Your Portfolios in Brief—FTAI Aviation (FTAI)
FTAI Aviation is a company specialized in aviation assets and services, with a particularly attractive position in the maintenance, repair and exchange of commercial jet engines. The company has built a platform around critical aviation assets, with a focus on widely used engines such as the CFM56 and V2500. This model allows it to capture value not only through asset ownership, but also through technical expertise, access to parts and execution capabilities in a market where repair infrastructure remains limited.
FTAI Aviation recently reported results that, in our view, confirm the strength of its operating trajectory, even if the fourth quarter was received a little more cautiously by the market. In an environment where investors are becoming more demanding on cash flow quality, financial leverage and visibility on future outlook, the company continues to execute in a specialized aerospace niche where demand remains solid.
For the fourth quarter of 2025, FTAI reported:
• net income attributable to shareholders of US$111.9 million
• diluted earnings per share of US$1.08
• adjusted quarterly EBITDA of approximately US$277.2 million
• revenue of approximately US$662 million, up about 32.7% year over year
For full year 2025, the company delivered:
• adjusted EBITDA of approximately US$1.19 billion, up 38% year over year
• net income attributable to shareholders of US$477.5 million
• adjusted EBITDA from the Aerospace Products segment of US$671.3 million, up 76% year over year
Management also raised its 2026 adjusted EBITDA target to US$1.625 billion, up from US$1.525 billion previously, which reflects increased confidence in demand and operational execution. The quarter was therefore a little more mixed on the earnings side, but the overall read remains constructive. What matters most, in our view, is that the company continues to improve its operating base while raising its targets for the year ahead.
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Key Highlights in 2025–2026
The main growth engine for FTAI clearly remains its Aerospace Products segment. This is the segment that gives the story both depth and distinctiveness. The company is benefiting from sustained demand in the maintenance, repair and exchange of commercial jet engines, particularly around the CFM56 and V2500 platforms, which remains widely used across global fleets.
What stands out most is that FTAI is not limited to being an asset lessor. The company is building an integrated platform around critical assets, specialized maintenance, access to parts and technical expertise that is difficult to replicate. In a market where repair capacity remains constrained and many airlines are extending the useful life of their aircraft, this positioning becomes particularly relevant.
Another positive element is the higher 2026 guidance. Management now expects approximately US$1.05 billion of adjusted EBITDA from Aerospace Products and approximately US$575 million from Aviation Leasing. This upward revision reinforces the view that the growth seen in 2025 was not temporary.
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Why is this a stock to watch
The story retains several attractive characteristics in the current environment:
• a specialized niche with high barriers to entry
• tangible operating growth
• better visibility for 2026
• an integrated model that allows the company to capture more value across the aviation value chain
The company also raised its regular quarterly dividend to US$0.40 per share, which reflects a certain level of management confidence in the progression of the business and future cash generation. At the same time, FTAI continues to move forward with its capital structures, notably SCI I and SCI II, while gradually expanding its growth avenues.
The stock remains volatile, but the fundamental read stays constructive. Even though the shares still trade below their recent highs, the market continues overall to recognize the quality of the company’s growth drivers, while remaining demanding on execution and financial structure.
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Conclusion
In a more selective market, FTAI Aviation still offers several desirable attributes: a specialized niche, tangible growth, improved outlook and an operating platform that is gaining depth in a still-favourable aviation market. The strong growth of the Aerospace Products segment, the upward revision to 2026 guidance and the dividend increase all reinforce the positive read on the company.
Beyond the quarter, what continues to hold our attention is the depth of the business model. FTAI is building a platform capable of capturing value in a market where demand remains solid and specialized supply remains limited. At Pratte Portfolio Management, we view FTAI as an industrial growth stock with a more volatile profile than average, but also with still-interesting upside if execution remains on track.
We also took advantage of an attractive entry point when the stock was trading near its recent lows, which reflects our approach well: stepping in when the market becomes more nervous, while the fundamental thesis remains intact. In our view, the recent volatility has not undermined the company’s growth drivers.
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Market Brief
Monday
Monday
• S&P 500: +1.01% at 6,699.38
• Nasdaq: +1.22% at 22,374.18
• Dow Jones: +0.83% at 46,946.41
• S&P/TSX: +1.03% at 32,876.65
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Canadian Dollar Movement
The Canadian dollar appreciated to US$0.7313, up from the previous session, supported by renewed risk appetite and stabilization in commodity markets.
