Ben Gossack

[music] >> Hello, I'm Greg Bonnell. Welcome to MoneyTalk Live, brought 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 are going to take you through its moving markets and answer your questions about investing.

Coming up on today show, TD Asset Management's Ben Gossack will take us through why investors may be missing the big picture about what's happening in the markets right now.

Our Anthony Okolie is going to have a look at whether the latest Canadian GDP report shows signs of slowing growth. And in today's WebBroker education segment, killing Courtney is going to show us how you can find analyst research on the platform.

so here's how you can touch with us. Just email moneytalklive@td.com or fellow that viewer response box under the video player on WebBroker.

bEFORE WE GET OUR GUEST OF THE DAY, LET'S GET YOU AN UPDATE ON THE MARKETS. iT WAS A DOWN SESSION YESTERDAY.

sOME MONEY IS BEING MADE TODAY. oF COURSE,all of this is ahead of the US Federal Reserve's rate decision tomorrow. They have entered that two day meeting, they come out of it at 2 PM tomorrow Eastern time.

A lot of people bank on the end of interest rate hikes at some point south of the border this year.

we've already gotten that clear signal from our central bankjust last week, was in it.

20,714 at the TSX Composite Index, up a pretty decent 142 points. That's good for two thirds of a percent. We are seeing some risk appetite today feeding into tech stocks on both sides of the border. Here at home, the obvious tech stock to take a look at his Shopify. At 66 bucks and change, it's up 4 1/2%. Gold been an interesting want to watch ahead of the US Federal Reserve. It's rather flat, at $6.17 per share, got Kinross down a little bit more than half a percent.

South of the border, S&P 500, after shedding some point yesterday, putting on some points today. We will hear from the Fed tomorrow which will be important in terms of the direction of this market at 2 PM Eastern time.

Ahead of that, up almost 26 points, up a little bit more than half a percent.

The tech heavy NASDAQ is of the present right now.

United Parcel Service is upmore than 4%.

earnings miss, warns 2023 to be a bumpy year.

And that's your market update.

It has been a money making month for stocks, but we've also seen plenty of warnings from companies about potential pain ahead.

oUR NEXT GUEST SAYS THAT INVESTORS MAY BE MISSING THE BIGGER PICTURE IF THEY ARE NOT LOOKING BEYOND THOSE NEGATIVE HEADLINES. Joining us now for more, Ben Gossack, Bartelijne manager at TD Asset Management.

Always a pleasure to have you.

> Thanks for having me back.

>> Let's talk about the tone we have seen in the markets.

The first couple of days of 2023 were rocky but it's been a pretty decent start when we look back at the first month of the year.

What do we need to be mindful of?

> Yeah, I mean, we are basically at the end of January.

We are about 5% up on the S&P 500.

I know people like to look at the investing based on solar calendars, so yeah, it's 5% relative to the beginning of the year.

I would say we are still about 15% down from the highs that we last saw. I thought today, you know, the beginning of the year, tech stocks changed over the holiday break.

I talked about what I did over the holiday break.

>> You analysed charts.

>> I analysed charts. Some people went on holiday, but I analysed charts.

You're right, there is still a bearish tone.

We are finally getting a bearish tone for management in guidance and expectations. And there is still a bearish tone in terms of investor positioning.

having said that, over the holidays, going through charts, I saw some interesting developments underneath let's say the S&P 500 or the TSX. One of the first ones that really surprised me was looking at homebuilders.

If you read any newspaper, if you been looking at housing, that something for a personal for everyone.

The headlines can be more atrocious.

So in the US, they do 30 year mortgages.

They peaked over 7%. They are still around 6 1/2%.

That's pretty expensive for a marginal mortgage.

Home sales are down, existing home sales have been retracting for the last couple of quarters. He couldn't get any worse for housing.

And when I looked at housing stocks and companies that are in the housing sector, the worse it got for them relative to THE s&p 500 WAS mARCH 2022.

>> rEALLY? tHAT'S ALMOST A YEAR AGO.

>> tHAT'S ALMOST A YEAR AGO. aND IF YOU RECALL, IT'S IN mARCH THAT THE fED STARTS THEIR HIKING CYCLE. Now, if you look at two-year rates, they had already imposed tough financial conditions, so they were at 2% when the Fed was just making their first set of hikes.

But if you went long with homebuilder, Home Depot, Lowes and you shorted the market, you would have an amazing track to return even though the headlines are getting worse and worse. And what that's telling me is that we factored in the slowdown.

Now, caveat, it could get worse. It doesn't mean that it's smooth sailing or I'm endorsing the housing sector, but it's one of the sectors that are now improving against the market.

It's a bit of a reverse that we saw in 2021.

>> Okay.

That's fascinating.

i THINK YOU HAVE THREE MORE CHARTS.

>> Yes. The next when we move into it is a risk on, risk off indicator.

When we look at risk off, risk on indicators, it's indicating risk on.

One of the measures, again, it's not prescriptive, but I look at discretionary sector versus the stable sector.

So we are a consumer let economy and I look at these as the wants versus the needs.

And one thing that I did in this particular chart is you have to look at the discretionary sector on an equal weight basis.

If you take it as is, it's very dominated by Tesla and Amazon.

And so the results that you are looking at is basically is Tesla up or down or is Amazon up or down, it will not tell you about discretionary as a whole.

we are looking at discretionary versus Staples.

this aligns well with the market.

You can see there was a consolidation phase in 2022.

But if this was a tug-of-war, the beginning of this year, it pulls towards discretionary. And so we've seen staples underperform. We've seen retail come back.

We've seen them whether a lot of the headwinds.

It's coinciding with the tone we are seeing in the market in terms of +5% at the beginning of the year.

I could do this for industrial versus Staples, I'm seeing the same tone. Risk on is outperforming risk off.

>> Very interesting. Let's get to the third chart right now. What you want to show the audience, what does it tell us?

>> Yeah, so I think this is about active and passive management.

It's about how you're going to outperform the market.

What we are looking at is a tug-of-war between the equal weight version of the S&P 500 versus the traditional S&P 500 which is weighted based on market cap.

so companies like Apple, Microsoft, they are the bulk of weighting in the S&P 500.

I went back 10 years, that's a better generation, I went back to 2013.

This chart pulls to the bottom right,which means that the traditional market cap weight has outperformed for almost 10 years. So investors got very comfortable gravitating to this because they were market cap and if you want to outperform that, you just overweights the big market cap companies and that's how we came up with monikers like Facebook, Amazon, Netflix, Apple.

When you look back, you just had to be more overweight than the largest companies in the index. The equal weight is outperforming the market cap.

what that means is it's a big opportunity for the stock market. So that does meanthat you have to look beyond… >> The passive ETF is not going to work like it used to work.

>> Is not that it can't work, but it's an opportunity now for active stock selection.

When I talked our analyst team, they are very excited and they've been proposing a ton of new ideas this year. But it's an opportunity for active managers to provide differentiation, justify their management fees to clients.

>> One more picture to show the audience. What do we got?

What's the finale here?

>> Okay, the coup de grace, the final picture is the outperformance of the S&P 500 versus the rest of the world. So again, we are looking at a tug-of-war contest between US markets and every other market.

This has been probably the cleanest signal I've ever seen, which is up into the right at an almost 45° angle.

Let's call it the last 10 years, you earn better returns on your dollar versus going into other markets.

It goes back to large capital US companies that are tech dominated.

That's what most of these markets lacked.

So there is a change in trend.

It coincides with that equal weight outperforming.

We will see how long this trend persists, but especially for us in our global funds, the marginal dollars going outside the US, it's going to Canada, is going to Europe, it's going to Asia. There is a change in trend.

So people look at their Global Fund's and said, why was it 80% US?

It's because the US had just dominated for so many years.

> So you put those four pictures together, what's the big take away for the audience?

>> I think when it comes to active stock selection, this is the year for managers to shine.

And put on top of that, what I'm really seeing in the market is that there is opportunity.

It's very possible that the S&P 500 or the TSX Composite Index might be down this year as it was last year, having said that, underneath the market, there are opportunities.

We have seen semiconductors bottom, biotechnology bottom, housing bottom, so many of the sectors that nearly crashed in 21 are starting to outperform. So the theme here would be opportunity.

>> Interesting stuff indeed and a great start to the show. We'll get to your questions about global stocks and market trends for Ben Gossack in just a moment time, including his take on CN Rail, Amazon and bear traps.

A reminder of course that you can get in touch with us anytime, just email moneytalklive@td.com our fellow the viewer response box under the video player on my broker.

Right 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.

Shares of General Motors are in the spotlight today, that after the Detroit automaker blew past earnings expectations on strong demand for its vehicles.

GM is also forecasting another solid year of sales, with estimates above the streets expectations.

The stock has really to the tune of 7%.

McDonald's says that customer foot traffic increased in its most recent quarter, pretty stark contrast to the broader restaurant industry. The fast food giant beat earnings estimates, saying demand for its offerings is holding a better-than-expected.

Better than expected even six month ago. Soaring inflation has pressured a lot of full-service restaurants as customers change their dining habits.

We've got Imperial oil saying its profit more than doubled in its most recent quarter. Improved refining margins amid tight supply and higher prices saw net income hit $1.7 billion for just those three months.

Imperial recently announced it would push ahead on a $720 million renewable diesel facility near Edmonton.

We see the stock up a little more than 2%.

A quick check in on Bay Street and Wall Street.

We will start here at home with the TSX Composite Index.

124 points to the upside, a little more than half a percent, making up some of the ground that we lost yesterday.

South of the border, much of the same story. Some green on the screen. Risk appetite growing with the tech stocks getting a bit.

All of this is ahead of the US federal rate decision tomorrow at 2 PM Eastern time. We will see what we get then and how the market reacts.

We are back now with Ben Gossack, taking your questions about global stocks and market trends.

Let's get to them. Still in the thick of earning season.

From earning season so far, any big takeaways?

>> Yes,, we are about 1/3 of the way through.

There will be the F MLC decision, we get jobs at the end of the week.

We have another 30 to 35% of companies reporting, some major ones are coming through.

I would say a couple of highlights, revenues up about 4% but margins continue to be a big headwind, down almost 9%.

And with buybacks, getting earnings-per-share growth of about -3.

The key drivers, if you take out energy, it's worse. If you exclude technology companies, earnings-per-share growth is actually positive. It just tells you what sort of driving things up and down. I would say in general, the reaction to stocks, whether they miss or have been moderate, we've seen that if you really beat coming up for, if you miss, you're down six. We are not getting that this quarter.

What is notable this quarter versus other quarters, typically, as we get into January just before companies report, earnings expectations are down about 4 to 5% compared to a couple of months ago.

We will say that management analysts are just taking down numbers.

Coming into this January, I'd say numbers or expectations are taking down almost 9%, so a lot more than seasonality. We are getting results, but in a sense, we are not surprised.

The other thing is, as companies beat, we take numbers up. We are not taking numbers up.

The numbers that we took down a kind of where they should be, and it goes back to that talk about earnings expectations have to calm down. They are slowly coming down.

>> We have that conversation a couple of times last year.

So this is the quarter, has it finally arrived, we getting a dose of that realism that we weren't getting in previous earnings statements when the Fed was so aggressive and the Bank of Canada was so aggressive with rate hikes?

>> So it is coming down. Having said that, when we spoke, earnings-per-share growth for say 2023 was $230 for the S&P. It's down to 225.

So it's low. And it goes back to the market is expecting the second half of this year to be an acceleration. I think that's a big unknown. Still in the numbers and is one of these ones where someone called in with a crystal ball and tell us what's happening.

That I don't have foresight to know.

> Look at another question now. This one about Amazon.

It's been a pretty tough ride for the stock in the past year. Do you think Amazon's fall from pandemic eyes is the new normal for that company?

>> So going back to what I was doing over the holidays, looking through charts, similar to the ones we talked about. The one chart that really stood out to me was Amazon.

So it's nice that the question is coming up.

But if you look at Amazon relative the S&P 500, it peaked in June 2020.

If you recall, June 2020, we were into the second wave of COVID 19.

There was still no data as to when we would get a vaccine, even if there would be a viable vaccine. And it's as if the market had already known that the best for Amazon was in the cards and since June 2020, it's been and underperform a relative to the market.

It's had a bit of a bounce back this January. What would take Amazon back to let's say a darling, they spent too much during COVID. They spent as if the COVID demand would never end.

And I think what they have to prove to the market is that operating margins matter again.

They've done this in the past. So maybe they need to separate out some businesses, show us some retail margins and show us that all the great stuff about Amazon, such as cloud, was not just being used and subsidized and overspend on on the retail and commerce side. We will see how the report. If they start showing us more clarity on operating margins, then the gains that we have seen so far this year going to continue.

>> Is that Amazon story one that is shared by the broader tech community? They spent a lot of money during the pandemic, as if the new paradigm had arrived and it would never go away.

Is there a bit of corporations doing soul-searching in the tax base?

>> Yeah, so the new normal across tech has been demonstrating expense discipline, operating margin discipline as well. We saw that even with Microsoft.

We've seen Google now shed some jobs.

Having said that, I think they were taking down about $12,000 but they also hired 12,000 people a month before, so it's the Delta.

But to your point, tech has to show that they can create operating leverage in their models.

>> Here's an interesting one. If you wants to get your opinion on CN Rail. We often think of these big railways being pretty tightly connected to economic fortunes.

>> So I like real companies. I think they are a core part of portfolios.

CN Rail actually had a banner year in 2022.

They got a new CEO in February.

She has done an amazing job.

Expenses were managed, prices were put through.

There was a lot of green volumes going through Canada.

And that all benefited CN Rail.

So it was a great stock.

I think earnings were up 20 something percent.

They also just recently reported and they put out a dour forecast for 2023.

It looks like managements are really trying to take down expectations is such that they can beat it, so they are saying for 2023 they are looking for a low single-digit earnings growth.

But Greg, they have like a 5% of buyback authorization so with all else being equal, they could easily hit that earnings-per-share target on their buyback.

It still looks like they have the ability to put in pricing. There are still some tail was for operating margins.

It's not to say the economy could slow and we've seen trends in the industrial production.

Where that was a setback for the stock in the last couple of days, it is a set up it looks like management could be there expectations.

>> Is another thing that could go wrong with CN Rail or any rail during a recession?

Right now everybody seems to be feeling sort of good.

Came out today and said they were lifting the global forecast. Is the biggest risk hear that things do go bad?

>> So in general, again, we talked about there is opportunity.

I am shooting for better.

I don't disagree with anyone's worries or concerns about the economy. It I think they are all valid. I think we have all just been tilted to one side and it's on a balance market.

Specifically in the rails, the Canadian rails have shored up but if you look at the US rails, to your point about concerns about where the macroeconomy could go, it's been the US rails that have been taking it harder. So I feel CSX or UMP, they have been struggling.

And the Canadian rails have held up a lot better.

>> Interesting stuff. As always at home, make sure you do your own research before you make any investment decisions.

We are when you back to your question for Ben Gossack on global stocks and earnings trends in just a moment.

You can get in touch with us any time. Email moneytalklive@td.com.

Now, let's get our educational segment of the day.

If you're doing some research on a stock, analyst reports or one tool that you can use.

joining us now for more is Caitlin Cormier, client education director at TD Direct Investing. Where can clients go to find out more about stocks they might be looking at to see what the analysts are thinking?

> Absolutely.

analyst reports are kind of a piece of the research puzzle, if you will, the clients can use. Either they are looking for some ideas by looking at different stocks that havebeen recently analysed by analysts or given updated recommendations from those analysts or just to dive a little bit deeper into a specific stock if you are looking for that information.

So let's go ahead and take a look at the analyst report under the overall market. So what I'm going to do is I'm going to click in the platform on research and I'm in a go under markets to the analyst sector.

So as I said, this is the analyst Centre for the market as a whole, not a particular security.

This is where you can get a feel for those different stocks that are being updated. Maybe they are changing recommendations for that particular stock.

Here we can see these the most recently rated stocks.

We can see what the ratings are, who the analyst is that made that rating and what their price target is.

We can see all of these have been updated today, so quite a few different stocks. It does give you kind of a different place to look and see maybe some different stocks may be that you want to do further research on.

You can also filter them by saying for example just Canadian stocks.

A lot smaller when we just look at Canada.

Or we could look at just the US. We can also filter by market cap.

if we want to look for some medium-size companies, for example, we can kind of do that as well. So quite a bit that we can do as well based on sector if we are looking for a specific area in the market, there is quite a bit we can seefrom most recent.

We can also see trending stocks. So trending stocks is showing us kind of those different stocks that are really well covered by analysts as well as kind of what they are looking at as far as the consensus and all those sorts of things. So there is a lot of information and even here, under these trending stocks, you can do this filtering is to get down a little bit further to see what it is specifically that you are looking to dive a bit deeper on.

>> Caitlin, I have started this journey before were sort of focus on stocks and with the analyst community is thinking about her name. What if certain analysts piqued our interest? We want to find out more about them. How do we do that?

>> Yeah, for sure.

That's a great piece about this tool is that not only can you see who the analyst is, but you get a little bit more perspective on what their track record is and see if it's someone who you want to take their opinion at face value or do additional research grants we will click back in and look at these individual securities.

We can go ahead and click on the actual stock symbol and that will take us in to information about that stock. So I've just kind of randomly picked one out of the list there. Then I'm going to click on analysts again.

So this is the analyst centre for an individual stock as opposed to fourthe overall market. So this analyst centre looks a little bit different.

Showing us those price targets. More detail on this specific stock.

Once I get here, I can see all of these different analysts that are covering the specific stock.

I want to know more about them, I can click on their name.

Once I can see their name, I can see their win loss rating.

For this individual, it's 94 to 294 successful ratings, meaning they predicted the movement of the stock correctly.

Their average return is -10. I can also click to view their profile. When I do that, it will give me more information about this individual.

So this person follows the technology sector. Down below, it also shows other companies that they cover and what those actions have been on this particular stocks. So it's really a way to get more detail. You can click follow and then appear right above it it says followed analysts and then I can see any analysts that I am following that I want to see what those ratings are. I can actually have that here. I bought a couple of those four and five star rated analysts. So maybe there's somebody I want to put more weighted rather than somebody towards the top there was a lower rating or whatever the ratings may be.

Just a way to get some different information and here a little bit more from those analysts and poke a little around a little bit to get perspective.

>> Great stuff there.

Thanks as always, Caitlin.

>> Thank you so much.

>> Caitlin Cormier, client education instructor with TD Direct Investing. Make sure to check out the learning centre and Whataburger for more educational videos, live interactive master classes and upcoming openers.

Never forget back to your questions about global stocks and market trends for Ben Gossack, a reminder and I get in touch with us.

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 writing your question and hit send.

we will see if one of our guest can get you your answer right here at MoneyTalk Live.

We are back with Ben Gossack, taking your questions aboutGlobal stocks and market trends. Lots of questions coming in.

Then, let's get your thoughts on lightspeed commerce's stock value.

You can't give buyers all recommendations but what are some of your thoughts?

>> Yeah, I've never owned lightspeed so I don't want to talk specifically about lightspeed.

But they are a merchant acquirer.

They are in retail, it could be a store, a restaurant, but they are the ones who would provide those terminals that we are comfortable with paying with and doing some processing for those retailers.

What I have noticed is that the merchant acquirers have been underperforming. It could be a lightspeed, and add Jen in Europe, it could be global payments. For some reason, the merchant acquirers have been struggling.

But I have noticed and where we have seen the opportunity are on the payments networks. So Visa has been doing very well relative to the market. Same with MasterCard.

And then we just saw American Express last week. It was holding and I would say treading water relative to the market and then massively on Friday as their specific clientele, let's say a higher wage earner, is still in good shape, still is to travel, still wants to spend, which is a very different picture than we are seeing for let's say a Capital One or other companies that tend to focus on different customers.

>> If you think about the credit card spaces, is it fair to call that a tollbooth industry?

With PayPal, it links back to my credit card. At a restaurant, if someone brings me a terminal, I slapped my credit card on it. The credit card seems to be always part of the action.

>> It's been an amazing business model.

It's had a lot of value generation for American express, Visa and MasterCard. Having said that, you always have to worry about the existential crisis.

We just haven't met yet. There are still other things that we worry along the way.

But for now, we call it a four player market. We have a retailer, a consumer, a merchant acquirer and the bank and in the payment network system in the middle.

It is entrenched for the time being.

>> Interesting stuff. Another question.

We sort of talked about tech there a little big.

Someone wants to know specifically are there any TSX tech stocks on your radar? We don't have a huge offering of those.

>> No we don't.

We tend to focus on the US and the rest of the world.

Will it is, I has been a Shopify.

Clearly, it was a darling before COVID, got a boost with the pandemic and then has significantly derated.

There has been destruction in terms of the price.

What was notable to me was that all the underperformance was probably in Q1 of last year and since then, it's basically performed in line with the market.

And it's been slowly picking up and I think they had a very strong Black Friday weekend, and that might have continued into the holiday season. So we will see how they report.

They also have to demonstrate operating margin discipline, and so we will see how it comes out the other side.

But so far, that one has shown some relative strengths.

It's been on our radar as well.

> It'll be interesting to see how the trends play out for that. Someone wants to know if you got any specific stock you been watching in the semiconductor space?

This has been interesting particularly in the last couple of days.

>> Right, and that's where I want to take people beyond what we have seen in January to say that these trends have continued even before that.

So I think semiconductors, I think the world needs more semiconductors. Having said that, it's a very cyclical sector.

So as an investor, you want to be there for the ups and you find one you beat the downs and this particular down, I think, was very painful.

I would say if you look at a company like Nvidia, a very popular company, from its ties to its lows, it was a 60% correction.

If I look at earnings expectations, they've been taken down by about 40%.

So what we've noticed for all semiconductor stocks is that on a relative basis to the market, they hit lows in October.

Again, not to say that things can't get worse.

we were talking about housing. We can get negative headline after negative headline, we saw companies reporting last night, there are still issues.

there is still too much inventory, demand is waning.

Having said that, the stocks are starting to look forward. So that's telling you that for the most part given the current expectations have captured a lot of that negative headwind into the current stock prices.

So they are looking to the future.

>> Lots of questions. What sectors does your guest like for the long term? Would he deploy any new money right now?

We can't make recommendations about what people can do with their money but what do you think?

>> This will frustrate everybody. I don't like to look at sectors.

There are 11 sectors and so sometimes you look at companies and you're like, why are you a discretionary stock and not a staple stock? I don't know if people know this, but they are going to take Visa, I think it's a tech stock, but they're going to put it into the financial sector in a couple of months. So I don't like to look at the world based on these 11 sectors.

I care about secular trends. We talk about payments, that's an enduring secular trend.

There is still a lot of cash and that cash has to go digital. We know there is tons of opportunity in the cloud and that's, again, a long-term trend.

Electrification is a secular trend.

If the companies end up in consumer discretionary, if they end up intact, if they end up in industrials, so be it.

We have about 10+ particular trends. So luxury, expensive leather handbag, that's a secular trend.

Those are where I want to bet on.

If that means I'm overweight discretionary, so be it.

>> Interesting approach. We'll get back to your questions for Ben Gossack on global stocks and market trends in just a moment. At home, do your own research before you make any investment decisions and a reminder to 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.

You will see if one of our guests can get you with the answer right here at MoneyTalk Live.

The Canadian economy edged up in November, matching consensus estimates, following a solid performance across the service sector. ButWill that report because the Bank of Canada to have some second thoughts about the path that it's on? Or rather the positives on?

Anthony Okolie joins us now with more.

>> Thanks very much. As you mentioned, the Canadian economy… [inaudible] growth was relatively broad-based with gains coming from 14 of the 30 industries. Again, the service sector rose.

Transportation saw the biggest increase of any single industry in November.

That was boosted by recovery in air travel.

Accommodation services also did well. Again, the rise in the number of Canadians travelling that month. At the same time though, there was contraction in rate sensitive industries and I point to construction which fell as residential buildings and repairs to the weak spot in November. Retailers also did poorly in November with food and beverages subsector sitting its lowest level since 2018.

Also again fewer Canadians went out to restaurants and bars in November. That drag down that subsector.

But overall, TD Securities doesn't see this report as a game changer for the Bank of Canada.

They look for the Bank of Canada to remain on hold in terms of rate increases for the rest of 2023, again with no indication so far of a collapse in economic growth requiring rate cuts or unexpected resilience which require more hikes for the Bank of Canada.

>> That's our economy, the Bank of Canada and what they may do going forward. Of course, the Bank of Canada gave us the decision last week. Tomorrow, we are going to hear from the US Federal Reserve area pretty big one. What should we expect?

>> TD Securities is expecting that the Federal Reserve will hike rates by 25 basis points.

That's the consensus.

That will take the target range to an upper bound of 4.75%.

We also expect the post meeting from the Fed to be very hawkish. How likely to emphasize that the Fed is not done yet with rate hikes and to signal more hikes to come. I will interview James Marple, senior economist at TD Bank, right after the announcement with the immediate market reaction.

>> Will be a big one.

Thanks for that, Anthony.

>> My pleasure. Our Anthony Okolie.

We will get that instant reaction.

The decision will come after we have wrapped the show tomorrow. Let's take a look at the markets right now, a day ahead of the Fed.

We do have some green on the screen after yesterday was a money-losing session.

20,696, up 124 points on the the TSX Composite Index, which is good for a little bit more than half a percent. Athabasca was one of the names on the move earlier.

We can check back in now.

It is up to the tune of almost 5%, two bucks and $0.90 per share. Lithium America, General Motors is investing $650 million and the nameto help develop in a mine in Nevada. We see that stock on the move today.

It's one of the big movers on the composite index, up to the tune of over 13%.

South of the border, ahead of the Fed, we have a fairly decent gain of 30 points, nothing too crazy, but three quarters of a percent to the upside. This seems to be a bit of a risk appetite today for some big tech stocks so let's jump in on the NASDAQ. That's been in the broader indices. It's up 4%. And General Motors, we will check in on that, Lithium Americas moving up off that investment. There was a big beat. They blew up the doors of the quarter.

Saying the expected demand to hold into this year for their vehicles.

The stock is up more than 7 1/2%.

We are back now with Ben Gossack from TD Asset Management. Look back to your questions.

How to protect it from bear traps and when 23?

>> Bear traps? I guess stay out of the woods.

[laughing] Yeah, when people talk about bear traps, typically what I think about are someone sees a valuation discount, the stock looks too cheap and they want the market to recognize that, you get price appreciation, that's a very difficult game because there is a reason why stocks are cheap. And a lot of times, a bear trap is, and you have to catch yourself saying this, when you start making excuses for companies and let's just say a performance that's less than desirable and each quarter will go by and they will say okay, that's a one-off issue. That was a different issue, that was a different issue. But then looking back, I just keep grinding lower and lower and there was a problem.

So I typically do not chase sort of really beaten-down valuation type stocks and then look for that sum of parts and saying I'm getting some segment for free and I've never made money on that.

The market can look through that. There are cases, I mean, we are taught to find that sort of unappreciated asset before depreciates. I would say they are rare.

But if you do find it, it's great.

And then I would say my recommendation for anyone would be if you start making excuses for companies and missing performance expectations, it's always a one-off thing, that's when you gotta take a step back and say, is this something I want to own?

>> That sounds emotional, right? You start making excuses for a corporate entity that is not performing the way you want to.

>> Right. And we all think we are very rational, but in the end, it's very emotional and there is a reason why people look at their statements and holdings and Holland to a lot of stocks that have underperformed and heard them and they just don't want to part with them.

That's very emotional. So I do believe price levels have an emotional attachment. I bought it here, the stock went down, if get back to their, they will sell it. We see resistance at those levels.

So it's very persistent.

So that's where you have to manage your emotions and try to keep rational and stick to your process.

>> We are going to squeeze one more question in here.

Just came in off the platform.

I viewer wants to know your thoughts on IBM, please and thanks.

>> So I would say in terms of stocks that outperformed last year, IBM was an out performer.

And part of it was kind going sideways.

I would say that IBM benefited from two factors that were very persistent last year.

Low valuation, so we talked about potential bear traps, and high dividend yield. So it worked and IBM worked.

it looks like we are near the end of hiking cycles from central banks and in the absence of more hikes,we know interest rates have been a factor in the underperformance of technology companies.

In a way, it can't get worse which means it can get better, which is why think we are seeing some of the stock start to work even though there are some demand issues.

I suspect that IBM, the money that went there based on those two factors would gravitate back to areas of growth. We talked about semiconductors, we talked about… We didn't talk about growth software but we are starting to see some software come back.

So if it's the end of the hiking cycle, if we start to see Teck come back or trends persist, then I would look at IBM legging the rest of the tech sector.

>> As always, fascinating to have you on the program to get your process. We will have you back soon.

That's all the time we have for your questions. We'll try to get leftover questions into the upcoming show.

Our thanks to Ben Gossack, poorly manager at TD Asset Management.

A reminder, always do your own research before you make any investment decisions. On tomorrow show, you will want to tune in.

Hussein Allidina, had commodities at TD Asset Management will be our guest taking your questions about all things commodities.

A reminder that you can get a head start.

Email moneytalklive@td.

com.

That's all the time here for the show today.

Thanks for watching and we will see you tomorrow.

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