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[music] >> Hello, I'm Greg Bonnell. Welcome to MoneyTalk Live, brought to you by TD Direct Investing.
Every day, I'll be joined by guests from across TD, many of whom you'll only see here.
We're going to take you through what's moving the markets and answer your questions about investing.
Coming up on today's show,we get a contrarian view of the markets with Benj calendar, coeditor ofthe Contra the Heard Investment Letter. Moneytalk's Anthony Okolie will give us a preview of what to expect from tomorrow's Bank of Canada rate decision.
And today's WebBroker education segment, kilogram he will show us how you can use the watchlist feature on the platform.
Here's how you can contact with us. Email moneytalklive@td.com or fill out the viewer response box on WebBroker.
We have some big events coming up, not only the bank of Canada tomorrow but we will get a fresh read on US inflation.
Perhaps that'll be the more market moving event today.
We are seeing the price of the West Texas intermediate crude, the American benchmark up. We are seeing some easing of the US bug which has minors on the move.
Got the TSX up right now hundred 60 points, little bit more than three quarters of a percent. Let's start with some mining names. Kinross Gold right now at $6.95 per share, up about 3 1/2%. And Suncor, the bid is a bit more modest among the energy names and they are gaining momentum. A 4394, you got Suncor up a little more than 2%. Sets of the border, things are a little more mixed.
The tech sector is kind of dragging on the overall market so you do have the S&P 500 ahead of CPI day tomorrow south of the border up a very modest board have points, about 1/10 of a percent.
How about the NASDAQ? Noticing some weakness in the tech names.
It's holding us back from a better showing. 60 points in the hole, nothing too dramatic, a little bit more than half a percent.
It's the mega-cap tech names holding back the trade.
You got Amazon and a few of the big ones. Take a look at Amazon right now, 99 bucks and change, down almost 3%.
And I market update.
The equity markets are hanging in so far this year, but it's been a rocky ride for investors. They are navigating higher interest rates, recession concerns and headwinds for the global banking sector.
Joining us now to discuss were things they go from here, bend calendar, coeditor of the Contra the Heard Investment Letter.
Great to have you.
>> It's great to be here, Greg.
>> We've known each other for years in a former life and where I used to work.
Some of our audience probably know you already.
But for those we're hearing about Benj Gallander for the first time, talk about your investing philosophy in the newsletter.
>> We are contrary in. I've been investing for about 45 years, which is a little bit scary.
We look at stocks that have been badly beaten down.
We are value investors.
Investing companies that have been around at least 10 years so they've got a track record. I don't buy anything on the venture exchange for the portfolio.
So we look at stocks that have the potential to go up 100% +2, three, 400%.
But none of that is pie-in-the-sky.
It's all where the companies have traded in the past.
And since we are looking at a minimum 10 year track record, it makes it much more easy to say, okay, this was what it was for the past 10 years. If the company can return to form, it has a chance to get there.
So when not only companies or hit the dissector is hit or the market is hit, often the companies that we are potentially buying, they are hit for no other reason than the market itself gets beaten down.
So we've been doing this for a long time.
Our tenure annualized return is 19.1%.
We have one of the best track records out there.
But certainly, we do make some mistakes.
>> Okay, yeah, that's what investing is all about. You can't win all the time.
So given that that's the lens you are looking at the market through, 2020 she was a pretty tough year, weather was in equities, the bond market.
But so far, we've held in this year. What is happening in the market and what might be coming?
>> last year the portfolio was up 11.1%. The manager did very well. I'm impressed.
In terms of the markets themselves, I'm certainly more bearish than bullish.
I think that this, these interest rate hikes still haven't completely been… Absorbed into the marketplace.
There's a lot of corporations, a lot of people that when they have to refinance, there's a possibility that they won't be able to do it and that they'll go bankrupt.
I also think as we saw in the US and also in Switzerland with Credit Suisse, their problems in the banking sector. So a lot of banks, of course, are just fine.
But one has to be a little bit wary, especially more in the states, but there are more dangerous, more shoes to fall, more boots to follow and it's just a question of when and how much the cake is. At the same time, a lot of people are very smart.
They are into a bullish phase and they think things are going to keep on going out. I am definitely more bearish than bullish.
>> I guess is somewhat is on more bullish side, they will make the argument that the market is a forward-looking instruments and that is already priced in, even if there are more challenges to come, the market has sort of anticipated them.
Do you think that's a little too optimistic a read of what's happening out there?
>> As I mentioned, I've been doing this for about 45 years. I remember 1987 when the market fell 22.4% in a day it had actually went for my house down to a restaurant downtown and I wasn't hoping to watch people suffer but they were. So what is priced in? It's all priced in, so to speak, until it is in.
And then all of a sudden, things get hit. And it can be a bit of a domino effect.
Soit's strange. I've seen so many of these ups, ups, ups and then downs and there are certain groups of people who, because of what they do, they almost have to remain optimistic because they want to have a certain amount of money under management, etc.
Because I'm not beholden to anybody, I mean, we have our subscribers who pay 680 a year and we try to give them good ideas of what to buy, but I can say whatever I want, whatever I believe, and I've been doing it for a long time and I like to think that's what gives me some of my credibility.
>> Let's talk about perhaps some of the dangers ahead.
We know Credit Suisse… When we talk about some of the I guess stresses we've seen and banks, whether it's the failure of Silicon Valley Bank, the problems at Credit Suisse, people have used the word idiosyncratic. Yes, there was a backdrop of rising rates of but it also perhaps these banks were not managing their affairs as well as they should have. What you are read on it all?
>> Let's go back to 2008 when we had the real crisis.
So after that we bought, I think was six banks, all of them in the states.
And I figured that the US banking sector was going to survive.
There would be banks that would not survive. The question was how to avoid them?
And quite frankly, I came close on some that I almost bought I would say to a degree that I got lucky.
But we have seen this before, way back, let me try to figure out what your it was… It was in the 80s, 82, 83.
I did my MBA thesis on the Bank of Nova Scotia and looking into what… And the Canadian banks are having real problems back then.
They are a lot smarter now, I think.
There's going to be more difficulties ahead and a lot of times, they are just not recognized until effectively, it's kind of a silly thing that I'm saying that it's the way it is, and often things can be so complex, I mean, people say Credit Suisse, they should have known what was going on.
And to a degree, there was certainly a lot of red flags there.
And once it happened though, all of a sudden, people were saying, well, it was so obvious that this would happen.
>> Hindsight, right?
>> Hindsight it is absolutely brilliant almost all of the time, but this foresight thing is a completely different game.
One of the things that gets me about Credit Suisse is that it Switzerland.
Switzerland is arguably the banking capital of the world.
If there was a country you would not expect this to happen, it would be Switzerland.
So as I said, there's been that major change with interest rates, and I think we still have to see what's going to develop.
I will throughout one other point. The US government, financially, I don't think it's in good shape. The Canadian government, I don't think it's in good shape.
We are going to run another $40 billion deficit in upcoming years. So I don't think there's a lot of fiscal sanity. Because there isn't a lot of fiscal sanity, to get the governments to help certain sectors, it's going to be a lot more difficult.
Yes, you can ramp up the printing presses all you want, but at a certain point, you have to bring back a Paul Martin to bailout the system.
>>a former prime minister.
he did work to bring down the deficit.