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North American markets started the week with a strong technical rebound, mainly driven by a significant decline in oil prices. After several sessions under pressure, the pullback in crude, with WTI down more than 5%, temporarily eased inflation concerns and provided relief to risk assets.
From a fundamental standpoint, market dynamics remain largely driven by the geopolitical context in the Middle East. The market is now pricing in a scenario where disruptions in the Strait of Hormuz could be partially contained, notably through coordinated intervention to secure oil flows. This relative normalization triggered a tactical repositioning by investors, particularly after three consecutive weeks of declines in U.S. indices.
At the same time, bond yields edged lower (U.S. 10-year around 4.22%), supporting growth stocks, particularly in the technology sector. The combination of lower oil prices and easing rates acted as a catalyst for a broad market rebound.
That said, the move remains structurally fragile. Trading volumes stayed below historical averages, suggesting a lack of institutional conviction. The market remains in a wait-and-see mode ahead of a crucial week dominated by central bank decisions, particularly the Federal Reserve.
The market’s implicit message is clear: despite the rebound, rate cut expectations may need to be recalibrated. The risk of a more restrictive policy for longer persists, especially in a context where energy shocks can quickly reignite inflationary pressures.
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Stocks in Brief
• Nvidia (NVDA): +1.65% support from the AI sector with the launch of the GTC conference and sustained strong structural momentum.
• Amazon (AMZN): +1.96% rebound in megacap stocks amid easing rates.
• Meta (META): +2% optimism around potential cost restructuring and AI investments.
• ExxonMobil (XOM): +0.71% resilience despite lower oil prices, reflecting expectations of still-elevated pricing.
• Nebius (NBIS): +14.96% surge following the announcement of a major US$27B contract with Meta in AI infrastructure.
• Dollar Tree (DLTR): +6.42% better-than-expected results, a positive signal for defensive consumer discretionary.
• Micron (MU): +3.68% favourable expectations ahead of earnings, supported by the memory/AI theme.
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Oil: Tactical Easing, Risk Still Present
The main catalyst of the session remains the correction in oil prices. WTI fell 5.28% to US$93.50, while Brent declined 2.84% to US$100.21, after briefly surpassing the US$100 threshold the previous day.
This pullback is explained by several factors:
• anticipation of increased releases from strategic reserves by major economies, including openness from the IEA to release additional barrels;
• signs of early normalization of traffic in the Strait of Hormuz, a corridor for about 20% of global oil;
• perception of reduced immediate supply disruption risk despite the ongoing conflict.
In other words, the market shifted from an extreme supply shock scenario to a more nuanced one where some exports could gradually resume.
That said, structural risk remains elevated. Any escalation or sustained disruption in maritime transport could quickly push oil back above US$100, reigniting inflationary pressures and complicating central bank policy.
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Sector Performance
• United States (S&P 500): broad-based gains across all 11 sectors, with clear leadership from information technology and consumer discretionary.
• Canada (TSX): technology leading supported by the rebound in U.S. markets; financials also contributed positively.
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Tuesday
• S&P 500: +1.01%
• Nasdaq: +1.22%
• Dow Jones: +0.83%
• S&P/TSX: +0.16% at 32,929.09
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Canadian Dollar Movement
The Canadian dollar edged lower to US$0.7300, down from the previous day, reflecting a more cautious positioning ahead of central bank announcements.
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Macroeconomic Analysis
Equity markets extended their rebound on Tuesday, showing notable resilience despite intensifying geopolitical tensions and rising oil prices. Wall Street closed higher, supported by technical repositioning and some easing in sentiment following the initial volatility tied to the conflict.
Investors now appear to be operating within a gradual normalization framework, increasingly incorporating geopolitical developments into their base-case scenarios. However, risk appetite remains measured, with many institutional participants avoiding significant directional positions ahead of Federal Reserve decisions.
The market largely expects the policy rate to remain within the 3.50% to 3.75% range, but focus is primarily on forward guidance. Rate cut expectations have been pushed toward the end of the year, reflecting a reassessment of inflation risk in a context of rising energy prices.
Meanwhile, bond yields declined slightly, with the U.S. 10-year around 4.20%, helping support growth assets.
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Oil: Upward Momentum Driven by Supply Risk
Oil prices continued to rise Tuesday, reinforcing an upward trend fuelled by supply disruptions linked to the Middle East conflict.
Brent rose 3.20% to US$103.42, while WTI gained 2.90% to US$96.21, with intraday peaks above US$102 for Brent. This reflects a persistent risk premium tied to uncertainty around global energy flows.
