News From Us
This week, we had the pleasure of participating at Cap Intro 2024, a keyevent held in Montreal on November 14. This event provided us with theopportunity to exchange with asset allocators and discover unique perspectiveson emerging managers.
We also benefited from one-on-one meetings with institutionalallocators, strengthening our strategic positioning and our commitment toinnovative solutions for our clients.
Meanwhile, our recruitment process for our Montreal branchis making significant progress. Interviews are nearing completion, and we areexcited to soon welcome new talent to our team. Additionally, we are activelyfinalizing the setup of our new office in Montreal, marking an importantmilestone in our expansion and our commitment to better serving our clients.
Do not hesitate to contact us if you have any questions orif an important change in your life requires an adjustment to your investmentstrategies. We are always available to support you in achieving your financialgoals.
Our Portfolios in Brief
CAVA Group, Inc., founded in 2006, is a fast-casualMediterranean restaurant chain experiencing tremendous success thanks to itsvalue proposition that combines healthy food, competitive prices, andhigh-quality digital and in-store experiences. Since its IPO in 2023, thecompany has achieved remarkable growth, becoming a major player in theMediterranean fast-casual dining sector.
Key highlights in 2024:
• Exceptional sales growth: CAVA exceeded Wall Streetexpectations in the third quarter, with same-store sales increasing by 18.1%,far surpassing the anticipated 12.39%. This performance pushed the stock to anall-time high of $172 before closing around $147. In 2024, the stock has surgedby 261%, reflecting increased investor confidence.
• Increased in-store traffic: Traffic at CAVArestaurants rose by 10.3% year-over-year, driven by product innovations,particularly the grilled steak option, which contributed to a 7.9% increase inaverage order value.
• Competitive positioning: Unlike its competitors,CAVA has limited its price increases to 15% since 2019, well below the 25% to30% increases reported by other fast-casual chains. This strategic choiceattracts value-conscious customers, reinforcing its growth.
• Introduction of new products: The launch of a newgrilled steak dish exceeded expectations, significantly boosting customervisits and improving the company’s financial performance.
Why it is a stock to watch:
CAVA continues to benefit from a shift in consumerpreferences, with more people turning to fast-casual chains offering a strongvalue-for-money proposition. With revenue growth, continuous innovation, and astrong position in the Mediterranean segment, CAVA is at a decisive turningpoint.
CAVA’s exceptional performance in 2024, combined with itsaggressive expansion strategy and ongoing innovation in its product offerings,makes it an attractive stock for investors. Moreover, the growing popularity ofMediterranean cuisine and the trend toward healthier dining options supportCAVA’s position in the market.
Conclusion
Analysts remain optimistic about CAVA’s outlook,highlighting its ability to sustain strong growth and surpass marketexpectations. However, some express caution about the stock’s high valuation,suggesting a prudent approach for new investors.
At Pratte Portfolio Management, our investment in CAVA hasproven to be a strategically secure decision. Since its IPO in 2023, when thestock was introduced at $22, CAVA’s share price has seen remarkable growth,with a 261% increase year-to-date, demonstrating significant progress andstrong investor confidence in the company’s potential.
Its innovative business model, coupled with robust revenuegrowth and rapid expansion, confirms our decision to include this stock in ourportfolio. As CAVA continues to capture market share in a transformingindustry, we remain optimistic about its long-term prospects and confident thatthis company will remain a key player in the Mediterranean fast-casual diningsector.
Markets in Brief
Monday
Dow Jones: The index rose by 0.69%, closing at44,293.69 points.
NASDAQ: The index gained 0.06%, ending at 19,298.76 points.
S&P 500: The broad index increased by 0.1%, closing at 6,001.35points.
Banking Sector Rises
Major banks supported the Dow Jones, benefiting from theanticipation of eased regulations. JPMorgan Chase and Goldman Sachsled the gains with increases of 1% and 2.2%, respectively. Bankof America and Citigroup also climbed approximately 2% each,marking significant gains in the financial sector.
Tesla Soars Despite Technology Weakness
Tesla surged by over 9%, contrasting withdeclines in other major tech players. Apple fell nearly 2%, whileMicrosoft and Amazon both dropped about 1%. Meanwhile,small-cap stocks demonstrated strength, with the Russell 2000 indexrising by 1.47%.
