The Street for Monday, November 17, 2025

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

Key Concepts

• Canadian Federal Budget & Confidence Vote: The Liberal government's budget, proposing increased spending and an $80 billion deficit, faces a crucial confidence vote. The outcome could trigger a federal election.
• Canadian Housing Market: October saw a slight rebound in national home sales (0.9% increase) and a minor rise in benchmark prices (0.2%), though both remain lower year-over-year. New listings declined.
• Berkshire Hathaway Investment: Warren Buffett's Berkshire Hathaway acquired a significant stake ($4.9 billion) in Alphabet (Google's parent company) during Q3.
• Artificial Intelligence (AI) & Technology Sector: The AI sector faces challenges related to energy, data center capacity, and substantial funding requirements. NVIDIA's upcoming earnings are a key focus.
• Consumer Spending: A bifurcation in consumer spending is observed, with higher-income earners still spending while lower-income earners are more affected by inflation. Retail earnings from companies like Walmart and Home Depot will provide insights.
• Gold Market: Gold is in a consolidation phase, with tailwinds from central bank buying and retail demand in China. Potential catalysts for further price increases are being watched.
• Canadian Inflation (CPI): The October Consumer Price Index (CPI) rose 2.2% year-over-year, a slight deceleration from September's 2.4%. Gasoline prices were a key driver of this slowdown.
• Senior Living Facilities: The fundamentals of Canadian senior living facilities are strong due to growing demand and limited new supply. Sienna Senior Living is a key player in this sector.
• Canadian Commercial Space Race: The federal government is proposing significant funding ($60 million annually for three years) to boost Canada's commercial space sector, focusing on rocket launches and satellite deployments.

Canadian Federal Budget and Confidence Vote

The Canadian federal government, led by Prime Minister Mark Carney, is facing a critical confidence vote on its budget. The budget proposes increased spending on defense, housing, and new infrastructure projects, but also projects a significant deficit of nearly $80 billion for 2025-26. To avoid a new election, the Liberal government requires at least two votes from opposition members or abstentions from at least four Members of Parliament (MPs).

• Key Arguments/Perspectives:
  • Government's Need for Support: The Liberals are two seats short of a majority (requiring 172 votes) and need opposition support or abstentions.
  • Conservative Opposition: Leader Pierre Poilievre has stated that 100% of Conservative MPs oppose the "costly Carney credit card budget" but has not explicitly confirmed if all will vote against it.
  • NDP Stance: Interim Leader Don Davies indicated that while voting with the government is unlikely, his MPs might abstain.
  • Bloc Québécois and Green Party: Both parties have indicated they will vote against the budget, though the Green Party leader might be persuaded otherwise.
• Concerns Raised by Brooke Thackray (Guest Co-host, Research Analyst at Horizons ETFs):
  • Large Deficit: Concerns were raised about the substantial deficit ($70 billion in the first year, $321 billion over five years) and the difficulty in demonstrating its long-term economic payoff.
  • Accounting Concerns: A report from the Interim Parliamentary Budget Officer highlighted concerns about the accounting of investments and tax credits, and skepticism about the government meeting its deficit reduction targets over the next four years.
  • Aggressive Growth Assumptions: The budget includes aggressive assumptions about economic growth and does not account for a recession, creating risk to the deficit and debt projections.
  • Increased Government Borrowing: Higher deficits lead to more government borrowing, potentially resulting in higher interest rates and increased borrowing costs for the government.
  • Focus on Government Projects vs. Private Market: Thackray believes the focus on government-approved projects over private market solutions and supply-side improvements (like deregulation) is a misstep. He argues that removing regulations and making it easier for companies to start and expand would be more effective.
  • Red Tape in Energy Sector: Specific examples of red tape include the lack of a clear 20-year plan for pipeline construction and the continued presence of regulations like tanker bans, which deter private companies.

Canadian Housing Market Update

Canada's housing market showed a modest recovery in October.

• Key Data:
  • National home sales increased by 0.9% compared to September.
  • The benchmark price of a home rose by 0.2% on a seasonally adjusted basis.
  • The number of new listings declined.
• Year-over-Year Comparison: Both sales activity and the benchmark price were lower than in October of the previous year.

Berkshire Hathaway's Investment in Alphabet

Warren Buffett's investment firm, Berkshire Hathaway, made a significant acquisition of Alphabet shares.

• Key Figures:
  • Acquired nearly 18 million shares in Alphabet (Google's parent company) during the third quarter.
  • This investment represents a $4.9 billion US stake in the technology conglomerate.
• Other Holdings: Berkshire Hathaway also reduced its holdings in Bank of America and Apple.

AI and Technology Sector Outlook

The technology sector, particularly the AI space, is under scrutiny as investors await key earnings reports.

