Colin Lynch

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

Coming up on today's show: we'll discuss if the heyday for office real estate is over with Colin Lynch, head of global real estate investment trust TD Asset Management. And MoneyTalk's Anthony Okolie will give us a preview of what to expect from Wednesday's US Fed rate decision.

In today's WebBroker education segment, Bryan Rogers will take us through how trade alerts work on the platform. Here's how you get in touch with us, just email moneytalklive@td.comor fill out the viewer response box under the video player on the broker.

before we get to our guest today, let's give you an update on the markets.

the market may be treading a little cautiously ahead of Wednesday, try to figure out where the Fed is at. Bank of Canada gave us a hike last week.

Said we are going to sit here for a while.

Try to figure out what impact we've had. It will be very interesting to see what the Fed does on Wednesday and how they see the path forward.

Right now, modestly negative.

TSX Composite Index at 20,672, down 1/5 of a percent.

Seeing some weakness in Shopify today. The broader tech market is down today.

The Chief technology Ofc. stepping down for personal reasons. The stock is down more than 3%.

check in on the mines, the uranium play. Denison Mines is up a little bit more than 4%.

South of the border, that same kind of cautious trade happening. Down 26 points.

Down a little more than half a percent, two thirds of a percent. The tech heavy NASDAQ, noticing some of the big mega-cap tech names are shedding some points today.

As NASDAQ is down 1 1/4%.

Nvidia, another big chipmaking name, they had a pretty good start to the year. Bit of giveback in recent section. 196 bucks per share, down about 3 1/2%.

And that's your market update.

Most pandemic restrictions may be in the rearview mirror, but globally the return to office has not been as robust as some may have expected. So is the heyday for office real estate passed?

Joining us now to discuss is Colin Lynch, head of global real estate investments at TD Asset Management.

Great to have you back.

>> Thanks for having me.

>> Anyone who has a job in a traditional office and has me going into that office is five days a week or a couple of days a week is probably noticing something, that we haven't seen the big return to office that we were expecting. What's happening out there?

>> Well, it varies around the world, first off.

that is definitely the case here in Canada, the US and Europe.

a bit of an outlier is Asia.

So in Singapore, Hong Kong, COVID aside, Tokyo and Seoul, there has been a much more robust use of the office.

So let's put Asia to the side and let's look at North America and Europe.

And yes, it has been a little bit slower than a lot of people initially anticipate it. Is the heyday of office over? I would argue no and yes.

No if you are a well located, great amount of ties, transit linked to office that is relatively new and by that I mean new build or was renovated.

That's also a great environment… That I think has a wonderful future ahead of itafter we get through the dynamics of COVID and decree of return to the office and finalized that brought a hybrid experiment that we are all living through.

where the heyday of office might be over would be older offices, an older generation of officethat is not decarbonized,, meaning it is not ESG friendly, and it's not really close to transit or major transportation infrastructure.

That's going to be challenged.

We think around the world, that's going to be a theme, whether you're talking about Canada or the United Kingdom, the USA or even some of the stronger markets for offices in the Asia Pacific, I think that'll be a seam. So for those offices, yes, some of the heyday might be over.

what do you do with those offices? Do you invest capital to revitalize? Or do you convert to a different use?

That can be quite expensive.

>> We have an indication of which way we may be leaning? Before the pandemic, some traditional office spaces in the downtown core of Toronto were undergoing revitalization's.

They were freshening things up. In the end, if you want to attract tenants, and workers, give me that interesting environment.

Give me a good reason to be there. Have we seen which way that's going to fall yet or is that still up in the air?

>> Yeah, that's a good question. We have seen a significant number of offices pursing refresh and modernization programs, so whether that's the lobbies, producing a mobile environment, incentivizing tenants, incentivizing tenants to allow tenants build up a fresh new space. In Toronto and in other cities across the country, whether it's Montréal or Vancouver, we seen this.

That's going to continue and particularly as we see more and more impetus towards better quality ESG offices, that's going to require a significant retrofit of offices. So we're going to continue to see that and that will probably ramp up because there are a lot of older generation offices whether it's inside or outside.

We've seen this in a few places, Australia being one, the United Kingdom being another, but we are seeing this in Canada, this program in Calgary, for instance, where the municipal government in Calgary, to try to incentivize, they've had some success, incentivizing off his owners to convert those offices to other uses, usually apartment buildings.

The only issue with that is it is very expensive, as you can imagine. And not all offices are designed in a way that works for apartment buildings.

So if you think, if you're living in an apartment, you'd like to have a window.

>> May be some plumbing.

>> Some plumbing, yes. And not all offices are filled with a floor plan that allows you to have a lot of window space.

so you can see with some offices, if you convert to a residential apartment, you would have very long and narrow apartments withaa very little amount of window space and that tends to be an issue because we like to have a view, etc. So some of those restorations are better as it relates to the cost to retrofit and yes, plumbing, a number of things, ceiling heights, so not all offices can be converted to residential. So there's going to be some that we call stranded that will struggle to attract tenants and will struggle to have an alternative use and will struggle to justify the amount of capital required to upgrade the office to be something that is ESG friendly. And those offices will have a tough time.

>> I want to talk about the economic backdrop. Of course, one of the unknowns of this year is if there is an economic pullback, would be deep enough to call it a recession and the effect that's going to have on a number of investing classes. Is there way to consider this relative to real estate?

