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

Market. He does technicals in the beginning and at the last and then do other stuff in the middle. The headlines in the business world are tough to use to give explanations. There are several things that say we are in a corrective phase. You can go sideways, you can fall or a combination of both. He thinks we are in a correction from a technical perspective. He thinks it is mild. From the 5th of November to the 20th studies have shown that this is a pause period in the markets. The market has discounted phase one of the Chinese deal. 75% of companies in the S&P had earning surprises and that is pretty good. We have some pro-cyclical rotation. This should last into the new year. He thinks we are going up and higher.

REITs. Is there a bubble coming? There is currency, then there is that risk in the US. If the Canadian currency goes up 7% then that is your first hurtle. You need to look for more in the investment. The Canadian market would be a better way to play the real estate market. The XRE-T broke out in August. It then came down a little and is holding here. You could look at BAM.A-T or BPY.UN-T. He would take half a position now and then watch it.

Aurora Cannabis missed estimates. There's a hangover in the sector right now. Straight decline from the highs. More issues down the road. Valuations are still elevated, so slowdown in sales is a concern. There are better opportunities out there than trying to call a bottom in a volatile sector. Charts are telling you the party's over.

BAM reported today. Manage half a trillion dollars in alternative assets. Alternative assets make sense in a low interest rate world. Depending on your strategy, you can choose from the Brookfield stable. For example, BAM works for the Canadian portfolio. He owns BPY in his REIT portfolio, and owns BIP in his US dividend growth fund.

Trying to get a phase 1 US-China trade deal. Consumer's been doing well, so the Walmarts and Costcos are doing well. Pullbacks on fears of no deal. Want to see a reacceleration of data. We're starting to build in an expectation of higher earnings. His concern is if there is no deal, so they've been peeling back a bit.

Market Outlook It seems to have been a "melt up" over the last month and a half. The catalyst has to be the liquidity infusion by the Fed, putting in $60 billion per month since early October. He is expecting a little pullback before the end of November, maybe 3-6%. The liquidity infusion will get more media attention and should lead into continued growth into the first-half of next year. Autonomous driving is expected to grow to over $170 billion by 2030. It includes many different elements including automakers, semiconductors and communications, software and shared mobility services. He predicts it will be within 10 years that totally autonomous vehicles will be all around us.

Tech pullback soon? There does not seem to be a huge opportunity to purchase on pullbacks in the tech space right now as there is just so much money sloshing around -- share buybacks, Fed liquidity infusion, etc.

Disney popped today on strong subscription numbers to its streaming service and markets are at all-time highs. As profits rise, so do stocks. Nothing to fret about. Seasonality favours November and especially December in the US and Canada. He takes a long-term view. 24 of the last 30 Decembers have been positive for the TSX. Overwhelmingly positive, unlike last year. We're in the thick of Q3 reports in Canada; the U.S. is almost done. Valuations here are below the 10-year low. He's seeing a rotation from growth stocks to value/cyclical. The impeachment hearings in the U.S. are much ado about nothing; the Republican-dominated Senate will block an impeachment.

Hopes of a phase one trade deal and tariff rollback are fuelling the S&P's all-time highs today. The market says the growth outlook has improved and the yield has steepened. Growth is slowing and we're late in the cycle, though she doesn't see a recession. The US consumer is the main driver there; job numbers are healthy. And interest rates are declining which also boosts markets. Whatever trade deal is announced won't be all-encompassing and talks will continue. A pullback is possible, though not highly likely, but there's always uncertainty about what Trump will say or do. She looks at Canadian income and foreign growth stocks. Don't chase any stocks now.

It's the 9th inning for the markets with a rotation into stocks. Trump may or may not be impeached, with perhaps a blunted impact. A US-China trade deal appears likely before the end of the year. Brexit has been kicked down the road. The markets have had a great run, but there remains a lot of cash on the sidelines. After tax-loss selling, he expects some buying back in of stocks that have done well. It won't be a flat-out Santa Claus Rally, and investors will be happy if levels remain this high. But volatility is gone. Economic data will be crucial. If Hong Kong became Tiennamen Square, there will be a very negative reaction in markets and trade talks. January may see some selling and volatility.

Market. [Larry's Market Comment was pre-empted by Remembrance Day Coverage.]

Where to park cash when out of the market. He would want to put his money in a US$ money market strategy. Note that the markets could keep going up for 2 or 3 years.

Educational Segment. He thinks interest rates will continue to go lower. When we get to a recession, the best asset class to own is longer term fixed income – the US treasury market. He thinks the US 10 year will go to yielding close to zero during the next recession so owning it now will be a good investment. There is so much debt in the world that we can't see interest rates going up because we can't afford it.

Market. He is watching the American NAHB Housing Market Index. Global PMI numbers were contracting for 6 months in a row yet the home building numbers are at 20 month highs. You rarely have a recession when the home building industry is doing well. Lumber prices are picking up. Consumer spending south of the boarder is at a 6 year low but optimism is at a 19 year high. This is a conflict. The federal reserve is cutting rates and yet the unemployment rates are at 50 year lows. There are plummeting bond yield. Investors should take a shallow recession into account.