Ben Gossack – 06/21/2022

(Music) Hello I'm Greg Bonnell. Welcome to MoneyTalk Live. Brought to you by TD Bank. We want to answer your questions about investing. Coming up on today's so. We will speak to Ben Gossack manager of TD asset management, portfolio. In today's web of broker education, Caitlin Cormier will be speaking with us. You can email us at moneytalklive@td. com or you can fill that viewer response box under the video player here on web broker. Before we get to our guests today let's get you an update on the markets. Of course yesterday was the Juneteenth holiday in the states. Let's take a look at one of those names, Baytex a little over 2%. ^... ¸The S&P 500 right now more than 2%. Again, technology, some energy names are playing into that trade so let's check out the NASDAQ. The tech heavy NASDAQ. It's up even firmer. We are going to rounded up for the NASDAQ 100 among some of the big tech heavyweights getting in today including Apple. One of the most actively traded names on Wall Street. About $136 and change a share. And that's your market update. We know is investors the market has had a rough go so far. According to our featured guest today, here is been go suck portfolio management at TD Bank asset management. As we live through this is investors this year, some people I forget that protecting stocks is not cheap. >> Thanks for having me today I know it's a green day today and I don't want to spoil the party. We have seen ^...¸in the S&P 500 and the NASDAQ. 35% drawdowns, 25% drawdowns in an many cases we have seen stocks go down 50 to 60%. People always say that this is one of these weird industries were anything else that you saw, goods that you like, a car or T-shirt or something down 50% is an automatic bio. Yet in our industry with stocks down 50%, we start to ask questions as to why. I think it goes back to it's not the same item. Because we are always projecting forward. I think that's the big message that I want to share it. Is that when we look forward, we look at forward earnings, the surprising thing I think for most people is that earnings projections are actually higher today than they were at the start of the year. Which is very surprising given how we talk about a recession, ongoing crisis in Europe, the COVID-19it seems like things are slowing so how can we be projecting higher? It makes it look like the stock market is cheap and what I'm saying is it's important to understand to look at these earning projections that are being forecasted by the market is maybe not being correct. >> What do you think the underlying dynamic is there? Companies digging in their heels. We actually see better times? There is no shortage of risks. A big reason of the selloff is the central banks get a little too aggressive on tightening in rates. Knock ourselves over to our recession. >> So like we faced in February 2020 when we had a novel virus come out, what did that mean? Governments want to lock us down. What does that mean to companies? What companies can survive? It's very reminiscent today. Is there a soft landing? A hard landing? A recession? In the consumer holdout? I think it raises a lot of questions as to what that pass can be. Having said that, their earnings projections having come down, it's because the management teams have, I think they are holding out hoping that things will turn better. When we will see all of this come to fruition is in July. We see a little bit of that. Microsoft is come out and said "hey, we sell a lot of software outside the United States and the US dollar has been very strong which means our overseas profits are getting smaller. We need to take down guidance." We saw that with Adobe last week. Slowly trickling in. But it is concerning that when you look at analyst projections for any given stock, the earning variability's, the lowest and highest forecasts are very tight. So it means without dispersion, everyone is kind of thinking along the same lines. And you want people to have different forecasts. So to give you an example, the S&P 500, probably in the next 12 months is trading about 15 times more earnings. That's basically fair value when we look back going to the 1970s. But those numbers are going to start to come down. The question is that we are all trying to figure out his how much has Artie been priced into those stocks. In terms of the fact that it is a mild slow down or is there more to go. ^... ¸>> There is no alternative. With things shifting, do we have alternatives? >> There actually is an alternative. It did feel that with interest rates, prior to the pandemic, the US government came in at 3%. Even back then we said "okay that is not in the field." That almost fell to zero. Yes, in that environment there really was an alternative. I think that is why lots of stocks seesaw. They sort of run up really high. But now is a US government bond above 3%, never ^... ¸there is a new alternative, it's US treasuries. In some cases it might be US corporate and I think in many stocks, you are seeing them fall to the 60, 70% because they are too expensive. Not because they didn't have a good plan. Not because they are not winning new businesses. Many of these companies are still growing top line 10, 15, 20%. You have great management teams. It's just that now there is a discount factor. So there was no time value of money during the last three years. So a dollar today is worth a dollar in 10 years. Now, a dollar today is definitely worth more than a dollar 10 years out now. We have it we have to discount that back and I think that's being forgotten. Overlooked by many people in the market. >> Been in this environment, if you want to be down in the markets it's easy to find people to sort of support that view. Is that overly fatalistic? > So I think when you think about issues going on in Europe. And you're like "how can they avoid a recession?". We look at the supply chain and issues in China. You're saying how long can they persist with this COVID zero policy. Because it just impact supply chains and it's pushing up the costs of all sorts of inputs. When you think about the central banks around the world, trying to address inflation, I think we can debate whether higher interest rates would pull more oil out of the ground. Whether that would make milk cheaper. And at what cost. So let's bring down this inflation. Will that cost job loss? Will that cause people to stop spending? All this uncertainty. But to your point, I am arguing that that's kind of the consensus. So we see that an investor surveys, we are seeing that in how people trade option contracts. So this realization that it is easy to get barish. But that feeling and consensus makes us wonder if there is stuff to buyer opportunities. Things that have been oversold. Again, we have a very quality bias. So we are always looking for opportunities to buy quality companies at lower prices. But if people are feeling very negative and worried, a lot of people are feeling that too. So you don't have this special lens or global or compass that is not being thought of in the same way as other market participants. >> That definitely sounds like one of those, the adage of sharpening your pencils. What everything was going up. It was easy to make money. You sat back and it sounds at the moment were you really have to do your homework is now. >> Absolutely. Because there are so many things going on. You could say that stock prices are down 60%. Okay… Will it reach that high level watermark that it was before? I think there are a lot of questions as to whether or not it can do that. Specifically lira companies like that in the tech sector. Then there are opportunities in terms of whether or not we can see recoveries in it certain area. As the economy been impacted the same way in some areas versus others? So we have to put on the little reading glasses and sharpen our pencils. There are always opportunities in the market. Having said that, I think a key message here is that you're going to hear a lot of people saying the prices are cheap. Evaluations are cheap. The key message is that they look cheap because we haven't brought down the estimates. Start to watch the estimates come down. What I'm actually really looking forward to is we have seen bad news a stock prices go down. The key tell will be bad news comes in stock prices go sideways. Or they rally. We are not at that yet but that would be a key tell. That will be something I be looking for. A milestone to say that we have started to absorb a lot of it. A lot of this negativity. We are not at that yet. But those are the kind of things I be looking for. >> Interesting stuff indeed. We will get to your questions for Ben Gossack portfolio management at TD asset management. You can email us at any time just email moneytalklive@td.com or Phil at the viewer response box at the video player right here on web broker. First I want to get you updated on some of the top stories in the world of business. Take a look at how the markets are trading. It appears inflationary pressure didn't stop Canadians from shopping this spring. Retail sales were up 0. 9% in April. Compared to a month earlier. Stats estimates from May point to a 1. 6% increase. TD economics says overall consumer spending should hold up reasonably well over the Summer months. Although it will shift to some goods to services spending. That said, TD economics says consumer spending should slow up into 2023. Higher borrowing costs pressures along with housing markets. Kellogg is planning to split into three separate companies. One on snacks, one on cereal and one on plant-based foods. They say this move will unlock the full standalone potential of the three business units. Nearly 60% of net sales come from the global snacks division. With Kellogg estimating that revenue would more than $11 billion in snacks last year. The plan will see Kellogg hair shoulders awarded shares in the spinoff companies based on their current share of Kellogg holdings. Elon musk says there are still some unresolved issues in some deals the house to buy Twitter. Apparently the number of spam users remains a very significant matter. Musk says dead financing and the approval of Twitter shareholders were among some of the other unresolved matters. The Tesla CEO who made the comments of the Quatar economic form, said it appears more likely get this doing a quick check now on Bay Street and Wall Street with the benchmark index in Canada. The TSX comps now. A little more than half a percent. Building on yesterday's gains. A little more for Americans off yesterday for the holiday. That broader REIT of the American market. Showing some strength as well. Energy names and technology names on both sides of the border are showing some strength. You have the S&P 500 at a little more than 2% of the sour. Alright let's get to our questions for Ben Gossack right now. The first one coming in on the platform. Viewer questions. Let's talk about stocks that have beaten up off the top. The question about Shopify. What is your take on this one? Where Shopify was trading in November of last year and now. > I think many companies like Shopify rallied and benefited from COVID. From us locking down. People basically pulling forward a lot of featured profits into the last three years. I think it's been surprising for a lot of people to say the stocks of fallen and fallen below the tree COVID level peak. I think this goes back to what we were talking about before. About how there is an alternative. There's nothing specifically wrong with Shopify, with their business strategy, with their management. The issue that we are seeing right now with Shopify when we do our back of the envelope math… When we give them full credit for their growth going onto 2024 or 2025, we take that earnings and anyone can look that up online, those are pretty much public. We put it over the current stock price so you get what is effectively the earnings yield or the inverse of a PE range. Ratio. I think people know what that is. You compare that to let's say a US government tenure or a five year and it's trading below that. Which basically says that the government bond is cheaper. And then when people think of government bonds, they think of secure, stable payments and so this is where I go back to saying there is an alternative. >> Yes. >> Nothing against Shopify or any of the companies that have benefited from COVID but what is happening right now is they are too expensive. So what people have done is they've had to make that adjustment. Again, nothing is wrong with the company. So you're going to see people say that they have new contracts : new partnerships. All that's true. It goes back to us saying that we gave you full credit for your growth throughout the next 10 years. Now we have to start discounting that. Because there is such a thing as time value of money again. So on that measure, they looked expensive relative to bonds. > Very interesting. Let's stay with e-commerce. Based on that. Amazon obviously a recipient during the pandemic and for good reason. He was told to stay in your house and you did a lot of shopping online. But at the same time the same company that is not really going anywhere. How should we think about Amazon? > We will talk specifically about Amazon. We will talk about many other companies like Amazon. They saw a massive demand. We will call it impulse into their business because of COVID. So consumers had to change their behaviour. That put a lot of strain on these companies. So they started to have to invest and build to meet that demand. I think the hardest part for many management teams. … We can play Monday morning quarterback but how much is that going to sustain itself and how much of that was in overshoot because of, again, a situation where people had to spend and spend on goods. Specifically with Amazon, they literally re-created all their work in building up all their square footage is in all their warehouses and they did it in a matter of two years. So they said, let's say you have 100,000 ft. 8, I'm going to add another in two years time. That created a tremendous amount of capacity. You need to staff all that capacity. It just so happens that, as these investments of kind of near their end, people have alternated their spending behaviour. We don't want to buy goods. We have enough stuff in my house. I want to start spending on services and I want to do experiences and I want to travel. So you have made this investment and you are not getting a great return on this investment. So you thought you were going to have kids, you built a whole bunch of extensions on your houses… Now you just have the two or three kids. Maybe a dog. But now those rooms are empty. What you do with those rooms? So it's unused capacity. Effectively for Amazon has to work through that. It's a painful process. So, the stock market has basically said "okay now we are going to penalize you for all that investment." Knowing Amazon, again. … Everything about Amazon, the cloud, all that type of stuff is good. It will take some time for them to work through this capacity. That's why you see headlines about them trying to take some of their square footage and subletted. It's a sign that they overbuilt and the demand has not come through. > Alright while we were on the tech names right now, one of the things that will come up in recent months, a lot of them splitting their stocks. How does that impact those stocks? How does that impact the markets? >> Stock splits are one of those things that can drive PMs and analysts crazy. Because effectively, you took the value of the company and you just change the divider. So either of the stock split or reverse stock split. You were just changing the amount of shares and so you are just distributing the value. Rather spreading out more, concentrating it. But you didn't change the company. The market didn't change. Nothing changed. Having said that, especially for people with the options, one options contract is 100 shares. If you have a stock that shares and trades in $1000 or $2000 per share, that happens in Brookshire. I think it would happen for Apple, definitely Amazon and Google… You get, again, an appreciation for the business model and the market rewards them. For someone to buy one quick contract requires a good significant capital outlet. So seeing a stock split reduces that cost. It means more people can participate with calls. > A retail investor right? >> I've launched a fund recently, a few years back. We had challenges in trying to generate income. Or input. As you try to grow your portfolio, before we get 100 shares of Amazon… I do think it affects institutionally. But you're right. It will affect retail more. But from an enterprise and value perspective, I'd say from a utility perspective and a different market participant, I would argue yes there is some value in a stock split. But yes. It would be short-lived. But we definitely have seen that with Amazon and Google is coming up for their stock split. >> Great insight on that one. We will squeeze in one more in the retail space. But on a different game here, brick-and-mortar about dollar trauma. >> I think dollar drama got a recent boost in headlines. The fact that it used to be dollaramma. I think now they call it five dollaramma. Is it a mission of their model? Sure. But I think when people create forward earnings estimates and projections, the fact that you could slowly lift your average cost of your goods I think is a positive. I'd say in general, for the space for consumer discretionary's, looking beyond Dollarama and retailers, we've looked from staying away from that area. Shifting has been really expensive. It's been really hard to bring goods overseas to fill your shelves. Many companies have had to overpay for their inventory. So again, just to give you an example, to bring a container over from China to the United States may have cost $1000 on average. Again we are not talking about averages. We are talking about 10 times. So 10,000. 10 containers is $100,000. That's a big outlet. The big companies will do it. It comes up the expenses from retailers. But every company that is overpaid to fill their warehouses, to folder shelves, filling the company's major retailers, Walmart and Target… The list goes on. The supply chain was so delayed that nobody wants those goods anymore so maybe your Halloween showed up all of a sudden. It fits in the wrong time. People want more formalwear versus sweatpants… People are travelling… Gasoline and food is eating into people's wallets. So yes, I think there was a boost for Dollarama in terms of the future can be. But in terms of the future, we are a bit reluctant until we see this inventory come through and then a wash. Because the only way you can get rid of this inventory, Greg, is to discount. And that affects your margins. That impacts your earnings and you will see the stock price adjusted from that too. > Back to your questions. Make sure to do your own research before making any investment decisions. Were going to take that break from questions to remind you to email us here for any questions. If you are looking for information on to whether a stock pays a dividend or not, web broker has tools that can help you. Joining us now Caitlin Cormier instructor at TD investment. Caitlin always great to have you on the show. You are on web broker, where can you find dividend info on the platform? >> Make you so much Greg. On web broker, we are talking specifically about doing research and now you have an idea of the software you want to purchase. We just want to find out more about this. So what we want to do in this case is click on the research button here. The second one. We're going to go under investments and click on stocks. So in this case, it's going to bring out whatever stock we had last. But I'm going to search for a stock that I know pays a dividend. I'm going to type this in here and bring out the Canadian one. This page in general on research has a ton of information about this security. You can find a lot of great stuff within here. What we're going to look for specifically as we are just going to scroll down on the right-hand side and we are going to look at the fundamentals. We have a lot happening here. We see revenue, market captures. Outstanding. We are looking now I dividend yield to see what the dividend amount is versus the price of the share. We are looking at the annual dividend rate than what the actual dollar value of the dividend is for this company as well as the ex dividend date the payment date. So all of that information is actually available right within the research page here on web broker. >> All right. Caitlin that is useful advice as always. Another question is paying consistent dividends of course and if increasing that dividend over time… Is there a way to see that? >> Absolutely. Also a very important thing to make sure we have a consistency with the company. For example, we are going to scroll up a bit further back to the top. I'm going to click on our events button here. Right at the top of the page, the events tab. This is going to bring us to a spot where we can see the past dividend coming in. Here it kind of defaults to earnings announcements but instead I'm going to click on dividends. This will actually show me the past 20 references of dividends. The dates, the amount so I can see that it is increased over time. I can see that it is a quarterly dividend that the company is paying so that means on a consistent basis and has not missed a dividend payment at this point. So it gives me a lot of information right there. So I can kind of do that check and make sure that they are increasing the dividend and that they are making the payments consistently. >> Always great information. Caitlin thank you for joining us as always. No problem having me here. >> Caitlin Cormier. Instructor at TD asset management. Once again a reminder of how you can get in touch with us. You have a question about investing or what is driving the markets? Our guests are eager to hear what's on your mind. You can email us@moneytalklive.com or but a question here underneath the screen in the box. We'll see if we can get you an answer here at MoneyTalk Live. We are back now with TD asset management's Ben Gossack we are talking about growth. We're talking about the strength of the US dollar. … The core earnings. should I focus on core earnings? Fluctuations…? >> I think when it goes back to is what we were talking but at the beginning which is are the earnings forecast being projected by let's say, Wall Street or Bay Street correct? And I think the question is apt. So we have seen a higher dollar. We know many companies derive their revenue and earnings from overseas. That is a… We have seen that confirmed by Microsoft that it will bring these costs down. We have seen interest rates go up. We have seen credit spreads widen. Why is that important? Companies of the finance growth and so that's going to impact their margins. We have also seen the cost of bringing goods impact margins and so yes, you would expect that to come down. Whether that is core or real it's going to impact earnings. So, those are all things to be aware of. Now, it all depends in terms of 2023 where the dollar goes. Were interest rates go. As we have seen even with the dollar or yen it gets weaker and it can get even more weaker. So I think right now, the dollar strength is a reflection of the other currencies that it trades with. I always find when people ask about the dollar, they care about the dollar versus the Canadian dollar. So surprisingly, while we have seen the dollar perform against the euro, the yen, it's been effectively sideways versus the Canadian dollar. I think that's a reflection about the fact that there are a lot of issues in the world and a lot of concerns. The Canadian stock market does benefit from arising gasoline prices in oil prices, commodity prices. So that is help to keep the dollar versus the Canadian dollar in check. We haven't seen that weakness that we have seen versus the rest of the world. So, yes. It's important to look at a bunch of things. I do want to say just because the dollar went this way this is what will happen in 2023… It could get weaker. He could get stronger. But to be watching the dollar getting stronger is a reflection of the fact that we still believe that the earnings forecast would have to go lower. I think that is an important message. >> Another question coming in. This one coming in because for so many of the pain points in the market this year and broader industries without a really good run… What is the outlook for the sector from here? >> Yeah. Energy has had a great run. We've seen it perform well in Canada. The Canadian stocks, the US stocks, the European stocks. Actually, common interest as we have had a sort of upward trajectory. When I look at the US and energy sectors, actually had a 20% correction in the last couple weeks. It kind of went up really high. We've seen the 20% direction has not changed the trend. I think the big debate right now, I think we can all agree that there has been underinvestment in terms of extracting more energy out of the ground. We can debate all the issues as to why that happened. I think we can all also understand that you can't just turn these wells on. And so a lot of times people say the cure for high prices are higher prices. Which means supply will come on. But to spin up a new well could take… I don't know… Six months at best. Maybe a year. So that will take some time. Having said that, we talked about rising interest rates and what output that would have on the economy. Would it slow down? Are we entering a recession? How deeper recession? That means energy. When I think of GDP growth, I think… >> We're looking for secular trends. Companies can perform any given order and manage expectations in terms of hits and misses and stocks will go up and down. But a secular trend is something to, three, four or five years out. It could be about demographics or digitization. Specifically with Freeport, … If we want more electrification, electrification requires moving electrons. Electrons like to move on copper. So Freeport surprisingly, I think is the only copper company on the S&P 500. We might've a few more on the S&P TSX. But that's really the only majorly publicly traded one. So yes, we are looking at a very long term opportunity for Freeport to benefit. If you and I say "hey, EV's require so much more copper, let's start up our own mind," what we would face us is 10 to 15 years for us to put together the capital to date to order and extract copper in the future. So, that means that for a new supplier to come on board, we should have been investing five, 10, 15 years ago. That didn't happen. So there will be a supply and demand mismatch in favour of copper companies. Does that mean copper can't trade lower because China might not be building infrastructure? >> I wanted to ask you about that. One of the risks in the space? >> Supply and demand mismatch and there will be more demand and less supply… Having said that, if we are slowing down, there is going to be a depression for copper demand. If China doesn't invest in infrastructure to reproduce their GDP with this COVID zero policy, you'll see in the near term copper and Freeport and stocks like them fall 10, 15%. Absolutely. Will that cause people to panic? I'm sure that because of some concern. Where again we have to look at the three, five, 10 year time frame. Is this secular trend real? We do believe in electrification and decarbonization. It's about working with the short-term versus the long-term. >> When we talk about electrification, we talk about TVs. Other interesting spaces? Those cars in the batteries? >> We've looked all the different materials and metals that go into it. ^...¸there are specifically industrial companies that will benefit that will replace the infrastructure to handle all of us trying to do good in driving electric vehicles. >> Picks and shovels stuff. I always love that argument for stuff. Were going to get back to your questions for Ben Gossack, TD Bank asset management. Reminding you you can write us your questions anytime. Give a question about investing or what's driving the markets? Our guests are eager to hear what's on your minds and 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 this screen here on web broker. Just writing your question and hit send. We'll see if one of our guests can get you the answer right here at MoneyTalk Live. TD economics has released a new quarterly forecast for the Canadian economy. The title? It says it all perhaps. A thin margin for error. Does it? Money talks Anthony Okolie joins us now to tell us more. Anthony. >> Though TD economics is not predicting a recession despite weak economic forecast. They see GDB expanding 4.4%. That's up from the 3.1% of the first quarter. TD economics does expect that the economy will cool down later this year with GDP growth only going at 1. 6% in the fourth quarter. Now, on the forecast of an imminent recession. It's based on some key forward-looking data that they looked at. One, the yield curve. Right now it is positively sloped. Second, indicators like … Third, the labour market here in Canada and the US. There still tight. TD economics does know that with growth close to stalling, there is a very thin margin for error. If another shock its economies. Now, in terms of some other expectations to the economics. Expect further rotations into services through the third quarter of this year. On housing, basically the impact of higher mortgage rates slowing residential investment significantly this year as well as into 2023. On interest rates, they expect the Fed and the Bank of Canada will both hike interest rates to about 3 1/4% by the end of this year. And finally, on currency. They expect some improvements in the risk off trade which could see the loony potentially, potentially rally against the dollar in the US. >> One of the big concerns of how we are going to react as consumers to inflation. Anything in the report about some of those inflation expectations? >> So far we are not seeing everything any evidence of that Greg. When you look at pricing for Canadian and micro-pricing for Canadian inflation on the horizon, it's still pretty stable. It's still in line with expectations. Back in March. That indicates that there is still a strong Canadian banks inflation. >> Great stuff as always thanks for that. >> Thanks. >> Money talks Anthony Okolie. Let's see what's happening on Bay Street and Wall Street. TSX comps… During the lunch hour we are seeing somebody movement and the energy names including Athabasca oil, one of the most traded stocks right now on Bay Street. Almost up to and 1/2%. The S&P 500 is in rally mode right now with Americans back from the holiday of June 19. Let's check on the NASDAQ. Fearing a little bit better as three quarters of a percent. Text sides on each side of the border today. We are looking at Kellogg's. Of course that news of them splitting into three companies. No names for the three given divisions just yet. Stocks at 69. About 3 1/3%. We are back now with Ben Gossack with TD asset management. >>… I think that's about pent up demand. Many of to cancel flights. While we hear words about retailers, we have actually been very excited about experiences, travel, services and so for us, we don't typically invest in airlines. It's a very difficult and cyclical business. We like payment services they get tied to travel. Hotel wing. Again, trying to think about business and ability to grow earnings and to sustain them through cycles… Yes. That scenario we are still excited about. It is seeing inflation. But it is an inflation that most consumers are willing to tolerate versus let's say, other types of inflation. Be it gasoline, food, certain products. It's just been withheld from people for so much and it's like we will just deal with that cost next year. Or put on the credit card and work it out. But we are definitely excited by travel. Still excited by it and we still think that has an opportunity to continue to expand. There's way too much demand, very little supply. >> With all those reasons you gave us, our people wanting to travel? Huge cost for the airlines obviously. The price of fuel. That is been through the roof. >> Again yes and it goes back for the margin. For us, we have been not typically concerned with investing in airlines. Again, their margins will go up and down. How much is going to cost for me to get you into that seat? I might have to discount depending if there is supply and demand that affects margins. Obviously, jet fuel cost which maybe they can control hedging, maybe not all over the place. Then going back to our picks and shovels examples, we used to like companies where they got paid every time someone sat in the seat. Well. We know that trend is increasing. So it will flow through earnings and be very smooth obviously. People using their credit cards. It would be tied to the seat but all the spending they are going to do overseas, because now they have an opportunity to go and visit places. Go spend money in restaurants and tour things… There is an expansion opportunity versus just a specific seat. Trying to get somebody from point A to point B and all the costs and logistics that go with that. >> We have a question on the platform. We are all set a time of the show will be doing at this one in. It's what the financials and perhaps where they might be headed this year. We have a few things happening here. Inflation, rising rates, but at some point does the economy turn out? >> Yeah. So I want to be very clear: it's very uncertain as to where we are today as to where the future looks like. So a lot of people would be thinking that we are supposed to know where things are going. If you tell me what the recession would look like I can probably tell you where I think certain sectors and stocks would trade. It's very challenging. So a key message for everyone is, again, have a plan, stick with your plan. Stocks are going to move up and down. Specifically for financial reasons, I think about banks. I question myself as someone who used to cover banks. The day that would the data that we are seeing, are we looking backwards or forward? The Canadian banks reported their earnings recently. So things looked rosy. My question is, as somebody that can sustain itself, US banks, the stock prices have definitely been impacted. So I think the people are worried about is we're starting to see some layoffs. Specifically in the tech sector. The lifeblood of banks is servicing debt. People are worried about financials of banks. That's the Northstar. If we start to see some unemployment pick up on both sides, we are at very low levels. It does feel like a tight layover supply. If any of that calculus or those dynamics change, that will push against it. For now, what people like about the banks, what can you help them, is there rising interest rate. It definitely flows through to the bottom line. It helps them on the margins. So it's a question of the impact about rising rate. Helping the banks versus rising rate impacting their customers and will they have the primitive the provision for credit question what we don't know those answers today. I think the market is trying to make some guesses. Is it going to be one of those sort of day to day, week to week, watching initial jobless claims and people announcing layoffs. That will have an effect of what banks will do going forward. >> Great having you here. Great insights. Of course you next time. >> Thank you. >> Our thanks to Ben Gossack from TD asset management. Always a reminder to do your own research when making your own decisions. … Securities and options in the futures can be substantial. Let's give you a taste of what some of the guests we have coming up for the rest of the week. We are already round on the Wednesday show. Michael O'Brien will talk to us. On Thursday, Alexandra Gorewicz about fixed income. On Friday Monica Yeoung will join us. Thanks for joining us we will see you next time at MoneyTalk Live. (energizing music)