• NVIDIA's Earnings: NVIDIA's upcoming earnings report is highly anticipated and considered a pivotal moment for the AI sector.
• Bottlenecks and Challenges:
  • Energy and Data Centers: Concerns have emerged regarding the availability of energy and data center capacity to support the growing demand for AI. Companies like Core have indicated delays due to data center limitations.
  • Funding: The immense capital required for AI development has led to discussions about potential government backing, though such proposals have been met with skepticism.
• Brooke Thackray's Perspective:
  • NVIDIA's Track Record: NVIDIA has a history of exceeding expectations and providing optimistic forecasts, making any deviation from this pattern potentially concerning.
  • Potential Disappointment: A disappointment could arise from forecasts indicating fewer chip purchases due to companies pulling back on investments due to energy constraints.
  • Impact on Other Companies: Challenges faced by AI companies in managing cash flow due to high capital expenditures could impact the broader sector.
  • Credit Default Swaps: An increase in credit default swaps for some AI companies suggests rising risk, linked to their significant capital expenditure.

Consumer Spending and Retail Earnings

The health of the consumer is a key focus for the market, with upcoming earnings from major retailers.

• Consumer Bifurcation: A split in consumer spending is evident, with higher-income earners continuing to spend, while lower-income earners are more impacted by inflation and have reduced spending.
• Retailer Performance:
  • Fast Food Chains: Recent earnings from fast-food companies like Chipotle and Wendy's have shown weakness, attributed to reduced spending by lower-income consumers. McDonald's performed adequately, citing spending by higher-income customers.
  • Upcoming Earnings: Walmart, Home Depot, and Target are set to release their earnings, which will provide further insights into consumer behavior.
• Key Metrics to Watch:
  • Same-Store Sales Increases: A measure of sales growth at established stores.
  • Foot Traffic: The number of people visiting physical stores.
  • Spending per Customer: The average amount spent by each shopper.
• Brooke Thackray's Concerns: Weakness in the consumer discretionary sector could impact retailers like Home Depot, as consumers cut back on non-essential purchases.

Gold Market Analysis

Gold is currently in a consolidation phase, with underlying support from central bank and retail buying.

• Market Trend: Gold has performed well through 2025, experiencing consolidation rallies. It is currently in a pause rather than a peak.
• Tailwinds:
  • Central Bank Buying: Central banks have been consistent net buyers of gold since 2010, with significant ramp-ups in 2022. Eastern countries like Poland have been major buyers.
  • Retail Demand in China: Significant retail buying of gold is observed in China.
  • Government Spending: Continued government spending contributes to the demand for gold.
• Temporary Pressure: The Federal Reserve's less aggressive stance on interest rate cuts has put some temporary pressure on gold prices.
• Brooke Thackray's View: He believes the drivers for gold remain strong and anticipates another catalyst to push prices higher.
• North American Perspective: There is less excitement for gold in North America compared to other regions.
• Ways to Invest in Gold:
  • Gold mining stocks (e.g., Barrick).
  • Gold ETFs that own gold miners.
  • Gold ETFs that hold physical bullion.
  • Physical gold purchase.
• Costco's Gold Sales: Costco sells gold bullion at competitive prices, sometimes offering arbitrage opportunities when the spot price rises. Physical storage and security are considerations for direct gold ownership.

Canadian Inflation Data (October CPI)

Stats Canada released the October Consumer Price Index (CPI), showing a slight deceleration in inflation.

• Key Figures:
  • Year-over-Year CPI: Rose 2.2% in October, down from 2.4% in September.
  • Core Measures: The Bank of Canada's preferred core inflation measures also showed a slight deceleration.
• Drivers of Deceleration:
  • Gasoline Prices: A 4.8% decline in gasoline prices was a primary contributor.
  • Food Prices: Some relief was observed in food prices, with fresh vegetables seeing a monthly decrease.
• Sticky Inflation Components:
  • Rent: Rent remains a significant driver of inflation, with a year-over-year increase of 5.2%. While expected to moderate, month-to-month fluctuations are anticipated.
• Jemmy Jean's (Chief Economist and Strategist at Desjardins) Analysis:
  • Bank of Canada's Stance: The inflation numbers are consistent with the Bank of Canada's comfort level at its current interest rate of 2.25%, provided inflation continues to track expectations. The data is unlikely to cause alarm.
  • Grocery Prices: The impact of the removal of counter-tariffs in September is starting to be reflected in grocery prices, providing some relief. However, global food prices can cause volatility.
  • Cellular Services: An increase in cellular service prices year-over-year is attributed to providers offering more services and data within bundles, which affects how prices are accounted for.
  • Core Measures: The Bank of Canada is focused on core measures that filter out outliers. One such measure moved from 3% to 2.9%, falling within the Bank's target range of 1-3%.
  • Interest Rate Cut Expectations: The current inflation data does not significantly alter expectations for Bank of Canada rate cuts, which are already anticipated to be limited. The Bank is cautious about cutting rates too aggressively due to potential supply-side weakening and the risk of future inflation.

