Trading Day for Monday, Nov. 24, 2025

Key Concepts

• Artificial Intelligence (AI) Race: The ongoing competition among companies to develop and deploy AI technologies, with a focus on identifying winners and losers.
• Agentic AI: A more advanced form of AI that combines generative capabilities with the ability to set goals, plan tasks, take action, and adapt to feedback ("do it for me" technology).
• Generative AI: AI that can create new content, such as text, images, or code ("create it for me" technology).
• Data Centers: Facilities that house computer systems and associated components, such as telecommunications and storage systems. Crucial for AI development and deployment.
• Copper Mining: The extraction of copper, a vital component for various industries, including AI data centers and electric vehicles.
• Trade Negotiations: Discussions between countries to establish or revise trade agreements.
• Foreign Interference: The act of a foreign government attempting to influence the political processes of another country.
• Creative Operating System: A comprehensive platform designed to manage and facilitate creative workflows, moving beyond simple design tools.
• IPO (Initial Public Offering): The process by which a private company becomes public by selling shares to investors.
• Unrealized Losses: Losses on an investment that have not yet been realized because the investment has not been sold.
• Rate Cuts: Reductions in interest rates by a central bank, typically aimed at stimulating economic activity.

Industry Minister Mélanie Joly's South Korea and Japan Trip

Industry Minister Mélanie Joly is undertaking a trip to South Korea and Japan with the primary objective of attracting significant investments into Canada's defense sector. This initiative includes meetings with key Asian companies, specifically engaging with one of the two bidders for Canada's major procurement project. Beyond defense, Joly's discussions in South Korea will extend to a Korean business conglomerate, and her itinerary in Tokyo will encompass talks on the automotive industry, battery manufacturing, shipbuilding, and mining.

Scotiabank's Latin American Operations Transfer

Scotiabank has secured regulatory approval to transfer its banking operations in Colombia, Costa Rica, and Panama to the Colombian bank Davivienda. This consolidation will result in the formation of a new holding company, Davivienda Group. Scotiabank will retain a 20% ownership stake in this newly formed entity operating in Colombia and Central America.

Teck Resources and Anglo American Merger

Shares of Teck Resources are experiencing an increase following BHP's withdrawal from its takeover attempt of Anglo American. Anglo American is proceeding with its merger plans with Teck Resources. Shareholders from both companies are scheduled to vote on this proposed partnership on December 9th. The potential merger is still subject to approval from the Canadian federal government.

Market Performance and AI Enthusiasm

The Canadian market, represented by the TSX, is showing a positive trend, bouncing back after a strong performance on Friday. The TSX is up 1.22%. In the U.S., the S&P 500 has gained 1.6%, the Dow Jones is up 0.6%, and the Nasdaq has seen a significant rise of 2.6%. This market upturn occurs as the U.S. Thanksgiving holiday approaches, following a period of volatility. While recent weeks have slightly tempered enthusiasm for Artificial Intelligence (AI), investors are actively assessing the emerging winners and losers in the AI race.

Michael Zinn's Perspective on AI and Market Dynamics

Michael Zinn, Managing Director and Senior Portfolio Manager at UBS, discusses the dynamic nature of the AI market. He notes that the market is becoming more discerning, emphasizing cash flow and utilization, and favoring players with established infrastructure at lower costs. Private AI companies are facing increased scrutiny due to their reliance on valuations for financing rather than positive cash flow. Zinn suggests that the market is still determining the optimal chip architecture for AI – whether specialized or generalized. He believes this period of tech consolidation is healthy, allowing other sectors like healthcare and financials to perform better, leading to a broader market participation.

Key Points on AI and Private Companies:

• Market Discernment: Investors are moving beyond broad enthusiasm for AI and are now focusing on profitability and operational efficiency.
• Private Company Scrutiny: Private AI firms are under pressure to demonstrate viable business models beyond funding rounds, with concerns about the cost per chip for token generation and the ability to generate sufficient cash flow.
• Chip Architecture Debate: The market is still debating whether specialized or generalized chips will dominate AI applications.
• Sector Rotation: When the tech sector consolidates, other sectors like healthcare and financials tend to perform better, indicating a healthier, broader market.

