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Today, The Panic-Proof Portfolio (Stockchase Research) and Andrew Pyle commented about whether POW.TO, ENB.TO, XGB.TO, SHOP.TO, CHR.TO, RSI.TO, MEG.TO, COST, BIP.UN.TO, MEE.TO, LNR.TO, WSP.TO, AC.TO, TRP.TO, F, BCE.TO, TLT, CWB.TO, MX.TO, SJR.B.TO, NOA.TO, DELL, PNC, NTR.TO, TECK.B.TO, CVE.TO are stocks to buy or sell.
Nobody should be shocked with Jerome Powell's hawkish comments now about raising rates sooner, if needed, given economic data. There's some talk that the Fed will hike rates next by 75 basis points, not 50, though he disagrees with this. Powell is saying that he will do what it takes to get the job done--tame inflation. The economy is okay now, but we will get a lot more tightening until the early part of 2024 may see an economic crunch. The TSX will re-test its 19,150 level in light of these new rates. Though, the Bank of Canada says it will pause hikes, while the U.S. will raise faster. The reality may fall in the middle.
Many seek safety in the bond market, unless you get years like 2022 and 2023 when interest rates rise quickly. Also, a long-dated bond is risky if rates run up like last year. That said, bonds have better return prospects than stocks. If we enter a recession, the more likely there will be rate cuts and the longer the term of the bonds the greater the price impact. Hang on, don't sell, if you already own.
We reiterate this Canadian major energy producer as a TOP PICK. The company announced it will buy out its partner’s share of the 160 mbd refinery in Ohio, with a capacity to consume 90 mbd of heavy production. We like it has aggressively been retiring debt and buying back shares, while still growing cash reserves. It trades at under 2x book. Recently reported earnings support a ROE of 25%. We continue to recommend a stop at $23, looking to achieve $33 -- upside potential of 28%. Yield 2.4%
(Analysts’ price target is $32.97)