The Street for Friday, Feb. 13, 2026

Key Concepts

• Trump Tariffs: Ongoing uncertainty surrounding potential adjustments to tariffs on steel and aluminum, impacting trade relations with Canada.
• AI Impact: Discussion of the influence of Artificial Intelligence on various sectors, including tech, finance, and even personal relationships. Concerns about potential bubbles and shifts in investment strategies.
• Market Rotation: A shift in investor focus from the “Magnificent Seven” tech stocks to smaller-cap companies and value stocks.
• CPI Data: Analysis of the latest Consumer Price Index (CPI) data and its implications for interest rate decisions by the Federal Reserve.
• Economic Indicators: Examination of various economic indicators, including oil prices, metal prices, and earnings reports, to assess market trends.
• Company Specific Analysis: Detailed discussion of individual companies like Hydro One, Enbridge, Coinbase, Alphabet, Honeywell, Aritzia, Constellation Software, and Air Canada.

Market Overview & Economic Data

The broadcast began with updates on several key economic stories:

• Hydro One: Reported fourth-quarter profits and revenue exceeding estimates, initiating a transmission line project with First Nations communities under a 50/50 equity model, framed as a step towards reconciliation.
• Enbridge: Also beat fourth-quarter profit expectations, reaffirming 2026 targets, driven by US expansion and partnerships with Meta.
• Coinbase: Experienced a significant loss in Q4 (-$650 million) and a 20% revenue drop due to the cryptocurrency market decline (Bitcoin down nearly 50% from its October high), despite outperforming in trading volume.
• Trump Administration Tariffs: Reports indicated the Trump administration was considering narrowing its broad tariffs on steel and aluminum, though uncertainty remained.

The US CPI data released during the show showed a 2.4% year-over-year increase in January, slightly below expectations (2.5%). Month-over-month increase was 0.2%, also below consensus. This data triggered a positive market reaction, with futures rising and the US ten-year yield falling below 4.10%.

Trump Tariffs & Trade Relations

The discussion centered on the fluctuating signals regarding Trump’s stance on steel and aluminum tariffs. Steve Rolls emphasized the current market uncertainty, advocating for a cautious approach and highlighting Scott Bessent’s views as a reliable source. He noted that the tariffs are beginning to be felt, particularly in the auto sector (citing Ford’s disappointing earnings). Trump’s strategy was described as creating chaos to ultimately achieve his desired outcome, but the exact nature of that outcome remains unclear. Canada also imposes tariffs on steel imports, adding complexity to the situation.

AI & Investment Strategy

A significant portion of the broadcast focused on the impact of Artificial Intelligence (AI) on the market.

• Market Rotation: Rolls observed a rotation out of the “Magnificent Seven” tech stocks and into smaller-cap companies, particularly those with value characteristics. The Russell 2000 was highlighted as a beneficiary of this shift, up 6% compared to the S&P 500’s 1% gain.
• AI Concerns & Capital Expenditure: The massive capital expenditure (CAPEX) commitments by companies like Google (potentially reaching $1 trillion) sparked debate. While some view this as a potential bubble, Rolls argued it represents a tangible infrastructure investment with broader economic benefits, unlike the dot-com boom.
• Investment Focus: Rolls advocated for a focus on cash flow, high-quality stocks, and dividend-paying companies, particularly in sectors like financials, utilities, and energy. He emphasized the importance of active management and avoiding chasing headlines.
• Quantum Computing: Rolls discussed the potential of quantum computing as the next frontier, building upon the foundation laid by AI. He highlighted Honeywell’s investment in quantum computing through its partnership with Quantinuum.

Company Specific Analysis & Recommendations

• Alphabet (Google): Rolls expressed a strong positive outlook on Alphabet, citing its vast data resources and potential to capitalize on the AI boom. He saw the recent dip in price following the CAPEX announcement as a buying opportunity.
• Honeywell: Recommended as a beneficiary of infrastructure spending related to AI, with a focus on its diversification and innovation, including its investment in quantum computing.
• Aritzia: Praised as Canada’s “greatest company” of the past decade, citing its strong growth, prudent management, and expanding US presence.
• Constellation Software: Rolls expressed a negative view, citing concerns about its acquisition-based business model in the face of AI disruption.
• Coinbase: While acknowledging the company’s recent losses, Rolls saw potential in its focus on stablecoins and viewed it as a more attractive investment than directly holding Bitcoin.
• Air Canada: Rolls advised avoiding airline stocks due to inherent uncertainties and the impact of economic conditions on travel demand.
• Thomson Reuters: Rolls saw potential for adaptation and growth, particularly through leveraging AI to enhance its data services.

Notable Quotes

• Steve Rolls on Trump’s strategy: “He will cause chaos and and back people into a corner. And then we'll come out, usually get what he wants. But we never know what he wants until he gets it.”
• Steve Rolls on AI and infrastructure: “This is more of a tangible infrastructure spend, which has more of an impact on the overall economy than than the.com.”
• Steve Rolls on Quantum Computing: “Quantum is going to allow you to read all the books at the same time.”

Technical Terms & Concepts

• CPI (Consumer Price Index): A measure of the average change over time in the prices paid by urban consumers for a basket of consumer goods and services.
• CAPEX (Capital Expenditure): Funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, and equipment.
• Magnificent Seven: A group of seven large-cap US technology stocks (Apple, Microsoft, Alphabet, Amazon, Nvidia, Tesla, and Meta) that have driven significant market gains in recent years.
• Russell 2000: A small-cap stock market index representing approximately 2,000 of the smallest securities in the Russell 3000 Index.
• Stablecoins: Cryptocurrencies designed to maintain a stable value relative to a reference asset, such as the US dollar.
• Yield Curve: A line that plots the interest rates (yields) of bonds having equal credit quality but differing maturity dates.

Logical Connections

The broadcast flowed logically from macroeconomic updates (CPI, tariffs) to broader market trends (rotation, AI impact) and then to specific company analyses. The discussion on AI served as a unifying theme, influencing perspectives on various investment opportunities. The analyst calls provided concrete examples of how market sentiment was shifting in response to these trends.

Conclusion

The broadcast highlighted a period of market uncertainty driven by geopolitical factors (tariffs) and technological disruption (AI). The key takeaway was the need for a pragmatic investment approach, focusing on fundamentals, diversification, and active management. While AI presents both opportunities and risks, the consensus was that it represents a significant long-term trend that investors must navigate carefully. The emphasis on value stocks and smaller-cap companies signaled a potential shift away from the dominance of the “Magnificent Seven” and a broader market participation.