Healthcare Sector Outlook

The healthcare sector, which had taken a backseat to tech since the rise of chatbots, is now attracting significant attention. After facing headwinds from COVID-19 related excesses and policy concerns, the sector is experiencing a turnaround. Policy headwinds have shifted to tailwinds, with less draconian policies than anticipated. Positive developments include drug discovery breakthroughs and increased Mergers & Acquisitions (M&A) activity. The sector is seeing broad participation across various segments, including big pharma, tools and diagnostics, contract research organizations, distributors, and insurers. Healthcare stocks are trading at a discount to the overall market, suggesting potential for continued M&A and IPO activity, and offering leadership value.

Novo Nordisk and Alzheimer's Drug Trial

Regarding Novo Nordisk, Michael Zinn acknowledges the market's negative reaction to a recent Alzheimer's drug trial failure, noting the stock's decline. He emphasizes that the Alzheimer's and obesity markets are significant, with high stakes for companies pursuing them, and that successes and failures will be met with corresponding market rewards or penalties.

U.S. Banks and Unrealized Losses

Zinn views U.S. banks as potential beneficiaries of rate cuts. He believes their balance sheets remain firm, and profits from trading, banking, and net interest income are holding up well. While acknowledging unrealized losses, he states they are not the primary driver of stock performance currently.

Interest Rate Cut Expectations

Zinn anticipates a potential interest rate cut before the end of the year or in the first quarter. He points to supportive comments from a Federal Reserve member and upcoming economic data, such as retail sales, as key indicators. The Christmas shopping season is seen as a potential indicator for inflation. He notes that market odds for a rate cut are increasing, and if they surpass 80% within the Fed's blackout period, it would further solidify the expectation of easing.

BHP's Takeover Attempts of Anglo American

Lindsay Visca reports on BHP Group's repeated unsuccessful takeover attempts of Anglo American. This marks the second time BHP has been rejected by Anglo American, following a similar bid in May 2020. BHP has stated it will focus on its own copper efforts. The recent bid, a mix of cash and stock, was also rebuffed.

Key Points on BHP and Anglo American:

• Copper Market Dynamics: The current market is characterized by a race for copper production due to dwindling supply and increasing demand from AI data centers and electric vehicles.
• BHP's Strategic Interest: BHP's attempts are likely driven by a desire to expand its copper mining capabilities, particularly targeting Anglo American's significant copper mines in Chile and Peru.
• Regulatory Hurdles: A successful takeover would create a dominant copper producer, raising regulatory concerns.
• Teck Resources Merger Context: BHP's renewed interest comes shortly before Anglo American shareholders vote on a potential merger with Teck Resources, suggesting a possible attempt to thwart that deal.

Potential Glencore Bid for Anglo American

Analysts suggest that Glencore, an Anglo-Swiss trading and mining company, could potentially make a bid for Anglo American, challenging the proposed merger with Teck Resources. However, there are no official reports of Glencore's interest, and analysts deem it unlikely due to valuation constraints, headquarters locations, and the need for Glencore to spin off its coal production. Anglo American and Teck Resources appear to be further along in their merger process, with ongoing efforts to secure approval from the Canadian federal government.

Canada-India Trade Relations Reset

Following a breakdown in trade talks in 2023 due to allegations of Indian government involvement in the assassination of a Canadian Sikh activist, Prime Minister Justin Trudeau and Indian Prime Minister Narendra Modi have agreed to resume trade negotiations. This marks a significant warming of relations between the two countries.

Key Points on Canada-India Trade:

• Economic Diversification Strategy: The reset is crucial for Canada's strategy to double global exports to non-U.S. destinations by 2030, requiring engagement with major economies like India.
• Trade Targets: The leaders aim to reach $50 billion USD (approximately $70 billion CAD) in bilateral trade by 2030. Last year, two-way trade stood at $31 billion USD.
• Areas for Growth: Significant potential exists for Canada in exporting natural gas, minerals, fertilizers, and pulses to India.
• Trilateral Agreement: A trilateral agreement with India, Canada, and Australia focusing on AI, quantum tech, and innovation has been established.
• Political Context: The trade talks occur amidst an ongoing RCMP investigation into allegations of Indian government agents' involvement in the assassination of Hardeep Singh Nijjar and a campaign of extortion and violence against Canadian citizens. The foreign interference inquiry also identified India as a significant threat actor.
• Public Safety Concerns: Despite the push for economic ties, significant concerns about public safety persist.
• Cooperation and Future Steps: Increased cooperation between law enforcement agencies is reported. Canada's upcoming foreign agent registry is seen as a step towards documenting foreign involvement in politics.

