News From Us
We are delighted to welcome Maria Campos to the Pratteteam. With over a decade of experience in portfolio management, wealthmanagement advisory, and fintech, Maria brings solid expertise ininvestment management for individuals, families, and institutions.
Her professional background spans banking, Family Officeservices, and wealth management, providing her with a deep perspective in financialplanning, asset allocation, and investment strategy. This diverseexperience enables her to navigate complex financial environments and offersolutions tailored to clients’ needs.
In addition to her finance education, Maria also holds a backgroundin psychology, which enhances her understanding of investor behavior andfinancial decision-making. Passionate about financial education, shehelps her clients approach wealth management with confidence. She has alsoworked as a financial coach, with a particular focus on supporting womenin building confidence in their financial management and fostering economicindependence.
Before joining Pratte, Maria assisted her clients in portfolioconstruction, risk management, and investment policy development, workingacross a broad range of asset classes and strategies. She has also contributedto fintech innovation, integrating technology into wealth management toenhance efficiency and accessibility in financial services.
Maria joins Pratte with the mission to support andguide clients in managing and growing their wealth. Her strategicapproach, expertise, and commitment to financial education aim to provide high-levelpersonalized support.
We are thrilled to welcome Maria Campos to the Pratteteam. Her expertise in portfolio management, wealth advisory, andfintech, combined with her human-centered and strategic approach,will be a great asset to our clients.
Welcome, Maria! We are delighted to have you on board.
Your Portfolios in Brief
Founded in 1995, Intuitive Surgical (ISRG)develops and markets the da Vinci surgical system, a revolutionary robotictechnology that enables surgeons to perform minimally invasiveprocedures with enhanced precision. Present in over 66 countries,the company has installed more than 8,600 systems worldwide andcontinues to expand its footprint in hospitals and specialized clinics.
Key Highlights in 2024 and Early 2025
Strong Financial Performance
- Significant revenue growth: In 2024, Intuitive Surgical generated $7.12 billion in revenue, a 14% increase compared to the previous year.
- Fourth quarter 2024 results: The company reported $2.4 billion in sales, representing 25% year-over-year growth, well above the consensus estimate of $2.2 billion.
- Increase in procedure volume: The total number of procedures performed using the da Vinci system grew by 18% in the fourth quarter.
The Success of the New da Vinci 5 System
- Launched in 2023, the da Vinci 5 has been a key growth driver for Intuitive Surgical.
- Out of the 493 systems sold in Q4, 174 were da Vinci 5 models.
- The company forecasts procedure volume growth of 13% to 16% in 2025, supporting its revenue outlook.
Why This Stock is Worth Watching
- Robust growth in the robotic surgery market: The minimally invasive procedures segment continues to expand, with increased adoption of the da Vinci 5 and an extension of surgical indications covered by the system.
- Strong competitive advantages: ISRG remains the undisputed market leader, with a growing installed base and widely adopted technology.
- Favourable financial outlook: The company continues to show steady revenue and margin growth, reinforcing its long-term profitability.
- Valuation to monitor: ISRG is currently trading at 25 times its revenue, higher than its five-year average of 20 times. However, this premium appears justified by the strong increase in procedure volume and sales.
Conclusion
At Pratte Portfolio Management, we strongly believein Intuitive Surgical’s potential. Its continuous innovation, marketdominance, and strong growth make it a strategic stock in our portfolio.
The stock has risen 11% year-to-date and 34% overthe past six months, reflecting investor confidence in this growthstock. Analysts remain largely bullish, recognizing the strongsales and procedure volume growth. While the stock trades at high levels,its valuation is supported by increasing demand and solid growth prospects.
However, we remain mindful of risk factors, includingthe uncertain macroeconomic environment, interest rates, and politicalchanges in the U.S. Despite these elements, we are confident that ISRGremains a strategic and promising long-term investment.
Markets in Brief
Monday
- Dow Jones: +0.65% to 44,713.58 points
- S&P 500:-1.46% to 6,012.28 points
- NASDAQ: -3.07% to 19,341.83 points
- TSX: -0.70% to 25,289.15 points
DeepSeek Shock: A Threat to AI Giants
Investor enthusiasm for tech stocks was shaken by theemergence of DeepSeek, a new Chinese AI player that unveiled a morepowerful and significantly cheaper AI model than its American counterparts.This announcement triggered a massive sell-off in AI-related stocks,particularly impacting semiconductors and leading tech firms.
