Larry Berman CFA, CMT, CTA

Trump will be empowered this time. He's more experienced and wants to make things more efficient for U.S. business. Everyone is wondering what his impact will be internationally, including Russian and Ukraine. U.S. earnings season so far sees the big banks doing very well, but there remain issues with the long-bond rates. Blackrock's deputy CEO expects inflation to be far stickier than what the street expects. So long-bond yields have to stay higher for longer. 

Trump 2.0 will see him using tariffs as a negotiating tool to add jobs to the U.S., but there will be inflation. The debt problem is real. Trump wants tax cuts, too. His decisions will add a lot of volatility. For every 10% tariff, the US dollar gains 4%, so we're pricing in a 20% tariff across the board now. But at 8:30 am, the Wall Street Journal said that Trump won't impose tariffs, so the Canadian dollar rallied as the US futures and US bond market rallied. Risk assets rallied. Get used to volatile markets in the first 100 days. Private equity and bonds are very attractive now.

An ETF to park money and pays a good dividend. It has a little credit risk, but exposes you to corporate bonds for year, so it acts like a money market fund in a sense. However, it pays you a little more yield by 20-30 basis points.

It's a challenge going forward. He likes it for using hedging strategies which mitigates a good part of your risk. It still gives you upside potential. Gives exposure to equities with an income tilt. Markets are overvalued, but it's possible that markets can keep grinding higher. He prefers buffer ETFs, like ones that BMO offers, which offer more safety.

The version that gives you exposure in USD has given you a stronger return in past years. He prefers /F, the one that gives you the hedge.

He's the wrong person to ask for a crypto recommendation. He doesn't touch them for being highly speculative. He's an investor. Pick any crypto ETF.

In quantum computing, follow this company. Doesn't know of an ETF in this sector; it's too early. Quantum is way too early. Earnings aren't there yet. The hype has made this sector volatile.

The CAD has weakened, and ZSP has the USD in it. So, he much prefers ZUE. Because interest rates are much lower than the U.S., it will cost you 1.25% in hedging. Weigh that 1.25% over, say 5 years, to where the CAD-USD exchange will go. If you expect the CAD to strengthen, then ZUE will give you a better payout than ZSP. Be hedged over not.

The CAD has weakened, and ZSP has the USD in it. So, he much prefers ZUE. Because interest rates are much lower than the U.S., it will cost you 1.25% in hedging. Weigh that 1.25% over, say 5 years, to where the CAD-USD exchange will go. If you expect the CAD to strengthen, then ZUE will give you a better payout than ZSP. Be hedged over not.

With Trump, there's a little less concern of threats of breaking up the company. GOOG is doing well in cloud, and Europe won't be as hard on them as before. GOOG is one of the cheaper Mag 7 stocks, but still vulnerable to market risks. Prefers it at $150 than $200, though.

He expects the gold trend to continue as central banks keep adding gold among many reasons. He buys on dips, though, not on rallies.

He's looking for earnings growth and a broadening out of it. We've had a very narrow and strong leadership by a handful of tech names (the Mag 7). For this bull market to sustain itself, it's really important for earnings to broaden out beyond those names. What will largely set the tone in the coming weeks is AI and what its related companies tell us about going forward.

We'll hear from banks to start off earnings season, as we typically do. There we have rising interest rates and a steepening yield curve, and the banks will provide some insight into that situation.

The market's swinging quite dramatically here and, for him, that speaks to the narrowness of the market. There's uncertainty. If we do get some bad forward guidance on earnings, that won't be good for the market.

True. There's a saying that "a rising tide lifts all boats". You want that broader participation. There are an awful lot of companies that just aren't making any, or any significant, money. When you look at the topline (revenues) versus the bottom line (earnings), you're seeing earnings growth expectations of 10-12%. But we're seeing nominal GDP of 4%. It's getting ever more difficult to reconcile what economic growth will deliver and what earnings will be.

When it's more concentrated that tells you that if those companies miss, look out below. It becomes a higher-risk market when earnings aren't broad.

That's it. The market went from pricing in a dramatic amount of rate-cutting six months ago, to virtually pricing out the entire rate cut path. Now the Fed still thinks it's going to cut rates a couple of times, but the market is now down to 1 rate cut for 2025.

Import prices will be lower with a stronger US dollar, sure. But that's a small part of the pie compared to labour costs, healthcare costs, and everything else related to supply/demand that's driving inflation. Domestic inflation is driving prices higher, and has little to do with exports.

Trump incorporating tariffs is a concern. It makes it far more difficult for the Fed to add stimulus until we actually see more economic weakness. Right now, the economy and labour markets are still ticking along.