Bart Melek

[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 show, fears about the health of the US banking sector have pushed gold above $1900 an ounce, but will not run continue? We'll discuss with TD Securities global head of commodity strategy, Bart Melek. Money talks Anthony Okolie is going to have a closer look at the latest US inflation report and what it could mean for next week's federal rate decision.

And in today's WebBroker education segment, Jason Hnatyk will show us how you can do research on specific sectors using the platform.

Here's how you can get in touch with us. Just email moneytalklive@td.com or seller that viewer response box under the video player on WebBroker.

Before we get your guest of the day, let's get you an update on the markets.

A bit of a risk appetite today.

Got the TSX Composite Index up 218 points right now, a little firmer than 1%.

The risk appetite is showing in some of the tech names, including Shopify you're at home. We are up 4% to 5969.

Even though West Texas intermediate crude is still below 74 bucks a barrel, you are seeing a bit of money move towards some of our energy names are in Canada.

At four bucks and $0.95 per share, Baytex is up almost 4 1/2%. South of the border, pretty firm rally on our hands after the gyrations and shock waves caused by the collapse of Silicon Valley Bank. Of course, the news we saw from the Fed and regulators on the other side of that. 3928, got the S&P 500 up almost 2%.

The tech heavy NASDAQ was very even a bit better, up 2.4% at this hour. Some of those regional banks that got hit pretty hard in the wake of Silicon Valley Bank,, seeing a bounce back today, First Republic Bank of 51%. There is ground to recover.

That's your market update.

The recent turmoil in the US banking sector has pushed gold above $1900 an ounce as investors are seeking safe haven assets.

But will that strength last through the year? Joining us now to discuss his Bart Melek, global head of commodity strategy with TD Securities. Great to have you here.

What are you saying out there?

>> Hello. Great to be here.

well, it has been interesting, to say the least. Gold has rallied quite aggressively over a period of two days, actually, so that was Friday and Monday.

But today, we are off a little bit.

I put out a note yesterday essentially saying that the ferocity of this reality will likely slow down and I think there will be some additional reversals. I don't think we have a route. I don't think we go to levels prior to this bank event or the US labour data.

But I think we likely will try to little lower. And this is essentially why. Inflation continues to be a problem as we have seen today.

On the margin, things look a little bit better, but still several times over and above where the feds inflation target of 2% is.

So it's very unlikely that the US central bank reverses course right away.

They may very well lift rates a lot less than we thought. Perhaps even no hike next Wednesday. But I don't really see a reversal and a cut anytime soon, given that inflation data.

In fact, Gold started to do better after the payables numbers which was mixed. We had above expectations jobs figure at 311, but there was a little bit lower-than-expected wage growth, and that triggered the rally in gold and then we've had the Silicon Valley Bank issue which, well, increased risk a lot and got people to go to safety. What we have seen is as a result, rates across the board dropped and that basically mentioned that, with such a large decline in rates across the treasury curve, we've seen a significant decline in real rates.

And that helps gold.

We've also seen a pretty significant reduction in future feds funds expectations.

I think some of it might have been major, but it drove the market. Another factor is the US dollar fell because of the yields.

And that, again, it helped gold.

Today, it's a little different.

Things seem a little bit more stable. The US authorities acted very quickly and essentially have underwritten depositors over and above insurable levels.

So the risk off sentiment has reversed, as you just mentioned.

>> I find it fascinating, made all of these a very fascinating development of the past couple of days, when I saw gold taking off, I thought, okay, this is part of the world that I understand.

In the past, gold hasn't reacted to risk the way I thought it would but it seems to be having this safe haven play.

> Yes.

And I think the key difference between what has happened now and in previous periods where we've had a crisis, we've pretty much decided right away that both the treasury and the US Federal Reserve would come to the rescue.

And I don't mean give money right, left and centre, but prevent systemic risk from getting out of hand.

That generally implies a lower interest rates and may be more liquidity.

And gold responds positively to that.

Previous times in 2008, I still remember that, immediately in the aftermath of COVID collapses, gold didn't do so well.

And that was because the reaction by authorities wasn't as speedy and we were quite worried about liquidity and we were quite worried about the solvency of the entire financial system. And gold was sold to cover margin and get cash.

We didn't really see that this time around.

We actually saw short covering that was occurring prior to the employment data.

No one, I would say, expected a collapse of a major bank though.

And those shorts were unwound and people want long thereafter.

