Colin Lynch

[theme music] >> Hello, I'm Greg Bonnell. Welcome to MoneyTalk Live, brought to you by TD Direct Investing.

Every day, I'll be joined by guests from across TD, many of whom you'll only see here.

We're going to take you through what's moving the markets and answer your questions about investing.

Coming up on today's show, we are going to discuss the potential opportunity in the real estate space.

Interest rates are expected to head lower. Central bank action front and centre. Colin Lynch from TD Asset Management joins us. In today's a broker education segment, Ryan Massad is going to shows how you can find information about real estate investment trusts here on the platform. So here's how you can get in touch with us.

Just email moneytalklive@td.com or fill out the viewer response box under the video player on WebBroker.

Before we get to all that and our guest of the day, let's get you an update on the markets.

First trading day of the week. We were on hiatus last week. It was quite a week not to have a show, wasn't it, with the action that we saw on the markets.

Things are a little calmer today. We've got the S&P TSX composite index at 129 points, good for more than half a percent. Seeing the price of oil move higher as well today supporting some of our energy names and we got some dealmaking out there, it's a pretty busy Monday. I want to start with Scotiabank taking a minority stake, 14.9%, in a US regional lender, Keycorp. The entire deal about $2.8 billion US. Keycorp shares moving up on the news, Scotiabank's stocks are down. Osisko Mining is being acquired by South African minor Gold Fields.

It's got Osisko's up around 63%.

South of the border, is going to be a big week for data, including inflation on Wednesday from Americans, consumer numbers on Thursday.

We are getting a read on the health of the US households. A lot of key things. We are a little calmer to start this trading we compared to last week but some big data points that could make it interesting for us as we move further into the week. 14, 15 points to the upside, quarter of a percent for the S&P 500.

The tech heavy NASDAQ, want to check in on that space and see how it's faring. Right now it's hanging in there, at the modest 25 points.

Keycorp, the other side of that Scotiabank transaction we were talking about, though shares are up to the tune of almost 12% as Scotia takes minority is taken the name, $16.30 per share.

And that's a market update.

The prospect of lower borrowing costs is putting the spotlight on some sectors which might have been out of favour, including real estate. Joining us now to discuss the potential opportunity there is Colin Lynch, managing Dir. and head of alternative investments at TD Asset Management. Great to have you back.

>> Thanks for having me. Glad to be here.

>> Interesting times indeed.

Before some of the market volatility we saw last week and the week before, we were talking about market rotations because of this anticipation that has major central banks, including the Fed, either have already cut or get ready to start cutting, we are going to see some other sectors get some spotlight on them. Let's talk real estate.

If we are talking interest rates, we have to talk real estate.

>> Absolutely. Certainly, the possibility of potential cuts in the states and here in Canada and in other geographies around the world, it eases the pressure off of real estate just a bit. We haven't seen it fully filter through because generally put, these things take time to filter through but a couple of big things to look at. Number one. If you are an investor and you got an opportunity to invest in many different things, what is the bar for competition for real estate, right? That bar for competition is the dividend yield off of equities and potential for upside, it's the yield off of fixed income. It is so those yields off a fixed income have been elevated because you can effectively invest in what was perceived to be lower risk assets but to get a pretty attractive yield. Now, as those yields come down, the equivalent, which is in real estate cap rates, which is effectively your net operated it operating income to divided by your value, that it's gone up as well as have gone down.

As those bond yields come down, as cap rates go up, real estate becomes more attractive. That's big .1. Big point to you is that debt is used a lot in the real estate world, so not just income producing assets where people may choose to own debts in addition to an equity position but you also have things like development and what we call value add where you are doing retrofitting, renovations, etc. It debt is used sometimes extensively in those activities so the cost of debt is coming down and frequently that debt is variable-rate debt. As that cost comes down, the attractiveness of doing some of those activities increases. So we are at the start of this journey because for instance in Canada, we have had to rate cuts and relative to historic highs, we are pretty much near those historic highs still so I'm not gonna say the whole world has changed but what I would say is there is a dose of greater optimism today than there was just a year ago.

>> Those of the macro conditions on what we are seeing out there in terms of the bigger landscape. We know we can break real estate down in so many different ways. I think the first way we are going to break down his geography, the US versus Europe versus Canada.