Canva's Path to IPO and Creative Operating System

Cliff Albright, Co-founder and CEO of Canva, discusses the company's product rollouts and leadership development as it prepares for an IPO. He highlights the overwhelming uptake of their offerings, particularly the acquisition of Affinity, which has been made available for free to empower professional designers and the broader creative community.

Key Points on Canva:

• Creative Operating System: Canva is evolving from a design tool to a comprehensive "creative operating system" that aims to help organizations achieve their visual communication goals at scale.
• Challenging Adobe: The company's strategy, particularly with the integration of Affinity, positions it to challenge Adobe's long-standing market dominance.
• Business Goal Focus: Canva's core mission is to help businesses achieve their goals through visual communication, rather than just providing design tools.
• Financial Performance: Canva has achieved $3.5 billion in annual revenue, serves 260 million users, and has been profitable for eight years, indicating a strong trajectory towards becoming a public company.
• Talent Acquisition and Retention: The company's rapid growth, strong product, and commitment to offering liquidity to employees are key to attracting and retaining talent. A strong C-suite, including a CFO from Zoom, has been assembled to support the IPO and future growth.
• AI Integration and Partnership with OpenAI: Canva views AI as a crucial component of its innovation. They have a strong partnership with OpenAI, allowing users to initiate designs within ChatGPT and seamlessly transfer them to Canva for further editing and deployment. Canva is also developing tools around models like Sora to enable end-to-end video creation workflows. They have launched a layered design model that allows for immediate editing of generated Canva designs.

Kraken Robotics Financial Performance

Kraken Robotics shares are down following missed estimates for profit and revenue. Capital spending increased significantly to $6.3 million, up from less than $1 million the previous year, attributed to a new battery facility in Canada and internal marine assets aimed at revenue growth.

Alibaba's Revamped AI Tool

Alibaba's shares are rising after announcing that its revamped AI tool is projected to reach 10 million downloads in its first week of public availability. The company plans to integrate e-commerce functions into the tool, positioning it as a rival to ChatGPT.

Market Performance Update

The TSX is up 1.26%, and U.S. markets are also performing well, with the S&P 500 up 1.6%, the Dow Jones up 0.64%, and the Nasdaq up 2.61%.

Citi Report on Agentic AI in Finance

A Citi report highlights the potentially transformative impact of Agentic AI on the finance industry, suggesting it could have a greater impact than the internet era. Sophia Bentolides, Future of Finance Analyst at Citi, explains the distinction between AI and Agentic AI.

Key Points on Agentic AI in Finance:

• Agentic AI Defined: Agentic AI is generative AI plus action, characterized by its ability to set goals, plan tasks, take action, and adapt to feedback ("do it for me" technology).
• Generative AI Defined: Generative AI is the "create it for me" technology.
• Impact on Financial Services: Agentic AI is particularly relevant for financial services, with examples like autonomous payment error resolution through unstructured data analysis and automated workflow execution.
• "Wow Year" for AI in Finance: 2025 is considered a "wow year" for Agentic AI in finance, as key components like advanced language models (LLMs), cloud infrastructure, and enterprise controls have converged.
• Shift from Pilots to Production: The industry is moving beyond demos and prototypes to actual use cases, with a significant amount of investment flowing into the space.
• Future Implementation (2026 and beyond):
  • Scale Deployment: 2026 is anticipated to be the year of scaled deployment.
  • Measurable Commercial Impact: The first return on investment (ROI) stories are expected to emerge.
  • Agentic Commerce: Agents will begin transacting on behalf of individuals, comparing financial products, and managing funds, representing a significant shift.
• Impact on Careers:
  • Task Transformation: Tasks within jobs will change, leading to increased productivity and a shift towards higher-value activities requiring oversight, judgment, client engagement, and strategic work.
  • Shrinking Roles: Some repetitive operational roles may shrink.
  • Emergence of New Jobs: New job categories will arise, such as Agentic AI Ethics Officers, Agentic AI Guardrails Officers, workflow designers, data quality managers, and governance enforcers.
  • Reshaping, Not Replacing: Agentic AI will reshape the workforce rather than simply replace it.
• Trust and Accuracy: Building trust in Agentic AI will require robust guardrails, governance frameworks, and regulatory approaches similar to those being developed for generative AI, with Europe's AI regulation serving as an example.

