Market Commentary — Page 221

Market Commentary

COMMENT

Impact of Starlink on tower companies and wireless carriers. Starlink is Elon Musk's project to be launched into space to provide internet all over the world. It won't make companies like AMT obsolete. It's designed to provide high-speed internet to replace broadband, not to replace wireless. Great for rural and poorer areas. More that half the world does not have access to high-speed.

COMMENT

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Sector diversity is important. You can get good growth for income focused securities too like with ENB that is up 18% this year. With a longer term time frame, you could focus more on growth. Slow and steady growth is key for a stable portfolio. Unlock Premium - Try 5i Free

COMMENT

Pullbacks based on technical analysis by Carolyn Baroden Technical analyst Carolyn Baroden months ago called our current volatility. She measures past swings in a stock market and analyses them. One big finding: the S&P pulls back pretty hard, but it lasts only three trading days, like in June, two in May and one in January this year. She thinks the market is in good shape, as long as the SP holds above 4,233.

COMMENT

His reaction to Monday's sharp sell-off was, this has been a long time coming. We haven't had a correction in a long time. Expectations have long been building about the recovery and reopening, but no one can predict how long or smooth that recovery will be. Yesterday saw the start of hesitation on some people's part. Valuations look high, but are distorted by very low interest rates. Don't be surprised. Have cash handy on the sidelines if there's a 10-15% correction, so you can buy those companies for the long term. Meanwhile, he's staying with safe, dividend-paying stocks. Any correction won't last long, he suspects. Energy remains undervalued with some good buys here. Financials are safe. Pipes and utilities too, based on many contracts, though they could suffer a hiccup with interest rates tick up. We're seeing the start of price inflation for consumers in many items.

COMMENT

Oil stocks and energy sector outlook Energy is still under pressure. Many confuse energy with the ESG movement by blaming the oil companies. In reality, oil is still very much needed. We won't see peak oil demand for another decade as China and India's economies gain speed. Oil prices are never stable, and company earnings will be pressured to be shared as buybacks or dividend hikes. Focus on an oil company with flexible and can buy other companies; he expects more industry consolidation. You need some exposure to energy and don't sell your energy holdings.

COMMENT

Equity sell-off. The pull back is from a variety of factors. There is the start of earnings, Powell last week tried to convince the market of transitory inflation, tapering aid, geo political tensions and lots of bond supply coming to market. There is a perfect storm starting to brew.

COMMENT

China-US tension. The modern day Cold War with China's tech right now. China wants to become the largest economy and global influence. The Cold War is being debated and fought in large cap tech. Right now it is the secondary companies that are being affected.

COMMENT

Earnings. Earnings expectations year to date have ramped up tremendously. At the start of the year, $163 on the S&P for this year was expected. However, now it's up to $191. We have never seen earnings ramp up so much, but also we have never seen this much government spending.

COMMENT

Market drivers. It's always earnings that drives the market. The valuation is on the high side right now. You get some risk off and this is what we are seeing right now.

COMMENT

Crypto and gold. It is a digital asset that can be traded. The fundamental value is probably closer to zero and thinks it will collapse under its own weight in a bubble. The real interest rate is negative. Gold has seen a dislocation from this.

COMMENT

Educational Segment. Any good educated market technicians, the number of stocks participating in performance is important. Some analysts are saying breadth is still doing okay. He does not agree. In March and April, the S&P was making new highs. However, the average stock was turning down. Last week, most stocks were down but the index was only slightly down. This was last seen 25 years ago. Market breadth is wonky. This divergence often leads to a 5-10% correction. This should be looked at as an opportunity. We have not seen markets come down to trend. There are indicators that are showing cautionary levels. Risk-return is telling us to be cautious here.

N/A

Market. The TSX has been hitting record highs over the summer. The delta variant is weighing on the markets. We don’t go from lock-down to re-opening and it is all over. Markets and earnings will tend to go higher. Inflation is now off the table and we are now on to the delta variant. Markets climb a wall of worries but every day will not be a day of roses. We do not know the full extent of the damage done by COVID. This is a 95% amazing economy and 5% bad. He does not think the economy is in trouble but it is not going to be a straight line.

BUY

Canadian Banks. What a difference a year makes. Terrific return so far on the backs with no loan losses so far. As interest rates started to go higher, everyone got excited but now that story is put to bed. Canadian banks could not raise dividends or buy back stock due to COVID. It will be interesting to see what regulators will do with them now. They will trade sideways for now. His favourites are TD-T, RY-T and NA-T. They are very well run banks. NA-T is his favourite of the three as it has the greatest total return.

DON'T BUY

Oil Stocks. Nothing would warm him to the producers. They are just trading vehicles. The re-opening on some of those names got way ahead of itself. Oil stocks are not cheaper than last week as the oil price has plummeted.

COMMENT

Too much speculation and not enough stablity in the face of Covid uncertainty, which explains today's meltdown. This was the end of euphoria. The spec stocks, which attracted young investors, were hardest hit. Those specs include SPACs (638 this far so far, which is insane), IPOs and the Reddit/meme stocks, such as Corsair. Throw in the cryptos, though he likes and own Bitcoin, but likes it more at lower levels. Crude oil was also speculative.

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We paraphrase the experts by hand, we watch the shows and write down what we understood from the experts’ comments. We are human and can make mistakes, help us fix any errors. If you see something that you know is not right or if there is a problem with the site, feel free to email us at : [email protected].

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

Impact of Starlink on tower companies and wireless carriers. (A Commentary)

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

Pullbacks based on technical analysis by Carolyn Baroden(A Commentary)

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

Oil stocks and energy sector outlook(A Commentary)

Equity sell-off.(A Commentary)

China-US tension.(A Commentary)

Earnings.(A Commentary)

Market drivers.(A Commentary)

Crypto and gold.(A Commentary)

Educational Segment. (A Commentary)

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

Canadian Banks. (A Commentary)

Oil Stocks. (A Commentary)

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

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