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

US Shale Oil? He thinks the US production of 13 million bpd will rise, but not as high as other analysts (maybe only to 13.4 million bpd). The rig counts are 24% lower than a year ago, so he is conservative on production growth. Companies are working to spend less of the cash flow and improve their balance sheets and buying back shares.

The sentiment isn't great, but it's not any worse. Most of Canada is operating on Toronto and Southern Ontario. Calgary hasn't transitioned yet, but it will eventually because the infrastructure is good. It's one of the youngest, educated workforce. Highest median income is still the highest in Calgary.

The sell-off is because the market was looking for a reason to sell-off. It's been straight up since September. He doesn't think the sell-off is due to the coronavirus. China seems to be better prepared than when SARS happened. They can close down cities.

He still sees 2020 as still going up, though not as up as in 2019. He's bullish on a strong 2020.

Market. The whole renewable cycle will happen but play it over decades. Millenials are going to be the next portfolio managers and energy stocks may just fade away. It is a sector that needs some help.

Market environment. He's very optimistic, only because he sees so much uncertainty as we head into the election. Lots of noise in the system, which will add uncertainty. Look at the bigger picture. The big news this week wasn't the impeachment, real story was Trump's speech at Davos about the shape of currency reserves. Also, Fed has new members. Trump is going to come out stronger. He's setting up a totally different system with trade deals with individual countries. This will reshape the global economy, and gold is part of that.

Why isn't gold moving significantly higher on fears of Coronavirus? He'd argue that gold is holding up extremely strongly. China and Asia aren't participating in the futures market this holiday week. Plus, an overwhelming amount of shorts in the futures contracts. Gold is set up to break through $1560 because of global demand. Bigger opportunity is in the producers to move higher.

Copper. Keeping his eye on it. Near $3, and sometime it will get a break. At that point the inflationary trade will be on. The Coronavirus issue should be monitored, but it's just short-term noise for the market.

Trump bringing back manufacturing to the US. He can't do this without really killing the dollar, because the cost of labour is key. Big manufacturing won't come back to the US with the dollar where it is. But if we get a correction, and some kind of monetary adjustment, then everything is off in terms of economic activity. That's why copper is the barometer of economic activity, it's ticking up, and he sees that as bullish.

ETF flows 2019 was a record year of inflows to ETFs -- over $28 billion in Canada and now over $200 billion in total. The US has hundreds of billions of dollars each year. ETF inflows now exceed mutual fund inflows. A movement back into bonds by investors signals a risk adverse behavior following the trade related uncertainty. This caused a lot of inflows into low volatility ETFs. As 2019 came to a close higher market returns moved flows back into risk on investments. 2019 was a "Goldilocks" years as virtually all markets were up globally last year.

S&P Inverse ETF? Anything that is inverse or leveraged requires caution and he advises only highly sophisticated traders use these. HIU-T is an inverse S&P ETF in Canada. Volatility makes them erode over time, so be careful.

High-growth Tesla hit a $100 billion market cap today. Tesla laid the groundwork, such as developing powerful batteries, for its success....It's been a remarkable year for stocks this year so far, continuing the trend of last year with low interest rates despite sub-par growth. Pensions and others have little choice but to invest in stocks, given rock-bottom rates. Fixed income yields too little...The Bank of Canada today held interest rates at 1.75%. He doesn't see the Canadian economy weakening later this year and expects rates to stay put or drift lower. That could mean big gains to the TSX, certainly for utilities and REITs (defensive sectors) that will trade higher.

The US Fed has been cutting rates to buffer any negative impact of Trump's aggressive trade moves. It's not surprising that in real terms, U.S. interest rates are negative. Trump's hostile moves have driven global investors to American stocks and ETFs, which are viewed as safe. He specializes in Canadian mid-caps. Canada is two-tiered: one, the household names which are a crowded trade, and two, the midcaps which are great but not big enough to be included in the mutual funds of the big banks. Therefore the midcaps enjoy a discount.

What should my allocation be among Canadian, American, EM stocks and cash? An important question, so ask your advisor. Some points: EM account for 33% of global GDP, but 44% of world trade--dependent on trade. In this environment, therefore, EM, are disadvantaged. The US is a far bigger, diversified market, whereas Canada lacks diversity in tech and healthcare. He prefers US stocks.

Markets fell today due to fears of the coronavirus. Stocks got hit including gambling ones. Maybe this will have a big impact or it could be a yawner. Too soon to tell and we need more information about this virus.... Netflix reported after-hours. They face a lot of competition, but it's still doing well and he still likes it. Cable TV should be worried, though.... 2020 outlook: the sky's the limit for U.S. stocks as gains continue.