Hussein Allidina

[music] >> Hello, I'm Greg Bonnell. Welcome to MoneyTalk Live, brought to you by TD Direct Investing. Every day, I'll be joined by guests from across TD, many of whom you'll only see here. We're going to take you through what's moving the markets and answer your questions about investing. Coming up on today's show, we are going to discuss the dynamics in the oil market after Saudi Arabia announced more production cuts with TD Asset Management's Hussein Allidina, our guest of the day. MoneyTalk's Anthony Okolie is going to have a look at what auto sales are saying about the health of the economy south of the border. And in today's WebBroker education segment, Hiren Amin is going to show us how you can make in-kind contributions using the platform. So here's how you can get in touch with us. Just email moneytalklive@td.com or fill out the viewer response box under the video player on WebBroker. Before we get to our guest of the day, let's get you an update on the markets. We've got some green on the screen on Wall Street, but not the case for the TSX Composite Index. At least not the last time I checked. Let's check in now. Indeed, we are down a modest 50 points, a little shy of 1/3 of a percent. The price of gold is firmer today, feeding into some of the minoring names. For Kinross, it's up a little bit more than 2%. Did notice CN Rail under some pressure today. Nothing too dramatic. At 153 bucks and change, the stock is down a little more than 1%. South of the border, the S&P 500 and the NASDAQ are in positive territory. The S&P 500, the broader read of the market, up 17 points, little shy of half a percent. Let's take a look at the tech heavy NASDAQ and CO it's holding up against the broader market. A little strength here as well. It's up almost a full percent, 116 points. There was a bit of weakness yesterday. Some of the big names are getting a bid. Amazon is up a little bit more than 3% 225 bucks and change. And that is your market update. News of a Saudi production because it did give the price of oil a bit of a boost earlier this week, but the trade has been choppy amid global growth concerns. Joining us now to discuss the longer-term dynamics in the market's Hussein Allidina, head of commodities and TD Asset Management. This is the first time we've seen this playbook. It wasn't the Saudis before but OPEC. You get a cut, a rise in the price of crude and then things go sideways in the tray. >> It's a good question. The macro is concerning. It is overwhelming, in my opinion. the relatively constructive micro data that we've seen, we have talked before about how demand is expected to weaken as we get the sort of well anticipated recession but the data to date is actually showing still firm demand. I think there is kind of a cross current between and expected macro challenge, which we believe is forthcoming. We have had rate hikes that should impact economic growth and activity. But it hasn't yet. Yesterday, newly released oil demand data for the US, gasoline demand is averaging above the five-year average. Even if I removed the weakness in 2020. You've got the sort of conflicting currents. I think Saudi's decision to unilaterally reduce production by million barrels a dayin the month of July only maybe is meant to clean up the front of the market and/or scare the shorts. But I think this market has been a very challenging one to trade in the first half of the year, very different than last year or the year prior when you heard about commodity trade houses posting record profits, had fun making record numbers. This year has been a choppy one partially because of disappointed expectations and because Russian volumes have stayed elevated. I don't think the crew market is going to be able to stand on its own untilwe see the expected draws in the second half of the year because the macro, again, and so concerning. >> Let's talk about that macro. The fear of recession. We've been living with that fear for quite some time. We can dial back into late last year and we were saying it's coming. Where is it? With that kind of uncertainty, what does it actually mean for crude? > I think this is very important. If we don't get a sufficient slowdown, and we have talked about this, if we don't get a sufficient slowdown in demand growth, signs the second half of the year .2 well above normal draws. The recession is sort of anticipated, expected. But we haven't seen it yet. Demand is still exceeding supply. We had draws yesterday in the DOE data. The week before we had a record draw. These draws are occurring notwithstanding the fact that you have continued SPR releases. We talked about the SPR before. Yesterday's 400, 500,000 barrel drama in commercial inventories would have been materially larger if we didn't reclassify 1.8 million barrels out of the SPR into commercial. That ends at the end of June, those mandated sales by Congress. I think that the July data will be sort of more transparent, more honest and should show again that if these balances are true, should show pretty material draws for July, August, September and into the end of the year. >> We see some prognosticators pushing out the forecast of the recession into next year. Some say maybe we escape it altogether. If that is the scenario and we are in the situation in terms of production for crude, what are we setting ourselves up for, what kind of prices could we see? >> I think that the crude market is… If I look at the level of inventory and spare capacity and given the fact that demand is still exceeding supply, if we don't get the sort of well telegraphed or