>> Absolutely. He was absolutely critical.
I don't see anything like that from the cabinet now. I think they talk a reasonable game but if you look at the numbers, I think what they are doing is major, major mistakes.
>> Fascinating stuff and a great start to the show.
We are going to get your questions about contrarian investing for bench calendar in just a moment time.
A reminder that you in touch with us at any time.
Just a male moneytalklive@td.com will or float the viewer response box under the video player on my broker.
Right now, let's get you updated on the top stories in the world of business and take a look at how the markets are trading.
Glencore is sweetening its bid for Teck resources, adding a cash component to it was an all stock offer for the minor.
this new, unsolicited proposal would give Teck shareholders a 24% stake in a combined metals business, and up to some $8 billion in cash. That offer appears to be aimed at Tech shareholders who want to avoid exposure to Glencore's thermal coal business.
Now, Teck rebuffed the original offer, of course, and they said today the new offer appears to be largely unchanged.
Shares of Moderna are in the spotlight today. The drugmaker is facing some challenges with its mRNA-based seasonal flu shots, saying it doesn't yet have enough data to determine its efficacy. Moderna says it will continue testing the shot and collecting data. The company is forecasting a notable drop in sales this year as demand for its COVID shot wanes.
It appears cost-cutting measures that CarMax is helping offset softer demand for used vehicles. The pre-owned auto retailer posted quarterly profits above the streets expectations. Late last year, CarMax took a number of cost-saving actions, including a hiring pause for the office positions and a slowing of its acquisition of used car inventory.
A quick check in on the market, we will start here at home on Bay Street with the TSX Composite Index. We are seeing minors on the move higher as well as some energy names.
You gotta hundred and 52 points to the upside, good for three quarters of a percent in the green.
South of the border, things are a little more mixed.
The S&P 500 is modestly in positive territory, although some heavyweight tech names are holding the market back from a better showing.
Of course, tomorrow, you're going to get the latest read on US inflation.
So you're getting a bit of a sense in the market of a wait and see what that report says and wetlands tomorrow before the markets open.
We are back now with Benj Gallander, we are taking your questions about contrarian investing. You've already got some questions coming in, bench, so let's get to them.
What you think of REITs now, the viewers specifically thinking about the office real estate sector. This will back to work then, how is it playing out?
>> I think REITs have been hit and they gone down for a bit and people do have to bevery wary of the sector because as companies leave buildings that they are in, of course that hurts cash flow.
Those companies leave malls, that hurts their cash flow.
so there are some problems they are and typically they pay quite a high distribution and whenever they cut the distribution,as with normal corporation, the stock price tends to go down quite a lot. So because they have huge debt loads and interest rates have gone up, you're going to have to refinance at much higher rates.
at the same time, because they have been beaten up, if and when they return to form,you got much better amplitude on the upside.
So you will get potentially, you can get two, three, four beggars here plus at the same time they will increase the distribution. So definite risk here, no question about it, and there are certainly reasonable rewards.
>> If someone is looking at the sector, whether it's REI TS that cover offices or malls, other types of real estate, they have to have a sort of thesis about life eventually getting back to normal?
Maybe is taking longer than what we expected.
Some people would've thought at this point coming out of COVID and where we are right now that there would be more people in the office, more people in the food court every day.
>> Well, things will move closer to normal.
I mean, a lot of people don't want to go back to offices.
I was reading the numbers on and a lot of people just want to stay at home.
I worked at home forever and I love working at home.
It's not for everybody. I enjoyed the distractions and I enjoy the cheap lunch.
>> Couldn't be the cheap lunch when I was at home.
That's for sure.
>> There you go.
But for a lot of people, it's not what they want to do.
A lot of corporations are putting pressure on their employees to come back.
Some people, of course, we'll have to come back.
Some people will go back maybe three days a week, some big corporations are saying. That will definitely help at the food court and the businesses downtown.
I don't think they'll go back to normal though.
I think we are also seeing, I was wondering around Toronto today, I live here, but the amount of building that's going on, and of course they have to plan these years in advance, so you're gonna have a lot more office space and it's gonna be difficult to fill.
The Canadian poster child right now is Calgary where there's so much open office space.
So I think it's a real problem going forward. They're going to have to be more adjustments made and we will see how well they do it.
>> Okay, let's get to the question now from the viewers. This one wants to know your outlook for gold.
This will be an interesting one. One of the drivers here and what do we think might happen going forward?
>> If you want to go on a trip, head up to Iqaluit.
From the 25th the 28th of this month, they have the Nunavut mining symposium and I'm the keynote speaker. I want to talk a lot about gold and mining of there.
So gold, I'm pretty agnostic on it. What happens when gold starts to rally, which it's been doing recently, the gold bugs come out. I don't know what Rocks they crawl under, but when gold is cold as it has been for 20 years, they disappear.
And then now, they are coming out again.
So there's going to be a certain amount of momentum for the gold players.
When you see the problems and the huge debts and deficits, a lot of people are saying you gotta go and invest in something else. Of course a few years ago, crypto was the place to go for many, many people. The bloom fell off the rose, although it's come back a little bit.
I had a couple of Bay Street boys over my place a couple weeks ago and said, what to think of crypto?
I said, I like it. He said, I thought you would hate crypto. I said that there is value there. That's another question. I'm not buying it.
Gold has been around for a long time. You have to look at the US dollar and where you think the US dollar is going to go.
I still think the US dollar is probably high. I think the US dollar, of course, is the major world currency.
I'm not so sure how much longer that's going to last.
>> There's been a lot of discussion about that. How long they can hold onto their dominance.
What factors might cause it to lose its global dominance?
>>I think basically the debt and deficit levels, I think the Chinese would love to become the currency.
The euro would like to perhaps get up there little bit more. So there's competition there.
But a lot of it is just based on the American economy and how it's doing.
And if we look at the unemployment rate there, now it's towards historical lows.
But at some point, it could possibly end up being a bit more of a bag of currencies. I don't think we would switch immediately to the won, but the US has been losing a certain amount of its dominance and I think for good reasons.
>>so we will take it back to then gold. You are fairly agnostic on Gold but you're gonna be talking to a room full of people who are interested in it. Is it all about the US back down?
>> No.
you have to look at the input costs and what does it cost to mine gold?
And whenever you look at investing in a gold company, you have to look at these sustaining costs. What does it cost to get it out of the ground?
For some companies, it's far less.
Others have to get up to a certain economy of scale for the cost to go down.
But that's absolutely critical. Now, in a place like none of it, the cost of mining is very, very high.
The cost of all their equipment is very, very high.
Working there is incredibly difficult.
So the costs are a major thing. Now people I think are always going to want some gold and that's critical. So you've got what is the real value of gold?
Is it just jewelry, etc.? How much of it is just because it's shiny?
It will continue to have a certain cachet.
Go back and look at the twenty-year chart if you have some extra time and when you look at the chart, you can see how much gold has gone up and down, up and down.
At times, it has dropped precipitously. I'm glad I got that word correctly.
It has dropped precipitously and that will certainly happen again but often when it challenges highs, I think the high was in 2000, 74, once it blows through that, it tends to go for a while.
>> As always, make sure you do your own research before making any investment decisions.
we are going to go back to your questions for Benj Gallander on contrarian investing in just a moment's time.
