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

Market Outlook He is 75% cash right now. He is glad the market is rebounding, but he does not really buy into it. He sees the economy slowing down still and black clouds are still forming. He is focusing on stocks that are not going to be impacted by today's market uncertainties.

Gold Strategy. It will always be volatile. He reads a lot of analysts suggesting this is the time to get back into it -- especially with some market uncertainty. He prefers owning bullion bullion rather than individual companies. He thinks it is hard to find companies that avoid accidents. He likes owning a basket of stocks.

It's been a good week. The selling was overdone, given record employment levels in the U.S. and other positive indicators. Corrections must happen. He'd like to see a base building, though. As long as there's a momentum happening, he doesn't see a recession, which may happen in 2020--and even that could be too soon. Trump as well as the Democrats have been talking about infrastructure spending, which could extend a positive market. China-US need to reach an agreement; it would benefit both especially China. Both countries are realists and he believes they are working towards an agreement. US Fed Chair Powell should go easy on rate hikes, and it seems like he is now.

When would you buy a gold stock? You buy these stocks when you expect currencies, namely the US dollar, to weaken, and when inflation rises, which eats into your assets. We haven't seen serious moves in gold lately, only minor ones.

Market. Since we got super oversold back on Christmas Eve, we bounced up. Base metals look good; energy, base metals and technology look really good. Around the 24th we saw a further rollover of the US$. It will support emerging markets amongst others. We should move ahead strongly at the end of January. The base metals move inverse to the US$ so as it is breaking down, we expect base metals to go up. He expects a multi-year bear market in the US$. The 10-year US note is falling with the price of oil. These yields should now continue higher.

US$. The billions of repatriation dollars are probably ending? There was a bit rush of money coming back in so we could start to see a fall in the US$ rate. The Canadian dollar has rebounded since Christmas. We will run into resistance around $0.76. You will probably see a continuation of the strength in the Canadian dollar. Resistance would be at $0.80.

Utilities vs. Telcos. Which Sector? He would look at a basket of them. XUT-T is a utility ETF. For Telcos he would get a basket directly because of the ETF's volume. In case rates go much higher he would not get a large position.

Market Outlook - The Market got oversold on December due to negative sentiment. Concerns about US trade war with China, flat yield curve flattening and oil price collapsing and a misinterpretation from the market on what Powell said about raising rates regardless of what was going on weighted on sentiment. Powell then talked again and he said that he was data dependent. The Bank of Canada said the same recently. That provided relieve to the market. The preliminary holiday sales estimates indicate that it was a strong season. Unemployment is still low. It is too early to say.

Is it a good moment to convert CAD into USD? - It is always very difficult to call on currency. She sees the CAD in a range of 1.25 to 1.35. We are kind of at the high end of that end of that range. Having said that she doesn't see the CAD appreciating as there is no reason for that.

Market Outlook Q4 was the worst for the resource sector since 2008. It is now setting us up for a good 2019. WCS differentials are likely unsustainable at these tight levels around $9. He expects the WCS discount to be $20-$25 US/bbl and light barrels to be discounted by $10-$15 US/bbl range. About 325,000 barrels per day is curtailed as part of the Alberta government policy -- about what the market is long in Canada right now. Then when Enbridge Line 3 comes on around later in the year it will also be supportive. The US dollar has come of its peaks and he thinks this will help gold prices -- he thinks gold will get to $1350 US/oz. This will be good for gold stocks in 2019.

Positive going into 2019? He was cautious going into 2018, de-risking portfolios, as we approached the late stages of the economic cycle. Some of those concerns came home to roost in the fourth quarter. Prices, valuation, and sentiment are markedly lower. Risks and rewards are more balanced for 2019. Recession risk is still out there, but we could still have a soft landing, and we have a cushion with contraction of P/E multiples last year.

Seeing buying opportunities? Yes. They have a blank sheet every single day. If they wouldn't buy it today, they wouldn't own it.

Market vs. US Fed. The minutes are signalling a certain amount of discord on the committee, which is not unusual. The vote needed to be unanimous to demonstrate solidarity and stand up to the bullying White House. Foreshadowing of less hawkishness going forward.

Canadian interest rates staying put. Represents the totality of all market conditions. It's more complex than just one variable. Extent of credit, bond yields rising, equity conditions all have an impact. When the markets, bank lending channels, and bond market are doing some of the tightening for you, you can take your foot off the brake.