A Comment -- General Comments From an Expert

A Commentary

Market Outlook A large oil stock build this week when a draw was expected has put downward pressure on oil prices. We have almost 100 million barrels more in storage than last year and another 5 weeks before the summer driving season begins. We might see another run towards the low-$50s for WTI soon. Be a buyer on weakness. He thinks debt is still high for some key players like CPG-T and will hold back companies from buying back shares to improve per share metrics.

Why look at energy? He has seen two incredible bull trends in energy in his career. The last bull market was from 1999 to 2003. There were several 10-baggers during those cycles. He thinks a new bull trend started in February 2016 when we were at $26 per barrel. He is now watching India as the next source of major demand -- eventually growing to over 5 million barrels per day over the next five years. In the next five years, he thinks a five-bagger is possible in TSX Energy in the next handful of years.

How are you trading these markets? Not a retail market. It's a trader's market, it goes up and down on rumour. It's all noise right now. There's nothing new happening to these companies. It's just Trump talking the markets up and down.

Outcome of US-China trade wars? Money managers are caught in the middle. That's what makes it a trader's market. Until something materializes, that's all it is. Markets are either toppy or trading lower.

Are you a bull or a bear right now? Short-term, markets have been resilient. But he'd be erring on the sell side. Take wins if you have them, short it, or sell a bit and buy it back if it goes cheaper. Sell half, and then you look smart no matter what happens. The big stocks have been steady and boring.

Could we see another correction like December's? A correction is coming, but it won't be as fast as the one in December. We're slowly going lower in the S&P and the Dow. We've had a market slowly creeping up for the longest time, and it's way past its expiry date.

Gold sentiment. Stuck in a range for so long. Resistance around $1375, support around $1200. Avoid the little ones. Even the big ones have just drifted. We need more than a 1 day or 1 week pop.

Market Outlook - The trade war is weighting on the market. The US is basically holding all the cards. China can't stop importing what is importing. The only thing they could do is sell their US bonds but then they would have a currency problem driving their own currency up making the trade issue worst. India is then next big market to emerge. For now he prefers to play it by investing in large international companies with exposure to those markets.

Market. There are a couple of wars being fought. The super powers of China and the US are fighting a war that is bigger than is going to be solved this year. Now there is a technology war that is happening. It needs to be fought if the US is going to be a power in Technology. The smaller wars probably get solved with band-aids this year. China has their 70th anniversary this year and the US is starting the 2020 election campaign. He sees no recession on the horizon. Investors should be cognoscente of technical levels. The Fed has said they are not hiking this year.

Bitcoin vs. US$. The US$ is backed by a stable government. Bock chain may become a form of payment for younger generations. But Bitcoin is too volatile. It might change value before your transaction settles. There is always a market for something that gives you an alternative. With Bitcoin it is buyer-beware.

Market Outlook The Chinese trade situation is multifaceted. You have worries of spying in Canada and he wonders why our government is so uncertain how to proceed. You have to go back to the 1930s when we saw this type of trade wars.

Retail sales data of late have been weaker than expected. Trade talks is on the mind of investors. The sectors that are more driven by trade have lead the declines. However, corporate earnings are still looking good. 1.4% year over year on earnings growth. Monetary policy should be accommodative for some time. Last few years, growth companies have outperformed value companies and with low interest rates, he expects this to continue.

What's market telling you right now? It's decently positioned. Canadian market hasn't gone up a lot over the last 5 years. So Canada has more upside than the US, because of valuations. In the current decade, energy and materials represent only 25% of the TSX, a decrease. TSX is neglected among the world indices. Valuations are very attractive. Since 2010, S&P has done 3x better than the Canadian side. Financials are the biggest sector, but are still trading at lower valuations than the norm. International investors have turned their backs on Canada in energy. So this is an opportunity.

Navigating the choppy market. Volatily can be your friend. If you like a company that's a chance to buy it. The markets seems unsure about the direction it's going in. Regarding the trade war between China and the U.S, he thinks the U.S. is in a pretty good place since they don't export as much to China as China exports to the U.S., and the U.S. economy is going quite well, they can afford going through this deal. It used to be the Republicans and Trump being against China, but now you got the Democrats saying to put pressure on China.

Market Outlook He thinks we are into the correction part of "sell in May and go away". He is watching long term bond yields, if 10 year yields drop below 2.35% it is a sign that investors are heading for the exits. A break down could take the yield down to 2.00% -- a big boom for bond holders.