>> Absolutely. In Europe, we saw certain countries move ahead of the rest of the world.

Two years ago, if we go back a couple of prime ministers in the UK to Liz Truss… >> We don't have to go back that far, do we?

>> That's true. It was quite interesting. A lot was going on. One of those things had to do with the budget and the impact of the budget and what that did was impact the pound but it also impacted borrowing costs in the UK. So that plus a proclivity of appraisers in the UK to adjust to real estate values meant that the real estate market declined faster than the rest of the world.

That was a very interesting test case for the rest of the world, not just in terms of what the rest of the world is seeing in the clients but what is the magnitude of those declines. We have seen about 20 to 25% in terms of income producing properties, in terms of declining values, in the UK. That has happened. The market I would say has effectively reached the bottom and we are seeing a bit of optimism on the other end.

Why? Because we see more buyers in the market from around the world looking at properties that are attractively valued. Go back to the cap rate perspective, POV. The UK, the Nordics, very interesting. It moving through that bottom and inflecting. Other areas such as German offices, not so much. Come to the US, we have also seen significant value adjustments in the last year that followed what we saw in the UK and Nordics.

We now believe that we are reaching a point of potential attractiveness as well in the US so we have seen a decline around that 20% range, weighted average across all the property types. Canada has followed the US.

We have been a little bit slower than the US but here, we are beginning to approach those values that we are seeing in the US. But in Canada, the fundamentals are a little bit more attractive, we have less retail per capita than the US, less industrial per capita than the US and we have a housing shortage here.

So the fundamentals are a bit stronger in Canada than in the US. The last place of interest is in the Asian-Pacific, because they are the dynamics are little bit different. In Japan, you saw a rate hike and so there still is, we look at bond yields relative to cap rates and if cap rates are above bond yields it's positive, there still is a positive spread in Japan but it has narrowed because of the Bank of Japan moves so we are watching that and lastly in Australia, I really has followed Canada. If you look at the order, UK, Nordics first, and then other parts of Europe, such as German, in particular offices, the US, Canada than Australia.

>> He started mentioning the other way we can start thinking about real estate as investors weathers offers properties, retail properties, industrial, residential.

When we start looking at this big macroenvironment in the opening innings of lower borrowing costs, it's her to have an effect. How you start seeing those different sectors?

>> Very good question.

Different impacts across the sectors.

In areas where there is the most supply demand pressure, meaning limited supply and a lot of demand, i.e. housing, we have seen movement up in cap rates but that movement has not been as pronounced as other areas.

So conversely, if the borrowing costs go down, and debt is used relatively extensively in the residential space, think new construction, developers tend to lose a lot of leverage, or even income-producing properties which tend to lose a lot of leverage. So therefore if the cost of debt is coming down, there is a more material impact on the residential space relative to other spaces. Plus significant demand. And yes, there has been supply incrementally in certain places but overall still and not just in Canada but in the US, the UK, Australia, etc., relatively insufficient relative to demand. Pretty big positive in the residential, rental, condominium development space.

In the industrial space, relatively positive in Canada.

In the US, you see a lot of supply and that is of some concern in certain parts of the US. In the UK, relatively positive because the supply is constrained and ditto for parts of the Nordics. So in the UK, the Nordics, parts of Europe like in France and Germany, in Canada, and parts of Australia, generally quite positive.

Okay, retail, essential retail, very positive. Why?

Demand is very high.

We all know, we've been paying a lot for essential goods, think grocery, pharmacy, those prices have been high, those retailers have done well, so therefore they have taken lots of space, so therefore the cost of that has come down. That means that the ability for buyers to buy into those spaces increases demand for the spaces, prices increase over time. So that's a relatively positive space. Then you have shopping malls which have been stressed, so think enclosed shopping centres in the last 10 years. If they have survived the last 10 years. Generally put, their business models are generally strong. There are exceptions. And the key point is what is the potential for those shopping centres to develop residential? And if there is potential, go back to what I said about residential.

Lastly, office.

Lower rates is not the cure-all for the office challenges. The cure-all for the office challenges are the propensity of people to actually physically be located… >> Go back to the office.

