The Street for Monday, Nov. 24, 2025

Key Concepts

Canada-India Trade Talks: Resumption of bilateral trade discussions aiming for $50 billion USD by 2030.
Canada-MERCOSUR Trade: Intensified free trade talks with the South American trade bloc.
BHP and Anglo American: BHP's abandoned takeover bid for Anglo American, amidst Anglo's potential merger with Teck Resources.
Copper and Potash: Key commodities driving BHP's interest in Anglo American due to energy transition and electrification demands.
UAE Investment in Canada: Commitment of $70 billion USD by the UAE into Canadian energy, AI, logistics, and mining sectors.
Market Performance: Overview of US futures, Asian markets (Hong Kong, Japan), European markets (Germany's DAX), and the TSX.
Oil Prices: Impact of US sanctions on Russian oil and potential peace deal between Ukraine and Russia.
Natural Gas: Bullish outlook due to winter demand and increasing international LNG exports.
Canva: Company's expansion into professional design with the acquisition of Affinity, aiming to challenge Adobe.
Gaming and Leisure Sector: Investment picks including Wynn Resorts, Carnival, and BRP Inc.
Novo Nordisk: Shares plunge after Ozempic fails in Alzheimer's trial, facing competition from Eli Lilly.
European Automakers: Goldman Sachs' initiation of buy recommendations for Ferrari, BMW, and Mercedes-Benz, with neutral ratings for mass-market players.
Altice Group: Value creation plan including a dual listing in the US market and focus on Argus Intelligence platform.

Canada-India and MERCOSUR Trade Relations

Canada and India have agreed to resume bilateral trade talks, with a target of reaching $50 billion USD in bilateral trade by 2030. This announcement followed a meeting between Prime Minister Mark Carney and Indian Prime Minister Narendra Modi at the G20 Summit in South Africa. Last year, the two countries exchanged approximately $31 billion in goods and services.

Additionally, Prime Minister Carney has agreed to intensify free trade talks with the South American trade bloc, MERCOSUR. Canada views bilateral trade with MERCOSUR, which has a combined GDP of over $4 trillion, as a significant economic opportunity, particularly in sectors such as industrial goods, chemicals, forestry, and seafood.

Mining Sector Drama: BHP's Abandoned Bid for Anglo American

The mining sector is experiencing significant activity with BHP walking away from its takeover approach for Anglo American. BHP confirmed preliminary discussions with Anglo American after reports of a late-week approach, which Anglo American rejected. This development occurs just two weeks before Anglo American and Canada's Teck Resources shareholders vote on a $60 billion merger.

Paul Allen Hunt from Bloomberg highlighted that copper is a critical commodity for the energy transition, electrification, and data centers, representing a key growth area for BHP. BHP is also interested in potash. The scarcity of large, high-quality copper assets, like those held by Anglo American, makes them attractive targets. Finding new copper deposits is increasingly difficult and expensive.

BHP had identified Anglo American as a desirable target last year, but a deal did not materialize. The impending shareholder vote on the Anglo American-Teck Resources merger likely pressured BHP, with time running out.

Challenges for BHP's Bid:

Premium Offer: BHP would have needed to offer a significantly higher premium, likely in a mix of scrip (shares) and cash, to gain serious consideration from Anglo American.
Anglo American's Simplification: Anglo American had divested non-core assets after rejecting BHP's previous approach, which was rewarded by shareholders with a higher share price.
Regulatory Hurdles: BHP would have faced anti-trust scrutiny, particularly in South Africa.
Market Conditions: Copper stocks have generally been trading higher, increasing the cost of acquisition.
China Antitrust: Potential antitrust issues related to China were also a consideration.

UAE Investment in Canada

The United Arab Emirates (UAE) has committed to investing $70 billion in Canada, focusing on vital sectors including energy, artificial intelligence (AI), logistics, and mining. This announcement follows Prime Minister Mark Carney's visit to Abu Dhabi.