DeepSeek’s R1 model, launched in late Decemberwith a reported development cost of less than $6 million, quicklybecame the most downloaded free app on Apple’s U.S. App Store.This raised concerns over the massive capital investments made by major techfirms in AI, sparking a wave of uncertainty in the markets.
Nvidia’s Historic Sell-Off
The biggest casualty of the session was Nvidia (NVDA),which plummeted 16.97% to $118.42, erasing $589 billion inmarket capitalization—one of the worst single-day losses in history. Thecompany fell from first to third place in global market capitalization,behind Apple and Microsoft.
Other semiconductor stocks also suffered steep declines:
- Broadcom (AVGO): -17.07%
- AMD: -6.37%
- Micron: -11.71%
- Marvell Technology: -19.10%
Energy Stocks Under Pressure
The DeepSeek announcement also impacted the energysector, as investors anticipated that more efficient AI models wouldrequire less energy consumption. The hardest-hit stocks included:
- Constellation Energy: -20.85%
- Vistra Corp: -28.27%
- Talen Energy: -21.59%
- GE Vernova: -21.52%
Pipeline companies were also affected:
- Targa Resources: -4.70%
- The Williams Companies: -8.43%
- Kinder Morgan: -9.28%
- ONEOK: -3.90%
Defensive Stocks Hold Up
As tech stocks tumbled, investors sought refuge in defensivesectors, which tend to be less sensitive to economic cycles. This sectorrotation supported the Dow Jones, with strong performances from:
- Apple: +0.8%
- Johnson & Johnson: +1.1%
- Travelers: +0.9%
- Procter & Gamble: +0.7%
Tuesday
- Dow Jones: +0.31% to 44,850.35 points
- S&P 500:+0.92% to 6,067.70 points
- NASDAQ: +2.03% to 19,733.59 points
- TSX: +0.51% to 25,419.45 points
Tech Stocks Rebound After DeepSeek Sell-Off
Following Monday’s brutal AI-induced sell-off, techstocks rebounded as investors deemed the massive sell-off excessiveand took advantage of lower prices to reposition themselves.
Nvidia (NVDA) led the recovery, surging 8.93% to$128.99 after its 17% decline on Monday. This rebound lifted othermajor tech stocks:
- Apple: +3.65%
- Microsoft: +2.91%
- Meta: +2.19%
However, the semiconductor sector showed mixedperformance:
- Broadcom: +2.59%
- Marvell Technology: +3.54%
- AMD: -0.73%
- Micron: -3.14%
Cautious Market Ahead of Tech Earnings
Despite Tuesday’s rebound, caution prevailed as major techfirms like Microsoft, Meta, and Tesla were set to release earnings onWednesday, followed by Apple on Thursday. Volatility remainedhigh, as investors awaited further clarity on the impact of DeepSeek andthe broader AI sector outlook.
Fed Meeting and Monetary Policy Expectations
Tuesday marked the start of the Federal Reserve’spolicy meeting under the new presidency of Donald Trump. The Fed waswidely expected to keep interest rates unchanged, with 97%probability of a status quo. However, markets were keenly awaiting FedChair Jerome Powell’s comments for any signals on potential rate cuts in2025.
Meanwhile, U.S. consumer confidence declined in January,missing analyst expectations. This suggests persistent household uncertaintyabout the economic outlook and financial markets.
Earnings Surprise
- General Motors (-8.89%): Reported a $3 billion Q4 loss, impacted by its China operations.
- Boeing (+1.50%): Despite record annual losses of $11.82 billion, the stock rose as management reassured investors.
- Lockheed Martin (-9.18%): Posted a steep Q4 profit decline due to $1.7 billion in exceptional charges.
- Royal Caribbean (+12.00%): Surged after better-than-expected earnings per share.
