Morning Markets for Thursday, April 23, 2026

Key Concepts

• Market Volatility & Momentum: The current market is experiencing a "historic snapback," where technicals and momentum are currently outweighing fundamental analysis.
• Rescheduling of Cannabis: The U.S. Department of Justice (DOJ) is moving marijuana from Schedule I to Schedule III, significantly impacting tax liabilities and research capabilities.
• Nuclear Energy Renaissance: Driven by energy security, AI data center demand, and the need for stable baseload power, nuclear energy is seeing renewed global interest.
• Capital Expenditure (CapEx) Discipline: A major trend in the telecom sector (e.g., Rogers Communications) where companies are cutting CapEx to align with market realities and improve cash flow.
• Long-term Compounding: The importance of "boring" companies (trucking, utility poles, farm supply) in achieving massive long-term returns, provided investors can withstand significant drawdowns.

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1. Corporate Earnings and Market Movers

• Lululemon: Shares fell 11.5% following the announcement that former Nike executive Heidi O’Neill will become CEO in September. The company faces weak sales, rising competition, and a sizing controversy.
• Lockheed Martin: Shares dropped ~4% due to missed Q1 profit estimates, caused by production delays in the F-16 and C-130 programs.
• Tesla: Shares fell 3.3% despite a profit beat, as the company announced capital spending will exceed $25 billion this year to fund AI, humanoid robotics, and the "Cyber Cab" platform.
• Dow Chemicals: Shares traded lower despite an earnings beat, as analysts noted the beat was driven by the suspension of equity losses at the Sadara plant rather than operational growth.
• Freeport-McMoRan: Shares declined after cutting production forecasts for the Grasberg mine through mid-2027, impacting copper and gold output.
• NextEra Energy: Shares rose following a Q1 earnings beat, driven by high demand for renewables and energy storage, particularly for data center power loads.
• Rogers Communications: Shares surged after the company announced an $800 million cut to annual CapEx, aiming for a sustainable 12% CapEx intensity.

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2. Investment Strategies and Market Outlook

Eddie Gabor (Key Advisors Wealth Management) Perspective:

• Strategy: "Ride your winners." Investors should focus on semiconductors and small-cap stocks.
• Oil Prices: Prices above $90 are viewed as problematic for the economy; a trend toward $70 is preferred.
• Emerging Markets: Gabor recommends the iShares MSCI Emerging Markets ETF (EEM) for broad exposure and iShares MSCI South Korea ETF (EWY) as a concentrated bet on Samsung’s technology leadership.
• Software: A contrarian play on the iShares Expanded Tech-Software Sector ETF (IGV), betting that the sector has bottomed out after significant declines.

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3. The Nuclear Energy Sector

Jonathan Hines (UXC) Perspective:

• Drivers: Climate change, energy security (post-Ukraine/Russia), and the intermittency of renewables.
• Technology: Advanced reactors (Small Modular Reactors - SMRs, molten salt, and high-temperature reactors) are enhancing safety profiles.
• Collaboration: North American cooperation is evident in projects like the GE-Hitachi SMR being built at the Darlington site in Ontario.

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4. Cannabis Reclassification (Schedule I to III)

Pablo Zuanic (Zuanic and Associates) Perspective:

• Tax Impact: Moving to Schedule III allows companies to deduct SG&A expenses, shifting tax liability from "gross profit" to "profit before tax."
• Market Reality: While the move is "monumental," it does not legalize recreational use federally or allow for interstate trade.
• Valuation: Zuanic suggests that if cash flow savings are applied to current valuations, some stocks could theoretically see significant upside, though the sector remains highly volatile.

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5. Long-Term Investing Framework

Brian Madden (First Avenue Investment Counsel) Analysis:

• The "Boring" Factor: The best-performing stocks over the last 25 years are not tech-heavy. They include companies like Stella Jones (rail ties/utility poles), TFI (trucking), and Tractor Supply.
• The Drawdown Reality: The 20 best-performing stocks over the last quarter-century experienced average maximum drawdowns of 70%.
• Actionable Insight: Success requires "conviction, fortitude, and a long-term view." Position sizing is critical; investors must trim winners to avoid being "shaken off the train" during massive market corrections.

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Synthesis/Conclusion

The market is currently navigating a complex environment defined by geopolitical uncertainty and a transition toward new growth drivers like AI and nuclear energy. While high-growth tech remains a focus, there is a clear shift toward operational discipline—evidenced by telecom CapEx cuts and the "boring is beautiful" investment philosophy. Investors are advised to respect technical momentum in the short term while maintaining a disciplined, long-term approach to position sizing to survive the inevitable volatility of high-performing assets.