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COMMENT
COMMENT
March 6, 2019
A quiet day today. The markets need a major headline to spark trading. He expects a China-US trade deal soon, and Trump will call it a victory regardless of the terms. A deal is priced in. The Bank of Canada held rates today, telling the market that they won't do anything in 2019. He's still more optimistic about interest rates in the U.S. which will push the USD a little higher. Canadian oil is not in an abysmal state, though the line 3 Enbridge news was a surprise. That said, he expects line 3 will happen. He prefers Canadian stocks tied to the U.S. (TD is his largest holding). In Canada, he likes utilities and REITs--the interest-rate sensitive yield plays.
A quiet day today. The markets need a major headline to spark trading. He expects a China-US trade deal soon, and Trump will call it a victory regardless of the terms. A deal is priced in. The Bank of Canada held rates today, telling the market that they won't do anything in 2019. He's still more optimistic about interest rates in the U.S. which will push the USD a little higher. Canadian oil is not in an abysmal state, though the line 3 Enbridge news was a surprise. That said, he expects line 3 will happen. He prefers Canadian stocks tied to the U.S. (TD is his largest holding). In Canada, he likes utilities and REITs--the interest-rate sensitive yield plays.
Andrew Pink
Portfolio Manager, LDIC
COMMENT
COMMENT
March 6, 2019
Canadian perpetual preferred shares vs. rate-reset preferreds We're seeing trough interest rates now--they won't get lower than this. The rate-reset preferreds are benchmarked a 5-year government of Canada bond, sitting around 2.6%. If that moves up, it will benefit the rate-resets. In a portfolio of preferreds, he looks for reset issues that have a high reset spread, north of 350 basis points; abd a reset expiry of 3-4-years which gives time for interest rates to rise. Also, wait for new issues.
Canadian perpetual preferred shares vs. rate-reset preferreds We're seeing trough interest rates now--they won't get lower than this. The rate-reset preferreds are benchmarked a 5-year government of Canada bond, sitting around 2.6%. If that moves up, it will benefit the rate-resets. In a portfolio of preferreds, he looks for reset issues that have a high reset spread, north of 350 basis points; abd a reset expiry of 3-4-years which gives time for interest rates to rise. Also, wait for new issues.
Andrew Pink
Portfolio Manager, LDIC
COMMENT
COMMENT
March 6, 2019
The Bank of Canada held interest rates and adopted a dovish tone today vs. a year ago when it sounded more aggressive. The rates won't go anywhere and the BOC will be cautious in tone. He's more positive on the US dollar. The rally's been great, but be cautious about the Canadian market. We had a really tough Q4, then up 19% from Xmas Eve to yesterday. There are reasons to be bullish and bearish, evenly mixed. Ultimately, Trump wants to see better markets and trade will be very big in this, including signing NAFTA and signing a deal with China. Wait and see how things shake out and don't take the wrong risk.
The Bank of Canada held interest rates and adopted a dovish tone today vs. a year ago when it sounded more aggressive. The rates won't go anywhere and the BOC will be cautious in tone. He's more positive on the US dollar. The rally's been great, but be cautious about the Canadian market. We had a really tough Q4, then up 19% from Xmas Eve to yesterday. There are reasons to be bullish and bearish, evenly mixed. Ultimately, Trump wants to see better markets and trade will be very big in this, including signing NAFTA and signing a deal with China. Wait and see how things shake out and don't take the wrong risk.
Cameron Hurst
Chief Investment Officer, Equium Capital Management
COMMENT
COMMENT
March 6, 2019
A senior wants to increase US dollar content in an RRSP, given Trump's decisions. Yes, beneficial to do this, to diversify. As a snowbird, you're probably going back and forth to the U.S., so holding more USD makes sense. But be really cautious in handicapping political outcomes, especially with Trump who is unpredicatable and keeps people off-balance. We are in the end of cycle, remember. There's a lot happening in trade, so see how that shakes out. He likes the software and services space. Energy is still shaky. Fintech is good. Don't go broad basket and be ready to exit if the wheels fall off (i.e. something wrong happens in trade).
A senior wants to increase US dollar content in an RRSP, given Trump's decisions. Yes, beneficial to do this, to diversify. As a snowbird, you're probably going back and forth to the U.S., so holding more USD makes sense. But be really cautious in handicapping political outcomes, especially with Trump who is unpredicatable and keeps people off-balance. We are in the end of cycle, remember. There's a lot happening in trade, so see how that shakes out. He likes the software and services space. Energy is still shaky. Fintech is good. Don't go broad basket and be ready to exit if the wheels fall off (i.e. something wrong happens in trade).
Cameron Hurst
Chief Investment Officer, Equium Capital Management