Market Call: Chris White's outlook on Canadian Equities (June 29, 2026)

Key Concepts

• Bond Yields (US 10-Year): Used as a proxy for market risk sentiment; rising yields exert downward pressure on growth stocks.
• AI Data Center Demand: A primary structural tailwind driving growth across utilities, infrastructure, and hardware sectors.
• Inflation Expectations: Influenced by energy prices and gasoline futures; expected to moderate as war premiums in oil prices dissipate.
• Structural Tailwinds: Long-term growth drivers, such as housing/shelter lag in CPI and global defense spending.
• Financial Super Apps: Platforms like Robin Hood and EQB that leverage digital-first, low-cost structures to capture market share.

---

1. Macroeconomic Outlook

Chris White (Fiveey Research) argues that the "war premium" associated with US-Iran tensions has been fully priced out of the oil market. The focus should now shift to the US 10-year bond yield.

• Yield Impact: Since February, the 10-year yield has hovered around 4.5%. At these levels, forward market returns for non-AI growth stocks are typically muted.
• Inflation: While the Fed focuses on Core CPI, White notes that lower oil prices will eventually trickle down to gasoline futures and broader inflation expectations. He highlights an 18-month lag in shelter/rent data, which he expects to act as a "structural tailwind" for lower inflation.

---

2. Sector Analysis & Stock Recommendations

Energy & Infrastructure (AI-Driven)

• Alta Gas vs. Pembina Pipeline: Both benefit from AI data center demand. Alta Gas is preferred due to its 50% exposure to the US (Virginia, the world’s data center capital) and superior margin expansion.
• Fortis: A resilient utility play. While capital appreciation is limited, it is recommended as a defensive, income-generating holding that benefits from long-term data center power needs.
• Bird Construction: Benefiting from secular growth in AI data centers, EVs, and nuclear power. Despite a higher valuation, its order backlog remains strong.
• Stantec: Preferred over Atkins Realis. Stantec is viewed as a long-term winner in infrastructure, though it currently faces "software-like" downward pressure due to AI disruption fears.

Technology & Growth

• Constellation Software: A premier capital allocator. Despite fears that AI would disrupt its niche vertical software businesses, the company reported 20% year-over-year sales growth.
• Shopify: Positioned as an "AI-first" company. White argues that while the 70x P/E ratio is high, the company’s "flywheel effect" (merchants attracting developers and vice versa) and its move into the "agentic AI layer" justify its long-term potential.
• Celestica: Identified as the "best Canadian AI infrastructure name." It manufactures the hardware systems (semiconductors, networking, power) for hyperscaler data centers.

Financials & Retail

• Propel Holdings: A subprime lender with a unique "Lending-as-a-Service" model. Trading at 7x forward earnings, it is considered undervalued. A price move above $25–$28 is needed to confirm a trend reversal.
• TMX Group: Operates Canadian exchanges. Growth is shifting toward data analytics (e.g., the VettaFi acquisition). Recent price declines are attributed to debt taken on for acquisitions, but the long-term outlook remains positive.
• Aritzia: A resilient fashion retailer. Despite a 35x P/E, its successful US expansion and supply chain management make it a strong performer.
• Quebecor: Preferred over Rogers/BCE due to the Freedom Mobile acquisition, which provides a significant growth engine through market share gains and improved regulatory access to cell towers.

---

3. Notable Quotes

• "I don't need an analyst to tell me when a 10 times P/E stock is cheap. I need an analyst to tell me when a 70 times P/E stock is cheap." — Chris White (on Shopify).
• "[The P/E multiple] is more of a speedometer than a value indicator." — Christine Lee (on high-growth tech valuations).

---

4. Synthesis & Conclusion

The market is currently undergoing a rotation where AI-related hardware and infrastructure stocks are leading, while other growth sectors face pressure from high bond yields. White’s investment thesis centers on identifying companies with structural tailwinds—specifically those providing the physical or digital infrastructure for AI (data centers, power, and hardware) or those undergoing successful digital transformations (EQB, Robin Hood, TMX). Investors are advised to look for "price floors" in stocks that have been unfairly punished by broad sector sell-offs, particularly in the engineering and software-adjacent spaces.