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Stockchase Insights A Comment -- General Comments From an Expert A Commentary COMMENT Jul 21, 2023
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Believes momentum will continue. What's holding us back are Donald Trump's tariffs, which are very specific. About 90% of goods are moving across the border tariff-free under USMCA. It's a very complicated setup.
On the other hand, our economy's been "liberated" by turning on a big gas and a big oil export facility on the West Coast. These have pumped a lot of $$ into the Canadian economy. Gold production with the price rising has also added a lot.
The pessimism around Trump's noise has flattened the housing market. But we are going to get rate cuts, which should hopefully rekindle that market. Bruce's wife is in real estate, and so he's had feedback that housing is starting to pick up a bit.
The TACO part of Trump is coming through, and people are starting to ignore Trump and just get on with their lives. The outlook looks very good.
Canada has lots of technology expertise, so we're well-equipped for the AI revolution and will benefit from that.
For Canadian energy, we're finally turning on exports to countries other than the US (who always paid us at a discount). So now that we'll get a better price, Canadian energy is probably in for a better run than the world is. Canada enabled Putin 20 years ago, because we wouldn't build pipelines and he did.
The unemployment rate remains the same. But the job-loss number isn't too surprising given that we are expecting a bit of softness in the Canadian economy in the middle 2 quarters of the year. Jobs market will continue to be a bit choppy, especially with the push and pull between part-time and full-time.
That Canadian manufacturing posted gains is surprising, but is probably just a result of the ebbs and flows of the economy. And there's the tariff issue affecting everything.
In the US, technology makes sense. Financials also make a lot of sense in this environment. Likes industrials, they've been right at the top of the 11 sectors so far this year in terms of performance. Among the very diverse healthcare industries, you have to be selective; some names have been beaten up, others have held up quite well.
He's being very selective in the Canadian market and somewhat cautious.
When you look at the US market, we're seeing about 8.5-9% YOY Q2 growth. That's more than expected. Good news. Technology continues to lead -- great reports from MSFT, NVDA, GOOG over the last month or so. About 81-82% of US companies so far this quarter have beaten earnings expectations.
The word he'd use right now would be "resilient".
In his portfolio he has AMZN, AAPL, GOOG, and NVDA. Those are the names he favours. META screens well, but he doesn't own it because you can't have 90% of a portfolio in tech/Mag 7 names. MSFT always seems expensive.
TSLA is a different animal entirely, based on expensive valuation. Concerned about management and where management attention is at any given moment.
Investing 101: Don't Buy Fads
Nearly every investor has been caught buying a fad that didn’t work out. Cannabis? Check. Electric vehicles? Check. Dot-com companies (for the older folks)? Check. When there is a fad that is attracting investor attention and money it is important not to get caught up. Yes, there are often good companies doing well, and that’s how the fad or bubble is created in the first place. But investors can focus on smaller companies and there are always promoters and brokers willing to extol the virtues of a sector or specific businesses. Stick to the fundamentals. Don’t pay 100 times sales for a tiny company just because it is in a ‘hot’ sector.
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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:
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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