The Trump-tariff wobbles has clearly not been good for investors’ nerves. For the week, the S&P 500 is on pace for a decline of 3.1%, while the Nasdaq is on pace for a loss of over 3.50%. For both indices, this week is likely to be the worst week since the week ending back in September 2024. And for the Nasdaq, it will be the third straight weekly decline of 2%+, which would be the longest such streak since late July/early August of last year. The Toronto exchange is down 2.4% on the week. The S&P 500 has gone from firmly overbought to ‘extreme’ oversold territory in only eight trading days. These kinds of swift moves have been very uncommon over time. But, as Petyr “Littlefinger” Baelish from Game of Thrones says: “Chaos is a ladder.” [see link in Weekend Reading]. In other words, perhaps we should be taking advantage of all the confusion and using it as an opportunity rather than a signal to retreat. As shown in the chart below from Bespoke, US indices are more oversold than they were at any point in the last year. Taking a wider look, the last time the indices were this oversold (at least 2.5 standard deviations below its 50-DMA) was back in late September 2023. While it’s expected that market lows should be right around the corner, it’s important to be patient until this does happen in a manner that helps to add conviction. I don’t like the risk/reward of being “out” of the market at this point, and I expect any pullback here to prove an excellent risk-reward opportunity. It remains difficult to try to make a stand at this point with no meaningful evidence of any trend improvement and I will need some evidence of breaking the current downtrend before having much confidence.

Should you have any questions or concerns, please feel free to reach out.

Portfolio Notes

(+) indicates a positive development, (-) indicates negative, and (~) indicates neutral

(+) Alimentation Couche-Tard Inc (ATD-T) The company said its top executives will visit Tokyo to speak with media about its $47 billion bid to buy 7-Eleven convenience store operator Seven & i Holdings. Founder Alain Bouchard, CEO Alex Miller and CFO Filipe Da Silva will hold a media briefing on March 13. Separately, Couche-Tard said earlier it is in exploratory talks with third parties about a potential sale of U.S. stores to help it gain regulatory approval should it reach a deal to take over Seven & i. "We believe there is a clear path to obtaining regulatory approvals of a transaction with 7&i and have made a robust proposal to 7&i about our commitment to doing so.' Owned in Core and ESG+ Portfolios.

(+) Canadian Natural Resources (CNQ-T) Another strong quarter. Production hit a record at 1.47m boe/d, which was 3% better than consensus, and capex was 6% lower than expected. As a reminder, post the acquisition of Chevron assets CNQ’s net debt rose to ~$18B and CNQ is currently allocating 40% of free cash flows to reduce debt and 60% towards shareholder returns. Once net debt reaches $15B CNQ will use 75% of FCF toward shareholder returns, and this will increase to 100% once net-debt reached $12B. CNQ also raised its dividend by 4.4%.The stock has recently come under substantial pressure given tariff-related headwinds. We remain constructive on the name given its substantial reserve base (second only to Exxon, globally), strong FCF generation and high quality, long life, low decline assets. The FCF yield has recently widened to ~11.5%, and we remain buyers for new money. Owned in Core and Cash Flow Portfolios.

(-) Costco (COST-US) For the first time since 1Q22, Costco missed EPS estimates, instigating a profit-taking pullback in a stock that was up by 12% on a year-to-date basis. However, the 2Q25 earnings miss was mainly driven by FX headwinds, which created a $0.13/share headwind. While COST's Canada and international businesses achieved record results on a constant currency basis, negative FX fluctuations caused comps for Canada and international markets to fall short of expectations. Considering that the EPS miss wasn't due to weaker-than-expected demand or operational issues, we believe that the stock's selloff is more likely tied to concerns that tariff-induced inflation will result in consumers pulling back on discretionary purchases. COST's more affluent customer base has been a key asset for the warehouse retailer amid this high interest rate and inflationary environment, as illustrated by strength in its non-food categories. Owned in Core and ESG+ Portfolios.

(+) ON Holding (ONON-US) The popular running shoe retailer reported strong financial performance in 2024, with significant growth in net sales, gross profit margin, and adjusted EBITDA margin, exceeding its strategic financial ambitions. The company expanded its direct-to-consumer share and launched 19 new retail stores, enhancing brand visibility and supporting premium margins. Its apparel business reached over CHF100 million in net sales, driven by product expansion and brand-building campaigns. ON also introduced several new products, including the Cloud six, demonstrating its commitment to innovation. Despite operational challenges with its Atlanta warehouse, progress is being made towards a solution expected to go live in the first half of 2025.Every stock in the mall is getting obliterated on Tariff headlines and slow spending. ONON could have bounced higher. In fact, it really should have gotten a bigger bump from today's report, which was about perfect. ONON margins were over 60% (a record high) with huge growth. Owned in Opportunity Portfolio.