And a reminder that you can get in touch with us any time.
Just email moneytalklive@td.com.
Now let's get to our educational segment of the day. If you're lookingto test out a potential investment before you buy, the WebBroker watchlist is a tool which can help. Caitlin Cormier, client education Dr. TD Direct Investing has more.
>> Today we will take a look at the watchlist tool within my broker.
It is one of many tools we have to help you build a portfolio of self-directed investments.
We are going to hop in and click was in WebBroker, probably the easiest way to get to watchlist is in the top right-hand side in the corner where we have this little star buttonaand that will bring up our watchlist page. So we can do is we can actually create up to 10 different watch lists with up to 10 securities per watchlist. I can type in here either the name or the stock symbol for whatever securities I would like to add to my profile.
I'm just going to go ahead and add some Canadian and US securities here so I have a good mix.
So add… Add a couple more here. There we go. That should be enough for now.
So under this initial page which we can see, is you click the drop-down and see the performance of this particular security, so a quick chart, we can also see the quote information, so what that current price is for that security, the bid asked, the open price, the volume of trades for the day and we've also got some ranges for both the day and the week.
We had the analyst rating and we can also hit buy or sell here if we want to move forward with the security.
If we click on fundamentals, we can see some dividend information, market Information, P/E ratio and estimated earnings if that's something you're interested in.
At the bottom here we also have some quick links. You can go to the overview for this stock, news, charts or options if that's something you're looking to do as well.
Within this watchlist, you can add stocks, mutual funds, options and indices. Lots of different types of securities that you can add.
Another really need tool within this watchlist is we can hit the tracker.
So the tracker actually allows us to build a portfolio, kind of like a mock portfolio, right within our watchlist. So what I mean by that is we can click right here on this quantity and we can act as if we are actually going to purchase the security.
So I could say for example I want to purchase 100 shares of Apple and I'm just going to put in the current price there and click save, and then I can do the same here for the Telus stock, so it's a 50 shares of Telus at 2762, and I'll choose… I'll do this one as well. 75 shares at 1182.
Okay. Now once I click save here, you can see already these securities are actually updating to show me how the performance would have been if I had gone through with this purchase. Showing me the last price for the security, the average cost based on the information I input, the price change, market value, book value and any gain or loss that has been unrealized of course at this point. So it's a really neat way to be able to build a portfolio without actually having to go through and put any of your money on the line.
You can test out some of your theories about investments you'd like to purchase and see how it would've panned out.
All right, so that is our watchlist tool. Of course, if you have other questions, feel free to send them into MoneyTalk Live and check out the Learning Center for a bunch of additional information on all different topics to do with direct investing education.
>> Our thanks to Caitlin Cormier, client education instructor at TD Direct Investing.
Now before you back to your questions on contrarian investing for Benj Gallander, 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.
Okay, we are back with Benj calendar, taking your questions about contrarian investing. This one just came in. TK tankers, like to get Benj's opinion on this. You told me at that you don't know this company specifically.
>> A few years ago, the whole sector got trashed and they were selling at what appeared to be incredibly low prices.
So I actually bought into to do when you and I hate to say it but I did not do well on either of them.
It's a sector that generally the companies have very, very high debt loads.
And that's the danger. It's a sector that, over time, if you look at some of the companies, you will see that they have been badly beaten up, sometimes multiple times. Often what they do is they are being beaten, day issue more shares.
Often an incredible number of shares.
And then what they have to do is have a reverse stock split.
Generally, those are very bad for stocks. When I own a company and they have a stock consolidation, or they are going to have it, I almost immediately sell.
Because sometimes they'll go up a little bit at the beginning, but generally then they go down.
Once it consolidates it may go up a bit but then they tend to go down. Those are very bad for stocks periods of the sector, it's a tough one.
It's a completely necessary sector. You gotta get goods from point A to point B, perhaps to point C. But one has to watch those debt loads because they are often great.
What is happened to is that some of them have started to turn around and start to pay either dividends or better dividends.
So you can get a pretty good return from some of these companies just through the dividends.
I know, Greg, that you've heard me say this before: dividends allow me to be stupid longer because if I get
at least I'm getting some sort of return even if the company is going down or they don't go anywherefor a while.
a large number of my stocks do indeed pay dividends.
>>let's get another question now. This one just coming in and the past couple of minutes. What technical indicators are smart to use to get a sense of the bottom of beaten-down stocks?
how does the work of a technician figure into what you do?
>>we look at all different kinds of systems and in mind to best-selling stock books, one of them is still out there which is contrary in investor 13, you can order it from our website and I'll sign it, whatever that's worth, I look at technical factors, fundamentals, momentum, management.
We try to cover a tremendous amount of ground.
Now over time, I've read different books on technical analysis.
I certainly like looking at charts and I like buying into a stock when the stock is stabilized near the bottom. Often it's had a bit of an uptick too.
Again because we are looking at such huge potential gains, usually there's a great distance between where the stock trades and the initial cell target we are going to look at.
So you know, it's worthwhile reading up on. You can read up about your head and shoulders formation, etc., but definitely it's good to have. Part of it works into investor psychology and psychology is such a huge part of investing.
I'm laughing because some people think they can be free from psychology but most people aren't.
And there's a tremendous follow the herd approach which is one of the reasons we are named Contra the Heard.
We are contra the regular thinking and contra what people are hearing.
So it's worthwhile to understand because often when people react in a certain way at certain times, they will react the same way again.
And if you can read the charts, do some technical analysis, you can prosper because of the I will add one other point.
I remember going out with one of the great technicians in Canada, and he explained to me the system. I said, do you do anything besides technical analysis? And he said, no.
So I can be a little slow. So I said, you only do technical analysis?
He said, yeah.
If they want something else, they have to go somewhere else.
So to me, just basing everything on technical analysis, it's like, you build a baseball team and you say, I'll just let my cousin pitch.
You have to actually look at a lot of the different aspects because so many different possibilities exist when you're trying to summarize and scrutinize the stock.
>> I had to find out after the show who the technician is because I probably talk to him over the years.
Another audience question.
It is now a good time to get into GE healthcare?
We can't give you investment advice about when to get in or out of a name, but GE healthcare. What's going on with them?
>> So GE healthcare was a spinoff of GE as of January 1.
I remember half the book all about spinoffs andspinoffs generally do pretty well.
So if you have the stock and it is a spinoff, the combination of the original stock that you are still holding and the spinoff generally does better than you would've done if you had just held the stock.
So GE healthcare has had a pretty good run since it came out of GE and it might be worthwhile knowing that they are planning to spinoff I guess the renewable sector next year.
So healthcare is definitely a growing field.
GE healthcare, I think their revenue is about 18 billion, so it's a major spinoff. The debt load is about 6 billion.
Governments are putting more money into healthcare.
If you looking for a demographic play, this may be one of them because populations are aging. That could be good.
At the same time, as I alluded to before, because governments are getting backed into a corner to a degree, the question is, how much money can they put into support healthcare?
The leading article in the Globe and Mail today was about some of the nursing homes closing because it is just not worthwhile for them to put more money into it.
So GE healthcare is a longer-term play. It could be good. At the same time, you gotta really think about how they are going to finance operations in the future.
>> We are going to get back to your questions for Benjamin calendar on contrarian investing in just a moment's time.
