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

Five to nine stocks have led this bull market, but only in the past week is it expanding to other stocks and sectors. The Fed needs to stop raising rates until we're in a true bull market. The trick is, you need to invest before that bull runs.

Believes US Federal Reserve done raising interest rates for June.
Expecting another interest rate hike in July, or August.
Biggest mistake US Fed could make is raising rates too high (difficult balance).
US Tech is leading market, & making back losses from earlier this year.
Bull market in the USA only represented by tech companies (weakness in markets remains). 

Previous Investment Bubbles: Cannabis.

In 2018/2019, investors truly seemed to believe that every citizen of Canada was about to become a stoner after cannabis was legalized in late 2018. Sales projections were through the roof. Companies were quickly created, raised billions in capital and watched their share prices soar. Large foreign companies with billions of dollars bought into Canadian companies. Then it all popped, very quickly. What happened?

First, it seemed no company could make any money. Most companies were bleeding cash. Second, demand was nowhere near predictions. It turns out that just because something becomes legal doesn’t mean everyone is going to buy it. Third, valuations were just ridiculous. Growth was great for a short period of time, but investors simply paid too much for this growth.

Now, the sector is pretty much a wasteland of company carcasses, Canopy Growth Corp, one of the early winners, was worth more than $15 billion less than two years ago. Today, it is worth less than $900 million.

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He does spend time on it, because his clients expect him to be knowledgeable about it and have something cogent to say. Still, earnings and dividends are the big drivers.

It will be really hard to bring down inflation to any great degree. So interest rates are likely to remain at these levels or close. 

Historically, these interest rates are not bad. When he came into the business, if you had 3% on short-term rates it was awesome, and 5-6% mortgage rates were standard. Things are only high relative to what we've been seeing over the past 10 years. Outside of that, they're reasonable.

He just got a bubble signal for the NASDAQ. As long as the bubble lasts, he'd keep holding stocks like AAPL. When the bubble bursts, and it will, just remember the bubble of June 2020 and the tumble of AMZN and the like. Expect it to happen again, but not now.

For people who don't want to take risk, it' not a bad time to sit on the sidelines. Intrinsic value of US growth stocks is relatively poor. Intrinsic value of Canadian stocks is pretty good, because our index is heavily weighted to oil/gas and banks.

At this juncture, you're doing a bit of gambling if you're in the stock market. There's a bubble building in the AI stocks. We've seen this before. You can have a lot of fun, but when they come down, remember Nortel. Go for value, but this is a gambler's market.

Lots going on in the generative AI space. It involves the cloud and SaaS, and it's a multi-billion-dollar marketplace. The uses can go on forever, from healthcare to manufacturing to the consumer.

But it's still very young, picks and shovels right now. But for those companies that can harness it, it's going to be very powerful.

Quite a bit of volatility. But if you look at the charts over the last 5 trading days, it's flatlined a bit except for the beginning. Spikes up, comes back, spikes up, comes back. Going back to 1983, the S&P 500 has an average gain of only 0.15% in June. If you go back only 10 years, it's around 0.2%, but with a lot of volatility. 

What you're seeing is a lot of rotation. On Monday, the market cap of AAPL equalled that of the entire Russell 2000. It indicated to the market that something was out of whack, and that's perhaps why we saw the surge in the Russell 2000. AAPL's revenue warrants high confidence, but still, something's out of whack.

Financials lack a catalyst now, so he's not excited about them. Generally, he likes Mastercard, Arch Capital Group (performing very well for him), AmEx and JPMorgan, but unhappy with MS and BAC.

Very bullish, so he just raised his price target on the S&P by 250 points to 4,550. Market price momentum will persist. He hasn't been overweight tech since 2019. He isn't late on tech, but rather tech is just beginning. The market bottomed last October and there's 6% upside ahead. He's excited.

Previous Investment Bubbles: Electric Vehicles (EVs). 

Tesla Inc. started this bubble off. That tends to happen when a stock soars to US$410 per share from US$1.05 in less than 10 years. The interesting thing with the EV Bubble is that it spawned other bubbles. EV manufacturers soared in value, and so did battery, lithium and copper companies and anything else that went into the manufacture of EVs. Some of these bubbles are still ongoing.

There have been big successes and big failures in the sector, but the growth potential is intact. The market share of EVs is still low, but is expected to grow for the next 20 years at least. Governments are mandating EVs, and price points are coming down. This bubble may turn out to have some legs.

As with any investment, investors need to be careful with valuations and watch cash flows. Growing companies tend to burn through cash. Not all will survive. With mining companies, be careful not to buy tiny, promoted companies with little possibility of actually building a mine. Bigger companies are probably the better play if you want to participate in this sector.
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Market does not believe Saudi Arabia/OPEC oil cuts will be effective.
Investors worried that OPEC cuts will be undermined by Russia production etc.
Long term energy shortage & under investment a good trend, but worried about China slowdown. 
US jobs data last week indicating a divergence between US Fed policy & employment.
Best measure of economy is IRS tax collections. 
Not expecting a another US Fed rate hike (believes enough monetary constraint in markets).

Not aware of any Canadian ETF's that are pure A.I. vehicles. 
Would wait until product is launched instead of hedging with semi-A.I. ETFs.