Wednesday
- Dow Jones: -0.31% to 44,713.52 points
- S&P 500:-0.47% to 6,039.31 points
- NASDAQ: -0.51% to 19,632.32 points
- TSX: +0.21% to 25,473.30 points
Fed Maintains Rates, Markets Pull Back
As expected, the Federal Reserve held interestrates steady in the 4.25%-4.50% range. However, the Fed’s cautioustone suggested that inflation remained above the 2% target,potentially delaying monetary easing.
Fed Chair Jerome Powell emphasized that the centralbank would closely monitor the economic impact of Trump’s new policiesbefore considering rate cuts. This disappointed investors, who had hopedfor clearer guidance on monetary easing in 2025.
Nvidia Under Pressure Amid Export Restriction Concerns
After Tuesday’s rebound, Nvidia (NVDA) fell 4% onreports that the Trump administration was considering restricting its chipexports to China in response to DeepSeek’s advancements.
With this decline, Nvidia has now lost more than 13% thisweek, highlighting investor concerns over China’s rapid AI progress.
Large-Cap Tech Stocks Under Pressure
As Microsoft, Meta, and Tesla were set to releasetheir earnings after the market close, the market showed signs ofcaution. Tech stocks, which had rebounded on Tuesday, experienced a slight pullback:
- Microsoft: -0.9%
- Meta: -1.2%
- Tesla: -1.5%
- Apple: -0.7% (awaiting its earnings release on Thursday)
The announcement from Alibaba (+0.72%), unveiling an advancedAI model capable of competing with American standards, also weighedon investor confidence.
Defensive Stocks and Telecoms Take the Lead
Amid uncertainty, investors sought refuge in defensivestocks:
- Starbucks: +8.63% after solid quarterly results, despite a decline in sales.
- T-Mobile: +6.34%, supported by a net profit of $2.98 billion, surpassing expectations.
Bonds and Currency Markets React
The U.S. 10-year Treasury yield remained stableat 4.53%, while the Canadian dollar declined after the Bank ofCanada lowered its key interest rate from 3.25% to 3%.
Commodities: Oil Declines
Crude oil fell to $72.62 per barrel (-$1.15 US),impacted by economic slowdown fears. Copper edged higher, while golddeclined slightly.
Bank of Canada Cuts Interest Rate to 3% Amid EconomicThreats
The Bank of Canada reduced its key interest ratefrom 3.25% to 3%, marking its sixth consecutive rate cut. Thisdecision comes amid significant economic uncertainty, particularly withthe upcoming 25% U.S. tariffs on Canadian goods, set to take effect on February1.
A Recession on the Horizon?
The Bank of Canada’s governor warned that U.S.protectionist measures could have a devastating impact on theCanadian economy. According to the central bank’s forecasts, if retaliatorytrade measures are imposed, Canada’s GDP could shrink by up to 3% in thefirst year, which would push the country into a recession.Currently, the expected economic growth is 1.8%, but the implementationof tariffs could reverse this trend and cause a significantslowdown.
Inflationary Pressures
The weaker Canadian dollar is already driving upthe cost of imported goods, especially food products from the UnitedStates. The Bank of Canada estimates that inflation could increaseby 1% to 1.5% if trade tensions intensify, which would jeopardize pricestability after the central bank had managed to bring inflation back to2% in recent months.
A Dilemma for Monetary Policy
The central bank faces a dual challenge:
- Supporting an economy threatened by a slowdown
- Controlling inflation
The governor emphasized that monetary policy alonecannot simultaneously counteract weaker growth and rising inflation.This is a complex economic shock, where each decision must becarefully weighed based on the evolution of trade tensions.
More Rate Cuts Ahead?
For now, the Bank of Canada has not provided anyguidance on its next policy moves. However, several economists believethat if a trade war with the U.S. escalates, further rate cuts may benecessary to cushion the economic blow. Some experts even predict areduction in the policy rate to 1.5% if conditions worsen.
Impact on Canadians
- For borrowers: This rate cut is good news for those with variable-rate mortgages, as their monthly payments will decrease. For example, for a home purchased at the current average price, the monthly mortgage payment could drop by approximately $68.
- For savers: Conversely, those relying on fixed-rate investments will see lower returns.
