BNN - Friday, May 24, 2024 - 03:00 p.m. (ET) - Segment #5

are getting better. With all the work that we're doing to continue to de-risk it. Watch us online or here on bnn Bloomberg. >> It is the end of the trading day. The beginning of the after hours session. You're watching the close on bnn bloomberg. I'm amber kanwar. Let's take a look and how things shape death. Well, the tsx managing to advance about half of a percent. But even with today's rally, not enough to save us from a weekly loss. The tsx putting in a loss for the week of 3 for us of a percent, snapping a two-week winning streak. Meanwhile, as we take a look at the U.S. markets, even with the gains that we're seeing on the s&p 500 still the worst weekly showing for the s&p in 5 weeks. Now, let's take a look at some of the big moves of the day. All right under the the tsx in canadian stocks take a look at shares of computer modelling, maybe a household name, but certainly did see a big break out there. The stock up about 10% cibc rating it a new outperform. This is the highest level that we've seen in computer modelling group in 8 years. Cibc putting a $13.50 price target, which I guess look more impressive when they came out with the report. Investors really racing to that that for the computer software and consulting firm. Meanwhile, I mean, it was a pretty quiet generally on the markets, but I didn't a couple stocks that really been beaten up their traction today. So both magna and mty food recently closing at the lowest level since 2020 mty looks like it was going to bounce offthat level. So in fact, it's making another multi-year low here, even if it is just by $0.12. But on a day where markets generally holding it is interesting to see the ones that are making 52 week lows are in the case of mty and magna multi year lows. So definitely going against the grain there, going with the grain shares of decker's all time high. I mean, who knew that shoes were such a fabulous business to be and but decker's soaring as their hoka brand sales grew way more than expected. And so too did their a and that's I guess all you can ask of some of these retailers is that they sell the brands are supposed to so decker's one of the top performing stocks today on the s&p 500. There were some areas of softness. Interestingly, it was the software into it work day sales force now into it with a warning in its latest set of quarterly results. This is the software provider of things like they that they've been losing free turbotax users, but trying to emphasize that they're making money and more money up their paying customers. Investors still flinching at that and just general you know, work day cut their outlook for subscription revenue, saying the clients are just getting a little bit more sensitive. But really this idea that, you know, if and if a company is going to spend on technology, maybe they're more inclined to do it around ai. And so other types of platforms, you know, whether it's hr software that work day, make sure sales for software that sales force maybe those intentions are being pulled back a little bit. I was on full display. Take a look at shares of nvidia, another fresh all time high. Celestica just continues to move higher on really no but it has been caught up in that ai frenzy as well. And putting up the energy energy as well, because that one is also pretty pretty it is one of the top performing stocks on the s&p 500 so far this year. And really as people think that power generators are going to do very well because of all this ai demand they've been building up the likes of energy as well as district celestica just by the way crossing above $80. That is for the first time since 2001. And it really has been basing out since 2004 to 2023. So 20 years abe saying and tech, they say that the longer the base, the higher in space. So certainly we have seen a rocket ship for shares of celestica on ai. And if it seems like we're talking about ai lot these days, it's cause we literally are this quarter

as and p 500 phone calls, a conference calls, I should say mention the I just under 200 times 199 times the term ai is being mentioned on conference calls in the 1st quarter. That's well above the five-year average. As you can tell. I mean, it was not exist in 10 years ago, probably just nvidia talking about it. But seems like we're talking about it a lot. We definitely are. Let's get a broader look at the markets. Chad morganlander, senior portfolio manager at washington crossing advisors joining us now. Chad, thanks so much for being with us. I was talking to vince cignarella at bloomberg about this idea. You know, we're looking for edge. I'm I'm wondering, where's the next crisis? But generally everything seems to be trucking along the way. Markets are supposed to there's no crisis, but maybe there's no froth either. Well, look, you know, what we're finding is that you have pretty strong economic growth here in the united states, followed by strong. >> For earnings growth, high margins historically, valuations are a bit stretched when you look at it from a historical perspective. But when you pair back to top largest market cap stocks in the united states, the valuations look a little bit conservative. So we continue to be overweight equities and that's due in part because of that major economic tailwinds. >> Let's talk about what areas of the market do you want to overweight, if you, if you're stripping out those tent. 20 companies. I seem largely tech. Does that mean you don't want to be there because you're favouring value. >> Well, we do favour and there are tech names that we do like so we we do, we are overweight. Some tech the likes of microsoft, which we can talk about, but we also favour industrials as well as consumer stocks. It's, it's based off of this very strong well, plan that were put in place by the by the U.S. government, that big fiscal stimulus program and as well, you have some more investment spending, U.S. corporations and corporate side that bodes well for next. You know, you mention profit margins that they're high and they feel like every year I have this conversation about. >> Peak profit margins and it can possibly get any better. And then it just does. >> Yes, I mean, you know, look no further than michael soft. And what they've been able to achieve regarding their bottom there's a lot of operating leverage within that want that typeof the company that falls to the bottom that has affected s&p estimates overall, when you putin put it all together and you're seeing that with the likes meta and google as well as well out of so this is a major tailwind s&p earnings in one should expect the next 12 to 18 months high rise when it comes to its earnings estimates. >> Investors are going to start to see demand. Going to start to demand seeing the returns and all these ai investments that are being made. I mean, right now those investments mean there is demand for nvidia, but >> All these that are massively investing. When are we going to start to see the the major returns and when are we going to start to demand that we see those returns from the investments. >> That's a great you know, the reality is the major beneficiaries besides nvidia have been microsoft oracle, the more of the cloud computing companies that are that are benefitting from this transition. The real question is artificial intelligence. And when exactly, you're going start to see major profit from that. And I think you're still several years to come when it comes to that effect. Many U.S. corporations are still testing out to use case for artificial intelligence. But yet there hasn't been a broad based application. When you listen to conference calls from the likes of cognizant we're accent or you have not yet seen it spending on brooke, broadly picking up as of as of yet similar or different. Very different then the dot com here, where broad that it spending spiked initially continued. This is more of a slower rollout. So once again, we expect this to be perhaps a 24 month kind of. Runway. What do you think of the rally and utilities and >> The idea that it's, it's also an ai play.

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