Cryptocurrencies in Overdrive
Bitcoin crossed the $USD 87,000 mark for thefirst time, fuelled by deregulation hopes. Crypto-related stocks also thrived,with Coinbase and Mara Holdings climbing 20% and 30%,respectively.
Stocks in Brief
• GameStop (+9%): Gained due to speculation on “meme stocks” afterTrump’s victory.
• Tesla (+9%): Continued its upward trajectory with a significant gainfor the day.
• Apple (-2%): Declined despite positive index performance.
• Coinbase (+20%) and Mara Holdings (+30%): Boosted by Bitcoin's surge.
• S&P/TSX Composite (+29.88 points): Closed higher at 24,789.28points.
• Oil (-$2.34): Crude oil settled at $68.04 per barrel.
• Gold (-$77.10): Gold dropped to $2,617.70 per ounce.
• Canadian Dollar: Traded at 71.82 cents USD, slightly downcompared to Friday.
Tuesday
Dow Jones: The index fell by 0.86%, closing at43,910.98 points.
NASDAQ: The index dipped slightly by 0.09%, ending at 19,281.40points.
S&P 500: The broad index lost 0.29%, closing at 5,983.99points.
Markets Pause After Gains
The market paused on Tuesday, with slight declines acrossmajor indices. Investors used the day to consolidate positions and takeprofits, particularly in stocks that saw significant gains following DonaldTrump’s election victory.
Rising Bond Yields and Inflation Concerns
The 10-year U.S. Treasury yield climbed to 4.42%,contributing to market caution as investors awaited upcoming inflation data.
Financial Sector Pullback
Shares of Goldman Sachs and American Expressdropped by 1.62% and 1.52%, respectively, reflectingconsolidation in the financial sector after recent gains. This pullback wasattributed to profit taking, with expectations still high for future regulatoryrelief.
Tesla and Trump Media Slide Post-Election
Tesla, which had surged nearly 31% since theelection, declined by 6.15%, ending a streak of notable gains. TrumpMedia & Technology Group also faced a sharp drop, losing almost 9%,bringing its post-election decline to 10%.
Stocks in Brief
• Live Nation (+4.74%): Gained despite weaker-than-expected results,supported by strong concert demand.
• Tyson Foods (+6.55%): Benefited from increased demand for chicken,offsetting weaker beef sales.
• Shopify (+21.04%): Soared after quarterly results far exceededexpectations.
• Boeing (-2.54%): Declined due to delivery delays attributed to astrike.
• Home Depot (-1.28%): Fell despite strong results, with executivescautious about future demand.
• Amgen (-7.14%): Dropped on concerns about side effects linked to itsanti-obesity drug, MariTide.
• S&P/TSX Composite (+133.73 points): Closed higher at 24,923.01points, supported by Shopify’s 21% gain.
• Canadian Dollar: Valued at 71.72 cents USD, slightly lower thanFriday.
Wednesday
Dow Jones: The index rose by 0.11%, closing at43,958.19 points.
NASDAQ: The index declined by 0.26%, ending at 19,230.74points.
S&P 500: The broad index edged up by 0.02%, closing at 5,985.38points.
Semiconductor Sector Weighs on NASDAQ
Losses in the semiconductor sector weighed on the NASDAQ. Nvidiafell by 1.36%, Broadcom by 1.50%, Qualcomm by 1.83%,Marvell Technology by 2.92%, and Micron by 4.02%. AMDalso dropped by 3.01%, amid rumours of layoffs to focus on AIdevelopment.
Inflation Data Sparks Fed Expectations
Investors reacted to October’s Consumer Price Index (CPI),which showed an annual increase of 2.6%, matching analyst expectations.Core prices, excluding food and energy, also rose by 3.3%, bolsteringmarket expectations for another quarter-point rate cut by the Federal Reservein December. Probabilities of a rate cut rose to 82%, up from 59%earlier in the week.
Stocks in Brief
• Amazon (+2.48%): Rose on the launch of a low-price product section.
• Spirit Airlines (-59.32%): Plummeted amid bankruptcy rumours.
• JetBlue (+9.31%): Gained as Spirit Airlines weakened.
• Rivian (+13.71%): Surged following strategic backing from Volkswagen.
• Walt Disney (+1.71%): Rose ahead of its quarterly results.
