Market Commentary — Page 420

Market Commentary

COMMENT

This week's market The jump in interest rates from last week to now doesn't scare him, at least not yet. VolatilIty popped on Monday, a signal to him that there's blood in the streets. Evergrande wasn't a major threat, so Monday was a buying opportunity. Unless there is a bad surprise in jobs or inflation, it should be smooth sailing until the November Fed meeting. He's glad the Fed will weigh employment data before making a decision on tapering. Also, with government benefits rolling off, more jobs will arise. As the supply chain remains conStrained, inflation will remain high. Move out of tech into cyclicals? No. Evergrande, though not a new story, feed fear and uncertainty which is always there among investors.

COMMENT

China is cracking down on all cryptos He's a crypto bull and short-term China's move is bearish. Remember that China has been pushing back on cryptos since 2013. Nothing has created more wealth than the technologies China has been banning. China is handing the U.S. and other countries a gift; China will be left behind in cryptos. Long-term, he's bullish on cryptos. Not worried about today's plunge in crypto prices.

COMMENT

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. If Feds start tapering, bond prices could come under pressure in the short term. The current rate environment is not normal, but it is okay considering the pandemic. Risk remains that interest rates and inflation will rise. Best to keep shorter duration bonds. Unlock Premium - Try 5i Free

COMMENT

Markets. Investors were bearish through the summer. Now every major US investment bank is saying we're in for some kind of trouble. He doesn't see that. Rallies tend to go on for a long time, and there's been a consistent rally in major indices since last November. These rallies don't end with a bang; rather, they fade. Russell 2000 has been sideways since February. Average stock names in the S&P are down about 12.5%. Conditions are in place to absorb a lot of bad news. As we get through September and into October, fourth quarter will be pretty strong.

COMMENT

Market sentiment. We have more bearish sentiment in the market than we've had at any other time since 2012, except for brief occasions. The market has an intact wall of worry. In China, unlikely there's major contagion. Fed will taper, but that's no surprise. Typically third quarter weakness comes as analysts realize they've been too optimistic in estimates. But they're still raising estimates for the rest of this year and next.

COMMENT

Energy sector. Quite bullish on the sector. Energy held in well on the recent pullback. Prefers exposure to gas than to oil. Likes the big guys in oil, such as CVE, CNQ, and SU.

BUY

Canadian banks using mountain of cash for dividends and buybacks. US investors are still cautious about banks. Whereas Canadian investors have tremendous confidence in our banks. Financials are his largest weight, because of dividend growth. Likely to see an acceleration in dividend growth. With rising interest rates, you need a rising stream of dividends. A great place to be.

COMMENT

General investing advice. The best companies tend to be well liked. When an industry goes through consolidation, some heavyweights come out in a much better position than the competition. Use stop losses on every position. Stay in the position as long as it's working. Once it breaks, come out.

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COMMENT

Investment strategy with the Liberal win. Fed politics in Canada doesn't move the investment needle all that much. The real focus is the Fed, inflation, the debt ceiling, valuations, and more recently what's happening in Beijing.

COMMENT

Potential taxation on Canadian banks. They're looking for revenue. This is one way to start. There's a view they could be put on the naughty list. The banks always have some headwinds. Dividends are fabulous. Valuations are still below the norm, though a bit higher than they've been. There are catalysts for them. It's good that there's some antagonism toward the sector. It might come down a bit, but the banks are still long-term wealth builders.

COMMENT

Energy stocks. Not overweighting them. It will take 30-40 years to wind down. Manipulated globally with Saudis and Russia. The supply/demand picture looks good right now for nat gas. He favours companies that tilt toward nat gas and they're still very cheap, underappreciated, and underowned. Some of the oil companies fit that description too, though he's a little less certain about the price of crude. Oil seems to have found its footing around $60-80, and there are some good names in oil land as well.

COMMENT

How do companies such as banks get employee talent to move to big cities? We're in a changing world. Employers are embracing that people can work from anywhere. Working in person is important, as are having connection points. The virtual world is getting better and better.

COMMENT

Favourite REITs. CRR.UN sets up beautifully from a growth to valuation perspective. BAM looks really good, though it's not a real estate play per se. AP.UN is pricey, but the growth is really there. SRU.UN has a nice distribution and looks good from a price to growth level.

COMMENT

Oil stocks. IMO is not one he follows too closely. If you're comfortable with the commodity of oil, try SU or CNQ. Both have nice dividends and are really cheap compared to their history.

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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.

We paraphrase the experts by hand, we watch the shows and write down what we understood from the experts’ comments. We are human and can make mistakes, help us fix any errors. If you see something that you know is not right or if there is a problem with the site, feel free to email us at : [email protected].

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

This week's market(A Commentary)

China is cracking down on all cryptos(A Commentary)

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

Markets.(A Commentary)

Market sentiment.(A Commentary)

Energy sector.(A Commentary)

Canadian banks using mountain of cash for dividends and buybacks.(A Commentary)

General investing advice.(A Commentary)

🔒 Premium Content Alert – This buzzing stock opinion is accessible only to Stockchase Premium

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

Investment strategy with the Liberal win.(A Commentary)

Potential taxation on Canadian banks.(A Commentary)

Energy stocks.(A Commentary)

How do companies such as banks get employee talent to move to big cities?(A Commentary)

Favourite REITs.(A Commentary)

Oil stocks.(A Commentary)

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Mike Vinokur, CFA, CMT, and CFP

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