Since the start of the conflict, oil volatility has been the primary transmission channel of macroeconomic risk. Rising energy prices are reigniting inflation concerns and directly influencing monetary policy expectations.
Despite this pressure, equity markets have shown an increased ability to absorb shocks, suggesting investors currently view these developments as partially transitory, subject to geopolitical evolution.
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Stocks in Brief
• Delta Air Lines (DAL): +6.55% raised guidance despite an estimated US$400M impact from fuel costs.
• Qualcomm (QCOM): +1.70% announcement of a US$20B share buyback program and dividend increase.
• Micron (MU): +4.50% positive anticipation ahead of earnings release.
• Boeing (BA): -1.23% margin pressure related to the integration of Spirit AeroSystems.
• Macy’s (M): -0.88% caution ahead of financial results.
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Sector Performance
• United States (S&P 500): broad gains, with continued leadership from technology.
• Canada (TSX): modest increase, reflecting higher sensitivity to energy and a cautious investor stance.
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Wednesday
• S&P 500: -1.36% at 6,624.70
• Nasdaq: -1.46% at 22,152.42
• Dow Jones: -1.63% at 46,225.15
• S&P/TSX: -1.87% at 32,312.67
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Canadian Dollar Movement
The Canadian dollar edged lower to US$0.7296, reflecting a more defensive positioning by investors following central bank decisions and rising geopolitical risks.
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North American equity markets declined sharply on Wednesday, in a context combining higher-than-expected inflation data and a cautious tone from the Federal Reserve. The sell-off was broad-based, with the Dow Jones falling below its 200-day moving average for the first time since mid-2025, a technical signal closely monitored by institutional managers.
The main macroeconomic catalyst came from the Producer Price Index (PPI), which rose 0.7% month-over-month, well above expectations. This reinforces the view that inflationary pressures remain persistent, even before fully incorporating the recent increase in energy prices linked to the Middle East conflict. The market is beginning to price in a more structural inflation scenario, driven by input costs, tariffs, and supply disruptions.
On the monetary policy front, the Federal Reserve maintained its policy rate within the 3.50% to 3.75% range, as expected. However, the tone remains cautious. Jerome Powell acknowledged that progress on inflation is slower than expected, while highlighting uncertainties tied to the geopolitical environment. The Fed maintains a projection of only one rate cut in 2026, reinforcing the higher-for-longer scenario.
Geopolitical risk remains at the core of the market narrative. The intensification of tensions in the Middle East, including attacks on energy infrastructure and threats toward major producers, continues to fuel volatility. The risk of prolonged disruptions to global energy flows is now fully embedded in market scenarios.
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Bank of Canada: Status Quo, But Elevated Uncertainty
The Bank of Canada maintained its policy rate at 2.25% for a third consecutive meeting, a decision largely expected by the market but occurring in an increasingly complex macroeconomic environment. The central bank is adopting a wait-and-see approach, seeking to assess whether the recent surge in oil prices, driven by Middle East tensions, will translate into more persistent inflation across the economy.
Despite inflation recently returning below the 2% target, policymakers expect a short-term rebound, mainly driven by energy. Governor Tiff Macklem indicated that this pressure could be tolerated temporarily, if it remains contained within the energy sector and does not spread to other components of the economy.
The Bank of Canada nonetheless faces a delicate trade-off between inflation and growth. On one hand, a prolonged increase in energy prices risks reigniting inflationary pressures; on the other, the Canadian economy is showing signs of slowing, with a weakening labour markets and softer-than-expected growth.
In this context, the path of rates remains highly data dependent. More generalized inflation could force additional tightening, while a more pronounced slowdown could open the door to rate cuts. At this stage, the central bank retains maximum flexibility, ready to adjust policy in either direction depending on economic developments.
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Nvidia Resumes Operations in China Under Regulatory Constraints
Nvidia announced the gradual resumption of production of certain chips destined for the Chinese market, marking a strategic development in a context of strong geopolitical and regulatory constraints. After several months of halted activity due to U.S. export restrictions on advanced technologies, the company obtained the necessary approvals to restart shipments, while developing modified versions of its processors to comply with limits imposed by Washington. This resumption remains tightly controlled, with Chinese authorities approving transactions selectively to limit their dependence on U.S. technologies. Strategically, Nvidia is seeking to maintain a presence in a market that historically represented more than a quarter of its revenue, while aligning with U.S. priorities around technological sovereignty. This situation highlights the delicate balance between commercial expansion, political constraints, and the reconfiguration of global semiconductor supply chains.