• S&P/TSX Composite (+66.01 points): Closed higher at 24,989.02points.
• Oil (+31 cents): Settled at $68.43 per barrel.
• Gold (-$19.80): Dropped to $2,586.50 per ounce.
Thursday
Dow Jones: The index fell by 0.47%, closing at43,750.86 points.
NASDAQ: The index dropped by 0.64%, ending at 19,107.65 points.
S&P 500: The broad index declined by 0.60%, closing at 5,949.17points.
Fed Comments Weigh on Markets
Jerome Powell, Chair of the Federal Reserve, emphasized thatthe strength of the economy does not justify rushing into rate cuts. Followinghis remarks, the probability of a December rate cut dropped to 62%, downfrom 82.5% earlier in the day.
Electric Vehicle Sector Under Pressure
EV manufacturers’ stocks plunged after reports that DonaldTrump’s transition team plans to end the $7,500 federal tax credit for electricvehicle purchases. Rivian fell by 14.30%, Lucid by 4.59%,and Tesla by 5.77%.
Profit-Taking in Technology
While Nvidia (+0.33%), Apple (+1.38%), and Microsoft(+0.40%) posted gains, profit taking weighed on Alphabet (-1.74%)and Amazon (-1.22%).
Healthcare Sector Declines
The healthcare sector suffered losses, with UnitedHealth(-2.10%), Amgen (-1.83%), and Johnson & Johnson (-0.89%)declining. Concerns stemmed from the nomination of Robert F. Kennedy Jr., avaccine skeptic, as Secretary of Health.
Uneven Recovery in China: Retail Sales Rise, Real EstateStruggles
China reported mixed economic data for October, with robustretail sales growth contrasted by continued deterioration in the real estatesector.
Retail sales jumped 4.8% year-over-year, surpassingthe 3.8% forecast and accelerating from 3.2% growth in September.This reflects the positive impact of recently implemented stimulus measures.
However, real estate investment fell 10.3% in thefirst ten months of the year, worsening from the 10.1% decline observedthrough September. This marks the steepest drop since August 2021, highlightingpersistent challenges in the sector. Despite this, Chinese authorities remainoptimistic, citing “active improvements” and reiterating their commitment to stabilizingthe property market.
Industrial production grew by 5.3% year-over-year,slightly below the 5.6% forecast, while fixed asset investment rose by 3.4%,slowing from the previous month. These results indicate partial but uneveneconomic recovery, supported by manufacturing and infrastructure sectors.
China continues to bolster fiscal and monetary policies tostimulate domestic demand and maintain its annual growth target of around 5%,despite domestic and international headwinds.
Stocks in Brief
• Disney (+6.23%): Strong increase following better-than-expectedfinancial results.
• Rivian (-14.30%) and Tesla (-5.77%): Sharp declines due to reports ofpotential tax credit elimination for EVs.
• UnitedHealth (-2.10%) and Amgen (-1.83%): Losses in the healthcaresector following the nomination of Robert F. Kennedy Jr.
• S&P/TSX Composite (+60.65 points): Supported by gains in theenergy sector.
• Oil (+27 cents): Crude oil settled at $USD 68.70 per barrel.
• Gold (-$13.60): Gold declined to $USD 2,572.90 per ounce.
• Alphabet (-1.74%) and Amazon (-1.22%): Declined due to profit takingafter recent gains.
Friday
Dow Jones: The index opened lower by 0.33%.
NASDAQ: The index dropped by 1.22% at the opening.
S&P 500: The broad index fell by 0.73% at the opening.
Markets Remain Cautious
The major indices opened lower on Friday, extendingThursday’s losses. Jerome Powell’s cautious remarks on rate cuts continued toweigh on market sentiment, dampening the post-election rally. The probabilityof a December rate cut was reduced to 62%, compared to 82.5%before Powell’s comments.
Retail Sales Show Resilience
Retail sales rose by 0.4% in October, slightly aboveeconomists’ forecast of 0.3%. This figure underscores consumerspending’s resilience despite prevailing economic uncertainties.
Stocks in Brief
• Applied Materials (-9%): Declined sharply after issuing weak revenueguidance.
• Domino’s Pizza (+2%): Rose on news of Berkshire Hathaway’s strategicinvestment.
• Tesla (-3% this week): Declined following a 29% surge the previousweek.