As always, make sure you do your own research before making any investment decisions.
And a reminder that you can get in touch with us any time.
Do you have a question about investing or what's driving the markets?
Our guests are eager to hear what's on your mind, so send us your questions.
There are two ways you can get in touch with us.
You can send us an email anytime at moneytalklive@td.com or you can use the question box right below the screen here on WebBroker. Just write in your question and hit send.
We'll see if one of our guests can get you the answer right here at MoneyTalk Live.
It's big week for financial markets as the Bank of Canada set to deliver its interest rate decision on Wednesday, tomorrow.
And traders get a look at the latest US inflation data also coming in tomorrow.
A big one. Anthony Okolie is joining us not to break it all down for us. TD Economics's outlook on this, look where should we start, here at home?
>> Yes.
Markets are expecting the Bank of Canada will stay steady and keep rates at PornHub percent.
No changes there. And this rate decision comes after the latest jobs report showed some impressive gains here in Canada with employment rising an unexpected 30000 Jobs in March.
the gains were entirely driven by the private sector with additions equally split between both full-time and part-time jobs.
While the job gains were impressive, TD Economics does highlight an interesting nuance in the data.
Specifically, they point to the fact that the unemployment rate has remained steady at 5% for the fourth month in a row as the chart shows.
Now a relatively flat unemployment and employment rate in recent months suggests that the labour market has not been getting tighter. In fact, TD Economics says this is an important distinction for the Bank of Canada and because it's labour market tightness that drives wage gains and hourly earnings, for example, were up 5.
2% year-over-year in the latest data. That's just a takedown from February. And with wage gains appears to be cooling in recent months and this was consistent with the Bank of Canada's Business Outlook Survey which showed that labour supply was improving and there's less competition for workers.
As the chart shows, on balance in the survey, firms view the current labour shortages as less intense versus one year ago when they were extremely high here in Canada.
Now TD Economics knows that its population growth continues at its pace and labour demand cools as it is expected to, the unemployment rate will start heading higher and will help to cool inflation. Of course that will be welcome news for the Bank of Canada.
Just to mention that I will be interviewing Andrew Hencic, Senior economist at TD, tomorrow with the immediate market reaction to the Bank of Canada decision.
>> We will get the big news here at home and then south of the border, perhaps global investors willE considering the latest read on US inflation.
>> This is a key report. It will come out after the US labour market showed it actually started to loosen steam following the March report.
But job vacancies in the US are still about 3 million above pre-pandemic levels and wage growth is unlikely to fall, according to TD Economics, until there is more significant reduction in labour demand. They mentioned that the core PCE, the Fed's preferred gauge of inflation, is expected to reach the FOMC's 2% target in early 2025.
TD Economics foresees that inflation will remain somewhat sticky in the near term.
They expect US CPI to ease from the annual rate of 5.9% in the first 3:45 .7% in the second quarter.
Regarding core CPI, they see it slipping from 5.6% to a still high 5.4% in the second quarter. Greg it?
> It's gonna be a big day. Thanks for breaking it down with us.
>> My pleasure.
>> Moneytalk's Anthony Okolie.
Let's check in on the markets. In Toronto, we have been in positive territory.
We are holding onto a triple digit gain of 160 points, little bit firmer than three quarters of a percent. The price of American benchmark crude is moving higher again today.
You're seeing the US book pull back a bit, benefiting some of the material stocks. Let's take a look at Hudbay Minerals. That's what you got on deck for you now.
That's up to the tune of about 4%, a little bit more than seven bucks per share.
Baytex energy and the energy space, look at that, they are making gain through the session as well. Five bucks and $0.47, building on some earlier momentum, little bit more than 4%.
South of the border, it's a mixed picture.
Got some mega-cap tech names holding back the broader market.
You've got seven points on the screen for the S&P 500, up a little shy of 1/5 of a percent.
But the NASDAQ weighed down by a lot of those big tech names.
It's been under some pressure today. It's off the lows of the session, down about 45 points right now, a little bit more than 1/3 of a percent. It was those mega-cap tech names, we showed you Amazon off the top of the show, Microsoft underwater again today. Nothing too dramatic at 283 bucks per share, is down a little bit more than 2%.
We are back now with bench calendar from Contra the Heard Investment Letter.
Let's get back to your questions now.
Does Mr.
Gallander anticipate a heart or a soft landing? This is the big question about the recession. If it does come, what kind of recession we get?
>> I think you'll have to ask my dad, the real Mr.
Gallander, that. You know what, I don't and I will say I don't know probably more than anyone else on television because when I try to do is look more at the audience.
you got a wild-card stay in Canada or the states, it's called the government.
What is the government actually going to do?
And again, I alluded before, they made some major mistakes in the past number of years, and it's leading us into some big problems.
When they lowered the interest rates as much as they did, I said basically this is really stupid.
They've gone too far.
>> Not only while the central banks were cutting rates, there was a huge amount of fiscal stimulus coming from the government side.
>> Exactly. That's a very, very good point. And all of that fiscal stimulus has created a greater long-term problems.
I don't know what they're going to do and that will have a definitive impact on the economy.
it seems like things are stabilizing to some degree and it seems like we are moving perhaps in the right direction, but I wish I could get into the heads of the people who make the decisions and governments and say, really?
What you are doing is very questionable here.
What they listen to me? Probably not.
I might just go back and lie on the couch and watch the more TV, watch some more succession or whatever.
>> No spoilers.
No spoilers for anyone who hasn't seen episode three yet.
>> No, it's quite good.
one of the big wildcards here is what is the goal of the politicians? Sure they want to help people.
At the same time, they want to get reelected and that's critical.
So sometimes they make the wrong decisions because they want to try and ensure their positions in office. Am I being too cynical, sir?
>> You know what, I think when you see some of the optimism in the market, they are getting used to governments coming to the rescue as they did during the pandemic with fiscal stimulus or central banks did with monetary policy coming to the rescue saying, as soon as you get into trouble,we will lower the cost of borrowing and the bond market seems to brisket and while the Fed keeps saying no, we are going to get a bit higher than here and then stay there for a long time.
There's a bit of a disconnect in terms of what people and the markets and governments are going to do things go sour.
>> As we see in in the US, bailing out all of the people who have accounts of these banks that have failed, that unto itself is a danger.
You don't want to ruin people's lives,but there has to be a sharing of the problems because if I know I can put money in any banks, no matter what the bank is, I may just go for the highest interest rates.
And whatever they are doing, they might not be doing so well. Fortunately, the banks here seem to be doing pretty well.
>> All right. A real pleasure to having you on the show. I look forward to our next conversation. Been a long time since we've had the chance to sit down and talk about the markets.
>> Me too. I can't believe it's already done. That's a good sign.
>> It goes by quick.
As always a home, you always do your own research before you make investment decisions. Our thanks to Benj calendar, coeditor of Contra the Heard Investment Letter.
stay tuned. On tomorrow show, we will have Andrew Kelvin, cheap Canada strategist with TD Securities on the program, taking your questions about the economy and interest rates. Off the top of the show, we got a few good things to talk about.
The Bank of Canada's rate decision and US inflation, you don't want to miss it. Our reminder that you can get a head start with those questions.
Just email moneytalklive@td.com.