But I think now things are a little bit more stable and we think there's a bit of a reversal.

But we are very bullish longer term.

>> Let's talk about the longer term then because ultimately it seems that the big macro overhang is still there, it's the Fed.

Maybe the math has change a little bit relative to the market.

The Fed has to consider a bank collapse. But is it really just about the path of the Fed for the rest of this year when we are talking about gold or other commodities?

>> I think it's important. Ultimately, I think the Fed probably is still increases rates but most likely on a slower pace than the market priced previously.

No one knows for sure how that's going to turn out, but I think the consensus is both that the next move is not going to be 50 basis points. Many are considering zero or 25 and I think consensus is split whether it's 20 540. No one is really counting on 50 anymore.

And also, we are pricing in a speedier pivot towards a dovish policy.

Well, that probably means, if that happens, that rates on the short end of the curve in particular will start slumping ahead of inflation.

And may very well decide that rates don't have to go as high as previously and may not have to stay there for as long and that is a good environment for gold, mainly because you can envision a world where inflation could hold above 2% for a long period, making the opportunity cost of holding gold quite low and having it as a hedge against inflation. After all, gold is a real asset that requires labour, requires energy, capital input. All sorts of things to produce that.

And if investors and others by it up, the marginal cost that ends the being for the long run determined by production.

And if that is going up and gold keeps pace, you can imagine that gold holds its own and might be even lifted up more as investors try to seek protection from possible inflation.

>> Fascinating stuff as always had a great start to our program. We are going to get your questions about commodities for Bart Melek in just a moment's time.

A reminder of course that you can get in touch with us at any time. Just email moneytalklive@td.

com or follow the viewer response box under the video player on WebBroker.

Now let's get you updated on some of the top stories in the world of business and take a look at how the markets are trading.

The parent company of Facebook is announcing another round of layoffs, this time cutting 10,000 positions.

Meta Platforms is also cancelling what it calls low priority projects and its reducing its hiring rates.

The news follows layoffs last fall at the company that affected some 11,000 positions.

We've got shares of United Airlines in the spotlight today.

The Chicago-based air carrier says weaker customer demand and higher fuel costs will result in a quarterly loss. In a filing, United Airlines says it's observing new seasonal pattern for travel, with January and February seeing lower growth rates and then the high demand months. The airline is also in the middle of contract negotiations with its pilot.

You can see the stock down to the tune of 5%.

The shares of a ride hailing companies Uber and Lyft are getting a bit today, that after a California appeals court ruled the companies can continue to classify their drivers as independent contractors rather than employees.

This battle with regulators over how to classify drivers may not be over yet.

The decision can still be appealed to the California serene court.

The stocks are getting a lift today. Lyft is on the screen.

The lift is up at 3 1/3%.

Alright, let's take a look at the main benchmark indices. We'll start here at home on Bay Street with the TSX Composite Index.

Got a bit of a rally on her hands, 204 points to the upside, a full percent.

South of the border, the risk appetite is back today, the S&P 500, the broader read of the American market, up 1.7%.

We are back now with Bart Melek, taking your questions about commodities. Let's get to them. Right out of the gate, what metals are poised to benefit from the demand of electric vehicles?

We've had discussions before the one I always forget is silver.

>> Yes, well, silver is quite important for elect vacation broadly, of course, as most people know.

Silver is very much used in the manufacturing process for electronic components, everything from Sauter to capacitors uses silver and if you look at your car, your regular gasoline or diesel car, it has a much less silver then an EV or a hybrid. They are full of electronics, full of sensors and they have a much higher silver content, so that's a one very important market. The other very important market is solar panels.you know, that is something that is going to be growing quite aggressively over time.

and as, in the United States, for example, the drive towards a carbon free economy intensifies over the years, and literally hundreds of billions of dollars are spent for everything from subsidies to grids to power, that silver is gonna benefit and on the supply side, we really have not seen sufficient investment and in fact, we predict that we could very well, for the next year or two, have deficits in the metal. If we are right on gold and silver, investors might want a piece of that market as well. We've talked about gold doing well during this recent crisis.

>> What's the correlation? Is it still there? You have this physical demand, solar panels, EV demand for silver, but it has been disparagingly called the poor man's gold.

What's the relationship like now?

>> Well, it outperformed gold over the last years.

It typically, over time, so for every 1% increase in gold, silver tends to go twice as far. But of course, it's a double edged sword.