anticipated slowdown, I would not be surprised to see oil at 90, $100 a barrel by the end of the year. I think the fear though is that this slowdown is going to be so material thatthe challenges on the supply side, we have talked before, if I don't have demand, the supply doesn't matter. there will be a battle over the near term that becomes more obvious as we move through the summer. But I think the market is grappling with this idea that the second half is going to be really tight. A lot of that tightness is predicated on Chinese demand growth. It has disappointed relative to expectations through the first quarter, first half of the year. I think that is in people's psyche and challenging their ability to get long. If you look at positioning in the market, there is very little speculative legs in the market relative to history. So I think if we do get clarity on how bad growth will be, you will see those participants return to the market. One thing that I think is very important to understand is, remember for commodities, it's the level of supply relative to the level of demand. Demand growth will slow but if demand doesn't fall in absolute terms so that it is below supply, I still have draws. The second derivative is important but the absolute level of demand, so long as it stays above supply, that means inventory draws and we have seen years of inventory draws so we don't have a ton of cover and why I think prices could move higher if the demand slowdown is not material. >> Those are some of the medium and longer-term dynamics. In the short term, if we are worried about the economy, so many asset classes obviously are hinging on the next moves from the central bank. We've always been central bank waters but now we are more keen than ever. We have the Fed coming out next week. Is that the next big catalyst, seeing what comes out of that meeting in terms of people trying to figure out a range of asset classes including commodities? >> Yeah. To the macro, the fixed income market is a driver of a lot of markets and if we continue to see Fed rate hikes or central bank rate hikes as we have seen in Canada and Australia, that does challenge risk sentiment for sure and it challenges growth expectations. I am not as smart on the fixed income market as others on our team but one thing anecdotally, I was speaking with my team about this before I down, this four, five, 550 basis point rate hike increase has an impacted me or a bunch of folks that I talked to because my mortgage hasn't reset, my car payment hasn't reset. So I think we have to appreciate that the monetary policy transition mechanism takes time. I think that's what folks are sorted grappling with. Growth will slow. How much does it slow and how much further monetary policy tightening there is over the course of the next little while is going to drive risk sentiment. That risk sentiment, that macro being the micro continues until the micro can stand on its own. If we continue to see $10 barrel draws in crude and continue to see an improvement in the crude structure that is when crude to trade on its own absent of the macro picture. >> Exciting stuff. Get back to your questions about commodities for Hussein Allidina at a moment's time. A reminder that you get in touch with us at any time. Just email moneytalklive@td.com or fill out the viewer response box under the video player on WebBroker. Right now, let's get you updated on the top stories in the world of business and take a look at how the markets are trading. We have shares of GameStop in the spotlight today. The company is parting ways with its CEO, Matthew Furlong, and it's not providing a reason for the move. In the meantime, Chewy founder Ryan Cohen has been named executive chairman. GameStop is among a number of so-called meme stocks that caught retail investor interest during the pandemic. Right now, the shares are down to a tune of almost 19%. The return to travel helping Transat 18 narrow its laws for its most recent quarter. The air carrier and tour operator says its revenue more than doubled on that demand and also higher ticket prices. Transat says that's helping offset what quality volatile cost environment. Got roots saying a challenging economic environment hit sales in its most recent quarter. The retail is reporting a wider loss and lower sales compared to the same period last year. Roots as well as saw weakness in its fleece bottoms apparel, there was strength in its activewear, dresses and skirts offerings. Let's check in on Bay Street and Wall Street. We'll start here at home with the TSX Composite Index. We are under a bit of pressure. Nothing too dramatic. 82 points to the downside, little 5/2 a percent. Meantime, south of the border, we are seeing a bit into stocks and that brought a read of the American market, the S&P 500 up 14 points or 1/3 of a percent. All right, we are back with Hussein Allidina from TD Asset Management, taking your questions about commodities. Already plenty of them starting to pop up on my screen here. Let's get to them. Can your guest please comment on the outlook for base metals? This one is from Trevor. >> Thanks, Trevor. The base metal space, earlier this year and late last year, a lot of expectation but robust Chinese demand. The market ran ahead of ultimately what was realized in the fundamentals. More recently, copper, zinc, alley have been selling aggressively. We have become more constructed tactically. The sort of seasonality in Chinese demand is favourable into August and so we think that tailwind will support the metals market. I would say if you look at EV sales in