Market Commentary — Page 537

Market Commentary

COMMENT

Investors need to look past this unknown period. Find great businesses on sale that can weather the storm and step into them. There are many unknowns, namely governments' ballooning deficits. He's surprised by the recent rally, but won't predict the future. Markets tend to test lows after such rallies, so have dry powder handy. In mid-March, he stepped into some companies, then waited. There could very well be another tumble. The pandemic is a new crisis, different from the recession of 2008-9.

COMMENT

For older, long-time investors, ride it out or sell? Make sure you have diversified portfolio with bulletproof stocks in finance, tech, etc. This is the worst possible moment to sell. In historic downturns, you should have stuck them out and bought. Don't watch your stocks obsessively, but watch a movie.

COMMENT

Buy high-yield corporate oil bonds? A great time to invest in them now. In the last 40 years, these bonds have had 8 negative ones; each negative year was followed by a strong up one. Bonds have to mature. They work well in a highly diversified portfolio. However, energy is very and he is avoiding that sector.

COMMENT

Is it a bad omen for all stocks with oil this low? No. Low oil means a weak economy, which is not good for stocks.

N/A

Market. It's difficult to make any macro forecast with any level of certainty. China is starting to get back to work. Others are looking like they are coming through. The big challenge is all the fiscal stimulus and its impact. Will remote working become a new 'thing'? These are a lot of unknowns. The Saudis and the Russians caused a number of hedge funds to blow up. The oversupply strategy has come to an end. There is a complete disconnect to supply, price, and demand. We may not see a normalized pricing environment for oil until Q4.

COMMENT

Market Outlook The energy sector has been very hard hit and much relief is needed. First and for most, financial backstopping is necessary with banks to not pull out financing away from the sector. The market is one of the toughest with so many range of outcomes possible. Could we see more and more waves of the virus through the economy. It depends on the ability of the government to test, find a vaccine and other support. He thinks the tech sector will be the positive stand outs. You can also look to sectors that will not likely become impaired such as medical devices, healthcare procedures, etc.

N/A

Market. There is a real risk of weakness in the markets in the weeks ahead. He is taking a longer approach and thinks he is seeing that in some of the economic numbers. Jobless numbers are still fairly high. 15% of our economy comes from housing in Canada. The number of mortgage deferrals is very high. Canada poses a risk on the housing side.

COMMENT

Market Outlook The Canadian Central bank is seeing stress in the corporate market and has decided to do quantitative easing, including buying back government and corporate bonds. Gold has had a big break out move and one of the only places to be lately. He thinks there are spaces that have also benefited from the at home situation we are in and will likely be the ultimate winners going forward. He sees companies that will also just keep chugging along, some that will face issues and some that you must stay away from. He would stay away from cruise companies and airlines for example. He thinks the market is rebounding in general as the initial shock to the market, particularly regarding credit issues. When the US Fed brought in QE in a bazooka like way and there was Federal legislation to keep people whole, it put floor under the market. You do not want to fight the Fed Reserve.

COMMENT

Dividends at risk? Traditionally companies have done what is best for shareholders and there is a growing movement to consider all those interested -- including investors. If you are relying on dividends for your income, you may want to look to the banks. The government may have a moral obligation to keep cash flowing into investors hands, but there are no guarantees. Trading revenues have been a good offset for bank revenues lost.

COMMENT

We're in a consolidation period after panic forced selling that was too hard. This rebound is moving stock to more realistic pricing models. We got to release the economy at some point. To get back to normal, Canada needs to start focusing on that. Don't be emotional about investing. There was panic in the third week in March, down 1,000 points a day. Each cycle has these emotions and swings. Part of the problem is we don't have enough information to forecast the economy and stocks. In 1918-1928, the start of which was marked by the Spanish Flu. Look at this period for perspective--the outcome doesn't have to be Depression. At least 50 million people died of Spanish Flu. The world is NOT coming to an end. In this period, the Down went from 70 to 380 points. Electricity became common in this period, which freed up people to have leisure time. Today, tech is doing the same thing, also boosting productivity. After the Spanish Flu, the markets and economy took off worldwide. This will happen once we get past this current pandemic.

COMMENT

Why has the Canadian dollar held up so well? He's surprised it has hung in, given the hit that oil has taken. A reason is that Canada has a hidden tech industry and that's kept the economy and CAD afloat. Tech is the future of the Canadian economy.

COMMENT

Gold sector outlook in 3-6 months. He doesn't own gold, just a bit in his RRSP. The best charts on the TSX are gold. He was disappointed when gold sold off during the initial panic sell last month. Now, gold is in a perfect place with cheap lending rates and good demand for gold. The mines can re-open even during social distancing. But he considers gold stocks a trade, not an investment. It's an opportunity now to trade. Gold is in seasonal strength now through the summer.

N/A

Market. This will not have been a complete quarter with the COVID19 crisis but earnings season will allow us to put real numbers to the bottom line with what we have seen with this pandemic. You will get a bit of a pass on the numbers from this quarter. The US Fed was an immediate savior of the liquidity crisis after the first fall in the markets. He thinks going forward we will see a distinction between the winners and the losers in the markets. The forthcoming rise will be more selective. Now is a time to reposition your portfolio. It is a bear market rally. Restarting the economy on the other side of this will be challenging. Some industries will do better than others. Massive debts that are being built up will have to be addressed.

N/A

Market. One Million plus job losses for the month. It is a doozie. It's the biggest job loss on record. It is going to sting. These job losses are self-induced by our social contract. He thinks it is not likely to be as long as the last recession as it is not a cyclical recession, nor a structural recession. It is an event-driven recession. You have to look at companies and understand the business you are investing in. You are not renting stocks for this quarter's earnings. The challenge for investors is to judge the value of a company. You need to take a long view. There are some bargains in the market. [Stockchase could not paraphrase the cat that was swatting at the guest's head while he was making this market comment. You'd have to watch it here: https://www.bnnbloomberg.ca/market-call/brian-madden-s-market-outlook~1936980 It is the new norm of business news in the COVID19 world.]

BUY ON WEAKNESS

Banks. A core holding in his equity portfolios. They are facing pressure and margins will be compressed. At the end of the day, we are not renting these stocks for the next 90 days or even for the next year. They are a leveraged play on Canadian economic growth. They are much better capitalized now than in the last recession.

Showing 8,041 to 8,055 of 21,957 entries

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

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

For older, long-time investors, ride it out or sell?(A Commentary)

Buy high-yield corporate oil bonds?(A Commentary)

Is it a bad omen for all stocks with oil this low?(A Commentary)

Market. (A Commentary)

Market Outlook(A Commentary)

Market. (A Commentary)

Market Outlook(A Commentary)

Dividends at risk?(A Commentary)

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

Why has the Canadian dollar held up so well?(A Commentary)

Gold sector outlook in 3-6 months. (A Commentary)

Market. (A Commentary)

Market. (A Commentary)

Banks. (A Commentary)

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