- For consumers: The weaker Canadian dollar and rising prices for imported goods could offset some of the benefits of lower interest rates.
An Uncertain Economic Outlook
The Bank of Canada is trying to stabilize theeconomy amid growing trade tensions. If U.S. tariffs remain inplace and Canada retaliates, the country could enter a period ofeconomic turbulence, making the central bank’s next monetary policydecisions critical for Canada’s economic future.
Thursday
- Dow Jones: +0.38% to 44,882.13 points
- S&P 500:+0.53% to 6,071.17 points
- NASDAQ: +0.25% to 19,681.75 points
- TSX: +1.3% to 25,808.25 points
Earnings Reports in the Spotlight
Thursday’s session was marked by a flurry of corporateearnings reports, with several major tech companies releasing their financialperformance. Despite some disappointments, the overall trendremained positive, allowing indices to close higher.
Meta: Strong Profits but Mixed Guidance
Meta Platforms (META) +1.55%
Meta beat expectations with strong revenue and profit growth atthe end of 2024. However, its Q1 2025 forecast disappointed analysts. Metaplans to invest between $60 billion and $65 billion in AI, a 50%increase from 2024, raising concerns about short-term profitability.
Tesla: Despite Weak Earnings, the Stock Rebounds
Tesla (TSLA) +2.87%
The electric vehicle giant reported lower-than-expected Q4 earningsand revenue. However, investors focused on Tesla’s 2025 positive outlook,particularly its progress in autonomous driving and new modeldevelopment, driving a stock rebound.
Microsoft: Cloud Business Disappoints, Stock DropsSharply
Microsoft (MSFT) -6.18%
Despite reporting $24 billion in quarterly profits, the stock fellsharply as cloud revenue growth failed to meet expectations.Investors had higher hopes for this key business segment, whichplays a crucial role in Microsoft’s long-term growth strategy.
Other Notable Earnings Reports
- Dow Inc (-6.09%): Announced a $1 billion cost-cutting plan, including 1,500 job cuts, after reporting disappointing results.
- Comcast (-11.00%): Despite better-than-expected Q4 earnings, investors reacted negatively to subscriber losses in broadband services.
- UPS (-14.11%): Plunged after issuing weaker-than-expected annual guidance.
- American Airlines (-2.48%): Affected by an aircraft accident involving one of its planes in Washington, D.C..
Investors Watch Monetary Policy and New Tariff Measures
Beyond corporate earnings, markets continued to analyzethe Fed’s decision to keep rates between 4.25% and 4.50%. The central bank reaffirmedits cautious stance amid economic uncertainties, particularlyPresident Trump’s announcement of 25% tariffs on Canadian and Mexicanimports.
This announcement boosted the U.S. dollar, which strengthenedagainst the Canadian dollar and the Mexican peso. Investors remain concernedabout the impact of these new trade barriers on economic growth.
Commodities Rise
- Oil: +0.15% to $72.73 per barrel
- Gold: +1.85% to $2,845.20 per ounce
- Copper: +0.7% to $4.31 per pound
Friday
- Dow Jones: +0.1% to 44,909.13 points
- S&P 500:+0.6% to 6,107.45 points
- NASDAQ: +1.2% to 19,915.40 points
- TSX: +0.7% to 25,988.12 points
Apple Beats Expectations Despite Weak iPhone Sales
Apple (AAPL) +3.0%
Apple reported $124.3 billion in revenue for its first fiscalquarter, exceeding analyst expectations. However, iPhone sales fellshort of forecasts, particularly in China, where demand for theiPhone 16 lineup was weaker than anticipated.
The services segment played a key role insupporting Apple’s performance, driving the stock higher despite concernsover iPhone sales.
Conclusion: A Positive January Despite Market Volatility
- S&P 500:+3.6% in January
- NASDAQ: +2.7% in January
- Dow Jones: +5.7% in January
Despite uncertainty surrounding interest rates, tariffs,and mixed tech earnings, Wall Street showed resilience throughoutJanuary.
As we enter February, investors remain focused on upcomingearnings reports, Federal Reserve decisions, and ongoing trade tensions betweenthe U.S., Canada, and Mexico.