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Oil: Persistent Upward Pressure and Inflation Risk
Oil prices remained elevated, supported by geopolitical tensions and supply concerns. Brent stood around US$107.38, while WTI traded near US$96.32, maintaining a significant risk premium.
Recent developments, including strikes on energy infrastructure in Iran and threats targeting Saudi Arabia, the United Arab Emirates, and Qatar, are heightening concerns about global supply stability. The Strait of Hormuz remains a critical chokepoint, and any prolonged disruption could have major implications for energy flows.
Persistently high prices act as a direct transmission channel for inflation. Rising energy costs feed into production and transportation costs, sustaining upward pressure on prices globally.
While some market participants believe an energy shock may not necessarily trigger a recession, the combination of elevated inflation and slowing growth introduces a stagflation risk that significantly complicates central bank policy.
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Stocks in Brief
• Nvidia (NVDA): +0.40% support from the AI sector in a declining market.
• Amazon (AMZN): -1.80% pressure on megacaps in a higher-rate environment.
• Apple (AAPL): -1.70% pullback in technology, increased sensitivity to rates.
• Microsoft (MSFT): -1.50% correction in growth stocks following Fed commentary.
• Marathon Petroleum (MPC): +2.00% new high supported by rising energy prices.
• Valero (VLO): +2.50% direct beneficiary of the oil environment.
• Micron (MU): +1.20% momentum maintained despite market volatility.
• Paramount (PARA): -3.00% continued pressure on consumer and media stocks.
• Lululemon (LULU): -4.20% fourth-quarter earnings decline, pressure on profitability and strategic repositioning in North America.
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Sector Performance
• United States (S&P 500): broad decline, with marked underperformance in technology and consumer discretionary.
• Canada (TSX): decline across all sectors, with materials and energy contributing significantly to losses amid heightened volatility.
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Thursday
• S&P 500: -0.27% at 6,606.49
• Nasdaq: -0.28% at 22,090.69
• Dow Jones: -0.44% at 46,021.43
• S&P/TSX: -1.42% at 31,854.98
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Canadian Dollar Movement
The Canadian dollar edged lower to US$0.7284, down from the previous day, as investors continued to favour a more defensive stance while geopolitical tensions and inflation risks remained elevated.
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Macroeconomic Analysis
North American markets posted a second consecutive losing session on Thursday, although Wall Street recovered a significant portion of its losses by the close. Market tone remained primarily driven by developments in the Middle East conflict and, more importantly, by its potential implications for energy, inflation, and the path of interest rates. During the session, the Dow was down nearly 500 points at one stage before partially rebounding, while the S&P 500 and the Nasdaq also recovered from their intraday lows.
The underlying message remains the same: as long as oil stays elevated, investors fear a prolonged inflation cycle. Following the Fed meeting the day before, the market now appears to be pricing in a scenario where rate cuts are becoming far less likely in the near term. Traders were now seeing virtually no room for a rate cut in 2026, while some firms were even beginning to discuss the possibility of the next move being a hike, even if that is not yet the base case.
From an economic standpoint, U.S. data sent a more mixed signal than the decline in the indices would suggest. Initial jobless claims fell to 205,000, below expectations, while the Philadelphia Fed manufacturing index came in at 18.1, above consensus. In other words, the U.S. economy is still not showing a clear sign of breaking, which further complicates the job of central banks if energy prices remain elevated for an extended period.
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Oil: Still the Main Risk Factor
Oil once again dominated the market narrative on Thursday. Brent closed at US$108.65, up about 1.2%, after briefly surging to nearly US$119 in the morning, its highest level since July 2022. WTI, for its part, closed around US$96.14, slightly lower after a highly volatile session. The late-day pullback began after comments seen as somewhat more reassuring regarding a possible reopening of the Strait of Hormuz and a potentially quicker resolution to the conflict.
The problem is that the market no longer believes in a quick return to pre-war energy prices. The risk of prolonged disruption in the Strait of Hormuz, combined with attacks targeting energy infrastructure in Qatar and elsewhere in the Gulf, continues to sustain a significant risk premium in crude prices. As long as that premium remains in place, oil will continue to act as the main transmission channel for inflation risk, weighing on equity valuations and reducing the room for maneuver available to central banks.
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Stocks in Brief
• Micron (MU): -3.8% despite better-than-expected quarterly results, the stock came under profit-taking pressure following a very strong run and concerns related to increased capital spending.