China, they are picking up. Copper is a big component of kind of ZEV vehicle. So we think that is supportive. Positioning has gotten quite short. Some of the metals have actually traded into the cost curve. You don't see supply being tightened immediately when you get into cost curves but that is a point where the market does find some support so we become tactically more constructive on metals over the course of the next couple of months. The big? Is going to be how robust Chinese demand is in the back half of the year. Metals are very important in property, construction, infrastructure. China is moving away from kind of the old economy to a more sort of service, consumer focused economy that is less metals intensive. So I think that you could again see potential headwinds later in the year. If I look at a bigger sort of or a longer duration of time, copper, to a lesser extent, aluminum and then nickel are all very important minerals in the energy transition. There was a big US bank yesterday calling for material shortages in copper as we look over the course of the next 5 to 10 years because we have not invested in the supply side and the demand side, even with the transition away from property and real estate towards EV is meaningful and there probably is not enough of these minerals and so on a longer term basis, we are quite constructive, constructive in the near term but do anticipate some weakness as we get into late summer, into the fall. >> Reading headlines around copper that the Democratic Republic of Congo, some issues with the mine. They said they were gonna have all this copper supply coming online in the short term. A little more copper than the world wants. Is it going to be a bumpy ride to get that longer-term thesis? >> I think it is going to be volatile not necessarily because of the micro but more because of the macro. If you are worried about macro, China, Dr. Copper, people are selling. Copper is trading down to 9000, 8000 a time which I think is reasonably fair given the seasonal demands on the margin in China. But I think it will be volatile. This entire sort of commodity story is going to be a volatile one. Partially because if you think about what's happened to inventories at the tertiary level, there have been a lot of these talking. We have been quite sanguine about the economic outlook. As a business operator, I'm not going to hold as much inventory because the outlook is not as favourable and because the cost of holding that inventory because of the increase in the cost of money is challenging. If the outlook is slightly more favourable than people have discounted, I'm going to have to race to accumulate those stocks and that contributes to the volatility. >> Thanks for that question. Before the show started, we were talking about how the air is not great here. It's not great in a lot of cities right now in Canada and the United States. These are the wildfires. Are they having any kind of impact on the commodity spaces? >> There were wildfires last week near the Alberta oil sands. There were some precautionary shutdowns that lasted for a short period of time. One could look atlittle pockets of data. LaGuardia had a ground hold this morning that's not great for debt the man. Not really meaningful but in the context of the global balance. I don't know, I haven't done any work on what cloud cover and the air quality means for crop development in the US. When we were talking yesterday, I mentioned that I don't think that it's impacted the supply demand balance is yet. It's hard for me to believe though that wildfires are good for supply. If anything, you are going to see supply impacted. So I think it's pretty asymmetric but I don't see anything that's pointed to any meaningful change in supplier demand due to the wildfires. >> Another question. This has been a hot topic through the spring. Gold. What is happening to the price of gold? There was a lot of excitement around it for a while. We are making some game today but we are still below 2000 and out. >> I think the games today are likely a symptom of the jobless data that was published earlier this morning. When you think about gold, the factors, if you build a gold model, the fact is that most people will have in our model is a real rate, the dollar and then maybe some proxy for ETF activity. Rates have been increasing. That's been a headwind for gold. Dollar strength has been a theme over the course of the last 16 months. Like gold from a structural point of view. We think gold has a place in the portfolio. Tactically, we are slightly overweight gold right now because of our expectation around dollar weakness and where real rates are headed. We have been on the margin bearish equities. As that comes to fruition, we think the appeal of goldincreases. If you look at a measure of investor demand, typically that is inversely correlated with the performance of equities. I don't need to hold gold of equities are continuing to move higher. If there is some turbulence there, which we anticipate, that should benefit gold. > But the gold supply situation? Because it's different. It's not an industrial metal. As a playoff a different kind of… >> On the demand side, you don't worry so much about the economy slowing and what that means for gold. David is more of an issue for silver which has more industrial uses. On the supply side, and I've bored you with this for the last two years we've known each other, we have not invested in the supply side across the metal space, across the commodity space, gold is not any different. And we have seen on the demand side, we