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President Trump knows that low oil prices are needed to contain inflation. We're in a regime where between now and the midterm elections, from a US perspective, low oil prices are a good thing because that will help the average family.

Oil prices have come down. Over the last 3-4 years, it was thought that under $70 the US would be buying back for the strategic petroleum reserve. Now he thinks they will, but it will be below $50 at some point. That support for the market's been deferred. As long as supply exceeds demand, prices will remain well contained, notwithstanding the little bump we got today.

We're going to be in a heightened period of uncertainty, and tariffs are part of that. Increasingly, we're starting to see some economic data that's starting to soften. To him, the recent pre-April highs are good highs; we're not going to go through them. Unless, that is, we see a significant uptick in economic outlook. And he just can't see that with all the uncertainties in front of us yet to be resolved.

That said, the extreme low from April is probably a good low until we see a really hard economic landing where we're talking about massive layoffs and recession. That doesn't appear to be on the agenda for this calendar year. Something to worry about down the road.

Right now, there's a 20% chance it cuts rates. None of the big 6 banks are expecting a rate cut. So he doesn't think we'll see one, though GS is expecting one. BOC is pre-emptively way ahead of the US market in terms of cutting. Still, we get employment numbers this Friday and we're likely to see a loss of jobs in Canada.

Canadian economy is structurally weaker than the US right now. BOC will be biased toward cutting further as we progress.

Corporate-based money market account. Will generate about 30 bps (ballpark) more than what you'd get in a traditional money market fund. Canadian T-bills from 1 month to 1 year are roughly at a 2.6% yield; add a small fee for running the money market fund, and your yield is about 2.5%.

With ZST, you'll get something like 2.8-2.9%. Very safe, very high quality corporate credits in Canada. Great vehicle for a number of years to get an enhanced yield on your cash savings.

These are covered call ETFs for banks, US (ZWK) or Canadian (ZWB). If tariffs and such are going to be negative for the economy, typically banks would underperform broader markets. He'd be cautious. Don't go out and sell right now, but be wary.

You'll probably get a better chance to buy in the next couple of months, when banks get a bit cheaper. In the meantime, ZST is a good place to park your cash.

These are covered call ETFs for banks, US (ZWK) or Canadian (ZWB). If tariffs and such are going to be negative for the economy, typically banks would underperform broader markets. He'd be cautious. Don't go out and sell right now, but be wary.

You'll probably get a better chance to buy in the next couple of months, when banks get a bit cheaper. In the meantime, ZST is a good place to park your cash.

Hasn't liked some of the decisions. Hasn't sold or added. Historically once you get a material dividend cut, that ekes out the last bit of selling. Probably close to a bottom right now. Still, you need a catalyst to take it over the top and start the recovery.

Nibble or accumulate. Doesn't see a catalyst for this to take off to the upside. There was a bump after the cut, but then it dropped right back down. Tells you that a catalyst is lacking. Be cautious.

Investor's talking about a way to use some leverage to get exposure to the market. That's a sophisticated strategy, and he wouldn't recommend it for most people. If the S&P valuation is pretty fully valued, then he doesn't love this strategy here. After a correction, sure.

What he does like a lot right now, with capital preservation in mind, is BMO's series of buffer ETFs. Upside potential, but there the covered call pays for some put protection. For the short term, he's more in the camp of "down" than "up". Long term, you have to love the S&P 500; but you just can't love it at 22x forward PE.

If shorting, be mindful of your costs to carry. There are ETFs that are the inverse of bitcoin. BITI is an example. Some ETFs have leveraged ways to play inversely, and you have to be careful with those ones. There are ones you can buy that go up if bitcoin goes down.

There are some new ones coming out with covered call bitcoin, where you can generate income and put some protection on.

If shorting, be mindful of your costs to carry. There are ETFs that are the inverse of bitcoin. BITI is an example. Some ETFs have leveraged ways to play inversely, and you have to be careful with those ones. There are ones you can buy that go up if bitcoin goes down.

There are some new ones coming out with covered call bitcoin, where you can generate income and put some protection on.

Go back to the 2017 timeframe and look at the last time he did this with steel and aluminum. Cheap for a reason. Need a high tolerance for risk and volatility to put a position on right now. These names are down, compared to US names that are up (today in particular).

There's an opportunity there, but don't rush in today. Get closer to where there's some sort of resolution.

There are ways to buy a US security that gives you exposure to other parts of the world. US money market or HISA would get you a 4.5% yield. There are USD instruments that trade in Canada.

He'd ask how fundamentally opposed are you to getting a better return on your money compared to your anti-US sentiment based on politics?

US economy.

As we get desensitized from tariffs, though those are still real and still matter, we're starting to see decay in the US labour situation developing over recent months.

He's brought in a graph of the JOLTS survey on job openings / losses / turnover going back a couple of years. Number of job openings is continuing to fall. The need for workers is falling. 

Last week saw another uptick in initial jobless claims data. It's very cyclical. Generally speaking, in the post-Covid normalization we've hovered in a range. We're now back up to the top end of the range, and we're worried it will break to the upside. We just heard that DIS is laying off people. That's a big part of what the market's going to start to care about, as it means the Fed will be off the sidelines and maybe start to cut rates.

That's initial claims. What worries him a bit more are the continuing claims. The graph is at a multi-year high for those numbers. Since Covid, it's taking people who have lost their job longer and longer to find a new job.

So you have less demand for labour from business (fewer job openings). You have an uptick (though modest) in initial jobless claims. And then you have the extended continuing claims. Those things are combining, and this Friday we get non-farm payrolls. There's some expectation that we get job growth, not negative, but less than 100k. If we start to see the US labour market weakening, it's going to matter a lot because the market (at 22x forward PE) is priced for 8% earnings growth this year.

If we start to lose jobs, and recession risk becomes real, then equity markets are not priced for that risk.

Finally, we have the big beautiful bill. A gentleman on social media at Piper Sandler took all the components of the bill, and calculated that we'd get an economic bump into 2026. But the growth rate for GDP following that is going to decline. It won't be the economic boost they hope. Larry's not sure the markets are correctly priced for what's coming.

Bottom line:  if you want to participate in the US market, use buffer ETFs. ZJAN is his recommendation. Gives you about 10% upside, and about 15% a year downside protection. Keeps you invested, in case he's wrong and the market goes higher.

OXX is an ETF that holds several semiconductor names, and roughly 40% of its expsoure is to AVGO, NVDA, TXN, AMD, and QCOM. The industry has lagged the broader markets year-to-date and on a one-year basis, but for an investor who believes chips companies can outperform the broader markets due to the AI revolution, we think SOXX can perform well here. It trades at a 22X forward earnings multiple, in line with the broader markets, and is seeing a faster growth rate. We could see a pullback or correction in the space, but largely, over a long period of time, we think the space has a lot of upside potential as we will continue to need more chips, more innovation in AI hardware tech, etc.
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The company is small at $900M, even with a double this year, but priced very well at 8X earnings. Q1 earnings were very strong, and resulted in multiple broker upgrades. The balance sheet has net cash, and good earnings growth is expected over the next two years. It has lost money in prior years, and earnings can be volatile. Insiders own 15% and have been net buyers this year. Overall, it looks quite good to us for a small cap in the insurance sector. 
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