Market Commentary — Page 412

Market Commentary

COMMENT

Pushing cost inflation through to customers. With the markets being as strong as they have been, markets don't seem too concerned about inflation. But some companies are having a harder time on cost pressures. This earnings season we're starting to see the winners and losers in terms of who can push through higher prices without being affected. Growth is still high. Corporate profitability remains very strong. Markets hitting all-time highs shows it's not too concerned about inflation yet. It will all come down to monetary policy in the new year, and investors will have to assess how it will affect their portfolios.

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COMMENT

Position in highly leveraged nat gas stocks? If things continue to be in the sweet spot, you're more likely to get a higher return with a company that's highly leveraged. But he'd rather stick with the high quality producers, get a decent return, and be happy with that. He doesn't need to gun sling for a massive move higher.

COMMENT

Canadian banks. He owns TD and RY right now. Setup is interesting. OSFI recently released the handcuffs on dividends and share buybacks. Usually banks do well at the beginning of a tightening cycle. We're in a tremendously over-leveraged economy. As we go along, and rates rise, banks on the other side of this credit cycle might have a tough time. He's as underweight banks as he's ever been. TD and RY are still great franchises, but he's not that excited about the banks. They can go higher, but you have to evaluate the risks of the credit cycle.

COMMENT

When to sell? For example, he owns CCO and lightened up while still retaining a small position. The position got north of 3% of his portfolio and he wanted to lock in profits. As the share price goes higher, it gets a lot more volatile.

COMMENT

Investing in futures. Great resources online, YouTube, TSX website. A lot more people are looking at other parts of the market like futures and options, and so this is contributing to the more speculative environment we're in. Be aware that these areas are very sophisticated investments and come with a unique and specific set of risks like margin requirements and posting collateral. Do your research, as they're not as straightforward as equities.

COMMENT

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. 5i thinks that investors should focus on their winning stocks and not their losers. It’s better to water the flowers and pull the weeds. A big win can make up for many losers. Unlock Premium - Try 5i Free

COMMENT

Inflation and supply pressures. She believes that inflation is transitory. Higher than most expected, but over time we should get the supply chain issues sorted out though it will take a while. Inflation is no longer a surprise, but what remains to be seen is how it will resolve going forward. Truckers' wages have increased, drawing people into that profession, and this will help the supply blockages.

COMMENT

Interest rates. As the economy and the job situation improve, rates will start to increase. Recovery of the Canadian labour market has been quicker than in the US, so we could see rates rise sooner here. The Fed is very focused on the employment situation. US participation and employment rates are still below pre-pandemic, nor does the Fed want to overreact, as that could dampen the economy.

COMMENT

Reopening plays. She didn't chase those names. A lot of those stocks have moved already. The reopening has been quite lumpy. For example, Asian economies have slowed. Retail companies that are well managed anticipated these issues and prepared for them, so they do have product to sell for the holiday season. Large companies are benefiting in this environment because suppliers will take care of their largest customers first.

COMMENT

Tech companies vs. rising interest rates. Rising rates are a headwind for growth or tech companies. The reason is that cashflows are discounted by a certain percentage, and this percentage gets larger when interest rates go up.

COMMENT

AN EMERGING MARKET

If the cryptocurrency market is relatively established there is another entity that is making more and more noise in the blockchain world: non-fungible tokens (NFT).

Growing from a $162 million market to a $9B+ market, the NFTs market has exploded this year. Interest in NFTs has even surpassed that of crypto-currencies in some countries.

The NFT is simply a smart contract deployed on a blockchain (when its hash is obtained, it is assigned a unique value, thus offering it "uniqueness") to which a computer file is assigned. Thus, a .jpg, a .pdf, .mkv, .mp3, .js, etc. can be NFTs.

Many personalities and celebrities have launched their collection, including Quentin Tarantino. The producer has decided to sell several unpublished scenes from the famous "Pulp Fiction". The sale should take place on the private blockchain Secret Network. Nevertheless, the production company Miramax, believing that this sale is a violation of its copyright, decided yesterday to file a complaint against him.

The blockchain's native SCRT token does not seem to have been affected by this news, with a daily gain of 10% in an overall bear market today.

N/A

Market. Inflation is here. Last year when the market was in a free-fall, he found that the recession was a 'shock-to-the-system type of recession. It is short lived and then there is a bounce back of pent up demand. Now it is supercharged because of subsidies from central governments. Total net income is up. People paid down debt when they could not shop. Now there is a surge of people flush with cash and this has pushed up demand across the board. You want companies with strong pricing power. They need to have superior business models. Oligopolies, duopolies and monopolies are good choices. We have been in an eleven year bull market. S&P valuations are at historic highs. It is harder to find those opportunities.

COMMENT

CDRs. These are ADRs but in Canada. He believes they are an option but US shares are easy for Canadians to buy so he would prefer them, They may be preferable if you are purchasing odd lots.

COMMENT

US-China Summit. Tensions between China and the US has ramped up for a number of years. There is no shortage of Chinese policy criticism. China is determined to put it in a place of equality with the US. Taiwan is a big part of the geopolitical tension. He fears we will see escalation in Ukraine but Taiwan will probably be handled differently.

COMMENT

Russia's escalating pressure on Ukraine matters for Europe and their energy market. For the US, it matters less for their stock market. Most market players will take a similar path to when they annexed Crimea. This is not yet priced in.

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Summer Sale

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

Pushing cost inflation through to customers.(A Commentary)

Position in highly leveraged nat gas stocks?(A Commentary)

Canadian banks.(A Commentary)

When to sell?(A Commentary)

Investing in futures.(A Commentary)

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

Inflation and supply pressures.(A Commentary)

Interest rates.(A Commentary)

Reopening plays.(A Commentary)

Tech companies vs. rising interest rates.(A Commentary)

AN EMERGING MARKET(A Commentary)

Market. (A Commentary)

CDRs. (A Commentary)

US-China Summit.(A Commentary)

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

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