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

It can vary client by client. At certain times, you just don't want an individual to have the risk of owning a stock, where you can see 10-15% moves over the course of a day or week. ETFs are better for broad-market exposure where you're trying to get specific access to an industry or a market. You can then use individual stocks to supplement that exposure, or for companies that you think are going to significantly outperform the market.

Believes interest rate cuts might be on the table from the Bank of Canada (mortgage situation much more fragile). Strong labor markets & sticky inflation not pointing towards US Fed rate cuts. Not until consumers start to weaken will this option be on the table. US Federal Reserve debt load is spiraling out of control - makes rate cuts and/or raises very complex. Currency situation would suggest Canadian Dollar is heading down. 

Nuclear energy is the power source of the future, however Uranium prices are fully valued at this time. Would wait for Uranium prices to fall before buying. Owns Uranium directly and in companies as well. 

Believes Bank of Canada is likely to cut interest rates this week. Canadian housing market is fragile due to 5 year mortgage rates, which would add incentive to cut rates. Canadian consumers much more vulnerable than in the USA. Canadian economic policy poor - reason for economic weakness, and further reason to cut interest rates. Canadian dollar will dip to ~$0.70 before any recovery in Canadian economy. 

Market Update:

Oil prices turn volatile as the members of the Organization of the Petroleum Exporting Countries (OPEC+) plan to extend production cuts voluntarily to stabilize oil prices. On the other hand, Canada’s gross domestic product (GDP) grew at an annualized rate of 1.7% in the first quarter, weaker than expected by most economists at 2.2%, raising the odds for a rate cut in June. The Canadian dollar was 73.14 cents USD. The U.S. S&P500 ended the week down 1.7%, while the TSX was down 0.7%.

Most sectors ended the week in red. Industrials gave up 2.5%, while real estate slid 2.1%. Consumer staples and technology edged lower by 1.2% each, while financials slipped 0.9% and consumer discretionary went down 0.7%. Energy and materials ended the week up 1.2% and 0.7%, respectively. The most heavily traded shares by volume were Lucara Diamond, Suncor Energy, and Canadian Imperial Bank of Commerce.
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Believes there is underlying momentum in commodities at this time. Watching a rebound in the industrial materials & precious metals simultaneously. Strength in energy markets also very positive. Fossil fuels will remain an important part of energy mix for the next 30-40 years. Energy equities presenting a lot of opportunity. High quality junior mining companies will continue to be able to raise capital going forward. Many high quality junior mining companies are over-capitalized. 

Market Update:

Oil prices turn volatile as the members of the Organization of the Petroleum Exporting Countries (OPEC+) plan to extend production cuts voluntarily to stabilize oil prices. On the other hand, Canada’s gross domestic product (GDP) grew at an annualized rate of 1.7% in the first quarter, weaker than expected by most economists at 2.2%, raising the odds for a rate cut in June. The Canadian dollar was 73.14 cents USD. The U.S. S&P500 ended the week down 1.7%, while the TSX was down 0.7%.

Most sectors ended the week in red. Industrials gave up 2.5%, while real estate slid 2.1%. Consumer staples and technology edged lower by 1.2% each, while financials slipped 0.9% and consumer discretionary went down 0.7%. Energy and materials ended the week up 1.2% and 0.7%, respectively. The most heavily traded shares by volume were Lucara Diamond, Suncor Energy, and Canadian Imperial Bank of Commerce.
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No shortage of negative headlines on commercial real estate. Office space was hit because it had capital expenditures rising faster than rents, and then the pandemic changed how we all use office space. 

Other headlines revolve around transactions that occurred in a different rate environment, and how they're working out today. Fundamentals in data centres and industrials are quite strong. With interest rates peaking, you're starting to see more bidders come to the table, construction activity go down, and financing become more available. Interest rates are in line with historic averages.

He's quite optimistic about real estate transactions occurring in the private market. Definitely bullish on valuations of publicly traded real estate.

They do, and they've been quite open about it. Yesterday, a spokesperson said they have $64B of dry powder ready to invest in real estate. They've already privatized 2 real estate entities in the past 6 months; TCN was taken out at a 30% premium. They see private markets as fully valued, but public markets as being on sale. It's an opportunity to put lots of capital to work in a very short timeframe, and to be able to finance it.

He's been doing this a long time, so he's seen a few movies. Any time you see interest rates peak, and fundamentals bottom, is the right time to be buying. Blackstone said that when sentiment is at its most negative, that's the time to step into the market.

We've seen this before: after the 2001-2002 recession, the great financial crisis, and March 2020. When values dislocate, real estate becomes such a great store of value. People look at it as a great inflation hedge. Great opportunity to be buying.

Yes. Almost as if third-party logistics companies thought they could supply patio furniture forever. Reality is that industrial real estate is down 17% from peak pricing. When he looks at public markets, industrial REITs are down 30-40%. Over-discounting what is really a temporary slowdown in decision making by tenants. Spread between in-place rents and market rents is quite wide, ability to capture a lot of cashflow.

It causes a lot of froth. Lots of cross-currents with promises made, possible shift in balance of power, polarizing situations. We're probably going to pause here for a little bit, and then ramp up.

Traditionally markets go sideways in summer, as it's more sell in May go away. In an election year, there's a bit of sell in May but it happens later in the summer, around July. And then markets pop up. 

It's a bit of an odd market. There's this tension between inflation-focused investments or commodity-type things versus the growth story. Your portfolio could look kind of weird if you try to create it from the world that you see, and it might not be best for you at this kind of time. Barbell might be a way to describe it, where things are seemingly opposite with tech and growth along with base metals and commodities and such.

Yes. They've been doing that consistently for Q1, Q2 and Q3, and then the outlook for the full year was raised. Not just the earnings, but the revenues too. Pretty positive.

It's just not going away. We saw the bottom of something like 0.4% back during Covid in 2020. And it's around 4.60% today. A bit of a correction late last year, but it wants to keep going higher.

When it pops above 5%, it starts breaking parts of the market. We're moving back up to that level right now. Bank of Canada may cut next week, but the Fed's ambassadors have been messaging that it might actually raise once more. The market's taking it up in advance of that.