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

If the court strikes them down, Trump could use another excuse than "emergency". A ruling would be a hornet's nest. Does the US give back all the money collected? Doesn't think a ruling would have a meaningful impact. Hedge: it's not a tradeable event.

There's more value in international than domestic banks. In a Canadian taxable account, you need a Canadian bank stock.

A rule of thumb is to sell 50% if your position has doubled, then sell 50% if it doubles again.

Historically, when gold has led and have stocks have declined typically happens after stocks have seen extremes. There's a case to be made for gold to keep rising and outperform stocks by up to 50% for 5-10 years, based on historical data. Higher gold reflects a loss of confidence in governments controlling their spending. He doesn't expect governments to, so gold will go higher, though in a bumpy ride. He's nervously bullish. He will wait for a correction to buy.

It's a very logical step for the federal government to go to China, and to other countries, and sign those agreements. They have to forge their own path, stand on their own feet, and form agreements with other countries. They shouldn't be held hostage to ongoing negotiations with one trade partner.

Absolutely. Negotiations will take place later this year, and you never know if they'll be postponed again or not. If there's no agreement, it could get extended. We'll have to see what happens.

What he's seeing is a firm commitment to build Canada. There's a lot of excitement and a real investable theme. At some point real money will start flowing, and this will translate into operating results for companies.

Build Canada is a big theme, and he thinks it's here to stay. Given what's happening on geopolitics globally, we've seen what happened in Venezuela and the rhetoric around Greenland, and potentially the Panama Canal and Cuba. Look at the Monroe Doctrine, its history, and what it means. The US administration has been very active and very clear in communicating what their vision is for the future -- dominance of the Western Hemisphere. The playbook is pretty clear.

Against that reality, we have to really invest in national defense and domestic priorities. We have to stand firm so we can maintain our position against pressure from the US in the years to come.

It's true that energy, infrastructure, and defense are all interesting industries. However, Canada should count its blessings. We have immense natural resources that we should take advantage of, but we shouldn't build a whole economy around natural resources. We have to take the proceeds from that and invest in high technology and aerospace as well.

Last year was mainly driven by the resources complex. Gold prices have rallied a lot, after about 10 years of waiting for them to do so. Now it's happened on the back of geopolitics and other dynamics. It's anybody's guess where gold prices are going. 

Overall, Canadian markets have benefited tremendously from that. Canadian banks also did really well last year and carried the benchmarks higher.

At the same time, it's been a very bipolar market -- some industries are under pressure. A number of tech companies really underperformed last year on the back of AI threats. Question marks about whether their business models will be challenged or not and what AI developments mean for those businesses. So last year was a unique environment -- some companies did tremendously well, but others are under quite a bit of pressure.

A solid hold. Long-term outlook remains pretty healthy, especially on the commercial side. Residential side is not doing as well. Provision for credit losses has been going higher, but nothing too alarming. Doing a pretty good job on expenses. Sees growth of 10+% for the sector this year, and potentially next year as well.

Also likes their high capital ratios, as ROE is trending higher. Regulatory environment is becoming more favourable.

Rebroadcast of yesterday's show.

Get out the crystal ball, right?  :)  His team looks at a number of top-down indicators that range from short- to medium- to long-term. They also have an early warning indicator. Right now, all of those indicators are positive. 

When they take a snapshot of today and moving forward, they're constructive on the markets. That means that they're fully invested. Those dynamics and indicators can change throughout the year. When they do, that's when the team makes changes to portfolios. 

Looking at some of the underlying economic conditions, they actually look quite healthy. For example, the rate of change of inflation continues to moderate downward. That gives central banks more room to lower interest rates, which is positive. We've also seen strong earnings across the board. It started off with just the large caps, and now that's starting to move down-cap. We've seen really strong performance this year from the Russell 2000.

There are a few areas where you always want to pay attention. One is earnings. We're heading into earnings season for Q4. We'll really want to watch and see what guidance looks like.

The other area of caution that he has his eye on is the rotation that seems to be happening between Canada and the US. Money flow has been so strong into the US for so many years, and now it looks as though it's actually flowing the other way. The Canadian markets outperformed last year, and that could happen again.

The other space to focus on is the relationship of the Mag 7 to the other 493 stocks in the S&P. What's happening to capital flows there? A lot of money has moved into the Mag 7, and there have been a lot of specialty products like the single-stock ETFs. What does the rotation mean for those stocks?

He's seeing more sector rotation as well. The discretionary sector continues to do really well -- fascinating, as consumer sentiment is very low. 

In the last few months we've also seen a move to industrials, which is really positive for the economy. These include the truckers and the rails, moving freight and goods. This indicates that there's going to be strong economic growth as well.

You always have to keep your eye on our banks. How sustainable is the move in the banks? We had great performance last year from bank stocks. As earnings trickle in, it'll be interesting to see what happens to the prices of those stocks.