That's all the time we have the show today. Thanks for watching. We will see you tomorrow.
[music]
Every day, I'll be joined by guests from across TD, many of whom you'll only see here.
We're going to take you through what's moving the markets and answer your questions about investing.
Coming up on today's show,we get a contrarian view of the markets with Benj calendar, coeditor ofthe Contra the Heard Investment Letter. Moneytalk's Anthony Okolie will give us a preview of what to expect from tomorrow's Bank of Canada rate decision.
And today's WebBroker education segment, kilogram he will show us how you can use the watchlist feature on the platform.
Here's how you can contact with us. Email moneytalklive@td.com or fill out the viewer response box on WebBroker.
We have some big events coming up, not only the bank of Canada tomorrow but we will get a fresh read on US inflation.
Perhaps that'll be the more market moving event today.
We are seeing the price of the West Texas intermediate crude, the American benchmark up. We are seeing some easing of the US bug which has minors on the move.
Got the TSX up right now hundred 60 points, little bit more than three quarters of a percent. Let's start with some mining names. Kinross Gold right now at $6.95 per share, up about 3 1/2%. And Suncor, the bid is a bit more modest among the energy names and they are gaining momentum. A 4394, you got Suncor up a little more than 2%. Sets of the border, things are a little more mixed.
The tech sector is kind of dragging on the overall market so you do have the S&P 500 ahead of CPI day tomorrow south of the border up a very modest board have points, about 1/10 of a percent.
How about the NASDAQ? Noticing some weakness in the tech names.
It's holding us back from a better showing. 60 points in the hole, nothing too dramatic, a little bit more than half a percent.
It's the mega-cap tech names holding back the trade.
You got Amazon and a few of the big ones. Take a look at Amazon right now, 99 bucks and change, down almost 3%.
And I market update.
The equity markets are hanging in so far this year, but it's been a rocky ride for investors. They are navigating higher interest rates, recession concerns and headwinds for the global banking sector.
Joining us now to discuss were things they go from here, bend calendar, coeditor of the Contra the Heard Investment Letter.
Great to have you.
>> It's great to be here, Greg.
>> We've known each other for years in a former life and where I used to work.
Some of our audience probably know you already.
But for those we're hearing about Benj Gallander for the first time, talk about your investing philosophy in the newsletter.
>> We are contrary in. I've been investing for about 45 years, which is a little bit scary.
We look at stocks that have been badly beaten down.
We are value investors.
Investing companies that have been around at least 10 years so they've got a track record. I don't buy anything on the venture exchange for the portfolio.
So we look at stocks that have the potential to go up 100% +2, three, 400%.
But none of that is pie-in-the-sky.
It's all where the companies have traded in the past.
And since we are looking at a minimum 10 year track record, it makes it much more easy to say, okay, this was what it was for the past 10 years. If the company can return to form, it has a chance to get there.
So when not only companies or hit the dissector is hit or the market is hit, often the companies that we are potentially buying, they are hit for no other reason than the market itself gets beaten down.
So we've been doing this for a long time.
Our tenure annualized return is 19.1%.
We have one of the best track records out there.
But certainly, we do make some mistakes.
>> Okay, yeah, that's what investing is all about. You can't win all the time.
So given that that's the lens you are looking at the market through, 2020 she was a pretty tough year, weather was in equities, the bond market.
But so far, we've held in this year. What is happening in the market and what might be coming?
>> last year the portfolio was up 11.1%. The manager did very well. I'm impressed.
In terms of the markets themselves, I'm certainly more bearish than bullish.
I think that this, these interest rate hikes still haven't completely been… Absorbed into the marketplace.
There's a lot of corporations, a lot of people that when they have to refinance, there's a possibility that they won't be able to do it and that they'll go bankrupt.
I also think as we saw in the US and also in Switzerland with Credit Suisse, their problems in the banking sector. So a lot of banks, of course, are just fine.
But one has to be a little bit wary, especially more in the states, but there are more dangerous, more shoes to fall, more boots to follow and it's just a question of when and how much the cake is. At the same time, a lot of people are very smart.
They are into a bullish phase and they think things are going to keep on going out. I am definitely more bearish than bullish.
>> I guess is somewhat is on more bullish side, they will make the argument that the market is a forward-looking instruments and that is already priced in, even if there are more challenges to come, the market has sort of anticipated them.
Do you think that's a little too optimistic a read of what's happening out there?
>> As I mentioned, I've been doing this for about 45 years. I remember 1987 when the market fell 22.4% in a day it had actually went for my house down to a restaurant downtown and I wasn't hoping to watch people suffer but they were. So what is priced in? It's all priced in, so to speak, until it is in.
And then all of a sudden, things get hit. And it can be a bit of a domino effect.
Soit's strange. I've seen so many of these ups, ups, ups and then downs and there are certain groups of people who, because of what they do, they almost have to remain optimistic because they want to have a certain amount of money under management, etc.
Because I'm not beholden to anybody, I mean, we have our subscribers who pay 680 a year and we try to give them good ideas of what to buy, but I can say whatever I want, whatever I believe, and I've been doing it for a long time and I like to think that's what gives me some of my credibility.
>> Let's talk about perhaps some of the dangers ahead.
We know Credit Suisse… When we talk about some of the I guess stresses we've seen and banks, whether it's the failure of Silicon Valley Bank, the problems at Credit Suisse, people have used the word idiosyncratic. Yes, there was a backdrop of rising rates of but it also perhaps these banks were not managing their affairs as well as they should have. What you are read on it all?
>> Let's go back to 2008 when we had the real crisis.
So after that we bought, I think was six banks, all of them in the states.
And I figured that the US banking sector was going to survive.
There would be banks that would not survive. The question was how to avoid them?
And quite frankly, I came close on some that I almost bought I would say to a degree that I got lucky.
But we have seen this before, way back, let me try to figure out what your it was… It was in the 80s, 82, 83.
I did my MBA thesis on the Bank of Nova Scotia and looking into what… And the Canadian banks are having real problems back then.
They are a lot smarter now, I think.
There's going to be more difficulties ahead and a lot of times, they are just not recognized until effectively, it's kind of a silly thing that I'm saying that it's the way it is, and often things can be so complex, I mean, people say Credit Suisse, they should have known what was going on.
And to a degree, there was certainly a lot of red flags there.
And once it happened though, all of a sudden, people were saying, well, it was so obvious that this would happen.
>> Hindsight, right?
>> Hindsight it is absolutely brilliant almost all of the time, but this foresight thing is a completely different game.
One of the things that gets me about Credit Suisse is that it Switzerland.
Switzerland is arguably the banking capital of the world.
If there was a country you would not expect this to happen, it would be Switzerland.
So as I said, there's been that major change with interest rates, and I think we still have to see what's going to develop.
I will throughout one other point. The US government, financially, I don't think it's in good shape. The Canadian government, I don't think it's in good shape.
We are going to run another $40 billion deficit in upcoming years. So I don't think there's a lot of fiscal sanity. Because there isn't a lot of fiscal sanity, to get the governments to help certain sectors, it's going to be a lot more difficult.
Yes, you can ramp up the printing presses all you want, but at a certain point, you have to bring back a Paul Martin to bailout the system.
>>a former prime minister.
he did work to bring down the deficit.
>> Absolutely. He was absolutely critical.
