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

Market Outlook In Canada, debt is running at 170% of income with investors. The US is only about 110%. This high household debt level does not leave much room for a family to absorb interest rate hikes. Unless Canadian start earning a lot more in income, he thinks there could be more defaults ahead. This have been build over the past decade. Unfortunately, there is no single government policy to deal with the risk. He thinks investor complacency at high levels, with volatility plummeting. Now another correction is likely coming.

Fixed Income vs. Equity? You should think of this over a long time period, depending on your needs for income. He is about 25% cash right now. To be defensive, hold cash -- not fixed income. You need to be aware that bonds can create as much risk as equity, depending on which issue you hold.

Market Outlook - The big names very strong after hours today. Earnings are in the growthy part of the market. That is what he needs to see to keep thins thing going higher. He needs to put there warnings: 1- We are at major resistance levels here, it is going to take a lot of energy to through to new highs, 2 - the small caps is still 7-8% off all time highs, 3- it bothers him and others that this has come so quickly. Don't quit yet. We are still in good shape.

Do you like the US Healthcare sector? He still believes in the sector. there is a lot of political rhetoric now so he would hold off for now. But He would look into names that held well in the last couple of months. United Health would probably his top pick in the sector.

It's been a strong Q1 with the S&P making a record high today. Investors were too negative in December 2018 and we've seen a 20% rally driven by new sentiment and lowering/flattening interest rates. But companies actually lowered their estimates heading into this quarter. Locheed, for example, reported strong this morning. Multiples are 16-17x forward earnings on the S&P. A China-US trade deal could drive more upside. The buying opportunities are getting tougher to find; it's a stockpicker's market. It's smart to take some money off the table, hold excess cash and wait for another pullback, possibly driven by another Trump trade war (with the EU).

The big question is: How long can it last? The rebound since December has been staggering. There isn't a balloon ready to burst, but a downturn will come. When? We're late in the cycle. Now are the good-ole-days. We're way below normal interest rate levels, but debt is high. These are the danger signals. He will be quicker to sell; he would love to take more money off the table. U.S. unemployment is at record lows which boosts spending, but also the Fed should raise interest rates. Trump is highly questionable, economically. He's had six companies go bankrupt. His tweets aren't the wisest things, but no one can contain him. How much is he getting done on the trade front? Our own trade deal with the US hasn't been signed yet. He creates more negativity than the positive; he thrives on discord, which is not the best way to do business.

Geopolitical dangers have never been higher, given the horrific Sri Lankan terrorist attacks over the weekend, and Trump continues to restrict the flow of Iranian oil. Geopolitics does impact world markets....MSFT and Intel report this week and have both broken to new highs. They will indicate whether the broader rally will continue. The S&P and TSX hit record highs, but he doesn't see a strong economic backdrop. Half of Canadians are a few bucks away from insolvency. He feels the economy is fundamentally weak. We're in for potentially decades of low interest rates.

How are daily stock fluctuations derived? A company's fundamentals. But also behaviour is having more and more an impact with extreme pessimism and extreme optimism that rarely reflects true value. Sometimes this means the noise (headlines) of the day. Also, algorithms are scanning headlines. Sharp fluctuations are becoming the norm.

Educational Segment. The price of oil Oil prices are moving up in Canada and America and rubbing against the 200-day average. Oil prices move in two ways. One is the supply push; the other is demand pull. When prices rise because supply is constrained, that's supply push, which is not a good way for prices to rise. The reason is ultimately economic output is going down--we're producing less. This is happening now in Alberta. The bullish move is the demand pull, where a growing economy propels rising prices rise which increases output to meet supply. This is good growth, but we're not seeing that now. Instead, we are in supply push. Sure, the price can still break-out, but there's resistance and that rise won't be sustainable. He'd rather sell into that rally.He doubts that the oil price will break out and he would sell during a rally. Now, it's a short-term rally driven by traders and speculators. He doesn't see $100 oil coming. Canadian oil stocks, though, are undervalued and need a demand increase.

The US market was a solid green to him for many years---until December 2018. It's now yellow. He's now raising cash, though the markets rebounded nicely since Xmas Eve. Data says that the global economy is slowing a bit. Geopolitics worry him in the States with the Mueller Report. Trump's threat to cut off Iranian oil is driving up today's oil price, but the world's biggest customer is China. Also, there's more oil supply than demand.

Where to start investing for a beginner? Buy an ETF of the S&P 500. Then, look at the top names within the S&P. If you use an iPhone, buy Apple. Buy around five stocks. Watch how news effects individual stocks.

American companies start to report this week. For example, UTX will give us some idea of how things are going in China, apparently grow is coming back there. Also, commentary from these companies will indicate where the U.S. economy is going....He'll be looking closely at Boeing's cash flow and operating leverage. Will they cut back production on the 737 Max? (He doesn't own Boeing.) He's surprised the company has held so well given the furor after the crash. It's fully valued now, so he wouldn't buy it. WTI has hit its highest levels in six months after Trump stopped waivers for Iran oil, up 50% since December 2018. There's a healthy, ongoing demand for oil (he owns oil stocks like SU-T and Parex).

Thoughts on Jason Kenney as new premier of Alberta. Have to look at the numbers. Rural Alberta went to Kenney, in Edmonton only 1 riding to Kenney, but in Calgary all went to Kenney except for 1 riding. Highest turnout ever. Tagline was "open for business". When gas prices were cheap, Peter Lougheed put restrictions on Sarnia, and they came to heel quickly. So precedent has been set by right-wing governments. Has potential to reduce the deficits. Likely that Alberta will play hardball with BC.

A new record high for the TSX today: It may run into a little resistance here, may pause, but Brexit is delayed and new unemployment numbers aren't bad. If Trump can sort of China, then things don't look bad. The second half of 2019 will look better. With flat interest rates, recession worries have faded. The big December sell-off was deceptive, because there were many, serious shorts by hedge funds. U.S markets could hit new highs and this will usher in another good run. In Canada, cannabis has surged and is a great place for investors to play around. But the fundamentals--and earnings--aren't there. It's like itnernet stocks in 2000. We'll see if there's real value here. This could be taking money away from investing in oil. Small, unknown pot stocks will get taken out, but there's a lot of room to play in the cannabis space.

Market Outlook. No surprise with the Alberta provincial election results last night. Don't expect any uplift in energy stock prices as a result, because these results have already been factored in by the market. Much is beyond the control of the new Premier, but he can end the production curtailments. Lower taxes will only help companies that are currently making any money. Don't expect any moves against BC from Alberta, because the province still needs the revenues. He needs a Conservative leader in Ottawa to make real changes.