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

Educational Segment. How do you Structure you Portfolio for Events like Saudi Arabia this week? We have an event now to think about. Don’t try to trade the noise on day one or two. Make sure your portfolios are structured to reach your goals in the longer term. This is probably temporary. We probably get a spike in oil prices and you should use this to reduce your oil exposure. You can't forecast international relations. Don’t make any big bets on this. The 2018 high in oil will be a monumental resistance. AMLP-N is the pipelines ETF in the US, which is the way he is playing it. He would trim this above $10.

Market. There was no risk premium in the market due to the attack on the Saudis. You need to know how badly the facilities were damaged and are there off-the-shelf supplies to fix it. The questions are how long it will take to fix the facilities? The game has changed but don’t chase stocks today.

Major Drillers. PD-T is on his action alert list, but he thinks the debt load is a lot. He likes the service sector. It will not do well now. It is a 2020 story. If they back off, it is a good time to buy them.

He doesn't hold many energy stocks, but today's spike could rise a few weeks or last into the winter. But this doesn't mean a material change in oil. Other countries, like Iraq, Iran and Russia want to produce more oil. That said, some pipelines were approved over the summer, so that's positive. He has picked away at ENB and BP, companies with big, sustainable dividends. He doesn't see a recession in the near future; the US consumer remains strong. He expects a 25-basis point interest rate cut, though it's possible this Saudi attack could delay that a bit. Don't be long bonds.

Market Outlook He is positive on Canadian energy stocks for the first time in five years. He can now construct a positive outlook for the forward value of Canadian energy prices and the stocks have already been crushed -- a good time to enter. In the previous few years, producers continued to grow production not because of good energy prices, but because of prolific increases in production productivity. Now, he is seeing energy production actually falling, while export capacity is increasing. He sees natural gas producers moving back to positive cash flows and earnings. Oil takeaway capacity will move higher by 2022, he thinks. The stock market will take this into account and, over the next six months, will discount the risk to not having enough takeaway capacity. Now is the time to focus on energy.

The market has gone up to the 3000s again, and everyone is getting wary of inverted yield curve, China talks and interest rates. The US manufacturing index showed a contracting economy, but the service sector was up so it is showing economic activity. Consumer spending is also very high, and the US consumers are doing well.

Amazon and other e-commerce makes it so easy for everyone to spend, so it's no wonder consumer purchases are up. He expects the consumer spending to continue.

The TSX hit a high today, but it only regained to the high in April. He isn't selling any growth ETFs, but he's always had covered calls in his portfolio. When there is a surge, you want to switch covered calls to normal equities. Markets are looking to top out so he wants to get advantage of that right now.

Market. We are above the previous record TSX close. What we see in the last week is a rotation from growth stocks to more value stocks. We are going to see the TSX be a net beneficiary of that rotation. He loaded up on insurance but is lagging in banks. The S&P has a nice up and to right trend since 2017. He thinks we will see some new highs but it will also be carried by some different stocks. Copper is in a triangle formation. We have been in a down trend since 2011. Interest rates are at 2012 and 2016 lows. If we break these levels then maybe there is something negative but otherwise the path of least resistance is eventually higher for interest rates.

Silver. He took some profit in precious metals a couple of weeks ago but now he is looking at Silver again. The risk/reward is probably pretty good. Buy a third of a position right now. This is a brand new move after years of heading downwards so there will be some to'ing and fro'ing to come.

US Bank Stocks. If they aren't making you money, then you can sell them. JPM-N has banged into resistance and then snuck above it. The breakout could be quite significant. Hang onto BAC-N also.

European central banks easing again. Easier for banks to lend money over there. The US economy is a better place to be than in Europe. European growth is much more sluggish than US. Though US growth is slowing, it is still growing. Plus, the US consumer is healthier.

TSX flirted with a new high. Sentiment is more positive on trade. The US index is also within spitting distance of a new high. The market reacts positively or negatively, depending on trade news. Expect more volatility until things get resolved. Try to ignore all the noise. The US economy is not as strong as earlier, but the good thing for the US and Canada is that we're seeing consumer spending kick in.

Bond market's wild ride. It has whipsawed, but it has come back from last year. Conveys slower growth. Cash flow is coming into the US from elsewhere, because of negative interest rates abroad, and this drives down US bond yields.

BOC saying we can go it alone on interest rates. Not sure we can do this, as Canada's economy is very tied to the US. BOC is aware of trade tensions. We've seen stronger than expected GDP number in Canada. Employment here is still pretty good.