John Manley, former Finance Minister and Senior Advisor at Bennett Jones, noted his recent visit to the UAE where he met with major investment firms and sovereign wealth funds. He mentioned Jefferies' role in advising Mubadala, a UAE sovereign wealth fund, on a $5 billion take-private transaction of CI Financial. Manley also highlighted that Mark Carney is well-known and respected in the UAE investment community due to his frequent visits in his Brookfield role.

Manley addressed the complexities of doing business with the UAE, acknowledging it is not a democracy and has faced scrutiny regarding its sanctuary for individuals involved in illicit activities. However, he argued that Canada's economic reliance on trade and inbound investment necessitates balancing interests and values, stating, "If we're only going to do business with like-minded countries, democracies, with with liberal values, we're not going to be doing business with very many players in the world."

Regarding potential defense procurement, Manley discussed the tough decision regarding fighter jets, weighing the F-35 against Swedish fighter jets. He noted the complications of mixed equipment for training and maintenance but also the need for Canada to "break the mould a little bit" to rebuild its industrial capacity.

Manley also commented on government infrastructure projects, viewing the government's increased focus on getting things done as a positive sign. He emphasized that government-driven investments are contingent on matching or exceeding private sector funding, aiming to "crowd in private sector investment."

Market Overview

US Futures: Attempting to build on Friday's strong rebound, buoyed by renewed hope for a December interest rate cut by the Federal Reserve.
Asian Markets: Markets in Japan were closed. Hong Kong's Hang Seng was up 2%, boosted by a 4.7% gain in e-commerce giant Alibaba following strong demand for its updated Quinn AI app.
European Markets: Major indexes showed small gains, with Germany's DAX being the biggest mover, up 0.5%.
TSX: Finished Friday up 254 points at 30,160, marking a nearly 22% increase year-to-date.
Top TSX Movers (Friday): TFI International (up almost 10%), Northland Power and Resources (down over 4.5%).
Metals: Gold futures were down slightly at $4,111 an ounce. Silver and copper showed minimal movement despite mining industry news.
Oil: Western Canadian Select was down close to 2% in pre-market trading. Crude oil prices dipped on Friday due to new sanctions on Russian oil but were up slightly in pre-market trading on Monday.

Oil and Natural Gas Outlook

Brian Kessens, Senior Portfolio Manager at Tortoise Capital, discussed the oil market's focus on the Russia-Ukraine situation, with conflicting influences from potential US sanctions on Russian companies (Lukoil and Rosneft) and indications of a peace deal.

Kessens believes that Russian oil will continue to filter onto the global market, even with higher sanctions, though potentially at lower prices. He cited ship-to-ship transfers in international waters as a method for "cleansing" barrels for more open markets.

The futures structure in the oil market is currently bearish, indicating ample supply. This is attributed to OPEC+ curtailing production and then accelerating the return of barrels. Despite demand increasing by approximately 1 million barrels per day this year and likely more next year, supply is considered more than sufficient. Kessens anticipates a more bearish trend in the near to medium term, potentially into early next year, with a possibility of oil prices reaching around $50, though this would likely be short-term, prompting OPEC intervention or non-OPEC curtailments.

Regarding investment strategies, Tortoise Capital focuses on buying public equities across the energy value chain, particularly oilfield service companies like Schlumberger and Halliburton, which are seen as the cheapest and most leveraged to oil prices.

Canadian oil sands stocks like Suncor and Imperial Oil are supported by the view of low-cost reserves and growing production volumes. Improved export options, including pipelines like Enbridge and Trans Mountain, are enhancing access to the US and Asian markets.

Natural Gas Outlook: Kessens is very bullish on natural gas in North America. He anticipates potential short-term spikes due to colder weather and increasing demand. Long-term drivers include growing international demand for liquefied natural gas (LNG), with North America looking to double LNG export volumes in the coming years. Domestically, data centers are increasingly power-hungry, and natural gas is expected to supply the majority of their power generation.

Canva's Expansion and IPO Plans

Canva CEO and Co-founder Cliff Obrecht discussed the company's evolution from a design tool for the masses to a "comprehensive creative operating system," challenging Adobe's market dominance. The acquisition of Affinity, which was made 100% free, allows Canva to cater to both professional designers (the 1-10% of the market) and the broader user base (90-99%).

