There may be some evidence of that. It's been an eventful first almost-4 months of the year, and especially since so-called "liberation day". A better name might be liquidation day. People are catching on to the fact that the White House says one thing today and negates it the next, which might make investors less trigger happy.
Hopefully, there's some longer reflection being made instead of knee-jerk reactions to off-the-cuff remarks. A lot of volatility for sure.
Now it's really a disparate group of stocks. Not at all the way they traded for 2024 and 2023. He favours the ones that have recurring revenue. TSLA was the first to report, and it was a bomb on the quarter.
GOOG skews more to the service sector side of the economy, which is distanced from tariffs. Very robust business, dominant player in Search advertising. He has no undue concerns about that. DOJ lawsuits are usually more bark than bite.
Cloud business is growing nicely for all involved in it.
Not something his firm is all that predisposed to doing. One of the most dangerous phrases that gets tossed around in investing is "buy low, sell high". A better discipline is to "buy high, sell higher" -- that's the approach in their momentum mandate, and it works very well. Momentum is a force of nature not only in physics, but also in the investing world.
There's a lot going on, and Mark Carney has to win first. We'll see what happens next week.
Carney is showing his hand a little bit and it's a good move. The Trump administration has put themselves in a bit of a pickle here, and they need to see deals. For this market to keep going higher, it needs clarity and a framework of agreement (without, necessarily, all the details). Both the bond and equity markets need to see that.
Time is ticking against the Americans. Trump likes to be popular. And he wants to win mid-terms that aren't all that far away, especially if they've made this one goof move to put the economy into a recession. The #1 rule of governance is to not put your economy into a recession.
The medicine delivered on April 2 was really too hard for economies to deal with. The reasons we've had rallies since April 9 is because the US has kicked the can down the road by 90 days and has done carveouts for electronics. That 90 days can go by quickly, time is ticking.
Markets are clinging to hope that something will come out of weekend meetings between Trump and other dignitaries attending the pope's funeral. CEO's won't like it if there's no architecture on deals for months and months. People will sit on their hands, economic activity will slow, and the odds of recession will tick higher.
You want to diversify, don't bank on just one stock carrying the load. Look at a mix of fixed income, preferred shares, good dividend stocks with visible dividend growth, robust dividends. Places to look: energy infrastructure, utilities, industrials, financials. These sectors are all in Canada, as well as being in the US and globally.
Especially in markets like these, you want to inch in incrementally and slowly. Same approach with falling knives.
Markets. He is currently cautious. Stocks are near their all-time highs, and yet we have got sub- 2% US GDP growth, Central Banks are talking more devilishly, and negative interest rates are quite a way out the curve. A potential risk is the prospect of inflation. Since the crisis of 2008-2009, but intensifying over the last 2-3 years, there is global competitive currency devaluation. Most Central Banks and governments saw the US economy as the best of all evils and the strongest of the bunch, and they wanted to export their deflation to the US. Feels this has really been intensifying in the last few years. Most Central Banks and nations have devalued their currencies, trying to export more to the US. The question becomes, is the US economy strong enough to import deflation from China, Japan, Europe, and even Canada. He is not so sure. If he is right, and inflation is not the issue, the back end of the interest rate curve should hold quite well. The interest rate curve has flattened from about a 2 year to a 30 year. He is seeing people with zero in fixed income and government bonds, which is a massively unhedged portfolio. He is currently looking to add 30 year bonds, which provides a huge cushion to a portfolio for a) deflation, if it comes, and b) if risk assets start selling off because of a flight to safety into government bonds.