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

Today's rally Stick to stocks that don't rely on stimulus (U.S.). There's too much partisan rancor. Yes, main street absolutely needs this stimulus money. They need to get Mitch McConnell onboard to close this deal. If there isn't one by Monday, he predicts a sell-off. Markets have recently run up too fast, too far, so we're due for a pullback. There's too much complacency in reaction to Washington.

Announcement of government funding to Ford's electric vehicle division. Wind at the back of the Ontario economy. Seeing pickup in auto demand. Auto industry is a real backbone and will have a really nice recovery over the next few years.

Is Washington stimulus or lack thereof a big market driver? Stimulus is a necessary bridge. Recovery is uneven. If certain sectors don't get stimulus, there will be bankruptcies and a domino effect. A stimulus package will get through and will be very bullish.

How safe are pipelines? Pretty safe. No commodity risk. Needed infrastructure to harness any growth in the oil space. Risk if oil completely falls apart or producers go away. That's unlikely. Oil will still have its place.

Will talk of curbing Amazon's market power amount to anything? Yes. A lot of ways to go after them. Maybe they won't be able to sell their own products, and be only a distribution service. So powerful. An enabler to the world. A blessing to have, but regulators will seek to curb their monopoly power.

Air Canada for a TFSA? In your TFSA, you could buy a high flyer like Shopify, but you could really get it wrong. Better to dial expectations down a bit. If you're going to buy a stock with balance sheet trouble, you probably want it in a non-registered account so you can use the losses. For the risk/reward, he wouldn't buy airlines here at all.

Canadian or US banks? Both get the vote. Canadian ones are accused of being more expensive. PE's are similar. At these levels, you can own both.

Companies that posted strong Q2 earnings have actually drifted lower? Yes. It's all about beating the spread. The market had high expectations, and there's been a selloff. On the flipside, companies whose worst-case scenario hasn't play out have started to perform a bit better.

Will euphoria return to big tech? Great question. In a number of cases, they've been ingrained in economies. Larger tech benefits from positive secular trends. Ultimately, there's a lot of money pouring in through passive means. Nothing to show a change to this, so we'll see new highs on those names.

When Trump tweets something that causes the market to go down, it's a mistake to sell (i.e. kieboshing stiumulus). Why? Trump will follow with a tweet that reverses himself (sort of), like today, which caused markets to rebound. Meanwhile, Democrats again announced that they want to break up the monopolies of mega-cap tech companies of Facebook, Apple, Google and Amazon. He's not sure that they are monopolies. Rather they have created industries full of small companies. Our economic system needs competition. Also, these tech titans are America's pride. Also, they support small business. How does a small business advertise cheaply? Buy ads on Facebook and Instagram.

Is today the time to buy growth stocks? Any time is. No matter the macro, there are companies but you have to look now with a fine-tooth comb. The velocity of money speaks to how often a given dollar circulates through the economy. Say he gets haircut and that barber buys groceries and those dollars are spent elsewhere. Now, that money is circulating is declining (less), so GDP will increase less. We won't see inflation until the velocity of money picks up. US government bonds are a safe haven and the price of them bid up in times of distress. Because stocks are strong, we're seeing a back-up in bond yields. He expects yields to go lower and even negative yields during the next period of economic weakness.

Yesterday's rally wasn't sustainable. Today, Trump axed the stimulus talks and markets slid. It's a crushing disappointment for all who lost a job or business during Covid, especially in hospitality. Investors are disappointed; markets thrive on liquidity. US Fed's Powell wanted more stimulus. Cramer thinks Trump is taking a calculated risk, seeing a V-shaped recovery. Can small business and travel hold on for another month when Trump says he will resume talks? Small businesses are suffering, but those don't show up on the stock market, which Trump closely watches. Sectors that are thriving are seeing a V-shaped recover, including tech and home-builders. That said, we need stimulus now.

"Stick to stocks," he often sees on Twitter. But now you can't divorce politics from the markets with the election around the corner. You must watch politics. For example, Trump loves fossil fuels, so he urged viewers to sell, sell, sell oil because Trump's approval would flood the market with oil, and it did. Politics and medicine are driving the market these days--including today when Trump cancelled stimulus talks.

The stock market doesn't work today without the stimulus from governments. Without the stimulus, we are in the worst depression since the 1930s. The headlines for stimulus bills around the world are coming out daily.