Market Commentary — Page 312

Market Commentary

COMMENT

Will the beginning of the next presidential election cycle later this year cast a shadow over markets? Not sure. Stats show that the third year of the presidential cycle is the best, and the fourth year isn't too bad either. There will be volatility and bumps along the road. If there's no recession or a soft one, maybe the markets oversold last year and there's an opportunity going forward. Instead of growth, he prefers the value side, which has been outperforming since late 2021. That's why the S&P 500 Equal Weight Index is performing well relative to the S&P 500 Index.

COMMENT

Sectors right now? Energy, financial services, and healthcare are his top sectors right now. Energy was a strong winner last year. Still likes energy, it's his largest weighting. Last year's outperformance from energy won't translate to this year, but it will still be one of the better performers.

COMMENT

CDRs. Hedge against the currency. More importantly, you get estate planning benefits for wealthier investors by avoiding potential US estate issues down the road. CDRs are considered Canadian content, as they're issued by Canadian banks.

COMMENT

Dividends and tech names. When looking at tech, he's always said you don't want names with high dividends, as those companies should be reinvesting in their business because they have such a high growth rate. But the environment has shifted, interest rates are going higher. So you want to be a bit more cautious on long-duration assets like growth and technology. Overall in the tech market, you're still paying about 5-6x price to sales, not cheap. He'd be careful of the space at this point. Leadership names are great long-term names.

COMMENT

Interest rates. There is a prospect of a slower pace of rate increases. The Fed is talking tough, which is in their interest. They have to use moral suasion to best effect. The bond market is much more dovish, signalling perhaps a rate cut late this year. No doubt that we're at the tail end of rate increases. Inflation is falling, and we're seeing marked improvement in the inflationary background. In the first 6 months of 2023, we'll see that annual number drop dramatically because we'll roll over some of the big monthly increases we had in 2022. That's very good.

COMMENT

Markets. 2022 was a year of medicine being administered. With that, the patient showed some suffering. 2023 will be a recovery year, though there will be some dislocation. Transition years are notoriously volatile. When the books are closed at the end of this year, it will have been a good year.

COMMENT

Back-to-back down years. Rare. Only 4 times in history have we had this. He has a value-add philosophy. You want to do better regardless of the environment presented to you. 2022 was decidedly poor around the world, and his goal was just to do better than that average. He had a tremendous value-add year. Canadian portfolio was up for the year. 2023 has promise.

COMMENT

Oil and the bear market. US market is still about 10% below what it needs to exit a bear market. He finds that once we go into a bear market, people are still talking about it a year later, even though we've exited it. 15 of the largest 23 world markets are in a bull market. Many countries are in bull markets, and that will sneak up on a lot of people. Oil market has great promise.

COMMENT

Target prices. He doesn't set target prices, as they lead you to ignore everything else in the environment. When things change, your view of a company should change. For example, macro issues, political issues, health of the world economy, China reopening. You should start every day looking at a company with fresh eyes and deciding whether you want to own it going into the future. Part of this is through peer group analysis.

COMMENT

End of a recession. History is that the market tends to bottom well in advance of the end of a recession. Once we end the bear market, market's growth is disproportionately high, so that means strong. If you want to read about what markets do once a bear market has ended and we move into a new bull market, go to the goodreid.com Gauge under Insights. People will be surprised that the market doesn't flatline, it tends to have very sharp advances, and this is great for the future.

COMMENT

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Glimmers of Hope for Investors in the New Year. Housing prices are cheaper: As far as Christmas gifts go, this one might be a bit of a stretch, but there has been a lot of talk about the affordability of houses, and how young people these days may never be able to afford one. Rising mortgage rates do not help this scenario in any way. But house prices are slowly — but surely — starting to tick down. A recent poll notes that house prices are expected to show a peak-to-trough drop of more than 17 per cent. We are not sure how long this price weakness will last, or how low prices will go, but it is certainly nice not to read about any tiny shacks selling for $2 million in bidding wars. Homebuyers this season can, at least, breathe a sigh of relief that the house they want is not likely to get a bunch of over-the-top, house-unseen bids. Unlock Premium - Try 5i Free

COMMENT

If yields spike in response to CPI tomorrow, then bank stocks will go down and stay down. And maybe the tech and industrial rallies can continue.

COMMENT

according to analyst Larry Williams Every rally between Sept. 2021 and April 2022 lasted 24 days; this also happened in the second half of 2022. The current rally should continue to Feb. 3 or even longer.

COMMENT

We will likely see a bounce this month after December's sell-off. Negatives are already priced into the market. Inflation will continue, but slow and is priced into markets. Short-term pain for long-term gain, meaning 2022's bad year will allow a better 6-7% annual market gains going forward and maybe better in years to come.

COMMENT

gold Go with senior gold producers among ETFs because of lower volatility than junior producers. Prefers low-debt stocks than actual bullion.

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Stockchase, in its reporting on what has been discussed by individuals on business television programs (in particular Business News Network), neither recommends nor promotes any investment strategies.

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Halloween Sale

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

Will the beginning of the next presidential election cycle later this year cast a shadow over markets?(A Commentary)

Sectors right now?(A Commentary)

CDRs.(A Commentary)

Dividends and tech names. (A Commentary)

Interest rates. (A Commentary)

Markets.(A Commentary)

Back-to-back down years.(A Commentary)

Oil and the bear market.(A Commentary)

Target prices.(A Commentary)

End of a recession.(A Commentary)

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research.(A Commentary)

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

according to analyst Larry Williams(A Commentary)

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

gold(A Commentary)

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