The same thing happens on the slide lower. But to the extent that we believe that gold does well down the road, silver should do even better and perhaps even outstrip its historical relationship to gold because of the growing importance in environmental products and as we drive into a zero carbon world.

>> Let's not forget copper.

I'm fascinated by the seller aspect because I always overlook it but in the end if we are talking electrification of everything, you just need that copper to generate electricity.

>> Absolutely.

Copper is, I would say, the indispensable metal for electrification.

Your EV car uses copper in the electric motor windings.

Transformers will typically have copper.

Much of the wiring will have copper.

As you are growing smart grids, as you are growing charging capacity, you're going to have to convert from AC to DC, you're gonna have to have step down transformers, computerized systems, switchgear, all of that will have some amount of copper used. And not to mention in construction and other uses as well.

So as we move forward, copper is going to be much more prevalent in vehicles and in the economy than it has been as we are pushing our drive to electrify.

And very much like all other commodities almost, there has been a significant underinvestment in the metal.

And we see very long lags between when you start investing in a mind and when it actually yields material.

It can take seven, 10 years, probably never less than five to get metal out of the ground. And we haven't really seen a large amount of investment in there.

the problem may very well be that a lot of our plans globally to electrify may havethe lack of availability of metals.

>> I was going to say, big demand for copper and silver and other metals but if the price get so high because you don't have enough of it, could that slow down electrification?

>> I'm not so sure the price close it down so much because still, metals make up a relatively small proportion of the total value of a vehicle, let's say, a 60 or $50,000 vehicle, they have small amounts of metal. It could very well be just a lack of availabilityand access to the quality of metal you need to make those devices that are needed.

>> Fascinating stuff. Look at to another question now.

That was a question you saw from the audience go up on the screen about Dr. Copper. Got a question now about your view on platinum.

>> I like platinum.

I think as the global economy recovers, it might go into a deeper slump first but we are in a recovery phase. We think that platinum may well tighten up in its supply and demand fundamentals and the big reason here is it's a metal used in auto catalysts and as automotive production increases, so will auto catalysts demand.

And on the supply side, we have several things happening. We have issues with electricity generation.

Russia is another one where a large portion of global supply comes from. We all know about the sanctions levied against them in the flow of the metal from Russia has been slowed down.

Again, we are not seeing a huge amount of investment.

There's been a lot of talk that platinum demand will die off with fossil fuel cars.

And that's, you know, it will slow down but I think before we go fulltilt into EVs, we are going to go through hybrids and hybrids also have large amounts of platinum group metals like platinum and… Loaded in the catalyst.

And we are probably not getting rid of fossil fuel cars anytime soon. Large parts of the world will continue to grow and we are using morbid per vehicle on average than we have because of regulations, because of clean-air regulations that are now being implemented in parts of the world that never had them.

And supply continues to be problematic. And there's that correlation with gold.

You might've noticed that when gold took off last few days, platinum did well.

And looking way into the future, platinum is a critical metal for the hydrogen economy, for using it to help extract hydrogen from the water, green hydrogen.

>> The platinum has a role in that too.

>> Yeah, and to feedback and electricity form into various fuel cells.

So I think platinum has a future.

We think it's probably going to be the after this downturn because of the significant a tighter supply.

>> I feel you get to know a lot about sides to do your job as well.

>> Well, you know, strategists and economists get to dabble. I'm certainly not a chemist. I can't tell you a lot of the details, but we do look into it and talk to experts who teach us and then we come to conclusions of what that means for the market and demand.

>> You got me convinced, but then again, you are ahead of me on that one.

As always, make sure you do your own research before making any investment decisions.

were you back to your questions for Bart Melek on commodities in just a moment's time. And a reminder that you can get 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're looking to do research on investment opportunities in a specific sector, WebBroker has tools which can help.joining us now is more it is Jason Hnatyk, Senior client education sector with TD Direct Investing. Great to see you. Let's talk about WebBroker and how it can help you find some investment if you are thinking about sectors and industries.

>> Thanks, it's always a pleasure. As for guest has described, commodities can play a major part in our interconnected global economyand I will show us how in WebBroker.

Under research, we have screeners.

You been here many times on the segment in the past but continues to deliver value.

We can screen for stocks, specific technical events as well as mutual funds and ETFs.

We will focus on ETFs today. This gives us an opportunity to get exposure and diversification within different sectors. You my whole arm's-length list of different individual securities.