talked about this the last time I was on, a considerable amount of central bank buying of gold. That continues. The China data that came out last week shows continued accumulation of gold reserves and I think that is another factor that supports gold medium-term. >> What's the thinking right now? Your expertise is central bank. Central banks are suddenly interested in gold. The supply? >> A couple of things. I don't think it's just recent, first. I think if you look at the last 20, 30 years, central banks used to hold and still hold a material amount of gold. And I think it's a diversification story. Reserve should not be in one currency just as your portfolio should all be in one equity or commodity. If you look at how EM FX has performed in periods of duress, the countries that hold a greater share of gold as a percentage of their FX reserves have exhibited less volatility. I think there is also a little bit of a deed dollarization theme that the market is talking about. If you look at the sanctions that the US has applied on Russia, the sanctions that the US has a plan on Afghanistan, these countries are may be saying that it's a good idea that I don't keep everything in greenbacks and that's what's taking place. >> Fascinating stuff. As always, make sure you do your own research before making any investment decisions. we are going to get back your questions for Hussein Allidina on commodities in just a moment's time. A reminder that you can in touch with us at any time. Just email moneytalklive@td.com. Now let's get to our educational segment of the day.if you are looking to move your investment between account, WebBroker can help. Joining us now to discuss his Hiren Amin, Senior client education structure TD Direct Investing. We are talking about in kind transfers. how do they work and how can investors do this in WebBroker? >> Most investors who have a trading account, when they think about moving cash, they think about moving it from account to account. however, in kind transfer's or another option for investors and what they are is that it allows an investor to use their existing securities,and when we say securities we are talking about either ETFs or stocks or mutual funds, perhaps Bob, maybe even certificates of gold or silver, whatever you have. You were able to, in fact, move those from one investment account to another within TD Direct Investing. So you can do this through either a nonregistered account to another nonregistered account or you could even do it in the form of a contribution. So usually when we think of redshirted accounts like RRSPs and TFSA's, we think to put cash there we come up with contribution room for the year, but you can actually do it with securities. I'm going to show you how you can do that. we are going into WebBroker and Morgan go to the accounts tab. Under the transfers and withdrawals column, you will seetransfers and investments within TD. I will show you paid for we show them and ration with screenshots. If I go and click on learn more, and this is where we can learn about exactly how to do it, it first of all tells you what type of accounts are eligible to do this. You can do it between nonregistered to nonregistered, you can even move between the Canadian side of your account over to the US if you have a stock perhaps the trades in both markets and some traders do this as a way of converting money. But once you get onto that screen tool on the security transfer, went to school here, your first one to select a counsellor you want to move from and move to. It will be available in your drop-down menu. And then once we go there, was going to come here, this is the page that you want to land on, it is going to then ask you to populate this symbol but you wish to put in. This is where you put in the ticker code of the ticker symbol or the code or the bond with the mutual fund and you will pop in and it will recognize what you have in the portfolio. If I scroll to the bottom, there is an option to make up the difference in cash. When you make these transactions you are doing them as whole units are whole shares, not parcels. You may not get the exact dollar amount that you want and you can use cash to make up the difference. And then once you have proceeded, you will see this next screen that we have here. We populated to securities, let's say we want transferred to a certain account. It will tell us the total eligible quantity that's available for us to transfer and then we can pick and choose which shares we want to go ahead with. Once you populate those in, gives us an approximate valuation and you can see in this example we have also chosen to put in 10,000 cash and that he gives the total approximate amount converted into Canadian dollars for us as referenced in case you happen to do it into a registered account like a TFSA and an RSP. Once you are happy with the information, you can he continue and then finally, the final step, we will show you a summary of what you're doing. if you are happy with everything, you can click transfer. Usually these transactions take 1 to 2 business days and there you go. And if it's going between nonregistered accounts, then it happens immediately. >> Now we have a nice grounding on how this works and how we can use WebBroker to do these kinds of transfers. But if you are going to do this kind of transfer, would you need to consider? What are some of the risks? >> Some considerations to keep top of mind is first and foremost that while you can move from nonregistered accounts to registered accounts very easily online, you can't do the opposite online. So if