Canadian Senior Living Facilities

The senior living sector in Canada is experiencing strong fundamentals driven by increasing demand and limited new supply.

• Sienna Senior Living: One of Canada's largest owners and operators, Sienna Senior Living aims to reach 95% occupancy by year-end.
• Occupancy and Rent:
  • High Occupancy: Deposits and existing occupancy levels indicate they will be close to 95% occupancy within the year.
  • Rent Adjustments: Annual rent escalations are mandated by the government for retirement living. Care rents are separate, and market rent can be charged when homes are fully occupied, allowing for appropriate pricing.
• Revenue Streams:
  • Retirement Living: Income is derived from rental income and ancillary services (care, food services).
  • Long-Term Care: Primarily accommodation-based, with government funding for care.
• Evolving Retirement Living: The sector has matured, now encompassing senior apartments, assisted living, memory care, and dementia care. Residents can pay different rates based on the level of services received.
• Demand Driven by Long-Term Care Shortages: The lack of long-term care beds and resident preferences for specific communities are driving demand for more comprehensive services within retirement homes. Sienna Senior Living is unique in operating in both retirement living and long-term care.
• Acquisitions and Development: Sienna Senior Living has had a significant year for acquisitions ($800 million) and is also actively building new facilities. New long-term care homes are filling up within 60 days of opening, indicating no lease-up risk.
• Geographic Focus: The company operates in Ontario, British Columbia, Saskatchewan, and Alberta, with plans to expand into new provinces, including potentially Quebec, which has a mature market with a high absorption rate for retirement homes.

Canadian Commercial Space Race

The Canadian federal government is poised to inject significant funding into the country's commercial space sector.

• Proposed Funding: $60 million annually for the next three years, contingent on the passage of Prime Minister Mark Carney's budget.
• Goal: To establish a fully Canadian solution for launching satellites into space.
• Industry Response: Companies like Nord Space view this funding as a catalyst and accelerant for the industry, a significant vote of confidence in Canadian sovereignty in space.
• Geopolitical Influence: Geopolitical shifts have heightened Canada's desire for self-reliance in space-based technologies, which are crucial for services like banking, cell phones, and global broadband.
• Key Players: Maritime Launch Services in Nova Scotia is preparing for a rocket launch on November 18th. Nord Space is focused on developing launch capabilities by 2028.

First Call Segment: ETF and Stock Analysis

Brooke Thackray addressed viewer questions on ETFs and North American large-cap stocks.

• Canadian Banks (Email from Mike):
  • Performance: Canadian banks have performed well year-to-date, driven by a resilient economy and high dividends. They are in a strong seasonal period for performance.
  • Recommendation: Thackray prefers a Bank ETF over individual bank stocks to mitigate headline risk and capture the sector's overall performance. He notes that while individual banks are not a bad place to be, ETFs offer a more diversified approach.
  • Quarterly Results: While earnings are expected to be strong, he doesn't anticipate the same level of outperformance seen previously.
• Baytex Energy (Email from Carl):
  • Sector Performance: The energy sector in Canada has performed well, despite falling oil prices, due to supply-side dynamics.
  • Baytex Outlook: Thackray agrees that Baytex is showing a positive breakout. While it's a bit early in the seasonal cycle for energy stocks, the breakout is a good sign.
• Brookfield Corp (Email from Craig):
  • Long-Term Outlook: Brookfield is considered to be in a strong long-term position, benefiting from renewable resources and government budget policies related to infrastructure.
  • Recent Performance: The stock dropped sharply after recent earnings, which were perceived as disappointing.
  • Current Trend: Thackray expects Brookfield to consolidate and bounce around in the near term, without an immediate breakout. A catalyst is needed for it to start its next upward move.

Conclusion and Key Takeaways

The broadcast covered a range of critical economic and political developments. The upcoming confidence vote on the Canadian federal budget highlights political uncertainty and the potential for an election. The housing market shows signs of stabilization, while inflation is moderating, though sticky components like rent remain a concern. In the technology sector, the AI boom faces practical challenges, with NVIDIA's earnings being a key indicator. Consumer spending patterns are diverging, impacting retail performance. Gold is seen as a stable asset with underlying demand drivers, and the Canadian commercial space sector is poised for growth with government support. The senior living sector presents a strong investment case due to demographic trends and limited supply. The "First Call" segment provided actionable insights into banking ETFs, energy stock breakouts, and the longer-term outlook for infrastructure companies.