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Market. We have a rally afoot presently, he thinks. Normally we see Managers selling winners in June to reposition later in the summer, which can position the market later for a good rally. The trade wars will likely resolve themselves, he believes, so he still sees a brief rally playing out before the fall. The TSX has been in a long term bull trend and he expects it to continue. However, if we saw the TSX move below 15,000 roughly, he would become cautious. The S&P500 continues its bull run and is looking to make yet another new high and he expects that to continue. He thinks any calming of the trade wars with China would cause a short-term sharp upward rally.
Perpetual preferred shares and interest rate increases. Perpetual preferreds are not his favorite holding, because of the interest rate increases. However, after selling most of their interest rate sensitive holdings, he is thinking rates may be peaking. He would hold an ETF for a preferred portfolio such as PFD-T. He thinks the equity market for common shares may provide more liquidity, such as Fortis, Altagas or Enbridge and they tend to have a lower beta as well.
He likes this stock and thinks it is about to enter a period of seasonal strength, which begins in late-July typically. Once it breaks through the the bearish channel started back in mid-2017, it should be a good rally. He does not own any utilities at the moment since they saw the increase in interest rates coming. Now, he thinks interest rates will plateau soon. He prefers Fortis (FTS-T).
He does not own any utilities at the moment since they saw the increase in interest rates coming. Now, he thinks interest rates will plateau soon. This is a well- managed company. The technical outlook is demonstrating higher lows, so he thinks this is setting up well for a buy soon. The risk-reward is looking favourable. He sees support at $39.50 and a break above $43.80 would be a signal that $48 could be coming.
He feels the transportation sector is entering into a good seasonal cycle and thinks this stock is in a good risk-reward position. The bearish move since March is now testing long term support near $20, so this could be a good place to begin to build a position at these levels. He would use a 5-6% range for a stop-loss.
The percentage of the Financial Services sector to GDP is the largest in Europe – approaching 400% of GDP for its capitalization, compared to 150% for the US. He thinks this creates an overhang for the European banks. He would continue to hold for now as there is some short-term basing on the chart, but sees better value elsewhere, like US banks.
He sees $22.50 as key support. He wonders if there is topping action on the chart. He prefers Fairfax Financial, although it does not quite the same quality. MFC-T has been focused on their market, but prefers Sunlife (SLF-T), which is demonstrating better technical trending. He would suggest swapping MFC-T for SLF-T at current levels.
Base metals could benefit from any trade war positive news and could see a $7-$8 move quickly, which would test resistance near $39. Seasonality is working against the base metals at the moment until October. He likes this as a good long term risk-reward, but it could potentially re-test the $22 range.
