Morgan Stanley (MS)

The earnings they reported were quite strong. The US financials have been weak this year. There is still concern about the US economy a year or 2 out. He favours Bank of America.

It lagged the US market this year. They still have a lot of decent transactional business but their future is in asset management, which is a slow business. They are doing a very good job on that side. He thinks it has a long way to go.

The U.S. market is outperforming Canada, so he prefers financials there than here. MS had a recent pullback, but feels it will do well going forward. The U.S. financials will move in a pack. You should get a decent return in MS in the next 12 months.

US Banks are very successful and are trading at reasonable valuations. He prefers Morgan Stanley to Bank of America.

(Past Top Pick, June 25, 2018, Up 5%) Disappointed it didn't reach the $50's by now, given how the U.S. economy is doing. It should be moving up.

(Past Top Pick, August 17, 2017, Up 11%) There's fear out there over the flat yield curve and of course an inverted yield curve. Yes, we are in a low-interest rate environment, but the banks have changed from a decade ago. They can now money on a flat yield curve. In fact, they can make a lot of money just with rising rates, without a rising yield curve. He likes the banks in the U.S. and Canada.

He would stick with the big banks pure play more than the capital markets. Over the short term particularly more likely to see an upward movement on the money centered banks as they have underperformed recently.

It's testing its 100-week moving average which is appealing. $45 would be its bottom, and it's currently at $48. It's currently an attractive entry point. US bank de-regulation helps and, for whatever reason, US banks briefly fell out of favour. Take advantage of it. (Analysts' price target: $60.56 )