I don't see anything like that from the cabinet now. I think they talk a reasonable game but if you look at the numbers, I think what they are doing is major, major mistakes.
>> Fascinating stuff and a great start to the show.
We are going to get your questions about contrarian investing for bench calendar in just a moment time.
A reminder that you in touch with us at any time.
Just a male moneytalklive@td.com will or float the viewer response box under the video player on my broker.
Right now, let's get you updated on the top stories in the world of business and take a look at how the markets are trading.
Glencore is sweetening its bid for Teck resources, adding a cash component to it was an all stock offer for the minor.
this new, unsolicited proposal would give Teck shareholders a 24% stake in a combined metals business, and up to some $8 billion in cash. That offer appears to be aimed at Tech shareholders who want to avoid exposure to Glencore's thermal coal business.
Now, Teck rebuffed the original offer, of course, and they said today the new offer appears to be largely unchanged.
Shares of Moderna are in the spotlight today. The drugmaker is facing some challenges with its mRNA-based seasonal flu shots, saying it doesn't yet have enough data to determine its efficacy. Moderna says it will continue testing the shot and collecting data. The company is forecasting a notable drop in sales this year as demand for its COVID shot wanes.
It appears cost-cutting measures that CarMax is helping offset softer demand for used vehicles. The pre-owned auto retailer posted quarterly profits above the streets expectations. Late last year, CarMax took a number of cost-saving actions, including a hiring pause for the office positions and a slowing of its acquisition of used car inventory.
A quick check in on the market, we will start here at home on Bay Street with the TSX Composite Index. We are seeing minors on the move higher as well as some energy names.
You gotta hundred and 52 points to the upside, good for three quarters of a percent in the green.
South of the border, things are a little more mixed.
The S&P 500 is modestly in positive territory, although some heavyweight tech names are holding the market back from a better showing.
Of course, tomorrow, you're going to get the latest read on US inflation.
So you're getting a bit of a sense in the market of a wait and see what that report says and wetlands tomorrow before the markets open.
We are back now with Benj Gallander, we are taking your questions about contrarian investing. You've already got some questions coming in, bench, so let's get to them.
What you think of REITs now, the viewers specifically thinking about the office real estate sector. This will back to work then, how is it playing out?
>> I think REITs have been hit and they gone down for a bit and people do have to bevery wary of the sector because as companies leave buildings that they are in, of course that hurts cash flow.
Those companies leave malls, that hurts their cash flow.
so there are some problems they are and typically they pay quite a high distribution and whenever they cut the distribution,as with normal corporation, the stock price tends to go down quite a lot. So because they have huge debt loads and interest rates have gone up, you're going to have to refinance at much higher rates.
at the same time, because they have been beaten up, if and when they return to form,you got much better amplitude on the upside.
So you will get potentially, you can get two, three, four beggars here plus at the same time they will increase the distribution. So definite risk here, no question about it, and there are certainly reasonable rewards.
>> If someone is looking at the sector, whether it's REI TS that cover offices or malls, other types of real estate, they have to have a sort of thesis about life eventually getting back to normal?
Maybe is taking longer than what we expected.
Some people would've thought at this point coming out of COVID and where we are right now that there would be more people in the office, more people in the food court every day.
>> Well, things will move closer to normal.
I mean, a lot of people don't want to go back to offices.
I was reading the numbers on and a lot of people just want to stay at home.
I worked at home forever and I love working at home.
It's not for everybody. I enjoyed the distractions and I enjoy the cheap lunch.
>> Couldn't be the cheap lunch when I was at home.
That's for sure.
>> There you go.
But for a lot of people, it's not what they want to do.
A lot of corporations are putting pressure on their employees to come back.
Some people, of course, we'll have to come back.
Some people will go back maybe three days a week, some big corporations are saying. That will definitely help at the food court and the businesses downtown.
I don't think they'll go back to normal though.
I think we are also seeing, I was wondering around Toronto today, I live here, but the amount of building that's going on, and of course they have to plan these years in advance, so you're gonna have a lot more office space and it's gonna be difficult to fill.
The Canadian poster child right now is Calgary where there's so much open office space.
So I think it's a real problem going forward. They're going to have to be more adjustments made and we will see how well they do it.
>> Okay, let's get to the question now from the viewers. This one wants to know your outlook for gold.
This will be an interesting one. One of the drivers here and what do we think might happen going forward?
>> If you want to go on a trip, head up to Iqaluit.
From the 25th the 28th of this month, they have the Nunavut mining symposium and I'm the keynote speaker. I want to talk a lot about gold and mining of there.
So gold, I'm pretty agnostic on it. What happens when gold starts to rally, which it's been doing recently, the gold bugs come out. I don't know what Rocks they crawl under, but when gold is cold as it has been for 20 years, they disappear.
And then now, they are coming out again.
So there's going to be a certain amount of momentum for the gold players.
When you see the problems and the huge debts and deficits, a lot of people are saying you gotta go and invest in something else. Of course a few years ago, crypto was the place to go for many, many people. The bloom fell off the rose, although it's come back a little bit.
I had a couple of Bay Street boys over my place a couple weeks ago and said, what to think of crypto?
I said, I like it. He said, I thought you would hate crypto. I said that there is value there. That's another question. I'm not buying it.
Gold has been around for a long time. You have to look at the US dollar and where you think the US dollar is going to go.
I still think the US dollar is probably high. I think the US dollar, of course, is the major world currency.
I'm not so sure how much longer that's going to last.
>> There's been a lot of discussion about that. How long they can hold onto their dominance.
What factors might cause it to lose its global dominance?
>>I think basically the debt and deficit levels, I think the Chinese would love to become the currency.
The euro would like to perhaps get up there little bit more. So there's competition there.
But a lot of it is just based on the American economy and how it's doing.
And if we look at the unemployment rate there, now it's towards historical lows.
But at some point, it could possibly end up being a bit more of a bag of currencies. I don't think we would switch immediately to the won, but the US has been losing a certain amount of its dominance and I think for good reasons.
>>so we will take it back to then gold. You are fairly agnostic on Gold but you're gonna be talking to a room full of people who are interested in it. Is it all about the US back down?
>> No.
you have to look at the input costs and what does it cost to mine gold?
And whenever you look at investing in a gold company, you have to look at these sustaining costs. What does it cost to get it out of the ground?
For some companies, it's far less.
Others have to get up to a certain economy of scale for the cost to go down.
But that's absolutely critical. Now, in a place like none of it, the cost of mining is very, very high.
The cost of all their equipment is very, very high.
Working there is incredibly difficult.
So the costs are a major thing. Now people I think are always going to want some gold and that's critical. So you've got what is the real value of gold?
Is it just jewelry, etc.? How much of it is just because it's shiny?
It will continue to have a certain cachet.
Go back and look at the twenty-year chart if you have some extra time and when you look at the chart, you can see how much gold has gone up and down, up and down.
At times, it has dropped precipitously. I'm glad I got that word correctly.
It has dropped precipitously and that will certainly happen again but often when it challenges highs, I think the high was in 2000, 74, once it blows through that, it tends to go for a while.
>> As always, make sure you do your own research before making any investment decisions.
we are going to go back to your questions for Benj Gallander on contrarian investing in just a moment's time.
And a reminder that you can get in touch with us any time.
