A Comment -- General Comments From an Expert (A Commentary)
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Educational Segment. Looking back on the last year. He thought we would get a bear market over this year but it was a brief but deep pull back last December. He said then and still thinks we will not see it in terms of job losses until well into 2020. He said then, and still believes, that the trend of a declining Canadian dollar will continue into 2020 somewhere below $0.70. The Canadian banks may not correct until well into next year. He thinks interest rates will be lower in a year than they are today.
Larry Berman CFA, CMT, CTAUnknown
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Market. It looks like we are seeing a bit of re-acceleration in some of the global numbers he is looking at. One thing he is excited about is some of the changes in technical top down indicators. He is starting to see improvements one after another in many global markets around the world. Lots of stocks are moving higher, not just a few. The number of stocks in an uptrend is broadening out. There has been a fair amount of tax loss selling in the energy sector but there are pockets that look like they are ready to re-accelerate. In the cannabis sector he has started to see some interesting technical indicators changing and it looks like the Canopy stock may be turning the corner and ready to accelerate as well.
Bruce Campbell (2)Unknown
BUY
Gold. In some cases it would make sense for smaller companies to merge. The gold price has gone up over the year so now there is more focus on gold. Now you are seeing some mergers are being announced. Junior explorers and producers are now starting to move. The price of gold will depend on inflation, which he thinks will flare up a little. It will be fairly lumpy.
Bruce Campbell (2)Owned
COMMENT
He's bullish, certainly more so in the past few months as interest rates worldwide have eased. You have to look a year ahead, but also don't sell stocks on headline news, like tariffs. Focus on the fundamentals. He holds 15-20 names. When their fundamentals change, then he makes a move. keep defensive names; interest rates will remain low or go lower. He's still avoiding resource stocks, though they aren't a bad trade now; they're cheap and you can move them.
COMMENT
Market Outlook The latest jobs release in the US is bringing a rally. It has been a volatile week. He thinks the market will rally into the end of the month. There are still several black swan issues out there, particularly regarding trade issues with the US and the impeachment process. The Canadian dollar is off over a half percent today, but he does not think this is a new trend. He thinks the CAD will stay between $0.75-$0.76. A new Bank of Canada leader is expected to be relatively seamless, he thinks. He believes, Tech stocks should encompass the classes of digitalization, autonomous driving, 5G, gaming, hardware, data analytics, AI, software, and Fintech.
Kim BoltonUnknown
COMMENT
There’s no question that the job data from the US was great. Above expectations. Revisions were positive. In Canada, the compilation is a bit suspect, but overall it was weaker and this leads to weaker GDP numbers. Looks like we’re fading a bit since the beginning of the year.
Brooke ThackrayUnknown
COMMENT
Oil is coming back up as Saudi’s try to keep a base in price for the IPO of Aramco. Holding the WTI around $60. The energy sector looks to be oversold so it could be a good time to enter there.
Brooke ThackrayUnknown
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Market. There is a bull market in the US currency. He sees the US dollar way outperforming any other currency. Going forward we only need a couple of pieces of good news and it will take off. After five years of negative yields in Europe, the whole banking sector is putting that into effect. It is a mess. Japan is a tough spot to be. The US dollar is the place to be going forward. All assets priced in US dollars will do very well. There is a countdown for the recession. Once the US dollar starts to go up it suck up funds from all over the world. The US market may 'melt up'. Canada is setting up to be the laggard. If the TSX doubled it would still be a laggard in the world.
Brian Acker, CAUnknown
COMMENT
The S&P's intrinsic value is 3,150. No surprise that the index has pulled back a little since recently reaching that last Wednesday--in the past 25 years, the S&P has rarely exceeded this level. Blind optimism and low interest rates have overridden this math. Barron's recently wrote that the failure of the market to decline has caused investors to believe that we're in a new investing era where market risk is no longer a realistic consideration, and where FOMO exceeds all other actions. In February 1969, the market peaked, then took another 15 years to reach that height again. In that period, there were buying opportunities. He suspects we're at this stage in 1969. We'll find out....
COMMENT
The market was overbought coming into December, so it's natural to give some back this week so far. We're still in a consolidation phase, which is normal in early December during tax-loss selling. Technology and financials' gains will offset losses in, says, energy. This selling continues until the Santa Claus rally in mid-December. This year we have a strong consumer, unlike last December which was dismal, the opposite. Be ready after Dec. 15 to buy. Gains are rare in early December. Investors take on risk at the end of the month.
COMMENT
Stop loss strategy and indicators to use? He has a three-pronged approach to keep a stock: 1) stock is in seasonality; 2) technicals are good; and 3) fundamentals act as a tailwind. If even one prong fails, he will reduce or sell the position. He doesn't use anything strict for a stop loss, but will use breakdowns of moving averages; he'll sell a stock when it returns to its previous level of resistance/support. He won't sell on a break, because the stock could break down a point points further--don't sell into the panic. But take advantage of the rebound.
COMMENT
Tax-loss selling is happening for his clients, but he's holding onto candidates like Arc Resources and Manulilfe. The lifecos have done well this year, especially Sun-Life. Both offer relative safety and growth in Asia. In fact, Manulife isn't a tax-loss candidate. But NFI-T is; New Flyer's deliveries are below expectations and their UK acquisition needs time. The stock is overly punished, though, and will stay in this range for a while. There are signs of growth slowing worldwide with manufacturing data declining. Yet, markets are hitting new highs; markets are ignoring these signals. A narrow band of stocks, including tech, are driving these highs. He expects a rollover to come with investors looking for value. Building cash and fixed income isn't a bad idea now.
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