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The S&P 500 is outperforming the TSX. The TSX is down quite a bit today, led by energy. Whereas the S&P has been very resilient, all-time highs, up double digits, though very narrowly led by large-cap tech stocks.
What the Fed said yesterday, suggesting only 1 rate cut this year, was not really surprising. To her, it was reassuring that they still see a path to inflation going down. Unemployment is around 4%, and they don't see that deteriorating too much. Interest rates will trend down over time, as long as inflation does also.
In her growth portfolio, she has just over 50% outside Canada. This year, energy has not been working and oil prices are range-bound. It's anticipated that we'll be in an oversupply situation by 2030.
Plus, the Canadian economy is underperforming the US economy. Unemployment here is 6.2%, up a lot from the 4% low. That's all impacting the banks, which form a large part of our index. So sectors that are big weights in our index are holding it back.
While there are some Canadian growth stocks, not as much as in the US because our tech sector is so small, and tech is what's been leading the market for the past year.
Rate cuts in Canada would help our economy, and it will help the banks. In the US, if the first one doesn't happen until the end of this year, she doesn't know if that will make much of a difference.
What we want to look for, when the cut does happen, is the impact on sentiment. Corporations are going to be more comfortable with the rate environment, which they'll see as more stabilized. If it's a soft landing scenario, and the economy does continue to grow, over time that's going to be beneficial for corporate profits.
Nice run. An AI play on data centres. Very aligned on spending of hyper-scalers like AMZN, MSFT and GOOG. Margins quite low, around 5%. But getting volume on very strong demand. Momentum stock.
Future growth and success predicated on capex spending beyond 2024, which hasn't been announced. Be cautious. Once growth rate starts to turn, stock will pull back.
Likes the rail industry, essentially an oligopoly, can't replicate rail infrastructure. A "soft" cyclical -- pricing power, transports diverse goods. Synergies and cost savings from acquisition. Even though economy is slowing, they carry necessary goods, so OK as long as not an outright recession. You can hold rails through the cycle. She owns CNR.
Likes the rail industry, essentially an oligopoly, can't replicate rail infrastructure. A "soft" cyclical -- pricing power, transports diverse goods. Even though economy is slowing, they carry necessary goods, so OK as long as not an outright recession. You can hold rails through the cycle. She's been adding.
If it does, it's short term. Don't let it influence what you do in the stock market, you have to take a long-term view. If there is some profit taking or selling before June 25, then take advantage and buy some good companies. In general, just ignore the short-term noise. Her own clients haven't been stressing about the change.
Yes, it is. She owns it for attractive yield of about 7.5%. Backlog of projects supports the dividend, company feels it can grow by 3-5% annually for the foreseeable future. Diversifying end market by purchasing nat gas utilities. Rising interest rates and equity issue have held stock back. Trans Mountain has not affected takeaway capacity.
Volatility in the underlying commodity shouldn't affect pipelines that much, but it does impact sentiment.
She sold. Late to the game in launching a clear liner in lieu of braces. Slowdown in economy and household income means dental visits get cut. She misjudged how cyclical dental industry can be, not everyone gets coverage. Russian business hurt, China slowed, Israel manufacturing disrupted. Don't buy the dip.
Has done very well on weight loss, plus favourable news on Alzheimer's drug. Hard to buy, especially as a value investor, as it keeps going higher. Trades over 60x PE. Lots of momentum. Expectations very high. History has shown that it's really hard for companies to sustain really strong growth rates for consecutive years and to continuously ramp up margins. Competition always comes in.
She's not a technical fund manager, but if there's a big pullback, you could use technicals to look for an entry point. Have to consider your investment horizon.
She's buying here. You always want to allocate some part of your portfolio to a defensive stock like this. Not the highest yield, but attractive, under 4%; increases it annually by about 5%. Longer term, has outperformed TSX. Holding for any AI play is way down the road.
