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Trump is preparing a new list of tariffs against China: Not the best news, obviously. Market reaction is muted. Meanwhile, corporate profits are starting to report strong Q2. Both the Canadian and U.S. economies are strong. He looks at the long-term, but in the short term anything can happen, sparked by the unknown. But you can't invest based on a looming trade war. TSX hit new highs today with oil as part of the catalyst. But over the past 10 years, the TSX has paid 3% compounded average returns, which is poor compared to the States. FAANG stocks continue to gush profits, drive the U.S. markets, but valuations are still reasonable.

Is this time different for airlines? They've consolidated and they say they won't fight each other about capacity this time. Delta and the others look pretty good now. But rising oil prices forced Delta to issue guidance to limit expectations. This is trading at 8.5x earnings. He thinks this time is indeed different for the airlines. Delta generates a lot of money from its credit cards (air miles). Good dividend and they're buying back stock.

It's gone nowhere the past few years, stretched from some acqusitions, and fears of e-cars. However, ATD is testing charging stations at its stations. Also, as long as people like junk food, ATD will do okay. He wishes he had bought this in the low-$50's.

They seem to be riding gaming, the Cloud, other software--all the right waves. If you want to run an office, you have to pay them to use their software or Cloud. An amazing company. The problem is the valuation has gotten ahead of itself
at 27x earnings. It's a new company. Kudos to the CEO. Ultimately, if you believe the Cloud is in its infancy, buy it--but at a 10% pullback.

Market. Consensus forcecast for quarter’s earning season indicates about 20% earnings growth among S&P 500 companies, with top lines forecast to grow over 8%. With the strong employment growth and limited wage growth, the market should have surpassed the January highs but trade concerns are keeping it down. The economic data still indicate strong growth or expansion. They point to a second-quarter rebound in GDP growth compared to a softer Q1. Q1’s growth was about 2.2% partially because of weather. Forecasts for Q2 are in the range of 4 to 5%. Small business optimism is still near historical highs. It will be important to monitor earnings calls/reports for the impacts of tariffs on their business. High-growth companies have now grown to the point that their valuations are not attractive. However, companies that pulled back because of interest rate concerns are now looking better. The tariffs on raw materials will impact mnufacturing companies. Some companies are raising prices, others are holding prices for now, accepting lower margins. If that continues, there will be a permanent impact on earnings growth.

Comment on Interest Rates. She commented on a previous show that it will affect dividend stock prices when US Treasury 10-year bonds offer 4% interest rates. She expects them to rise to this level within the next year and a half, as the economy improves. For dividend stocks, it is important to choose an attractive yield and a record of increasing their dividends.

She has owned this for years. The long pullback has created a buying opportunity. There have been some good films, so box office receipts should improve. In addition, the company is diversifying the ways it delivers entertainment, with more interactive activities that are fun for families, and is increasing the dollars per customer visit. This will not be a very growth-oriented company until the diversification’s value kicks in. There is risk because the company is drawing on its credit to fund its diversification.

The stock has pulled back because of interest rate concerns but its yield is still twice that of 10-year Canadian government bonds. In addition, she expects some growth and holds the stock in both her growth and her income portfolios. She expects the dividend to grow by 6% per year for the next few years. This will buffer the effect of rising interest rates.

Wait for a pullback because the stock just popped higher, perhaps because of an analyst upgrade yesterday. This might be the wrong day to buy. She owns CN rather than CP. CN had some problems and it replaced its CEO last year. This seems to be working out well. CN needed to expand, because of increasing demand, and is now expanding. This is a play on the economy because they transport a broad base of goods. For both CN and CP they are benefiting from the lack of takeaway capacity for oil in the West. They are being disciplined requiring long-term contracts.

She owns different Canadian bank stocks, including TD. If she was setting up a new client, she would buy BNS today because of its price. The stock pulled back because of it issued equity to finance some large acquisitions. For the long run, the price will recover. It is a well-run institution.

(A Top Pick July 12, 2017. Up 5%). She continues to like Chartwell. This is the leader in seniors housing in Canada. She likes the demographic trend. Chartwell provides the full spectrum of living and care arrangements, including long-term care, which is fully regulated and which constitutes 15% of their business. Occupancy is very high. They grow organically and by acquisition. She likes the management. Rising interest rates have created a headwind for the stock price, but it offers an adequate yield.

(A Top Pick July 12, 2017. Up 27%). This technology company has had a nice rise but she might not buy it at this level. She would make the next buying decision after the next management report, which will come in a month. They are beginning to see good top line growth: 4 or 5%. They are seeing increasing demand from government and commercial clients. Half their business is outsourcing, which tends to be more stable because it offers longer-term engagements. The other half is IT services, which is growing. This is usually a leading indicator for more longer-term outsourcing contracts.

(A Top Pick July 12, 2017. Down 0.3%). 40% of their revenues are from emerging markets, which are buying more snacks. Emerging markets’ economies over the past year have been weaker but they are picking up. Developed economies are more mature and it is harder to increase business in them in this category. Among food products, the snacking category has the highest growth. Their brands include Cadbury, Oreo and Ritz Crackers: household names. She would buy at this level.

It provides an attractive dividend yield as do the other large telecom companies. She doesn’t own them, preferring the utilities. All of the Telcos have pulled back, though Rogers has already recovered a bit. They could be interesting at this price to people who are looking for income. Consumption of data is increasing and even though Shaw is entering the space, it does not look as though any of the players wants to be competitive, so prices are not threatened.

Canadian Banks. People own the Canadian banks for general exposure to the Canadian economy. Even though they have some exposure to other economies, they primarily reflect Canada. For income-oriented investors, it is better to hold the Canadian banks because Canadian investors receive the dividend tax credit for Canadian dividends to a non-registered account. In contrast, a bank like J.P. Morgan gives exposure to the American economy and so it may offer more rapid growth to compensate for a lower income stream.