There is predefined screens that are here but today we are going to walk through creating our own custom screen which can be accomplished over on the right-hand side of the screen.

On this particular page, we have the opportunity to choose a geographical location.

Let's go all over the board here.

Then from the next part I would like to show us here is under the fund type, if we add that criteria to our screen, we have now the opportunity to break it down even further, so we are focused on commodities like our discussion is here today, we can go ahead and add that in. There are 122 use specific commodity ETFs available to investing directly in Whataburger. To narrow that down maybe a little bit further, I'm going to choose the ratings and risks option. Here we have an opportunity to allow MorningStar… We can choose funds from this particular rating agency movie to highlight funds that are well performed based on their own metrics. Let's choose the top two categories, four and five stars.

We can see on the right hand side now our matches have continued to whittle down and based on just the criteria we've got, we have a different ETFs that meet our specific requirements.

Let's go ahead and look at those.

One of the nice things here to save time for the future so you don't need to always be re-creating the wheel when we are creating our screens, at the top of the page there is a safe screen option so we can have quick access to this if we want to run this tomorrow or next week, whatever is appropriate.

Now down below, we happen to have the eight results that we have. We can compare them in this regard.

But one of the nice ways here is you can dive deeper into that comparison through choosing these checkboxes over here on the left side. You have the opportunity to vertically stack and rank each one of these or horizontally is stack and view these right next to each other.

So we can get a sense of what these commodity ETFs are all about, how they are performing and so we can start to get a little bit more information so we can make an informed decision.

>> Alright, so start to put these elements together, get your screens together. How does WebBroker continue to help you monitor the results of your screen?

>> Yeah, that's a great question.

So, we've got our information. We've now kind of got a list of but we might not be ready to act on our choices right away so WebBroker allows us to monitor and follow through with some of that over time.

So let's jump back into the platform and I will show you how.

So one of the really useful tools is our watchlist tool within the site.

The way we are going to add these results directly into that list is by clicking on the name of each of these particular funds.

We are able to do a bit of additional research.

We get a quick chart on this year.

But the future I want to point out is this a little start here that says add to watchlist. If we go ahead and choose, we have the ability to create up to 10 watchlist within the platform. I'm gonna go ahead and select this list here at the bottom.

We choose that and go to our watchlist.

This one happens to be full. Let's choose another one here.

Once we've gone to our watchlist, you'll notice that we've got, looked like I've added a number of times.

What I want to show off to everyone is now we have an ability to customize this list so that we know what we are looking at. We will name this commodities.

That is a way we can save this for future reference.

But beyond this, we haven't really… If you're not ready to jump in and get some actual skin in the game for a particular investment but you want track to see how things are unfolding since you been able to identify that trading opportunity, this tracker function that's on the platform allows you to actually enter a simulated trade, so you can see and track, if you been successful, it might've been a worthwhile trading opportunity to follow up on.

You can go ahead and enter a particular quantity of shares.

Maybe it was gonna buy 100 and then buy it at the average price that is currently trading at now and then I'll be able to come back to this watchlist with the name commodity. I go back to the tracker function and now what will track my success and how I've done.

Maybe it will give me the confidence to act on my own information for next time.

>> Great stuff as always.

Thanks for that.

>> My pleasure.

>> Jason Hnatyk, Senior client education instructor at 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, including women and investing.

Before you get back your questions about commodities for Bart Melek, 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 Bart Melek, taking your questions about commodities.

This one is about China.

Has China's demand for commodities returned?

Do we have another question that just came in a few seconds ago saying, will this demand drive commodities inflation?

>> I think ultimately demand will return.

I think it is returning.

It has slowed down a little bit.

But I think is the economy in China normalizes after the covert shutdowns, activity should move back to normal.

Yes, they are performing less robustly than I think many have thought.

Officially, they are talking about 5% growth which is disappointing.

By China standards,… Disappointing for them.

That should help commodities across the board.

Things like copper, zinc, nickel I think will all benefit. I think for now, we have a slow phase.

But as the world recovers a and D export markets recover, domestic demand really takes off, metal should do well.

But I think big, I think a surprise for many has been what is likely to happen to oil demand from China.

Well, they are travelling again after being locked out for so long because of COVID.

The population there is growing.

Jet fuel demand is surging and along with other sources of demand, we predict that compared to the lows of the first three months of this year, over the next nine months or so, we could see as much is 1.

