The Street for Friday, Nov. 21, 2025

Here's a comprehensive summary of the provided YouTube video transcript:

Key Concepts

• Market Pullbacks and Opportunities: The current market downturn is seen as a sentiment-driven pullback, not based on fundamental issues like earnings or inflation, presenting opportunities for long-term investors.
• Interest Rate Policy: The US Federal Reserve is expected to aggressively cut interest rates in the coming years, particularly in 2026, which is anticipated to boost markets.
• Cryptocurrency Valuation: Bitcoin is viewed as a speculative trading vehicle with no underlying cash flow, making it difficult to value and prone to extreme volatility.
• UAE Investment in Canada: The UAE has committed to investing $50 billion USD in Canada across vital sectors, with ongoing discussions for a Comprehensive Economic Partnership Agreement (CEPA).
• Canadian Energy Sector: The Canadian oil and gas sector is seen as a key driver for economic growth, with potential for increased infrastructure development and exports.
• Tourmaline Oil: A natural gas company investing for long-term growth, potentially sacrificing short-term dividends, but with strong potential as demand for natural gas increases.
• Canadian Natural Resources (CNQ): A leading oil and gas company with strong management, significant reserves, and potential for production doubling, contingent on regulatory certainty and pipeline development.
• Intuit: A financial software company benefiting from its AI strategy, strong consumer and small business segments, and expansion into more complex businesses.
• Food Affordability: Persistent food inflation is impacting Canadian households, leading to changes in shopping habits and increased reliance on food banks.
• Christmas Tree Industry: Trade uncertainty with the US is dampening demand for Canadian Christmas trees, potentially leading to more availability and stable prices domestically.

Market Overview and Economic Trends

Global Market Performance: Global markets are experiencing a sharp decline, potentially hitting lows not seen since April. Major Asian markets, including the Nikkei, Hang Seng, and CSI 300, have reported their steepest weekly declines since April, falling by over 2%. European markets are also trading in the red, with renewed concerns over AI valuations affecting sentiment. US futures are showing a slight upward trend ahead of the market open, despite broader market declines this week.

Canadian Economic Indicators:

• UAE Investment: The United Arab Emirates has committed to investing $50 billion USD in Canada across vital sectors such as energy, artificial intelligence, logistics, and mining. Prime Minister Mark Carney is actively engaging with UAE officials in Abu Dhabi to strengthen bilateral trade.
• Retail Sales: Stats Canada reported that retail sales decreased by 2.7% to $69.8 billion in September. Sales were down in six of nine subsectors, primarily driven by motor vehicle and parts dealers. Core retail sales (excluding gasoline and motor vehicle/parts dealers) remained relatively unchanged.
• Food Affordability: A national survey indicates that persistent food inflation is a significant concern for Canadian households, with a quarter of respondents struggling to afford food. Canadians are adopting frugal habits like switching brands, seeking discounts, and shopping at cheaper stores. Food banks have seen a surge in demand.
• Christmas Tree Industry: Trade uncertainty with the US is impacting Canadian Christmas tree exports, with a reported 50% drop in shipments to the US. This could lead to increased availability and stable prices for Canadian consumers.

Interest Rate Outlook: There is ongoing discussion about potential interest rate cuts. While some Fed Reserve officials suggest a possibility for a December rate cut, the broader expectation is for aggressive interest rate cuts in the United States over the next year or so, as rates are considered too high and are choking business investment. Significant rate cuts are anticipated in 2026, which is expected to lead to strong markets. Canada has already undertaken significant rate adjustments.

Investment Insights with Barry Schwartz

Market Pullbacks and Investment Strategy: Barry Schwartz views the current market pullback as a positive development for long-term investors. He emphasizes that the decline is driven by market sentiment and "vibes" rather than fundamental issues like earnings, interest rates, or inflation. This presents opportunities to buy companies whose intrinsic value remains unaffected by the news, but whose stock prices have declined. He encourages investors to use these pullbacks to acquire companies at good valuations.

Cryptocurrency (Bitcoin): Schwartz is skeptical about Bitcoin, describing it as a trading vehicle with no underlying cash flow, akin to a commodity like baseball cards or gold. He states it's only worth what the next person will pay for it, making it very difficult to value. He advises that anyone investing in Bitcoin must be prepared for enormous volatility, which is currently scaring people. He would not recommend buying Bitcoin but notes that if one liked it at a higher price, they might like it better at a lower price.