(-) South Bow (SOBO-T) This spinoff of TC Energy, was down as it reported that its normalized net income increased in the fourth quarter, even if revenues were lower, but provided a wary market outlook based on concerns around a sustained tariffs war between Canada and the United States. For Q4, normalized net income was US$112 million, or US$0.54 per share, up from US$94 million, or US$0.45 per share. Normalized EBITDA came in at US$290 million, rising from US$278 million. Revenue declined to US$488 million from US$540 million. Keystone Pipeline throughput amounted to 621,000 barrels per day, up from 612,000 b/d. In a market outlook, South Bow said every day it transports crude oil to key demand and refining markets in the U.S. Midwest and Gulf Coast. With substantially all of the crude oil imported into the U.S. Midwest originating from Canada, and refining facilities in the U.S. Gulf Coast set up to process heavy crude oil, these markets rely heavily on Canadian crude oil supplies to meet their energy needs, it noted. This comes at a time when US President Trump is putting a tariff on Canadian energy. Also, while approximately 90% of South Bow's normalized EBITDA is contracted through committed arrangements, which carry minimal commodity price or volumetric risk, South Bow said demand for Flow Portfolio.

(+) Stack Capital Group (STCK-T) Stack has invested $10 million USD into CoreWeave, a leading cloud-based AI infrastructure company that provides GPU-accelerated data centers delivering high-performance compute capabilities with significant cost savings to its customers, many of whom are leading AI enterprises. CoreWeave offers scalable resources for high-compute workloads that demand intensive processing, making it easy and cost-effective for its customers to handle complex computing tasks without having to invest heavily in their own hardware. Its servers, storage, and networking solutions deliver best-in-class performance that is up to 35 times faster and 80% less expensive than those offered by generalized public cloud peers. From advanced data processing used in AI, machine learning, scientific research, finance, visual effects rendering, and pixel streaming, CoreWeave’s platform is designed to support a broad range of applications. By continually investing in cutting-edge GPU compute capabilities and infrastructure, the Company has managed to stay ahead of its peers, market trends and customer needs which, in turn, has served to enhance its credibility and overall reach. “Given its growing data center presence across the United States, Europe, and Canada, CoreWeave is extremely well-positioned to continue capitalizing on accelerating global demand for AI infrastructure and compute capabilities,” said Jeff Parks, CEO of Stack Capital. “With leading AI enterprises such as Microsoft, Nvidia, Meta, and Cohere already in the fold, and a recently announced IPO filing, it’s an exciting time to be an investor in CoreWeave, as well as Stack Capital.” Owned in Opportunity Portfolio.

(+) TG Therapeutics (TGTX-US) reported significant growth with Briohnvy, achieving $310 million in full year 2024 U.S. revenues, far exceeding target guidance and demonstrating strong market acceptance. The company highlighted Briohnvy's long-term efficacy and safety, with 92% of patients free from disability progression over five years. TG Therapeutic is a biopharmaceutical company focused on developing novel treatments for B-cell mediated diseases. The company has various investigational medicines in its research pipeline and holds license and collaboration agreements with several partners. Based in Morrisville, North Carolina, TG Therapeutics is actively engaged in commercialization and development efforts in the United States and internationally. Owned in Opportunity Portfolio.

Weekend Reading

RBC MacroMemo - March 4 – 24, 2025 U.S. policy in motion / Here come the tariffs / Economic developments / Canada’s path forward RBC

Gimme Credit In his latest memo, Howard addresses a common question he’s been receiving over the last few months: “what about credit spreads?” He explains that the key question should be whether today’s spread is sufficient to offset the credit losses that’ll occur, rather than whether it’s historically narrow or not. Further, he emphasizes that spread widening is a short-term phenomenon and expresses his belief that the elevated yield offered by credit presents a better deal than equities, even at today’s spreads. OAKTREE

The Stoic Guide To Stressful Times (14 Practices That Actually Work) Ryan Holiday delivers 14 practices you can turn to in tough times. RYAN HOLIDAY YOUTUBE

Tyler Cowen, the man who wants to know everything He is Silicon Valley’s favourite economist. Does his lust for knowledge have a place in the age of AI? THE ECONOMIST

Wall Street can’t stop talking about the ‘Mar-a-Lago Accord.’ Once considered an outlandish idea, more Wall Street banks are starting to take the plan seriously. Here’s how the currency deal would work. MARKETWATCH

The 100 Best Comedy Movies of All Time Although all lists, no matter how objective a scale one tries to apply, have some degree of subjectivity to them, few things are as subjective as humour. PASTE MAGAZINE

The point of F-you money What is the point of financial freedom if we never feel free? The real prison isn't material, it's psychological. THE WAY OF WORK

"Chaos is a ladder" is one of the most memorable lines in Game of Thrones Game of Thrones: Chaos is a Ladder

Diversions

Cold Wallet A team of Redditors lose everything after a cryptocurrency scam leads them to plot to kidnap the "financial influencer" who screwed them over. (Theatres, Streaming)

Toxic Town British miniseries that offers a look into a landmark legal case. (Netflix)

Douglas Is Cancelled Hugh Bonneville as a British TV host who becomes subject of a scandal. (Britbox)