2, 1.5 million barrels of demand return to China and that's going to tighten up the oil market quite a bit.

But on the supply side, we really don't have the excess capacity or the willingness to increase production at that tempo.

So we might see higher prices in energy in particular in the second half of the year, we think.

And that is something that I've written about as well in the last few weeks.

>> When you much production capacity, it makes me think about something I haven't talked about the well.

Other things have been stealing the headlines.

OPEC, what's their role in all this?

OPEC continues to be quite disciplined.

It might be quite surprising but it shouldn't be because only Saudi Arabia and the United Arab Emirates have the spare capacity and they continue to be quite disciplined.

They know very well that if they just keep up with demand growth, which should be robust as we move into the recovery phase in the third, fourth quarter of this year, it's probably going to get worse before it gets better, that they benefit on price if they don't overdo it on the supply side.

And it's not like they have a lot of competition.

We are facing all sorts of labour shortage in the US oilpatch, in the shale.

This year will probably be disappointing.

Next year might even be much more disappointing in the markets are forward-looking.

Not only is there a labour issue in the Western US oilpatch in particular, but there also is a lack of investment in capacity.

if you look at the financials, the firm to be covered, we aggregate them and look at what's happening, the cash is actually used for paying dividends, repaying debt, which is pretty much none, and buybacks.

A relatively small portion is used for new discoveries and new capacity.

The assumption has been that markets… It's probably wrong that we are going to get off oil. We may, but it's not going to be next year or the year after. We are going to be using oil for quite a while. This transition will take time.

And for the meantime, if you don't see the investment that keeps up with global demand and OPEC that controls the spare capacity, prices might be surprisingly high, I think.

>> Fascinating stuff. Let's get another question now, this one about geopolitics.

A viewer want to know, what geopoliticalareas are you keeping an eye on?

>> An important one is Russia because of its oil, palladium, platinum and nickel, and the other one is China because it has been helping to drive gold.

Then there's the situation with Russia.

Let's start off with gold. Last year was the highest level of official sector purchases, central banks and central-bank affiliates.

>> They want physical gold.

>> Physical gold.

400 pounds bullion bars.

I think it was 1100 and the little bit, which brought the gold reserves to the highest levels since the system broke down. And we are seeing actively that the proportion of US dollars and global foreign effects reserves is declining relative to gold.

So we are seeing central banks around the world by gold and part of the reason is geopolitics that non-Western affiliated nations in some respect are concerned that they may fall victim to Western sanctions and their US dollar reserves may be rendered useless. Certainly, that was a problem for Russia.

Russia had a large portion of reserves being held in gold and probably benefited where they swap gold for credits in other central banks and so on.

and I suspect with Taiwan being an issue potentially, not saying anything is going to happen, but the tensions are certainly there, it would stand to reason that the Chinese central bank, which is very little gold relative to its $3 trillion worth of reserves, may want to beef up. After all, US, Germany, France how well over 60% in gold as a proportion of their reserve.

I think China is just over three.

So other countries as well that you know for geopolitical reasons but also for trade reasons. As trade relationships move towards non-Western countries and perhaps over time more… You might want to hold a larger portion of reserves in something other than dollars.

So far, gold seems to be the choice.

We are actually seeing the Central Bank of China start to report gold purchases. We are seeing activity in other parts of the world as well where central banks are buying gold. We probably won't get as much purchases as we did last year but it's not going to zero. It's still going to be very high.

>> Fascinating stuff. We are going to get back to your questions for Bart Melek on commodities and just a moment 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 any time. Just email moneytalklive@td.com.

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.

for all the drama we've had in recent days about US financials, I personally had almost forgotten that we are getting a read on US inflation. Pretty important for the markets. We go on for this morning but it was in line with expectations but it could compensate the Fed's decision next week about race. Our Anthony Okolie has been digging in and taking a look at some reports coming out of TD.

>> The latest CPR report shows that inflationary pressures still refuse to go away.

While inflation rose in February, it remains stubbornly high. Month over month headline inflation came in at +0.4% in February, which was in line with expectations.

On a year-over-year basis, headline inflation came in at 6%, that's down from the 6.4% that we saw back in January.

Now this was the smallest annual gain since September 2021.

When we exclude food and energy, consumer prices came in at 5.5% year-over-year, while core prices rose about half a percent. That's slightly ahead of January 0.4% gain.