Retail Sector Performance: The current economy is characterized by the rich spending, while the broader population is affected by high prices. This dynamic is hurting low-end retailers and restaurants. High interest rates have also significantly impacted homebuilding stocks and ancillary building services. These sectors are not expected to recover until interest rates decline and there is more clarity on trade and tariffs.

UAE Trade Deal and Canadian Competitiveness: While the UAE's commitment to invest $50 billion in Canada is positive, Schwartz views the current agreement as an "agreement to keep talking." He highlights that Canada's trade with the UAE is significantly smaller than with the US. He praises Prime Minister Mark Carney's efforts to strengthen bilateral trade but points out Canada's lack of major companies that can attract substantial AI investment, such as those providing chips, semiconductors, and software. He notes that Canada has abundant natural resources, including natural gas suitable for data centers, but needs to develop the infrastructure and companies to capitalize on these opportunities. He suggests that Canada needs to build more relationships outside the US, but the challenge lies in identifying what Canada can sell to other nations, especially given that the UAE already has significant oil and gas resources.

Canadian Energy Sector and Infrastructure: Schwartz believes the Canadian energy sector is poised for growth. He advocates for building more pipelines and liquefied natural gas (LNG) infrastructure to monetize Canada's natural gas resources, which are currently being sold cheaply and burned in oil sands operations. He argues that investing in oil and gas infrastructure is crucial for kickstarting Canada's economy, given the global demand for these resources. He notes that the Trans Mountain Pipeline (TMX) is working to narrow the price differential for Canadian oil, leading to better returns.

Specific Stock Picks:

• Tourmaline Oil:

  • Company Profile: Primarily a natural gas company, though it produces oil as well. It has been an underperformer this year despite recent strong movements in natural gas prices (over $4.50).
  • Investment Rationale: Tourmaline is investing for the long term, growing natural gas production in anticipation of increased demand from LNG plants, pipelines, and data centers. This strategy sacrifices short-term results, impacting special dividends and free cash flow.
  • Management: Mike Rose, the founder, is a proven value creator who is buying significant shares of Tourmaline.
  • Outlook: With natural gas prices holding steady, there's potential for surprises in special dividends and buybacks. The company's strategy is to capitalize on low natural gas prices and prepare for high demand.
  • Dividend: The base dividend is covered, but special dividends are contingent on higher-than-expected natural gas prices and excess free cash flow. The company is prioritizing reinvestment for growth.

• Canadian Natural Resources (CNQ):

  • Company Profile: Described as the defining company in Canada for oil and natural gas, with arguably the best management team globally.
  • Strengths: Possesses gigantic reserves and employs smart financial management. A key strategic move was the acquisition of a 100% owned oil sands project from Shell, which is expected to yield low-cost production and high margins.
  • Growth Potential: CNQ is positioned to double its production over the next number of years, but this requires certainty from Canada, including more pipelines and regulatory easing.
  • Financial Outlook: If production doubling is not fully realized, the company is still expected to increase its dividend, pay back debt, and initiate share buybacks.
  • Valuation: The company is considered to have a "lovely valuation."

Intuit (Financial Software): Rishi Jaluria, Managing Director of Software at RBC Capital Markets, discusses Intuit's performance and outlook.

• First Quarter Performance: Intuit beat first-quarter estimates with broad-based strength across its consumer business (Credit Karma, QuickBooks Online) and Mailchimp (though Mailchimp remains a drag).
• AI Strategy: Intuit's AI-forward strategy is seen as a key driver, helping to acquire customers, increase usage, and adoption. While not yet a massive revenue generator, it positions the company for continued double-digit growth.
• Guidance and Outlook: Guidance for the next quarter is cautious, partly due to the Mailchimp drag. However, stripping out Mailchimp, numbers are better than feared. The company is striking an optimistic tone about its AI capabilities, viewed as a longer-term growth driver.
• Competitive Landscape: Jaluria notes that many software companies have been under pressure. For Intuit and similar companies to change the narrative, they need to demonstrate further acceleration in growth and overcome the "AI is the death of software" narrative.
• AI Integration: Intuit's approach to AI is described as "crawl, walk, run," focusing on innovation, utilization, and monetization. The company needs to show that its AI solutions generate real use cases and value for customers, leading to increased usage and willingness to pay.
• Key Strengths:
  • Core TurboTax: Strong market position with room for growth through tier upgrades and the "Live" business (human and potentially AI agents).
  • QuickBooks: Moving upmarket with the "Intuit Enterprise Suite" to target more complex businesses (e.g., 100 employees), offering significant expansion opportunities.
  • International Growth: Potential for further international expansion.
  • AI Agents: The company's vast data and context provide a strong foundation for AI agents.
• Mergers & Acquisitions (M&A): Intuit is expected to pursue smaller, technological "tuck-in" acquisitions to bolster AI capabilities. Large, transformational acquisitions like Credit Karma or Mailchimp are less likely, given Mailchimp's current drag on the business.
• Valuation: Jaluria uses a long-term discounted cash flow analysis rather than solely relying on multiples, which he views as shortcuts. He maintains a "Buy" rating on Intuit with a price target of $810 (lowered from $870 by BMO Capital analyst Daniel Jester, who also maintains an "Outperform" rating).