• Alibaba (BABA): about -7% significant pressure after weaker-than-expected quarterly results, with revenue below expectations and a sharp drop in net income.
• Rivian (RIVN): up more than 1% supported by the announcement of a partnership with Uber, which plans to invest up to US$1.25 billion in the rollout of robotaxis.
• Uber (UBER): down about 2% the market reacted more cautiously to the same announcement, despite the strategic significance of the partnership with Rivian.
• Canadian Natural Resources and Suncor supported the Canadian energy sector, with energy being the only positive segment on the TSX based on the day’s market reading in Canada.
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Sector Performance
• United States (S&P 500): the major indices closed lower, but losses were reduced by the end of the session thanks to a relative easing in oil prices. Technology remained under pressure, while the energy sector continued to benefit from elevated crude prices.
• Canada (TSX): broad-based decline, with base metals weighing particularly heavily on the index. Energy was the only sector in positive territory, supported by higher oil prices.
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Friday (in progress)
• Dow Jones: -0.1%
• S&P 500: -0.4%
• Nasdaq: -0.7%
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Markets opened Friday’s session lower, as oil resumed its rally after a brief easing move the day before. Investors remain concerned about the evolution of the conflict in the Middle East, its impact on energy prices, and the potential consequences for inflation and consumer spending. The major indices were therefore heading toward a fourth consecutive losing week, confirming that the market remains in de-risking mode rather than in a true recovery phase.
The technical backdrop also matters today. Friday’s session is marked by quadruple witching, meaning the simultaneous expiration of several categories of derivatives. This type of event tends to amplify trading volumes and intraday swings, and that potential volatility is being layered onto an already tense geopolitical backdrop. The market message is fairly straightforward: as long as oil remains elevated and the Strait of Hormuz stays at the centre of concern, investors will continue to demand a higher risk premium.
Adding to that is broader technical fragility. The S&P 500 is now below its 200-day moving average, a threshold closely watched by many portfolio managers and strategists. In a market where rate cuts appear increasingly unlikely in the near term, this kind of technical break naturally reinforces caution.
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Oil: The Market Remains Fixated on the Strait of Hormuz
Oil remains the main risk factor this Friday morning. After a temporary pullback, Brent was climbing back to around US$110.50 per barrel, up 1.7%, while WTI was up about 0.7% at US$96.78. That rebound illustrates clearly that the market continues to doubt a quick resolution to the conflict and, more importantly, a quick return to normal in global energy flows.
Even though some political comments briefly calmed the market Thursday evening, the dominant view remains that energy prices will likely stay durably higher than they were before the conflict. That is precisely what is keeping pressure on equities: higher oil means greater inflation risk, less flexibility for central banks, and potential pressure on both household spending and corporate margins.
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Stocks in Brief
• Super Micro Computer (SMCI): -26% in premarket trading after U.S. prosecutors accused certain employees of participating in a scheme to smuggle Nvidia chips into China.
• FedEx (FDX): +9% in premarket trading thanks to quarterly results that beat expectations and an increase in full-year guidance.
• York Space Systems: +11% in premarket trading after annual revenue came in slightly above expectations and 2026 guidance was viewed as strong.
• Micron (MU) and several semiconductor names were back under pressure Friday morning, giving back part of the previous day’s move.
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Sector Performance
• United States (opening): pressure remained concentrated in technology and semiconductors, while sectors more exposed to energy and defence continued to attract greater attention.
• Canada: the full-closing picture was not yet available for Friday at the time of this update. The TSX’s sensitivity to oil nonetheless suggests that the energy sector could show better relative resilience than the broader market if crude continues to move higher.
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Weekly conclusion
Despite a more nervous stretch in the markets, our medium-term view remains constructive. The main source of stress continues to be energy: as long as the conflict in the Middle East keeps a high risk premium embedded in oil prices and disrupts the flow through the Strait of Hormuz, investors will continue to price in greater inflation risk. On the other hand, the normalization scenario remains fairly clear: if the conflict eases and energy flows move more freely through the Strait again, pressure on oil prices should gradually subside, which would help calm inflation concerns. And when energy prices pull back, the market becomes much more receptive to the idea of eventual monetary easing, as we already saw earlier this week during rebound sessions tied to lower crude prices.
In other words, geopolitical de-escalation would not only support market sentiment; it could also more clearly put the possibility of future rate cuts back on the table, especially if core inflation continues to moderate. In this context, our bias remains disciplined, but not defeatist: a return to smoother energy flows could become the catalyst for a more durable market rebound.