Canva's focus is on helping organizations achieve their visual communication goals, enabling them to create on-brand content at scale. The company has achieved $3.5 billion in annual revenue and has been profitable for eight years, indicating a path towards becoming a public company, which Obrecht described as "imminent in the next couple of years."

To prepare for an IPO, Canva has focused on attracting and retaining talent, offering liquidity to employees, and building a strong leadership team, including hiring a CFO from Zoom.

Obrecht views OpenAI as a partner rather than a direct competitor. Canva integrates with OpenAI's models, allowing users to start designs within ChatGPT and seamlessly transition to Canva for editing and deployment. Canva is developing tools around models like Sora to create end-to-end workflows for video and design creation, including a "layered design model" that allows for immediate editing of generated content.

Gaming and Leisure Sector Picks

James Hardiman, Senior Vice President and Leisure Analyst at Citi, identified three top picks in the gaming and leisure sector:

Wynn Resorts: A premium operator targeting premium customers, well-positioned to navigate a "K-shaped economy." Wynn's properties performed well on the Las Vegas Strip despite a rough summer for middle-income properties. Its Macau business has also outperformed expectations. A significant opportunity lies in opening the first casino in the Middle East, Wynn Al Marjan in the UAE, in 2027.
Carnival: The cruise industry is experiencing a resurgence, with cruise consideration among Americans increasing to 9 out of 10 from 6 out of 10 in 2019. Carnival benefits from secular tailwinds in the industry and has launched its private island destination, Celebration Key, which is expected to drive significant benefits. Hardiman noted that traditional land-based vacations have become more expensive and service levels have declined, making cruises more attractive.
BRP Inc. (Canadian Manufacturers): Specializing in snowmobiles, off-road vehicles, and boats, BRP is seen as a potential share gainer due to its strong engineering and product development. Despite a CEO transition, the company is expected to benefit from growing demand in segments like off-road vehicles.

Market Movers and Analyst Recommendations

Barrick Gold: Upgraded to a "Buy" rating from "Hold" by BofA, citing strong valuation relative to peers, rising gold prices, focus on cost improvement and margins, and a strategic shift towards more developed markets, particularly its Nevada asset.
Novo Nordisk: Shares plunged after its Ozempic pill failed to slow the progression of Alzheimer's in a trial. This was seen as a "lottery ticket" for investors, especially as Novo Nordisk faces significant competition from Eli Lilly in the weight loss drug market. Investors are seeking clarity on the company's future strategy under its new CEO.
European Automakers (Goldman Sachs):
- Buy Recommendations: Ferrari (expected higher volumes of higher-priced special series vehicles), BMW, and Mercedes-Benz (healthy balance sheets, cash flows, shareholder-friendly capital allocation, and compelling product lineups).
- Neutral Ratings: Volkswagen, Stellantis, Renault, Porsche, and Aston Martin (expected to face more challenging headwinds than premium peers, tariff headwinds, restructuring costs, and absence of meaningful recovery in China).

Altice Group's Value Creation Plan

Altice Group's Incoming CEO and Executive Chair Mike Gordon outlined the company's value creation plan, which includes a dual listing in the US market targeted for 2027. Approximately 60% of Altice's revenue currently comes from the US.

The company is simplifying its portfolio to focus on two core assets:

Argus Intelligence Platform: A software engine for real estate valuation and calculations, integrated with data for portfolio analysis and benchmarking. New AI engines and agents are being introduced.
Valuation Advisory Services: Providing expert valuation services for commercial real estate assets.

Altice is also accelerating its share buyback program, viewing its own company as the best investment in commercial real estate.

The company aims to achieve double-digit growth in its core areas and reach EBITDA numbers north of 30% by 2026. Challenges include longer adoption cycles for new products, particularly for AI solutions, requiring close collaboration with customers to demonstrate quantitative value. Altice is also looking to expand its market presence in Europe and Asia.