you want to get security out of your or TFSA or RSP or put it into a cash or margin account, a nonregistered account, you will have to phone and to get that done. Another thing to consider is that not all securities will be eligible to be transferred into a nonregistered account. They might have to remain in the registered space. Also they have to be settled. If you spot something at this very moment or today for example,you are not going to be able to transfer it until it settles which may take a day or two, depending on what that security investment is. The other thing to keep in mind is because you are contravening an even number of shares or whole units, you are not going to quite hit your contribution room exactly dollar for dollar using that so you may have to make up the difference using dollars but you also have to make sure you are not exceeding any sort of contribution limits while you are doing this. Those are the top things to keep in mind when you are doing these securities in kind transfer's. >> Thanks for that. >> My pleasure. >> Hiren Amin, Senior client education instructor with TD Direct Investing. And make sure to check out the learning centre in WebBroker for more educational videos, live, interactive master classes and upcoming webinars. Now before you get back to your questions about commodities for Hussein Allidina, a reminder of how you can get in touch with us. Do you have a question about investing or what's driving the markets? Our guests are eager to hear what's on your mind, so send us your questions. There are two ways you can get in touch with us. You can send us an email anytime at moneytalklive@td.com or you can use the question box right below the screen here on WebBroker. Just write in your question and hit send. We'll see if one of our guests can get you the answer right here at MoneyTalk Live. we are back with Hussein Allidina, take your questions on commodities. We have plenty coming in. Let's get back to them. When do you think the Chinese commodity demand growth will recover? >> It is recovering. The gap is relative to expectations. Early in the year, folks are very excited about the idea that China was reopening and maybe got a little bit too constructive on their expectations around demand. If you look at the split between kind of the old economy and the new economy, the old economy is still slow. You haven't seen kind of the uptake in property that folks were expecting. I think the difference that we come to appreciate and remember the contrast between China between and the reopening that we saw in the rest the world. While we were sitting at home, many of us got checks from the government. He did not have that in China. Arguably, the sort of fiscal position of the Chinese consumers were challenged coming into the reopening than the Canadian consumer etc. I mention Chinese food import data has been quite positive. EV sales are picking up quite a bit again. There is some chatter that the Chinese government will stipulate that because things have not been as promising as expected, there is a lot sort of hanging on the second half of the year, a lot of expectations are and continued growth. There are signs but is not a full-blown recovery. >> When I think about geopolitics and the relationship between Canada, the United States and China, it strained a blade. Does that play into the commodities traded all or is that something that happens outside? >> I think it has an impact and… The redundancy of supply chain is actually quite constructive for the commodity. If we are moving,, in the production of a commodity that was historically produced or processed in China to the US or to Canada or to Europe, we are being redundant and arguably the reason it was being produced in China initially and not in the US or Canada was because they were more efficient at producing it. So we are introducing inefficiencies and redundancies and I think that is constructive. The globalization and the risk that we have between China, Russia, Iran, and the rest of the world is something that I think it's constructive. >> A preliminary report is coming out today about a US Iran temporary deal enabling Iran to export 1 million barrels of oil a day. Oil price and energy equities are drawing down. What are your thoughts on the outlook for supply if this is true with the emerging deal? Reuters is citing sources here. >> That's a very savvy viewer because when I downstairs that had not hit the wires yet. I saw on Twitter but I didn't see it anywhere else. Look at, I think the US has been kind of turning a cheek to Iranand letting them export. There is a pretty material increase in Iranian exports in the last 6 to 8 months and I think this is partly because of the importance of gasoline what it means for the economy and what it means for Pres. Biden's reelection prospects next year. The market I don't think has been focused or thinking about the risk of uranium and barrels coming off the market. I was in DC a few weeks ago and got to attend a great dinner. There has been no material increase in Arendt's ability to enrich uraniumand the partners in the JC POA have turned a blind eye. Israel is quite focused on this. We had a meeting with the Israelis as well when I was in DC and there comes a point when Israel is going to have to do something unilaterally if the US doesn't support because they do feel threatened and the level of enrichment in centrifuges in Iran has reached a level that is probably, the estimates vary but some folks say they are two months, some folks say they are 16 months away from reaching weapons grade