>> Exactly.

And if that office is well located, high quality, close to transit, and attractive, then people will be more likely to actually want to be in those offices and then tenants, therefore, the companies and those spaces will be more likely to want to pay good rents. And if it's not that, then guess what?

The lower rates is not, in my view, going to be a cure-all for a challenged office.

>> Fascinating stuff and a great start to the program.

You will get to your questions about global real estate and alternative investments for Colin Lynch in just a moment's time. And a reminder that you can get in touch with us any time. Just email moneytalklive@td.com or fill out the viewer response box under the video player on WebBroker.

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

A lot of stuff happening in Canada today. Let's start with shares of Barrick Gold in the spotlight. They are up to the tune of almost 8.5%. The Canadian mining giant beat on the profit line as cost came in slightly lower-than-expected for its most recent quarter. In a note to his clients, TD Cowen says Barrick appears to be on track to meet its 2020 for guidance and expects increase production and lower cost for the second half of the year from Barrick. He put it all together and the street clearly seems pleased. Got some dealmaking in the energy sector today. Tourmaline Oil has an agreement to buy Crew Energy in an all stock transaction valued at $1.3 billion Canadian. Tourmaline has made a number of acquisitions in recent years, including buying Bonavista Energy last fall. Crew Energy is up 74% on the news.

Gold mining sectors also getting in on the Monday M&A action. South African miner Gold Fields has a deal to buy Osisko Mining in a deal valued at $1.6 billion US.

Gold Fields plans to acquire all of Osisko's outstanding shares for $4.90 each. Osisko is up to the tune… Of about 11% on the news. So much M&A, I'm getting confused between the gold miners and energy names as well. Quick check in on the markets. We will start with the TSX Composite Index. We are up a solid half a percent, 129 points on the board. The price of crude oil is approaching 79 bucks per barrel, that would be American benchmark crude, West Texas intermediate. South of the border, the S&P 500 has been going in and out of positive territory all week. It's a big week for data. Right now we are up 15 points or a little more than 1/4 of a percent.

We are back now in Colin Lynch, taking your questions about global real estate and alternative investments.

Here is the first one. Can you just discuss the barriers to real estate development, and to increase the efficiency?

>> The most relevant barrier in terms of development has to do with the rental space. Put differently, and I think this is important. Office development cities generally like because it creates implement.

Industrial development, TBD. It depends on jurisdiction. Not so much in Europe but in US, easier.

Retail, generally cities like that, it's just it hasn't made a lot of sense to build it. And so the key then is rental and this is where things get interesting because we all know we are in a housing crisis in Canada, for instance, in our major centres and we also know that where we have major investments in transportation infrastructure, generally, you would expect there to be development in terms of high-rise rental or condominiums there.

The problem is, we operate in a complex structure. We have municipalities, provinces, the feds. If the feds say, we want to build housing, that decision, in terms of the micro location and approval process is not a fed decision, it's a municipality decision. And in the musicality, you got staff and you got elected officials, and they don't necessarily always agree. All to say, part of the solution is clarity along that vertical, federal, provincial, municipal, staff and city councilors and an agreement where there is transportation infrastructure, for instance, that there would be generally put a desire to have higher density.

Then we have processes that take a long time.

Whether it's permits, development permits or occupancy permits, the process by which you can go from an idea to the approval to actually develop might take up to five years. So given it might take another three to actually construct, that might be eight years.

So we are talking today about her critical housing shortage, you might see the outcomes in 5 to 8 years from now.

>> That makes a lot of sense in my community. I live in Brampton. I probably mention that before. There is a big mall called shoppers world. The owner of that mall, their former CEO who retired several years ago, well before the pandemic, when I interviewed him we would talk about taking that mall, building residential, completely reimagining the landscape. Fast-forward to 2024, it's still the same shoppers world pretty much that I grew up with as a kid.

>> Yeah, that's right.

And part of that is exactly what I described. Part of it is also labour costs are up, material costs are up.

