Today, Larry Berman CFA, CMT, CTA and Stephen Takacsy, B. Eng, MBA commented about whether GCG.A-T, PLZ.UN-T, CSH.UN-T, HR.UN-T, BYL-T, NEPT-T, JTR-X, NWC-T, OTEX-T, TPK-T, CJR.B-T, PHO-T, ET-T, INP-X, BLX-T, NPC-T, VLN-T, BUS-X, TFII-T, SAT-X, AQN-T, FOOD-T, ADW.A-T, ZUB-T, XGI-T, BANK-T, ZPW-T, PFE-N are stocks to buy or sell.
Educational Segment. The Bond Market and Interest Rates. Bond gurus over the last couple of weeks have come out and said that the bull market for interest rates is over. It has been 38 years now. One reason is technology as it advances and reduces the cost of everything. Society is aging and last year people took more money out of social security than money was put, into it for the first time. But he does not believe the end of the bond bull market is coming. He thinks the yield curve will invert by the second half of the year for North America. This does not support 24 times trailing earnings. Typically we eventually get a 25-50% correction.
It is his largest position. It has had quite a move to the upside recently. 3 analysts started covering the stock and they made an acquisition. They are very well managed and there is good growth in wine consumption. They also benefit where Ontario grocery stores are being encouraged to carry wine. Buy it on a dip and put it away. He does not think pot legalization will cut into wine consumption.
He has been looking at it for the last few months. He likes it. They are a basically a start-up. They got some big orders and turned it into a business. It’s still a little on the pricy side but he likes what he sees. He thinks they are onto something. He is looking closely at it in case it drops low enough.
Market. NAFTA: He believes they are at 50 out of 2000 pages of the agreement in negotiations. There may be two more meetings by April. If they haven’t moved ahead by July 1, when the Mexican elections take place, then he thinks Trump will be giving them 6 months notice to get the deal done and it may be a little bit worse for Canada and Mexico. He expects Trump in his next state of the union address to stay on script. This could be a surprise to the markets. US earnings look very, very good, both from a sales and a bottom line perspective. The question is how much of this is priced into the markets.