uranium. I think it is a concern. I haven't seen the details of the deal. What I would say is that Iranian arrows have already been making their way to the market. Maybe this makes it more kosher. But I don't know that it changes anything meaningfully. >> This viewers definitely connected to what's going on in the world. let's get to another question. They are always replies to your answers. Can you please comment on the agriculture sector? >> Yes. The space thankfully has not been a source of inflation of late. The US farmer has been able toplant their crop in the window that is ideal. The corn and bean crop is largely planted. If you look at data out of the US on the condition of the crop it is also quite favourable. In Brazil, the sort of absence of… El Niño has lead for good crops. There are also signs of demand weakness. If you look at US and Brazilian exports of corn to China, it is lower. So there are signs of demand weakness there. The supply side is quite positive right now if that is allowing for some softness and expected rebuildingfrom reasonably low levels. I don't want to say that it's sort of can't hit the all clear alarm because it's been reasonably dry in the US. If we don't get rain at some point in June, that can grow concerns about the yield ideas that we have. If you look at the US Department of Agriculture's yield forecast for corn in particular, they are forecasting record yields in a pretty material increase in yields year-over-year so that remains but if I stop right now look at how things look today, quite favourable, we are slightly underweight in that space. I don't want to leave your viewer with the idea that we are going to have copious amounts of corn and beans. No. But we are rebuilding which is a good thing. >> A little bit of that rain, I feel the same way when it comes to my very modest vegetable garden. Here's one about uranium. What is the outlook for uranium? The one in 10 year demand outlook versus production. Nuclear obviously enjoys a certain amount of in favourness that they didn't have before. >> I don't think we can do the energy transition without nuclear. Nuclear demand continues to grow. Recently, we need uranium to fire those nuclear generators and like most of the rest of the commodity space have not invested. What I think is unique in uranium that is maybe not as challenging in corn or soybeans is that the approval to mine uranium takes a very long time. Governments have to do a better job of tightening that approval process. Until they do, the uranium side remains challenged. Even when they tighten that process, takes a while to mine the stuff, it's not dissimilar from copper. So I like uranium. I don't trade uranium in the fund but I do own it. I don't know if I'm allowed to say. I think uranium does well over the medium term. >> We will get back to your question for Hussein Allidina and commodities in just a moment's time. As always, make sure you do your own research before making any investment decisions. and a reminder that you can get in touch with us at any time. Do you have a question about investing or what's driving the markets? Our guests are eager to hear what's on your mind, so send us your questions. There are two ways you can get in touch with us. You can send us an email anytime at moneytalklive@td.com or you can use the question box right below the screen here on WebBroker. Just write in your question and hit send. We'll see if one of our guests can get you the answer right here at MoneyTalk Live. The recovery in the US auto sector continues to be a long and bumpy road. Sales slowing in me. Consumers are pulling back on purchases. Anthony Okolie joins us now with a TD Economics report on the latest sales numbers and their outlook for the industry. >>the sales numbers in May, US vehicle sales fell 6 1/2%, that's about 15 million unitsannualized coming and slightly below consensus forecast that called for more modest decline. Meanwhile, unadjusted sales volumes came in at 1.36 million units or nearly 23% above year ago levels. A notable amount of pent up demand the market helped by a tight labour market in the US hasThings steady through the spring buying season according to TD Economics. With inventory continuing to bounce back from last summer's lows,we saw some underlying signs of strength and the average daily selling rate which rose to about 54,000 cars sold over 25 days, that's up from about 46000 Daily Rate in May of last year. Now when we break it down by the type of vehicle, start with passenger vehicles sales, they rose 20 2% year-over-year. Light trucks edged up about 20% year-over-yearand light trucks accounted for the bulk of May sales.that's 1% below the share of sales in May 2022. meanwhile, Fleet deliveries which includes rentals, they continued to see strong growth last monthand are now approaching the pre-pandemic levels. This suggests that the supply chain limitations that we saw in 2021 and 2022 may now be in the rearview mirror. Although supply affordable vehicles is growing, it is skewed towards higher end models and that is a major headwind for many US consumers who are hit by a combination of high vehicle prices as well as high financing rates. >> Given all of that and how the market is shaping up, what does TD Economics think about the outlook for the rest of the year and perhaps even some risks? >> In terms of the outlook, they see auto sales in 2023 at rising 12% year-over-year to just over 15 million units. Now while that is an improvement from 2022, it legs pre-pandemic levels of about 17 million units. In terms of production in 2023, they see