Market Commentary — Page 103

Market Commentary

COMMENT

Large banks announcing earnings this week (will be indicator of economy). Anticipating earnings from major companies to be strong (especially energy). Believes inflation will begin to cool with rising interest rates. Portfolio consists of long term investments on high quality names(blue chips).

COMMENT

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Don’t Overpay for Safety. Scared investors flock to so-called safe investments, such as food companies and utilities. Again, nothing wrong with this, and most companies in these sectors offer reliable, growing dividends. But investors need to be careful about what they pay for safety. Many companies’ valuations in these sectors are creeping up to high historical levels. Companies with historical average price-to-earnings ratios in the 15x range are seeing valuations bump above 20x. A change in valuation can still result in large losses, even with safe stocks. We would caution against loading up on safe sectors. Keep diversification in mind. Everybody has to eat, but because of low margins, inflation and higher interest rates can have a serious negative impact on food companies as well. No one wants to see their safe stock decline 25 per cent because they paid too much for it. Unlock Premium - Try 5i Free

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COMMENT

CME Group Inc. (CME-Q)

Walmart Inc (WMT-N)

Blackrock Inc. (BLK-N)

Advanced Micro Devices (AMD-Q)

AMC Entertainment Holdings Inc. (AMC-N)

Altria Group Inc (MO-N)

Invesco QQQ Trust, Series 1 (QQQ-Q)

Bed Bath & Beyond (BBBY-Q)

GameStop Corp. (GME-N)

Tesla Motors Inc (TSLA-Q)

Bank of Nova Scotia (BNS-T)

Enbridge (ENB-T)

Apple Hospitality REIT Inc. (APLE-N)

CVS Health Corp (CVS-N)

Sealed Air Corp (SEE-N)

COMMENT

Tough market. Still in a bear market. We could have a pretty significant rally in that bear market. NASDAQ could easily get back toward 13,500-700 level. Seasonal factors are coming into play. Going back to 1990, there's an 81% probability the NASDAQ could rally upwards of 9-9.5% from the levels here. A year ago, the runway forward for tech was very short. Now, the runways are anywhere from 40-70% lift from this level. Going into earnings season, the analysts are going to be talking about guidance going forward and whether they have to bring that down.

COMMENT

Can seasonality probabilities or guidance outweigh the Fed? He thinks yes. CPI came in today a little hotter. In fact, the core PPI was actually lower. Next spring, you'll probably have Fed funds around 4.5-4.6%, but that's already baked in. Markets are barometers of what we'll see in 6-9 months. So 6-9 months from here, the economy will look a lot better than it does currently.

COMMENT

Put cash into tech now, or wait? To invest, go with an investing manager. It's not an investing market, because it's still a bear market. It's a trading market. You'll still have rallies going into the end of the year. If you're going to do it yourself, do trades. Right now, he's about 85% invested, 15% cash, with a 70% hedge on top. The hedge is made up of short equity indexes that are correlated to the beta of the individual stocks, including futures and options on futures.

COMMENT

Macro assumptions for the next year. He reminds himself every day of 2 things: there's the economy and then there's the stock market. The economy is what it is today. The stock market's supposed to be a barometer of 6-9 months into the future. The market's saying it's going to be ugly until next spring and into the summer. But it's not going to get much worse. If we can keep the PPI and CPI anywhere from 0.1-0.4% month over month, then inflation can stay on top of the Fed funds rate. Second half of next year should see a much better economy.

COMMENT

Banks stocks are hitting new lows today She likes how cheap they've become. Banks go down the most heading into a downturn, but they will also rebound the most. They pay a good dividend and offer value. Are good for long-term investors.

COMMENT

Energy is up 43% YTD and 10% for the month, but this is at the start of a secular bull market. The low cost of debt and capital have been drivers. They will prioritize using technology, dividends and shareholder returns.

COMMENT

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Own Some High-Growth Stocks. Many investors dipping their toes into a bear market will start with ultra-conservative stocks, such as those in the consumer staples and utilities sectors. That’s one strategy, but investors need to look at growth stocks, and smaller companies (see below), if they want really big returns. It is very true that a stock down 80 per cent may never get back to its previous all-time high, but it can still double, triple or more. Growth stocks are absolute pariahs right now, and stocks that used to be 50x sales are now 3x sales. Many companies are still growing at 50-plus per cent, even in a weakening economic environment. Don’t forget that in a recession, investors will likely pay more for companies that can still grow while everything else retreats. Look for companies growing at 50 per cent today (a Bloomberg screen this week shows 982 North American companies with expected sales growth of 50 per cent or more next year). Even in a recession, many of these will still grow at 20-plus per cent, and that might be very attractive to investors when the economy is contracting.

COMMENT

How are higher anticipated rates by the BoC reflected in long-term GICs? Bond yields used to be so low, so now it's an opportunity if you hold them in the right account. Lock in these higher rates for the next 6-9 months, looking out to 2-3 years.

COMMENT

It’s been a roller coaster for investors so far this year. The U.S. Fed's aggressive policy on interest rates guarantees a recession and increases the odds of a hard landing. However, real-time data shows commodity and home prices are declining and should mean maybe interest rate cuts in the second half of next year. In this volatile market, the valuation risk in markets is much lower. Investors holding cash and low-yield fixed-income risk losing purchasing power over time. Going forward, I think investors should remain well diversified and defensively positioned. Don't exit or sit on on the sidelines.

COMMENT

The market looks irrational to retail investors as it see-saws. Markets are looking at a developing recession, which is increasing volatility. Yet, stocks are oversold. The US Fed will remain aggressive in hiking rates. If we see a wave of downward revisions and guidance this earnings seasons, it could warn central banks that we risk an overshoot in tightening.

COMMENT

Canadian banks They've seen a lot of pressure this year, including recessionary fears. But banks can now raise dividends; always been an attractive point for banks. Banks are well capitalized and the dividends are safe. He's been adding to his banks, preferring those exposed to the U.S. A real estate decline is a concern, but not right now.

COMMENT

Don't take the bait in buying as markets fall. Sure, everybody is negative and news is bad all around. There's a drastic decline in the savings rate, yet people are still buying houses. We don't know when the Fed will stop raising rates, but not soon. They will when wages, homes and food prices go down. Until then, all these rallies are head fakes. Stay the course and hold cash for better times.

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A Comment -- General Comments From an Expert (A Commentary)

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Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research.(A Commentary)

🔒 Premium Content Alert – This buzzing stock opinion is accessible only to Stockchase Premium

A Comment -- General Comments From an Expert(A Commentary)

Tough market.(A Commentary)

Can seasonality probabilities or guidance outweigh the Fed?(A Commentary)

Put cash into tech now, or wait?(A Commentary)

Macro assumptions for the next year. (A Commentary)

Banks stocks are hitting new lows today(A Commentary)

A Comment -- General Comments From an Expert(A Commentary)

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. (A Commentary)

How are higher anticipated rates by the BoC reflected in long-term GICs?(A Commentary)

A Comment -- General Comments From an Expert(A Commentary)

A Comment -- General Comments From an Expert(A Commentary)

Canadian banks(A Commentary)

A Comment -- General Comments From an Expert(A Commentary)

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