Any supply chain issues, tariffs, etc., filters right through to material costs and then you also have financing costs on their way up. So at the end of the day, if one has to cover those costs, the revenue side has to increase. The challenge that we see today, think condos, is that given the cost of construction is well in excess of $1000 per square footage, with the market as of today is that given-- if you are an individual buying a condo and given the high costs, it can you afford the price at which that condo needs to sell because the cost of building that condo just shot way up. So we have that dynamic that is also a bigger barriers to development that needs to be solved.

>> We have a question from the audience now. They want to get a grip on how Canada's real estate market is doing because they've seen lots of articles about stalled or cancelled condo projects. I think this is a hard one for he will wrap their heads around. We have a housing shortage, people need a place to live but the condos are stalled.

>> That's rated it comes right back to the costs.

Let's use a different analogy.

Let's say that you are buying shirts and you really need a shirt and so you go out and your budget to buy a shirt, let's say you're buying a dress shirt, is $50.

That all the dress shirts out there are $200. As a result, you go out, you look at, you really need a shirt, but you can't pay 200 bucks. What do you do?

You might reuse the same shirt that you have or borrower friends shirt, etc. And that's a version of what we have here in our market today which is that we have a lot of projects in the condo pipeline that are actually approved, i.e. that permanent process is complete, folks are ready to develop but for the price at which they need to sell, nobody wants to buy. So we are missing affordable housing and when I say affordable housing, I don't mean social housing. We are missing that too.

>> That's important to you. People say those things are going to change.

An affordable home is not the same thing as social housing but something that a first purchase can be made on.

>> I mean affordable housing, we will call it 80% of market rent. It's lower than the market rent but effectively, that apartment building or housing development is no different than any other housing develop meant.

We are dismissing that critical piece where the majority of individuals can actually afford whether to rent or afford to own. And this is where the government federally, provincially, needs to work with the real estate sector, both developers and owners need to work with academics and nonprofits and many things are part of this. One is, for instance, CMHC and they help reduce the cost of debt. That's great.

The government made the HST announcement last year but that needs to be linked with the provinces. Ontario agreed that not all provinces did.

But you also need things like labour.

You need more people here that can actually build because for all the infrastructure that we are building, so think transit, use largely some of the same people actually build the houses and so you need a labour strategy as well and that's where we have sort of fallen apart in addition to the alignment across provincial, municipal and federal.

Many pieces are in the equation.

I was part of a panel that created recommendations, but 15, last year. I would see a couple have been implanted. We have a ways to go. If we do those, we have a hope of actually solving this housing crisis.

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

we are going to get back to your questions for Colin Lynch on global real estate 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 our educational segment of the day.

REITs are 1 Potential Way to invest in real estate.

Joining us now to discuss how you can research the sector here in my broker is Ryan Massad, senior client education instructor with TD Direct Investing. Always great to see you. Let's talk about finding information on REITs.

>> Exactly, REITs are a great way to plug-in to the real estate market.

They own, operate or finance those income-producing properties. So how do we get access to them? One of the ways is going to be in web broker and I will show you how to access that market and gives more information on it and even show you where you can screen for them.

Let's jump into web broker right now. In web broker, what we are going to do just to find out a little bit more about it, just 8 feet wet here, we are going to click on research and then under the markets column, we are going to click on indices and we are going to go specifically into the sector under this sector indices, and then down to an index for REITs which is the S&P TSX REITs. I will click on it and then I want to know the members, which members make up this particular Index? This will get me started with some real estate investment trusts and again, a lot of these will invest in hospitals, office buildings, a bunch of things that are maybe not as easy to access yourself physically but through real estate investment trusts.

I could start by looking at any of these, may be clicking on one. Going to the overview and it'll give me an idea of this particular REIT, the details to this REIT, because it's important to know what it's doing.

There are a lot of things that are REIT could be investing in. You want to make sure you are investing in the right thing there, Greg.

>> Now we know how to start looking at the space in my broker. One thing I like about web broker's functionality is if I have certain criteria, I can whittle it down on web broker. Maybe you want to search by country or performance?

>> Let's start whittling.

Under the tools menu, we are going to go down to screeners.

In that, we are going to go into the tab that is exchange traded funds.

The beauty of these REITs, they trade on a stock exchange. I will click on create custom screen and then from there, just to pull out those REITs, we are going to go into the fund category and use that particular piece of criteria. When you're there, there's a whole bunch of criteria, I have a ton of it here, but we are going to go specifically to a couple of things like for example I know: was talking about global real estate as well, so we're going to that particular criteria.

