Canadian GDP data released Friday showed a 0.2% M/M expansion in December, reversing a contraction in November. The longer-term trend is less rosy though, with 2024 GDP per capita down 1.4% Y/Y, after a 1.3% decline in 2023.

The American data has deteriorated recently as well, with the Atlanta Fed’s GDP forecast for Q1 flipping negative, from expectations of >3% growth just a month prior.

Putting tariff impacts aside for this one, both Canada and the U.S. have a number of growth headwinds that pressure the near-term outlook.

In Canada, the challenges to growth are broad-based:

In America, a slowdown in growth could be self-inflicted.

The Department of Government Efficiency (DOGE) poses the biggest near-term risk, given total government expenditure accounts for roughly a third of GDP.

The initiative claims to have found >$100B in savings thus far, but the bigger impact could be felt in the labour market, where ~100K employees have taken a package or been fired to date.

There could be a lot of runway left on a workforce reduction, with more than 2x the contract and grant workers than full-time employees, and a portion of civil service workers not past their probationary period.

While Big-6 rate forecasts suggest continued monetary easing, future rate policy is far from certain at this stage, with yield curves inching higher after a prolonged period of inversion.

With core inflation still above target, the central bank’s decision is no longer an obvious one, potentially opening the door for a negative growth shock if some of the above risks play out.

Should that happen, duration exposure (long-term bonds, utility/telecom equities, etc.) could benefit from both lower rate expectations and a “flight to safety” as we explore in the full piece.

If the above link won’t work, try this: https://www.bullpen.finance/content/49

Yesterday, Trump announced the U.S. Crypto Strategic Reserve, an initiative that was first proposed in January. Five cryptocurrencies were included in the proposal, including Bitcoin and Ethereum, driving a >10% rally and recouping most of the drawdown in crypto over the past month.

We put our tinfoil hats on and started riffing on the incentives behind the move - things like increasing the loyalty of the cult-like subsegment of Trump’s voter base by making them money… making them feel like they have skin in the game.

That prompted us to look deeper into the trading picture and we found some suspicious activity being talked about online.

Between March 1st and Trump’s announcement yesterday, one trader put on a $4M position in Bitcoin and Ethereum with 50x leverage ($200M of exposure). Whoever it was then closed the positions for a cool $7M just minutes after the announcement.

At 50x leverage, a mere 2% drawdown would cause liquidation - seems to good to be true, right?

Alright… maybe I’m just mad I keep missing these rallies.

In any case, it sets a precedent for other countries to follow and should be interesting to see if it gets over the finish line! Look for publicly traded Canadian crypto names like Galaxy Digital (GLXY) and Hut 8 (HUT) to run today.

Important Events This Week:

Pembina (PPL) led the TSX, surging 7% on the back of its record results, with Q4 adj. EBITDA of $1.25B and $4.4B for the year thanks to increased ownership in core assets (Alliance/Aux Sable) and volume growth. The 2025 guide was well-received, specifically its lower leverage target of 3.3-3.6x debt-to-EBITDA.

Extendicare Inc (EXE) gained 7% after reporting strong Q4 results, with a near-45% Y/Y bump in adj. EBITDA to $33M, fueled by a 10% rise in home healthcare volumes and the strategic acquisition of nine long-term care homes from Revera.

Docebo (DCBO) beat street estimates for Q4, but its growth outlook sent shares tumbling 14% on the day, with a Q1 revenue guide of ~$57M below the street’s ~$59M and 11-12% revenue growth for the year (also below street forecasts).

Flagging Secure Energy (SES) here as they hammered the buyback in 2024, reducing shares outstanding by 19% (57M shares) at an average price of $11.47. The management team has done more selling over the last few quarters than normal… could warrant a deeper look.

Laurentian Bank (LB) fell 3.5% after reporting earnings: