The Street for Friday, April 10, 2026

Key Concepts

Strait of Hormuz: A critical maritime chokepoint for global energy, accounting for 20% of oil supply and 20% of LNG supply.
Core PCE (Personal Consumption Expenditures): A key inflation metric favored by the Federal Reserve, currently showing persistent upward pressure.
Inflationary Drivers: Rising energy costs (oil/gas) impacting production (fertilizer, aluminum) and consumer purchasing power.
Labour Market Dynamics: The shift from strong job growth to stagnation, with specific focus on the "softening" Canadian economy.
Smart Eyewear: An emerging technology sector integrating AI (LLMs) and Bluetooth into prescription glasses, viewed as a potential successor to the smartwatch market.
Floor Crossing: The political phenomenon of Members of Parliament switching party allegiances, creating uncertainty in legislative stability.

1. Economic Outlook and Market Risks

Hadiza Jatau (Mackenzie Investments) highlights that global markets are currently in a "fragile" state due to geopolitical tensions in the Middle East.

Inflationary Concerns: While headline CPI is expected to rise (consensus 3.4%), the real concern is Core Inflation. Recent data shows Core PCE increasing at the fastest pace in a year, suggesting that inflation is not decelerating.
Energy Prices: The conflict in the Strait of Hormuz creates a physical shortage of oil. Even if the conflict stabilizes, Jatau argues that markets are underpricing the "higher-for-longer" risk for oil prices.
Canada vs. US: Canada’s economy is showing more strain than the US, driven by a cooling labour market, a stalled immigration engine (which previously fueled consumption and rent demand), and a struggling real estate sector.

2. Labour Market Analysis

Brendon Bernard (Indeed) provided insights into the latest Canadian employment report:

Data: Employment was "little changed" in March, with the unemployment rate holding steady at 6.7%.
Wage Growth: Average hourly earnings rose 4.7% year-over-year. However, Bernard cautions that this is partly due to "compositional shifts" in the types of jobs being worked, rather than a uniform wage hike across all sectors. The "fixed" wage growth rate is closer to 3.6%.
Sector Trends: Professional, scientific, and technical services (including tech) showed strong gains, potentially signaling a shift in the post-pandemic, AI-integrated economy.

3. Corporate Highlights and Industry Shifts

Corus Entertainment: Reported a 15% drop in consolidated revenue, with the television business acting as the primary drag.
MTY Food Group: Reported net income of $37 million, driven by foreign exchange gains, despite missing revenue estimates due to declining US corporate store sales.
Innovative Eyewear: CEO Harrison Gross discussed the company’s strategy to disrupt the traditional optical market.
- Market Potential: The smart eyewear market is projected to reach $2 billion by 2025. Gross draws an analogy to the smartwatch market, which transitioned from niche to mainstream within five years of the Apple Watch launch.
- Tariffs: The company successfully navigated trade tensions by leveraging a "carve-out" for electronic devices, keeping their tariff rates significantly lower than traditional eyewear manufacturers.

4. Analyst Recommendations

Mondelez: Bank of America raised the price target to $65 (Buy rating), citing positive management meetings and progress in European chocolate retailer negotiations.
Strategy (Bitcoin holder): TD Cowen cut the price target to $350 (from $440) due to lower Bitcoin prices and reduced valuation multiples.
Simply Good Foods: Stephens downgraded the stock to "Equal Weight" following a significant guidance reduction.

5. Synthesis and Conclusion

The overarching theme of the discussion is one of cautious uncertainty. Investors are balancing the "peak narrative" of geopolitical conflict against the reality of persistent inflation and slowing economic growth. While the Canadian labour market is showing signs of stabilization after a weak February, the loss of key growth drivers—specifically immigration and real estate—poses a long-term challenge. The consensus among experts is that while energy prices and geopolitical tensions are currently the primary market drivers, the underlying health of the consumer and the ability of central banks to manage interest rates amidst inflationary pressures will dictate the market's direction in the coming quarters.