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WHAT'S ON TAP
HOT OFF THE PRESS
Gas prices drive retail sales higher in March
March’s retail sales rose 0.9% despite a 0.7% volume decline, above expectations for a 0.6% increase…
… on a 12% jump in sales at gas stations and fuel vendors, all of which was price driven - with volumes in the category down roughly 2% sequentially.
That drove a ~1% wallet share gain for non-discretionary spend, and with preliminary estimates calling for a 0.6% rise in April’s retail sales…
… the consumer “trade down” we highlighted previously looks set to continue.
PPI stays elevated in April on Iran conflict
Industrial product prices rose 2% M/M, above expectations for a 1.3% gain…
… on a continued grind higher in energy product prices, which added 8% in April and now sit ~50% higher than they were heading into this year.
The longer the Iran conflict drags on, the longer crude prices stay elevated…
… but if we get a deal at some point soon, the input cost side of the equation could whipsaw violently… let’s see.
ON OUR RADAR
GAINERS & LOSERS
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CAE Inc. (CAE) dropped 14% on its Q4 results, which were broadly in line or slightly above expectations but came with a guide for low-single-digit growth in 2027…
… underpinned by a weak order backdrop for its civil aviation segment, which should continue through the start of the new year on disruptions from the Middle East.
That’s enough to offset building momentum in the defence business, and could keep a lid on the multiple in the near-term…
… while new management executes on its strategy to reposition the company for long-term growth.
Slate Grocery (SGR-U) was up 6% Friday after announcing it’s reviewing strategic alternatives following a bid from its external manager. Unlike the $1.1B takeout of the office REIT, the retail REIT isn’t in trouble…
… with steady rent growth and occupancy, similar to the Canadian peers.
Despite that and Choice’s $5B First Capital deal coming at an 8% premium to NAV, the basket still trades at a discount to reported fair values…
… creating an interesting setup for private capital, or for public investors betting on a sentiment shift.
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