Just email moneytalklive@td.com.
Now let's get to our educational segment of the day. If you're lookingto test out a potential investment before you buy, the WebBroker watchlist is a tool which can help. Caitlin Cormier, client education Dr. TD Direct Investing has more.
>> Today we will take a look at the watchlist tool within my broker.
It is one of many tools we have to help you build a portfolio of self-directed investments.
We are going to hop in and click was in WebBroker, probably the easiest way to get to watchlist is in the top right-hand side in the corner where we have this little star buttonaand that will bring up our watchlist page. So we can do is we can actually create up to 10 different watch lists with up to 10 securities per watchlist. I can type in here either the name or the stock symbol for whatever securities I would like to add to my profile.
I'm just going to go ahead and add some Canadian and US securities here so I have a good mix.
So add… Add a couple more here. There we go. That should be enough for now.
So under this initial page which we can see, is you click the drop-down and see the performance of this particular security, so a quick chart, we can also see the quote information, so what that current price is for that security, the bid asked, the open price, the volume of trades for the day and we've also got some ranges for both the day and the week.
We had the analyst rating and we can also hit buy or sell here if we want to move forward with the security.
If we click on fundamentals, we can see some dividend information, market Information, P/E ratio and estimated earnings if that's something you're interested in.
At the bottom here we also have some quick links. You can go to the overview for this stock, news, charts or options if that's something you're looking to do as well.
Within this watchlist, you can add stocks, mutual funds, options and indices. Lots of different types of securities that you can add.
Another really need tool within this watchlist is we can hit the tracker.
So the tracker actually allows us to build a portfolio, kind of like a mock portfolio, right within our watchlist. So what I mean by that is we can click right here on this quantity and we can act as if we are actually going to purchase the security.
So I could say for example I want to purchase 100 shares of Apple and I'm just going to put in the current price there and click save, and then I can do the same here for the Telus stock, so it's a 50 shares of Telus at 2762, and I'll choose… I'll do this one as well. 75 shares at 1182.
Okay. Now once I click save here, you can see already these securities are actually updating to show me how the performance would have been if I had gone through with this purchase. Showing me the last price for the security, the average cost based on the information I input, the price change, market value, book value and any gain or loss that has been unrealized of course at this point. So it's a really neat way to be able to build a portfolio without actually having to go through and put any of your money on the line.
You can test out some of your theories about investments you'd like to purchase and see how it would've panned out.
All right, so that is our watchlist tool. Of course, if you have other questions, feel free to send them into MoneyTalk Live and check out the Learning Center for a bunch of additional information on all different topics to do with direct investing education.
>> Our thanks to Caitlin Cormier, client education instructor at TD Direct Investing.
Now before you back to your questions on contrarian investing for Benj Gallander, 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.
Okay, we are back with Benj calendar, taking your questions about contrarian investing. This one just came in. TK tankers, like to get Benj's opinion on this. You told me at that you don't know this company specifically.
>> A few years ago, the whole sector got trashed and they were selling at what appeared to be incredibly low prices.
So I actually bought into to do when you and I hate to say it but I did not do well on either of them.
It's a sector that generally the companies have very, very high debt loads.
And that's the danger. It's a sector that, over time, if you look at some of the companies, you will see that they have been badly beaten up, sometimes multiple times. Often what they do is they are being beaten, day issue more shares.
Often an incredible number of shares.
And then what they have to do is have a reverse stock split.
Generally, those are very bad for stocks. When I own a company and they have a stock consolidation, or they are going to have it, I almost immediately sell.
Because sometimes they'll go up a little bit at the beginning, but generally then they go down.
Once it consolidates it may go up a bit but then they tend to go down. Those are very bad for stocks periods of the sector, it's a tough one.
It's a completely necessary sector. You gotta get goods from point A to point B, perhaps to point C. But one has to watch those debt loads because they are often great.
What is happened to is that some of them have started to turn around and start to pay either dividends or better dividends.
So you can get a pretty good return from some of these companies just through the dividends.
I know, Greg, that you've heard me say this before: dividends allow me to be stupid longer because if I get
at least I'm getting some sort of return even if the company is going down or they don't go anywherefor a while.
a large number of my stocks do indeed pay dividends.
>>let's get another question now. This one just coming in and the past couple of minutes. What technical indicators are smart to use to get a sense of the bottom of beaten-down stocks?
how does the work of a technician figure into what you do?
>>we look at all different kinds of systems and in mind to best-selling stock books, one of them is still out there which is contrary in investor 13, you can order it from our website and I'll sign it, whatever that's worth, I look at technical factors, fundamentals, momentum, management.
We try to cover a tremendous amount of ground.
Now over time, I've read different books on technical analysis.
I certainly like looking at charts and I like buying into a stock when the stock is stabilized near the bottom. Often it's had a bit of an uptick too.
Again because we are looking at such huge potential gains, usually there's a great distance between where the stock trades and the initial cell target we are going to look at.
So you know, it's worthwhile reading up on. You can read up about your head and shoulders formation, etc., but definitely it's good to have. Part of it works into investor psychology and psychology is such a huge part of investing.
I'm laughing because some people think they can be free from psychology but most people aren't.
And there's a tremendous follow the herd approach which is one of the reasons we are named Contra the Heard.
We are contra the regular thinking and contra what people are hearing.
So it's worthwhile to understand because often when people react in a certain way at certain times, they will react the same way again.
And if you can read the charts, do some technical analysis, you can prosper because of the I will add one other point.
I remember going out with one of the great technicians in Canada, and he explained to me the system. I said, do you do anything besides technical analysis? And he said, no.
So I can be a little slow. So I said, you only do technical analysis?
He said, yeah.
If they want something else, they have to go somewhere else.
So to me, just basing everything on technical analysis, it's like, you build a baseball team and you say, I'll just let my cousin pitch.
You have to actually look at a lot of the different aspects because so many different possibilities exist when you're trying to summarize and scrutinize the stock.
>> I had to find out after the show who the technician is because I probably talk to him over the years.
Another audience question.
It is now a good time to get into GE healthcare?
We can't give you investment advice about when to get in or out of a name, but GE healthcare. What's going on with them?
>> So GE healthcare was a spinoff of GE as of January 1.
I remember half the book all about spinoffs andspinoffs generally do pretty well.
So if you have the stock and it is a spinoff, the combination of the original stock that you are still holding and the spinoff generally does better than you would've done if you had just held the stock.
So GE healthcare has had a pretty good run since it came out of GE and it might be worthwhile knowing that they are planning to spinoff I guess the renewable sector next year.
So healthcare is definitely a growing field.
GE healthcare, I think their revenue is about 18 billion, so it's a major spinoff. The debt load is about 6 billion.
Governments are putting more money into healthcare.
If you looking for a demographic play, this may be one of them because populations are aging. That could be good.
At the same time, as I alluded to before, because governments are getting backed into a corner to a degree, the question is, how much money can they put into support healthcare?
The leading article in the Globe and Mail today was about some of the nursing homes closing because it is just not worthwhile for them to put more money into it.
So GE healthcare is a longer-term play. It could be good. At the same time, you gotta really think about how they are going to finance operations in the future.
>> We are going to get back to your questions for Benjamin calendar on contrarian investing in just a moment's time.
