January’s $3.6B trade deficit was bigger than expected, growing over last month…

… on the back of a 5% drop in exports, led by a 21% decline in motor vehicles and parts - which continues to face challenges.

Passenger vehicles and light trucks were the driver, falling 33% on lower production volumes - as plant stoppages were used to adjust for new models…

… impacting demand for engines and parts, with imports in the category falling 8% sequentially. That offset a 3% gain in industrial equipment imports…

… caused by a 53% jump in equipment related to LNG infrastructure from China, who now represents ~7% of total trade.

Building permits rose 5% to $13B in January, beating expectations for a 2% decline…

… thanks to the largest industrial permitting increase in two years (~$360M), reinforcing growing interest in the asset class. Institutional activity was up too, offsetting some softness in commercial…

… while a single-family gain carried weaker multi-unit intentions out west.

Nutrien (NTR) was up 6% yesterday on the back of Hormuz shipping disruptions, which sent the peer group higher…

… given the Strait sees a huge share of the world’s trade in urea, ammonia, sulfur and phosphates. That could raise the price tag on NTR’s potential phosphate sale…

… and improve the economics of its nitrogen business, which accounts for ~15% of total company revenue…

… but a third of its EBITDA, given strong segment-level margins. If the 2021/22 surge in fertilizer prices is any indication of what comes next, Nutrien is positioned to print…

… which could drive multiple expansion in anticipation of positive estimates revisions by the street.

North American Construction (NOA) got a near-30% haircut on its Q4 results, which missed on a revenue slowdown that should persist through 2026 - with guidance representing ~7% growth at the midpoint.

Higher costs remain the real story though - with another retroactive charge in its Fargo-Moorhead JV, weather in Australia, mechanical availability issues in Canada, and labour shortages all weighing on margins…

… which could keep a lid on the multiple until showing signs of improvement.

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