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

You can make the case that if you go out into the latter part of Q3, you're going to have this financial tightening, which will weigh on the multiples. Therefore, we'll probably have an earnings recession going into Q4 and in the beginning of 2024. What that means to the market depends on where the market is when we get there.

For Q1, US earnings are expected down 9%. And for Q4, it was down about 5.5%. There is a trend going on. Revenues should be modestly higher, 1.5-2%. When you pull all the technicals and fundamentals together with what central banks are doing, it feels as though we're going to be entering a pause period, at least for the Fed. This is similar to what the BOC did. That would give a green light for investors to come in and put some money to work.

There are always going to be cracks out there. He wouldn't be surprised if we have some other nasty bank crises. The US has 5,000 banks, whereas in Canada we have fewer than 20. So the odds are that you'll have some problems down in the States.

Instead of trying to pick the winner on the hardware side, there are so many on the software side that have much better margins. When it comes to EVs, buy a TXN or a QCOM, which does the CPUs and the GPUs. LCID, for example, just announced layoffs.

Potential for a recession, but only if there's more credit or financial tightening. Credit tightening would happen, at the soonest, in Q3 of this year. If there is a recession, it won't be until later in Q3, maybe into Q4. Makes sense, because it's only a year ago that they started raising rates. Most economists say that for rates to filter through the market, it has to go on for about 18 months. 

He uses it at least half a dozen times a day. Phenomenal product that will change our world. He still thinks GOOG will be the winner, despite MSFT's entry in the space.

Are My Canadian Bank Deposits and Brokerage Accounts Safe? This is by far the most popular question asked by investors over the past two weeks. Having multiple bank failures in the United States has certainly raised concerns with savers and depositors. The short answer is … probably.

The Canadian financial system has a different regulatory system than the U.S., and it is far less competitive, meaning banks don’t need to take as many risks. Canadian deposit insurance is $100,000, and there are discussions right now about raising this limit. Broker accounts have $1 million in insurance under the Canadian Investor Protection Fund. The Canadian record of protecting investors is solid, and our banks fared much better in the 2008 financial crisis than their U.S. counterparts.

Could a bank run happen on a Canadian bank? Sure, anything is possible, and confidence is still the key to the banking system. But as in the U.S., we would expect governments to step in and protect investors, to prevent an entire financial system collapse. Thus, we would not lose much sleep over the safety of our Canadian banks.
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Don't count on central banks to stop raising interest rates as long as inflation remains historically high. To buy something just because it keeps rising in the market instead of buying due to a stock's fundamentals needs to change. Powell hiked only 25 basis points (instead of 50) earlier this month because a week before Credit Suisse collapsed. Unintended consequences could include a strong USD that will pressure US companies. In the 1970s we had high inflation and an energy crisis, which isn't that different from now.

How much non-North American stock should a conservative investor hold?

The best tech, pharmas and staples lie outside Canada, with some in Europe. In 8 of the last 10 years, global stocks have outperformed Canadian. Canada has a narrow market of banks, some pipelines and rails, then the quality drops a lot. To allocate, pick best of breed companies in each market. Invest when a currency is weak, like buying Europe last June when the Euro was weak.

Believes US Federal Reserve is losing money due to the inverted yield curve.
Borrowing short & lending long creating shortfall in revenues (assets yielding less than paying on obligations).
Expecting ~$100 billion shortfall in US Federal Reserve. Taxpayer will be on the hook.
Deficit will grow as a result.
Rising debt and deficits will impact portfolios.
Expecting inflation to persist over the next 5 years (will be hard to remove).

The Importance of Pricing Power: Inflation has been a hot topic in the investment community in the last two years. Every investor wants to protect their portfolio from losing purchasing power by diversifying into different asset classes such as real estate, foreign currencies, gold, real estate, crypto, etc. We think one of the best hedges against inflation is through the ownership of great businesses with significant pricing power that could raise prices to offset costs pressure without losing volumes. We believe that companies with strong pricing power have the ability to do well in an inflationary environment for these particular reasons: 1) The ability to raise prices to offset inflation without losing volumes helps companies maintain their profit margins 2) Pricing power allows companies to price their with flexibility, sometimes even faster than average inflation rates of 3-4%, leading to operating profit margin expansion 3) A high gross margin can be a powerful lever for organic growth over the long term, especially for companies with mature volume growth.
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The banking crisis is quite isolated and consists of a couple of banks not managing assets well. However we still need to watch whether other banks will tighten credit which can create problems for borrowers. There will be more consolidation in U.S. banks and tighter regulation. The probability is for a soft landing with just some slowing down, since the economies in North America are strong along with high employment levels. The market correction last year presents good buying opportunities especially in high dividend stocks and defensive sectors like utilities and banks. The bond markets have created equity like returns. Inflation is coming down. If things get worse in the economy or the banking crisis spreads, it could lead to lower rates which is bullish for stocks and bonds. Buy on dips.

The longer this mini-banking crisis drags, the higher the Fed must take interest rates. On the other hand, if a larger bank fails, those hikes halt.

Is confident crude oil will bounce back given China's demand. Also: if the Fed can design a soft landing; technician Larry Williams concludes that oil will rise based on his analysis of historic market patterns.

Remains bullish on oil prices.
Large volatility in oil prices due to instability in banking markets.
Believes dislocation between financial and physical demand for oil.
Indication from China is that demand for oil is still growing with re-opening of economy.
Inventory slowing rising, but not concerned for long term energy prices. 
Expecting higher energy prices going forward. 
People overly bearish on oil price with US shale production falling. 
Fundamentals in market is suggesting less supply than demand.