You're going to add the Canadian space as well to screen for those Canadian pieces of real estate, so Canadian real estate. We can even add the US real estate. We have a way of actually putting in different geographic categories. You can also add a dividends piece to it here and that criteria, we want it to change, what kind of yield are we looking for within this kind of product? We can add that criteria to it as well.

But once we have this, if we go down to the bottom right corner, we got our matches and again, we got a nice list of REITs here that we have whittled down and then we can look at them by summary or rating or performance and really dig into these things.

Again, remember, these are doing a bunch of different things.

REITs can be invested in a whole bunch of different things. We want to make sure that we are looking at the right type of sector within that reach category, whether it is office or retail or any other number of things. We can click on that item and then go to the summary and start reading more about it and what it invests in.

It helps to do that research that: was mentioning before and what kind of pieces of the real estate market and what are the factors but at least we can find some of those REITs here in my broker to get you on your way.

>> Great stuff as always. Thanks for that.

>> Thank you, Greg.

>> Ryan Massad, senior client educational instructor with TD Direct Investing.

And for more educational resources, you can check out the Learning Centre on WebBroker, or use this QR code to navigate to TD Direct Investing's YouTube Page here there are more informative videos.

Before you back your questions for Colin Lynch, a reminder of how you and to this.

And a reminder that you can get in touch with us any time.

Just email moneytalklive@td.com or fill out the viewer response box under the video player on WebBroker.

And a reminder that you can get a head start.

Just email MoneyTalkLive@TD.com.

Just email moneytalklive@td.com or fill out the viewer response box under the video player on WebBroker.

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.

>> Debacle: check your questions a global real estate.

Has changes to it Canada's immigration policy had any effect on real estate?

>> I think the beauty of alternative investments is that we power daily needs.

From an introductory side, the energy powers daily needs, transportation, the real estate side, housing powers daily needs. So regardless of outcome, those needs continue.

>> Whoever is in the White House, I want to be able to turn on the lights, I want the water to come out of the taps.

>> Precisely.

I don't want to imply that there is no impact. There is.

How do I bridge the two statements? Economic growth drives some of that demand.

More offices lead to more shoppers buying things leading to more ability to afford housing to create more housing units and that creates more demand for power and energy, creates more transportation so therefore more demand for transportation. The question then becomes what economic policy is, what immigration policies does each party represent and how does that filters through in terms of demand? Then you get into trade and that does have some impact as well, back to the ability to impact economic growth but also think ports and what flows through ports and how they flow through has an impact plus after they go through ports they tend to go into warehouses so for instance one of the things that the real estate world is very interested in is the proclivity to have items manufactured or distributed through Mexico into the US.

That has been a theme largely because of the previous president and policies related to that.

There is some impact but it is not especially dramatic because at the end of the day, the alternatives world serves largely the basic needs of society.

>> Fascinating stuff.

You mentioned immigration. Someone has a question about Canada. Have changes to Canada's immigration policy had any effect on real estate?

>> Yes and no. The bigger part of that answer is no.

Why?

First off because immigration has many components to it. There's economic immigration, there's refugees, there's students, there are temporary foreign workers.

So the biggest catalyst in terms of growth, population wise, is economic immigration and we are still at historic high levels there and that call that element of that immigration equation has been the most consistent regardless of party or prime minister in office for decades.

And from a real estate perspective, we really focus on that because that translates into demand for residential units, condominiums, etc.

Then you have the other buckets. Students grew dramatically. A lot of the governments focus federally and provincially is on that student bucket, particularly private colleges that grew from near nothing to something and so that's where a lot of that focus is.

Does it create incremental demand? Absently. Does it manifest, does that demand manifest into the type of tenant's many institutional owners and real estate serve? Not as much.

So therefore, the impact is not significant there.

You have temporary foreign workers which tend to be just repeated throughout the country. As institutional owners of real estate, you are really focused on economic migration. I will make one caveat and that caveat is student housing.