As always, make sure you do your own research before making any investment decisions.
And a reminder that you can get in touch with us any time.
Do you have a question about investing or what's driving the markets?
Our guests are eager to hear what's on your mind, so send us your questions.
There are two ways you can get in touch with us.
You can send us an email anytime at moneytalklive@td.com or you can use the question box right below the screen here on WebBroker. Just write in your question and hit send.
We'll see if one of our guests can get you the answer right here at MoneyTalk Live.
It's big week for financial markets as the Bank of Canada set to deliver its interest rate decision on Wednesday, tomorrow.
And traders get a look at the latest US inflation data also coming in tomorrow.
A big one. Anthony Okolie is joining us not to break it all down for us. TD Economics's outlook on this, look where should we start, here at home?
>> Yes.
Markets are expecting the Bank of Canada will stay steady and keep rates at PornHub percent.
No changes there. And this rate decision comes after the latest jobs report showed some impressive gains here in Canada with employment rising an unexpected 30000 Jobs in March.
the gains were entirely driven by the private sector with additions equally split between both full-time and part-time jobs.
While the job gains were impressive, TD Economics does highlight an interesting nuance in the data.
Specifically, they point to the fact that the unemployment rate has remained steady at 5% for the fourth month in a row as the chart shows.
Now a relatively flat unemployment and employment rate in recent months suggests that the labour market has not been getting tighter. In fact, TD Economics says this is an important distinction for the Bank of Canada and because it's labour market tightness that drives wage gains and hourly earnings, for example, were up 5.
2% year-over-year in the latest data. That's just a takedown from February. And with wage gains appears to be cooling in recent months and this was consistent with the Bank of Canada's Business Outlook Survey which showed that labour supply was improving and there's less competition for workers.
As the chart shows, on balance in the survey, firms view the current labour shortages as less intense versus one year ago when they were extremely high here in Canada.
Now TD Economics knows that its population growth continues at its pace and labour demand cools as it is expected to, the unemployment rate will start heading higher and will help to cool inflation. Of course that will be welcome news for the Bank of Canada.
Just to mention that I will be interviewing Andrew Hencic, Senior economist at TD, tomorrow with the immediate market reaction to the Bank of Canada decision.
>> We will get the big news here at home and then south of the border, perhaps global investors willE considering the latest read on US inflation.
>> This is a key report. It will come out after the US labour market showed it actually started to loosen steam following the March report.
But job vacancies in the US are still about 3 million above pre-pandemic levels and wage growth is unlikely to fall, according to TD Economics, until there is more significant reduction in labour demand. They mentioned that the core PCE, the Fed's preferred gauge of inflation, is expected to reach the FOMC's 2% target in early 2025.
TD Economics foresees that inflation will remain somewhat sticky in the near term.
They expect US CPI to ease from the annual rate of 5.9% in the first 3:45 .7% in the second quarter.
Regarding core CPI, they see it slipping from 5.6% to a still high 5.4% in the second quarter. Greg it?
> It's gonna be a big day. Thanks for breaking it down with us.
>> My pleasure.
>> Moneytalk's Anthony Okolie.
Let's check in on the markets. In Toronto, we have been in positive territory.
We are holding onto a triple digit gain of 160 points, little bit firmer than three quarters of a percent. The price of American benchmark crude is moving higher again today.
You're seeing the US book pull back a bit, benefiting some of the material stocks. Let's take a look at Hudbay Minerals. That's what you got on deck for you now.
That's up to the tune of about 4%, a little bit more than seven bucks per share.
Baytex energy and the energy space, look at that, they are making gain through the session as well. Five bucks and $0.47, building on some earlier momentum, little bit more than 4%.
South of the border, it's a mixed picture.
Got some mega-cap tech names holding back the broader market.
You've got seven points on the screen for the S&P 500, up a little shy of 1/5 of a percent.
But the NASDAQ weighed down by a lot of those big tech names.
It's been under some pressure today. It's off the lows of the session, down about 45 points right now, a little bit more than 1/3 of a percent. It was those mega-cap tech names, we showed you Amazon off the top of the show, Microsoft underwater again today. Nothing too dramatic at 283 bucks per share, is down a little bit more than 2%.
We are back now with bench calendar from Contra the Heard Investment Letter.
Let's get back to your questions now.
Does Mr.
Gallander anticipate a heart or a soft landing? This is the big question about the recession. If it does come, what kind of recession we get?
>> I think you'll have to ask my dad, the real Mr.
Gallander, that. You know what, I don't and I will say I don't know probably more than anyone else on television because when I try to do is look more at the audience.
you got a wild-card stay in Canada or the states, it's called the government.
What is the government actually going to do?
And again, I alluded before, they made some major mistakes in the past number of years, and it's leading us into some big problems.
When they lowered the interest rates as much as they did, I said basically this is really stupid.
They've gone too far.
>> Not only while the central banks were cutting rates, there was a huge amount of fiscal stimulus coming from the government side.
>> Exactly. That's a very, very good point. And all of that fiscal stimulus has created a greater long-term problems.
I don't know what they're going to do and that will have a definitive impact on the economy.
it seems like things are stabilizing to some degree and it seems like we are moving perhaps in the right direction, but I wish I could get into the heads of the people who make the decisions and governments and say, really?
What you are doing is very questionable here.
What they listen to me? Probably not.
I might just go back and lie on the couch and watch the more TV, watch some more succession or whatever.
>> No spoilers.
No spoilers for anyone who hasn't seen episode three yet.
>> No, it's quite good.
one of the big wildcards here is what is the goal of the politicians? Sure they want to help people.
At the same time, they want to get reelected and that's critical.
So sometimes they make the wrong decisions because they want to try and ensure their positions in office. Am I being too cynical, sir?
>> You know what, I think when you see some of the optimism in the market, they are getting used to governments coming to the rescue as they did during the pandemic with fiscal stimulus or central banks did with monetary policy coming to the rescue saying, as soon as you get into trouble,we will lower the cost of borrowing and the bond market seems to brisket and while the Fed keeps saying no, we are going to get a bit higher than here and then stay there for a long time.
There's a bit of a disconnect in terms of what people and the markets and governments are going to do things go sour.
>> As we see in in the US, bailing out all of the people who have accounts of these banks that have failed, that unto itself is a danger.
You don't want to ruin people's lives,but there has to be a sharing of the problems because if I know I can put money in any banks, no matter what the bank is, I may just go for the highest interest rates.
And whatever they are doing, they might not be doing so well. Fortunately, the banks here seem to be doing pretty well.
>> All right. A real pleasure to having you on the show. I look forward to our next conversation. Been a long time since we've had the chance to sit down and talk about the markets.
>> Me too. I can't believe it's already done. That's a good sign.
>> It goes by quick.
As always a home, you always do your own research before you make investment decisions. Our thanks to Benj calendar, coeditor of Contra the Heard Investment Letter.
stay tuned. On tomorrow show, we will have Andrew Kelvin, cheap Canada strategist with TD Securities on the program, taking your questions about the economy and interest rates. Off the top of the show, we got a few good things to talk about.
The Bank of Canada's rate decision and US inflation, you don't want to miss it. Our reminder that you can get a head start with those questions.
Just email moneytalklive@td.com.
That's all the time we have the show today. Thanks for watching. We will see you tomorrow.
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