Andrey OmelchakA Comment -- General Comments From an ExpertA CommentaryCOMMENTJun 26, 2026

We've seen a lot of rotation in the last 30-45 days. Tech was where most investors were crowded into, and now the air is really coming out of that sector while other sectors are starting to move. US healthcare is really making moves, as are US financials (Canadian ones have been doing that for some time). Sector breadth is broadening as investors look for returns.

His team trimmed its tech exposure over the last month. They're not moving out of the sector entirely. There's often rotation inside the sector itself -- software stocks were beaten up in the first quarter, and now some are coming back to life. At the same time, chips and semis are losing some steam.

He's looking at anything under ~$5B in Canadian industrials and technology that's been left for dead in the summer, a not unusual occurrence when volumes dry up. Yet the fundamentals on a lot of them have been extremely strong. If they continue to execute from a business standpoint, the stock price should follow.

His firm follows top-down indicators, and these are all still positive across all market caps. Seeing rotation into different sectors. If you project where growth is going to be, and where inflation is going, it looks as though the fall could set up quite nicely. Especially with the earnings expected in the next few months. It should all have a positive impact for the markets.

There's always rotation going on in the market. So you need to have a diversified portfolio. You need to have a stop point, so you know when to get out and when to stay in without emotions taking over. There's a great book called The Art of Execution, which defines how you should think of yourself as an investor.

If you look at the World Cup since 1930, stock markets tend to do a little less well than average in years with a World Cup. If you look at the down markets we've had in the last decade (2018 and 2022), both were World Cup years. Based on the data, we might have a bad second half of the year ;)

You have to be aware of them, but certainly don't try to predict them. It's incredible to think that if we went back a year ago and he told you that we'd see the Canadian economy flatline, CUSMA not be renewed, lingering conflict in the Middle East, affordability pressures, high unemployment, and yet the TSX would be up 30%.

The stock market's much better at telling you where the economy is heading, than the other way around. Strength in corporate profits is a much bigger driver of stock markets than the economy is.

Every day it seems as though it's semiconductors and the AI buildout, while the narrative on software has moved things in the other direction. Underneath that, financials have done very well around the world. Other parts of the market are starting to perk up.

Finding good stocks with good valuations is becoming much more idiosyncratic. It's harder work, as it's not obvious where the pockets of pessimism are. But with 10k stocks around the world, there's always something to uncover.

Stocks showing up on his radar are those whose price is depressed in the short term for whatever reason, but the long-term business is attractive.

A year ago, he struggled to find value. Ended up buying SVNLY, which had an attractive valuation. Everything else was expensive, and even more so today. Don't forget that banks are cyclical. The good times are here, and it doesn't get much better than this. Be mindful, risk/reward isn't attractive.

Similar argument for US banks on valuation, though he's slightly less concerned about them.

Be mindful of your overall bank exposure.

It's a decision to stay the course, steady as she goes. Seems appropriate for the current environment. They highlighted that there were signs of improvement in the Canadian economy, despite some one-time disruptions and some ongoing risk. Hard to predict what the outcomes will be from tariff talks and the Middle East situation.

It's something we've needed for quite some time. You want broad economic growth, not concentrated in one or two sectors (as that brings risk). Broadening is a good thing.

The volatility/uncertainty could continue for quite some time. What was really interesting was that as ceasefires were announced, the price of oil went down a lot more than the price of gasoline. Seems to indicate that the market was pricing in a certain amount of risk at the downstream end -- despite any movements in crude oil, the gasoline that is traded for use was indicating that it's not all sunshine and rainbows.

Crude oil probably overshot too much to the downside, now it's come back around $80, and we'll see where it goes from here.

His firm doesn't use seasonality in investing, as it's too granular. They use changes in RSI and capital flows instead. He's done a lot of work on it over the years -- it helps somewhat with bigger trends, but he's always struggled with how it helps in the shorter term.

We've seen some improvement in healthcare and some of the healthcare ETFs.