Increasingly, institutional investors in real estate are looking at student housing not just in Canada but around the world. They are to you, however, you have to differentiate between student housing for universities and colleges versus student housing for private colleges and, by and large, the universities in Canada is still need to grow because their costs are accelerating and therefore they need their revenues to accelerate so we think that long term, it's still an attractive space despite some volatility around the different announcements. That's a long answer.

Yes and no, but then no overwhelms, in my view, the yes.

>> Another one from the audience. They want to talk about China. As China's real estate sector still a big risk?

There is always a story that dominates in the summer. I think Chinese real estate was the story of last summer.

>> Over the last decade, you see a lot of supply in China in particular sectors, think residential, and fluctuating demand and so if you just keep those two tenets in place, you want limited supply and lots of demand. If you have the reverse, lots of supply were lots of supply potential and limited demand, there is some concern.

On that point, number one, it exists today and causes concern. Number two, international investors need some clarity on getting money in and getting money out and there is a bit of a system in terms of converting money into China and getting it out of China. There is also a land lease system. Most real estate is freehold were you on the dirt in addition to whatever you build above the dirt. In China, the government owns the dirt, it leases it to you. You might own what's above but was at leases over, the question is, what happens? So the three dynamics for us say a little bit more cautious.

The most important dynamic is that supply demand which is to put demand and the potential for a lot of supply.

Relative to other places in the world where one could invest and achieve a similar return, we would rather do that and achieve the return with lower risk than for instance invest in mainland China. Not to say we would never do so but certainly we would look for evolution that's more attractive from a supply demand perspective.

>> That's the investor's perspective. I think some concerns around the Chinese property market… Markets are looking, was the thing that happens over here? It has nothing to do with my life.

But it spreads through everything. That did not seem to be the case.

>> We have not seen that. I think the market, for the reasons I described, views the Chinese real estate sector as idiosyncratic. It is leasehold, there is more material government involvement there, developers in China are more localized and receive funding from international investors through Hong Kong but by and large, that sectors a bit more contained relative to very different dynamics that we see in Japan or Singapore, Australia, the rest of the world.

It is a much more contained market, the participants are much more localized to China and so as a result we have not seen a lot of contagion and I would not expect to see contagion.

>> Fascinating stuff. We'll get back to your questions for Colin Lynch on global real estate in just a moment's time.

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

and a reminder that you can get in touch with us at any time.

Do you have a question about investing or what's driving the markets?

Our guests are eager to hear what's on your mind, so send us your questions.

There are two ways you can get in touch with us.

You can send us an email anytime at moneytalklive@td.com or you can use the question box right below the screen here on WebBroker. Just write in your question and hit send.

We'll see if one of our guests can get you the answer right here at MoneyTalk Live.

You can now invest in fractional shares on my broker and TD Direct Investing has this explainer on how it all works.

>> To buy or sell partial shares, also known as fractional shares, in my broker, start by opening a trade ticket.

Then select your account. You can trade partial shares in Canadian and US dollars using a cash account, margin account, TFSA, RRSP, RIF, or ESP or RDS P. Next, enter the symbol or name of the stock or ETF you want to trade and check out the quote for the current price.

Partial trading is available on many stocks and ETFs listed on the Canadian and US exchanges. You will find a complete list available for partial trading here.

Partial shares are available for the stock or ETF you entered, the fractional icon will be green.

You can only buy and sell fractional shares as a market order, meaning your trade will execute at the best available price. If you switch to another order type, such as limit, stock market or stop limit, the partial quantity will round to a full share quantity. You can place a buy order in one of two ways.

Number one, enter the dollar amount you want to invest.

The calculator will estimate how many shares you can buy, including fractions up to five decimal places or, number two, enter a whole or partial quantity and the calculator will estimate the dollar amount.

You can enter quantity based orders at any time but the dollar based order ticket is only available during market hours. For all partial orders the good till date will be set to date. Click review order to review the details of your trade ticket. When you trade less than a share, you will pay a flat fee of 199.

Otherwise, standard commissions apply.

Your order is placed as soon as you click agree and send and executed in real time during market hours.

To check the status of your order, under the trading tab, select order status. Here you will find the details of your partial shares order. That's how you trade partial shares in my broker. For more information on partial shares, check out the homepage for educational resources on how treating partial shares can work for you. Have more questions?