Notable Analyst Calls and Recommendations

• Gap Inc.:

  • Bank of America: Raised price target to $27 USD from $23, maintaining a "Neutral" rating.
  • Rationale: Stronger-than-expected sales (comparable sales rose 5% in Q3) driven by celebrity marketing and inventory revamp are luring customers.
  • Concern: Analyst remains concerned about the pressure on lower-end customers due to tariffs.

• Northland Power:

  • Scotiabank: Analyst Robert Hope lowered price target to $23 from $24, maintaining a "Sector Perform" rating.
  • Rationale: Following an investor day, Northland Power announced a strategic update targeting to double its gross operating capacity to 7 GW by 2030, with a forecasted free cash flow per share of $1.55 to $1.75 by that year.

• Intuit:

  • BMO Capital: Analyst Daniel Jester lowered price target to $810 from $870, maintaining an "Outperform" rating.
  • Rationale: Intuit beat first-quarter estimates but struck a cautious tone for the next quarter. (Further details discussed in the Intuit section above).

First Call Segment with Barry Schwartz

Allied Properties REIT:

• Dividend Cut Expectation: Schwartz expects Allied Properties REIT to cut its dividend, given the current challenges in the Canadian real estate market, particularly office leasing.
• Focus on Debt: He believes the company should prioritize paying down debt.
• REIT Structure Issues: REITs are structured to pay out free cash flow to shareholders, which becomes problematic when the economy turns and debt needs to be managed.
• Market Signal: The current yield of 14.2% (compared to 4-6% for other major REITs) suggests the market anticipates a dividend cut.
• Office Market: The office market is described as a "very tough place to be right now."

Boeing:

• Anchoring on Stock Prices: Schwartz advises against anchoring investment decisions on past stock prices. Investors should focus on fundamentals and future earnings expectations.
• Company Challenges: Boeing has faced significant operational and regulatory issues with the Dreamliner and MAX aircraft.
• Demand vs. Execution: While there is "crazy demand" for planes, Boeing is struggling to build them fast enough.
• Balance Sheet: The company's balance sheet is not in good shape due to past issues, indicating a "tough slog" to recover.
• Aerospace Industry: Schwartz is bullish on the long-term demand for aerospace, citing strong demand for private jets and increased travel in emerging economies. He recommends playing this trend through companies like TransDigm (TDG), which sells aftermarket aerospace parts.

Stryker:

• Company Profile: Stryker is described as a marketing company that acquires and integrates technology. It is a market leader in hip and knee replacements.
• Market Drivers: Increased demand for joint replacements is driven by an aging population and people living longer, more active lives.
• Business Model: Stryker aims to be a primary supplier to hospitals, selling a variety of products and benefiting from economies of scale through acquisitions.
• Valuation: The valuation is considered "quite reasonable" for a company growing at double-digit rates.
• Healthcare Sector: Schwartz is a generalist investor and prefers healthcare companies with understandable business models. He likes Stryker and believes it's a good time to add to a position, despite the current unpopularity of healthcare stocks.

Sector Preferences: Schwartz is not strictly a sector investor. He prefers businesses with strong growth tailwinds. He believes technology, particularly AI, will fundamentally change the world. While acknowledging market sentiment can be short-sighted, he is comfortable investing in companies with substantial revenues from other sources, such as Meta, Google, Apple, and Amazon. He emphasizes using AI for productivity enhancement rather than stock picking.