production increasing by just over 5% year-over-year as supply constraints continue to ease. But they don't see full normalization to pre-pandemic levels until 2024. In terms of some of the risks, we have talked with them before. One of them is if inflation remains higher for longer, that could prompt the Fed to raise rates. That could lead to demand destruction and lower sales levels. Any additional stress in the banking centre that could cause lending conditions to tighten quickly which could weigh on auto demand going forward. >> Interesting stuff. Thanks. >> My pleasure. >> MoneyTalk's Anthony Okolie. Let's give you an update on the markets. We are going to take a look at TD Advanced Dashboard, a platform designed for active traders available through TD Direct Investing. Let's take a look at the heat map function here and give you a view of the market movers. We are screening through the TSX 60. We are screening by price and volume. I want to start with some of the gold names. [microphone error] Interesting moves in Shopify in recent days. You can see Shopify now up 1/2% and it had a bit of selling pressure on it yesterday. You have Cenovus down to the tune of 1. 8%. Got Canadian Natural Resources down about 1% as well. Obviously this is an interesting way of looking through the markets. I use this tool myself to see what people are actually trading at there. You can find more information on TD Advanced Dashboard by visiting TD.com/Advanced Dashboard. We are back now with Hussein Allidina from TD Asset Management, we are talking commodities. A viewer wants to get your look for natural gas. Dad US natural gas, imagine? US natural gas production has been reasonably elevated, averaging around just under 100 year to date. Our ability in the US to export is constrained because we only have a certain amount of Ellen G in place right now and that LNG export is being maximized. If delicate balances in the US, US balances are relatively elevated and ultimately if production remains elevated, I see gas prices remaining constrained up until we get to the winter and then I have my regular winter risk. Learn in the summer, the real upside you can see, if you see any, is from warmer than normal weather. >> People are running a CD. >> That's right. But he uses the amount of the relationship between cooling degree days, i.e. warm weather, and natural gas is not as pronounced as the relationship between heating degree days. So a warmer winter is more bullish for, warmer winter is more bullish, colder winter is more bullish for gas than a warmer summer would be. >> Okay. If you are here wants to know if you can discuss the market for carbon pricing? We don't talk a lot about carbon pricing on the show. I know you have some thoughts on it. >> Yeah. European carbon pricing has done exactly what many had thought it would do. It has remained uncorrelated with equities, commodities, fixed income, etc. If I look at European carbon pricing right now, we are trading north of $80, €80 per ton, and I think that is a relatively firm level given the weakness that we have seen in European economic activity. We like carbon over the course of the medium-term largely because policies are designed to tighten on the supply side. So remember the European ETFs program by design is reducing the amount of carbon credits that are available any given year and because my demand-side is not decreasing as quickly, I continue to believe that we see support in carbon pricing. >> We are out of time for questions. The audience might have noticed that I was sounding strange there. I had some technical issues. I was talking through your microphone. >> I thought you were trying to get closer to me. >> It's always a pleasure having you here. Before I let you go, and he thought about the commodities market heading out for the rest of the year? We have recession concerns, wondering what the central banks are up to, what you think about the space? I think that space will remain volatile and I think that's important to appreciate. It's not something that's going to go up in a straight line. Thematically, my balances are quite tight across the commodity space. There are some examples of softening balances. If we don't get this material slowdown that some people are expecting, I worry that because demand is running higher than supply, you will see continued tightness in balances and we might get some relief and inflation in the short run becausegasoline is down year on year, because oil is down year on year, we have not invested in the supply side. We are moving away from the supply side far quicker than we are moving away from the supply side in oil. In the metal space, quite a bit of incremental metals demand coming from the energy transition. Broadly speaking, I like the space but I think it will be volatile particularly over the course of the next couple of months. Dad was great having you here. >> Thing for having me. >> Hussein Allidina, head of commodities at TD Asset Management. Always do your own research before making investment decisions. We'll be back tomorrow with reaction to Canada's latest jobs report which will be interesting on the heels of the Bank of Canada delivering a hike and some of our best interviews of the week. On Monday, Maria Solovieva from TD Economics will be our guest taking your questions about the economy. On Monday, we will be a few days out of the US Federal Reserve decision. you get a head start with those questions, just email moneytalklive@td.com. That's all the time we have for the show today. Thanks for watching. We will see you tomorrow. [music]