While Americans paid more for gasoline and food prices, they also paid it at a much slower pace than they did back in January. Meanwhile, US consumers also paid less last month to heed their homes and prices for medical services.

But price growth across services accelerated last month.

Particularly shelter costs, which makes up about one third of the indexes waiting, actually jump to .

8% in February.

Now this was gained in strong gains from rent, primary residence, and others. One positive trend that we saw in the data is that core good prices were flat in February. Again, we are seeing a shift from services, from goods to services and that's kind of driving the weakness in core goods.

Many Americans paid less for things like used cars.

However, on the other side, good like furniture, clothing and new cars it did rise in February.

Overall, TD Economics says that this CPR report along with other recent economic data points when economy that can support further rate hikes.

They believe that if there is no further contagion and financial market confidence is restored over coming weeks, TD Economics is looking for a 25 basis point rate hike by the Fed next week.

Greg?

>> A lot of interesting details there.

Obviously some pretty key areas for people including households.

A food, they are paying more.

How confident is TD Economics@inflation can keep heading lower given these pressures?

>> Service inflation is most tied to the labour market asking the key to overall inflation coming down.

Here's what Beata Caranci, TD's chief economist, talks about regarding what the Fed will be watching closely for signs that inflation is waning.

> When we look at those numbers, we are focused now on what's the core services.

The Fed has mentioned this and they are taking out things like shelter costs which we know are super sticky but you can see that red rates are coming in.

That will turn over time.

So let's look at everything else and all of those service costs that are related to the business cycle and the job market. Those are sticky, and so that tells us that until the job market cools, it's going to be very difficult to get wages to cool and that in turn makes it difficult to get prices to cool.

>> And of course, you can see more of this interview with Beata on MoneyTalk BN and tomorrow night.

>>money talks Anthony Okolie.

The TSX Composite Index is up fairly firmly, up more than 1%. We are seeing a bit of rebound in some financial names, including Manulife today.

Let's check in on that one. Right now you got Manulife up to the tune of about 2%, putting some points on the top line number.

Gold had a pretty good run in recent days.

We talked about it on the show. Some of the gold-mining names giving a little bit back today.

They had a previous pop in recent sessions as well.

They are down about a percent.

South of the border, definitely a risk on appetite today.

The S&P 500 up 1.8%. The tech heavy NASDAQ fairing even better, up to and 1/3% at this hour.

Some of those bank names we saw get hit in the turmoil, the wake of the collapse of Silicon Valley Bank and others getting a bit of a bid back today. Got Charles Schwab up a little more than 10%.

We are back now with Bart Melek from TD Securities, we are talking commodities. Lots of questions coming in.

Someone wants to hone in on some of the conversations we've had on the show about oil. Where do you think oil goes from here?

I was looking at a chart this morning.

>> It's probably not a big surprise because we are still in a fairly slow period, particularly in China, but where prices go, I think is the market tightens up in the second half, over 90, 95.

Who knows? We think Brent could hit triple digits by year end. Much will depend on how the recovery happens, how quickly the Fed pivots.

So several things that are important.

Of course, the supply and demand balance is key but also positioning will matter.

If we all of a sudden start seeing a lot more liquidity in the market when the Federal Reserve is talking about rate cuts earlier than we thought, we could see speculative interest or positions go ahead of the actual demand and move that market and overshoot.

So we think and $90 plus the second half is quite feasible for WTI and 56 dollars a bit more higher for Brent.

>> Before I let you go, I want to ask you, you were at the PD AC conference.

General tone, mood among the buyers?

>> Well, it was quite refreshing.

People were coming back after COVID and I think the general sentiment was that the metals market in particular are entering a supercycle where the combination of fairly weak supply and surging demand for some of the key metals we were talking about ultimately means that prices will be significantly higher, these critical minerals that are now used in battery plants now, in Ontario, will be difficult to source.

Prices will have to go up to incentivize miners to take the risk.

so beginning of a supercycle in the next few years, I think that has been somethingthat the PDAs see participants were talking about and enthused about.

>> Always great to get your insights from the front line.

>> Thank you so much for having me.

>> Our thanks to Bart Melek, global head of commodity strategy at TD Securities. Stay tuned. On tomorrow show, David Toung, Senior analyst with Argus Research will be our guest taking your questions about healthcare stocks.

A reminder of course you can get a head start on your questions. Just email moneytalklive@td.com.

That's all the time we have for the show today. Thanks for watching. We'll see you tomorrow.

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