S&P/TSX Composite Index (STAR)
TXCX
True or false? Bad economic news is always bad for stocks. Answer: false. Sometimes it’s so bad, it’s good. Look no further than the S&P/TSX Composite Index, which rallied after the Canadian economy unexpectedly shrank in the second quarter at an annualized rate of 0.2 per cent, hit by a drop in housing investment and weaker consumer spending. In light of the lousy numbers, economists now believe the Bank of Canada – which had expected the economy to grow by 1.5 per cent – will hit the pause button on interest-rate hikes at its Sept. 6 meeting. That wouldn’t be bad.
VinFast Auto (DOG)
VFS – Nasdaq
What’s this? An electric-car company’s stock soared to a ridiculous valuation and is now plunging? Shocker. Even as its vehicles have received scathing reviews – a Road & Track tester said the VinFast VF 8 SUV “has the worst body control of any modern car I’ve ever driven” – the company’s market value surged to US$190-billion within weeks of its shares being listed in mid-August. That briefly made the Vietnamese startup the world’s third-most valuable automaker, behind Tesla and Toyota, despite selling just 24,000 cars globally in 2022. Reality set in this week, however, and investors couldn’t sell VinFast’s shares, well, fast enough.
Horizons Marijuana Life Sciences Index ETF (STAR)
HMMJ – TSX
Test your business knowledge! Cannabis stocks rallied after a) the federal and provincial governments lowered the legal age to purchase cannabis to 14 (or 12 with a note from a parent or guardian) “to support our struggling cannabis industry through this difficult time”; b) Domino’s said it will add dried marijuana flowers to its list of pizza toppings, potentially opening up the vast fast-food marketplace to cannabis producers; c) the U.S. Department of Health and Human Services recommended that the Drug Enforcement Agency reclassify cannabis as a Schedule III drug, which would dramatically loosen rules on the substance. Answer: c.
e.l.f. Beauty (STAR)
ELF – NYSE
In ancient times, people mixed ingredients such as boiled animal fats, fruits and pigmented clay together to create makeup. But in today’s hectic world, who has the time? It’s so much more convenient to pop in to Walmart or Shoppers Drug Mart and head over to the e.l.f. Beauty display. In addition to saving time, e.l.f.’s value-priced cosmetics save consumers money, which helps explain why sales of the brand soared 76 per cent in the first quarter. With e.l.f. (the name stands for eyes, lips, face) this week agreeing to acquire skin-care brand Naturium, the surging stock is giving off a beautiful glow.
Good Natured Products (DOG)
GDNP – TSX Venture
Investors in Good Natured Products can’t be feeling very good natured about the stock’s performance. Since peaking at $1.98 in 2021, shares of the “earth-friendly” food packaging company have plummeted about 95 per cent, hit by falling sales and growing losses. The hemorrhaging continued in the second quarter, as revenue in the company’s industrial business dropped amid soft demand, lower selling prices and increased competitive pressure from traditional, fossil-fuel-based products. The only people who are good-natured about any of this are the short sellers.
John Heinzl