Hot Picks in the Industrial Sector

Martin Turner, Director of Institutional Research, Growth and Innovation at ATB Capital Markets, discusses the AI bubble and its impact on his recommendations. He notes that while the AI space has outperformed significantly, recent corrections in NVIDIA and Bitcoin miner ETFs indicate a cooling off.

Key Points on Industrial Sector Picks:

• AI Bubble Concerns: While the AI sector has seen substantial growth, recent pullbacks suggest a potential correction. However, Turner believes that demand for GPUs remains high, with many being sold out.
• Terra Wolfe: An infrastructure provider building over a gigawatt of capacity, with attractive long-term data center contracts and significant guaranteed contracts from Google. Turner projects $1 billion in EBITDA by 2027, with the stock trading at a favorable valuation compared to traditional data center providers.
• Bitfarms: A fast follower in the data center space, Bitfarms has de-risked its balance sheet and possesses significant liquidity and capacity. Turner sees substantial opportunity for value creation as they build out their infrastructure, with the stock trading at a low Enterprise Value (EV) per megawatt.
• Galaxy Digital: This company operates as both an AI infrastructure player (similar to Terra Wolfe, with 800MW of capacity under development) and a broker for institutions trading digital assets. Turner believes both businesses are undervalued, with the stock price not fully reflecting their combined worth. He notes a correlation between Bitcoin prices and AI stocks, suggesting the current dip in Galaxy Digital presents a buying opportunity.

Prime Minister Trudeau's G20 Summit Engagements

Prime Minister Justin Trudeau is in Johannesburg, South Africa, for the G20 Summit, where he is seeking investment opportunities for Canada. CTV's Rachel Aiello reports on his engagements.

Key Points on Trudeau's G20 Engagements:

• India Trade Talks: Trudeau met with Indian Prime Minister Narendra Modi, announcing the launch of negotiations for a new economic partnership agreement. This marks a significant reset in relations after years of strain.
• South Africa Investment Agreement: Trudeau also agreed with South African President Cyril Ramaphosa to launch talks towards a new bilateral investment agreement.
• Diversification Strategy: These initiatives are part of Trudeau's broader strategy to diversify Canada's economic and security partnerships away from the United States.
• Engagement Philosophy: Trudeau stated that engaging with countries does not equate to endorsing all of their actions, emphasizing that Canada is not doing business with all countries.
• U.S. Trade Relations: When asked about speaking with U.S. President Donald Trump, Trudeau dismissed the question, stating Canada is ready to resume trade talks when the U.S. is.

Market Wrap-up

The markets are experiencing a positive day, with the TSX up 1.2%, and U.S. markets also in the green. The Nasdaq is surging by almost 2.6%, led by tech stocks, including Broadcom.

Conclusion

The broadcast covers a range of significant economic and geopolitical developments. Industry Minister Mélanie Joly's diplomatic efforts to attract investment to Canada's defense and other key sectors in Asia are highlighted. Scotiabank's strategic divestment in Latin America and the ongoing merger discussions involving Teck Resources and Anglo American underscore shifts in the corporate landscape. The market's performance, particularly the tech sector's response to AI developments, is a central theme, with expert analysis on identifying AI winners and losers and the evolving role of Agentic AI in finance. The report also details the crucial reset in Canada-India trade relations, balancing economic opportunities with ongoing security concerns. Finally, the segment on Canva's growth and impending IPO showcases a company transforming the creative industry with its "creative operating system" and strategic use of AI. The industrial sector's potential is explored through specific stock recommendations, and Prime Minister Trudeau's G20 engagements emphasize Canada's commitment to global economic diversification.