Browse our on-demand videos, live webinars and interactive master classes in the learning centre.

>> Let's get you updated on the markets. We are going to jump into TD's Advanced Dashboard, platform designed for active traders available through TD Direct Investing. This is the heat map function, and I see of the market movers. We will start the TSX 60, screening my price and volume.

You can see you got Barrick Gold up to the tune of about 8%. The street is pleased by his latest quarterly results, perhaps more pleased with what they think is going to come in the second half of the year.

Scotiabank is down.

Taking 15% share in Keycorp. Some movement into the energy names. South of the border, we've been on the other side of the breakeven line on the S&P 500 today.

We are going to narrow down to the 100. It's a simple way for me to look at it on the screen.

Nvidia, if you're using up a lot of real estate, that's where the action is in the market today. Nvidia of to the tune of more than 5%. Later this week we get another read on US inflation and the health of the consumer. It will be an interesting one to keep an eye on.

We are back now with Colin Lynch from TD asset management. This question just came in in the last couple of moments. What Canadian realist rate rates are best positioned in this interest rate environment? We can't talk about individual names but we can talk with the space.

>> It's a good question.

Certainly, in Québec and with some of my earlier comments, the residential space is tight in terms of high occupancy, low vacancy. We had seen rental growth and a touch of rental weakness in certain places like in Toronto but you step back and you see very significant rental growth, the population's growing you and the rental stock is not increasing. Expect this trend to continue. If rates continue to come down which is probably put the markets belief that will impact positively that space because that space tends to have more leverage than other spaces in real estate so certainly that's attractive. One caveat which is when you look at something called turnover, so turnover basically measures what proportion of your tenants move out and move in, that's been dropping dramatically.

That's generally a good thing because tenants are staying longer but if market rents are increasing dramatically, that means that you have more folks paying lower rents relative to market so turnover's drop significantly and it used to be about 1/3 in the industry, it has really come down materially so that is one caveat, turnover impact your ability to continue to raise rents relative to market growth. Overall it's a very positive space. Offices are I would say in Canada a touch better than they are in the US but it's really important to have the right type of office and so you want occupancy in the high 80s into the 90s for your offices. As soon as you get occupancy in the 70s, in the 60s, unless there is some real good reason, it's a new office and is just leasing out, concern.

There are haves and have-nots and I would be very focused on the have of office and not at all and the have-nots.

Essential retail, grocery stores, important.

Effectively, grocery, pharmacy, bank branches, etc., the daily needs, that's also important. You think about economic volatility, most resilient relative to for instance hi luxury fashion and then lastly the warehouses. In Canada, generally, still positive.

Vacancy has ticked up and that is a concern. We are no longer seeing rapid rental growth. I would argue that is actually a good thing because tenants have to pay the bills so there rents went from five dollars to 20, that's relatively unsustainable. So having moderation in that rental growth I think is good for the market long-term but a bit more challenging in the immediate term.

>> We are going to squeeze in one more question for Colin, you're such a popular guest.

Our lower rates good for Canadian infrastructure companies like pipelines or utilities?

>> Yes.

For a couple of reasons. Number one, the bar for competition. For investors, those companies produce earning yields. Then earning yield is attractive and has continued to increase. If the cost of debt goes down, that means that the fixed income yields also go down and so therefore the earning yields off of infrastructure companies are attractive.

Point 1.

Point 2, there is lots of demand for infrastructure.

You think pensions, they are just stepping into the infrastructure investing space. You have governments involved in energy in every aspect, social and for structure, transportation. They need more private-sector participation a the value of those assets, given both the improving earnings profile and the increasing demand from investors yields to general positivity for that space. Yes, a decline in the rates positively impacts Canadian infrastructure companies as well. And the government is inclined to create contracts that financially incentivize private-sector participation. All that to say demand will continue to grow in the infrastructure space.

>> If we can get your question today, we will aim to get it into future shows. Stay tuned for tomorrow show.

David Mau, VP and Dir., portfolio research, TD Asset Management, wants to take your questions on industrial stocks. You can get a head start on your questions.

Just email us@moneytalklive@td.com. That's all the time we have the show today. Thanks for watching. We will see you tomorrow.

[theme music]