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

This week shows that there's resilience in the market. It's healthy that discretionary and tech stocks will (if it happens) work off current overbuying. He's not excited by airline stocks, given today's news that American Express' CEO notes that card users are spending less on hotel and travel, and spending more on dining out. Technicals are extended for the homebuilders, so that's a challenge for that sector. Tech won't give up leadership, but will remain leaders, which is good; we haven't seen leadership since March 2022. In October, if the S&P sits near current levels, he predicts an all-time high made on the S&P.

Tech names are priced for perfection and have moved up sharply this year. He's pleased to see transports, health and materials rally now, because that shows the rally broadening out. He's looking at Chevron, Boeing and Exxon Mobile, for instance. Multiple expansion is the first leg of a bull market. If there are misses like with Tesla and Netflix then other big tech could fall like that. Megatech is certainly vulnerable to a pullback. Look at Tesla and Netflix this week. Healthcare and energy will likely be the best-performing sectors for the rest of the year; they have underperformed so far this year. The labour market remains tight, which is a catalyst for healthcare. Energy stocks are pricing in a recession.

Believes financial markets have entered into bull market territory. 
Economic rally has expanded from Big Tech into broader economy.
Any economic pullbacks will present buying opportunity.
Portfolio managers expecting a recession - are now under-performing indexes.
Tech rally will continue with strong earnings, and further growth expected.

Canadian Banking Sector: Not seeing major risk.
Canadian loan loss provisions very strong.
Not worried about prospects of the sector. 
If loan loss provisions are not needed - will be a large payout.
Royal Bank - top pick in Canadian sector. 

Believes Canadians in general, have too much exposure to Canadian assets.
Would be better to seek diversification in markets outside Canada.
ETF's offer good options for this. 
USA, Europe and Asia can be good places for investment as well. 

Investing Trends: The future of retail.

If retail wants to compete with the online landscape they need to do one of three things from our perspective:

1. Be lower cost (hard to beat online for this)
2. Be more convenient
3. Offer some sort of experience

Online wins on cost & convenience, so customers need an experience of some kind. Give people a reason to go to the store, to interact with others who have similar interests, share ideas and educate your customers or just plainly make a destination that is fun to be in and interact with. Apple get this and I think Indigo is starting to catch on as well.

Much ink has been spilled over the death of retail and a lot of stats show this to be coming true. The reality is that retail will always have a place in society, it will probably just need to look a lot different than it does today. The companies that can execute on this early or companies that can help make the physical shopping experience more personal and tailored whether it is through digital aids or not, will have a certain type of first mover advantage and will be the ones to watch.
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If you go back a year ago, the world was coming to an end, it was disaster. Meanwhile, the S&P is up 22%. What the experts missed was the common sense part, which was that production was really constrained, and demand was far outstripping it. That's not the environment for a recession, and we're still in that. There are still shortages out there, but they're getting better. 

If there's an inventory-type recession, it will probably be 9-18 months from now, when production finally catches up to demand and we start to see excess ordering work itself through the system. Other than that, the day we declare a recession the market will take off, because we'll be in a recovery.

We've seen the boom come back in travel, and that's been pretty impressive. A lot of money has been recovered in that area. There have been flight delays, but travellers aren't being told they're not going to reach their destinations at all.

Banks around the world are being squeezed on loss provisions. BAC has been broke twice in his career, as has Citi. Canadian banks have chugged along, giving 6% dividend increases continuously. Whereas US banks are cyclical as heck; you can make, and lose, a lot of money. Right now, we're going up, so hold on, but remember to sell when you get to the top.

Yes. We're seeing price momentum continue to trend higher. Last time he was on, he was of the view that a rally would take us into late June or early July. He thinks the short-term rally phase is getting long in the tooth. Three different sentiment indicators are suggesting that there's likely to be a 1-2 month, potentially longer, corrective phase. 

His longer-term work says that we started a new 4-year economic cycle (or 3-5 year cyclical bull market) back in October 2022. That's still his view. He'll be using the correction over the next month or two to add exposure.

He'd agree that in the next 1.5-2 months, we're going to see a pretty decent correction of 3-7%. But his longer view remains that this is a new cyclical bull market, within the context of a secular bull market that's been in place since 2011, and which has upside out to 2030. 

If we are starting a new 4-year cycle, portfolio managers will rotate out of the defensive sectors, and this will be the trend for the next 3 years. This includes consumer staples, utilities, and telecoms (especially in Canada). These sectors are most at risk for being a source of funds.

Over the next couple of weeks, they're primed for at least a short-term bounce. We're going to see a rotation to defense over the next month or two.

Silver as a commodity is seeing higher highs and higher lows. Silver has more economic applications than gold, and it's responding positively. His work suggests taking out highs of $27, with next upside target around $30. Really likes the potential longer term, especially for a Santa Claus rally.

Beautiful and strong chart is up and to the right. This type of chart's telling you that the market likes the stock, and the company's doing everything right. These are the kinds of charts you want to be looking for as you hunt for names to put in your portfolio.