in the composition of the rally. The S&P 500 managed to finish higher even as tech was weaker yesterday and most of the Magnificent Seven underperformed. But what’s really interesting is where the outperformance is coming from. Real estate, as we know, has been hammered because of rising interest rates. Now that we see a pause and cuts in our sights, it has outperformed on both sides of the border. Real estate stocks are up between 20-25 per cent from their October lows. We will look for beaten-up opportunities that are poised for a re-rating in this environment and whether the Magnificent Seven will be left behind. In Canada, Bank of Canada Governor Tiff Macklem will be delivering a speech in Toronto during the lunch hour. Will the BOC complement the softer stance from the Fed we got on Wednesday? We will watch for that today.
Not so fast: Shares of Gildan plunged when the company announced the surprise ouster of founder and CEO Glenn Chamandy. Now a pair of top shareholders are demanding Chamandy be reinstated. Recall, Chamandy said that he was fired without cause the day Gildan announced he left the company. Turtle Creek Asset Management and Browning West are calling for a reversal of the decision. “We have been impressed by Chamandy’s stewardship of the business, his strategic vision, his extraordinary knowledge of its competitive landscape, his extensive operational capabilities, and his relationships with key stakeholders and customers,” Turtle Creek wrote in a letter to the board.
Still in it: We are watching shares of Aimia. Its largest shareholder said it plans to continue buying more stock, after the company said it will revoke its “poison pill” that was in place to prevent such a move. Mithaq Capital said it plans to acquire more stock to get closer to its goal of taking Aimia private. Recall that Mithaq put an offer on the table to buy Aimia at $3.66 per share. The market is skeptical with the stock trading below the offer price. Aimia’s board has recommended investors reject the bid.
Dividends in Bulk: Shares of Costco are trading up after earnings beat expectations and the company said it would reward shareholders with a $15-per-share special dividend. This comes as the bulk goods retailer beat profit expectations for a fourth consecutive quarter.
If you build it: Shares of homebuilder Lennar are pulling back from an all-time high. Profit and sales beat expectations and Lennar is boosting its projections for home deliveries for 2024. Still, the stock is under pressure because its margins were weaker than expected, as was its forecast for margins.