>> Sure. When you look at real estate and commercial real estate, ultimately commercial real estate serves the economy.

So if the economy is slowing, there is certainly an impact that will be filled by commercial real estate.

Whether it's a slowdown, recession, light recession or deep recession, lots of folks… The key is is that there is going to be a bit of a slowdown. How does that impact the world? Offices are really on the front lines because if you have an economic recession,generally the number of jobs stagnate, might decline. Tenants begin looking at their spaces and say they really need that space now.

That's been happening already because we have moved from coloured four days or five days a week to something that looks and feels more like two and three.

So a number of tenant occupiers are going through that right now.

So recession might accelerate some of that thought.

There is also the view that a recession might prompt more people to come into the office. So that's a little bit of a contrary notion.

>> Is this like the FaceTime thing?

The economy is tough, it's hard to come upon a job, maybe I want people to see me.

>> We don't know, that's in the realm of psychology but there are certainly folks in the real estate industry that think more economic tough times will prompt more people to be in the office in order to develop those relationships, whether it's with a superior or with teammates as well.

If you look historically, the office tends to be the most exposed to recessionary environments, so it tends to do very well when things are growing and tends not to do so well when things aren't. Conversely, if you look at residential, the only place, whether it's economic growth or recession, the economics don't tend to be as much of a driver as the demographics.

So if the city is growing, attracting new folks or if people are having kids later in life, if you have a lower number of married, common-law individuals, that means that you have more and more households and that can mean significant demographic growth in that demographic growth tends to drive demand for housing.

Housing tends to be more driven by those demographic factors.

Particularly in the medium to long term. And then industrial and retail are kind of in the middle.

They certainly are impacted and so industrial warehouses, these aremanufacturing facilities,and so we have an issue with the economy, we will do less manufacturing, less shipping, but we also have less commerce.

So we have to look at the two, but certainly a slowdown doesn't help and then retail, well, folks are out and shopping, we saw that in December, lots of folks windowshopping and we had COVID.but if we don't have as much money to spend and feel the pinch, that's going to impact certain retailers.

So that's the broad sort of view.

The office is the most exposed, multi-residential the least exposed, and then you have industrial and retail in between.

>> Fascinating stuff is always in a great start to show.

We will get your questions about real estate for Colin Lynch including stocks on residential retail in just a moment's time. A reminder of course that get in touch thus any time. Just email moneytalklive@td.

com.

Or Philadelphia response box under the video player on WebBroker.

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

The deadline to complete the Rogers-Shaw deal is going to be extended to February 17.

That is the companies involved await a decision from the federal industry Minister on the transaction.

if successful, the multibillion dollar deal will see Rogers acquire Shaw and Québecor's Videotron division acquire Shaw's freedom mobile business.

We have four cutting prices on its electric Mustang Mach-E crossover in an effort to stay competitive in the EV market.

The Detroit automaker says it will also ramp up production of the vehicle.

Now this morning, investors learned of course tesla recently cut prices on its offerings.

It was another big week for corporate earnings with some of the biggest names on the street scheduled to deliver reports. We are fighting releases this week from tech giants as well including Apple, Amazon and Google parent Alphabet.

We've been getting some warnings from the tech community about a softerearning this year.

We will start with the TSX Composite Index.

The big event is on Wednesday with the US Federal Reserve, a rate decision. Right now, we are down to pretty modest 40 points.

You will call it 1/5 of a percent in Toronto. And on Wall Street, the S&P 500 right now is down about 26 points, a little more than half percent.

We are back with Colin Lynch, we are taking your questions about real estate, still is get to them. We have of you are talking about consumer debt levels.

We hear a lot about consumer debt levels. Our shopping malls going to be in trouble?

Maybe outside of a recession, if you a lot of money, how does it affect them all?

>> Certainly, higher debt levels has an impact on consumer spending ability.

You have to twin the higher debt levels with the cost of servicing the debt and certainly what we have seen in the last year is the cost of servicing that debt is rising. So certainly that will be a headwind for retail in general. And by retail, that's not just bricks and mortar, that is also online.

I think the powerful counterweight to that point right now is that we are still sort of emerging as a society out of COVID. As a result, we have seen folks really embrace the physical environment.

Not just to go to a shopping mall and shot, that's also to go and watch movies and go to restaurants with friends, etc.

So right now, we are seeing that second impact outweigh a bit the first impact.

As we go forward into 2023, the question is how much of that spending impulse will remain and certainly there is still savings and checking accounts and savings accounts alike in Canada, in the USA. There are still savings to be spent.

But certainly the inflation and the higher interest rates in Canada the higher debt level is going to impact that.

So then what does that mean for retail? Ultimately, it means if you are a destination as a retail centre, you will perform better because you will have things that draw people to you.

So if you think about a major shopping centre with multi-uses, if you think about major avenues and thoroughfares that are places that people go if you're going to visit a city, you know that thoroughfare, those will tend to perform a little bit better than other types of retail. And the second thing that will help retail and certain types of retail is if there are other uses on that site.

So think multiunit residential or condominium that is on that side or has the potential to have a significant number of residential units on that side. You create a community and the community actually frequents the shopping centre.

>> Jump in a car and drive in a car to get your groceries from downtown versus having them delivered.

>> Precisely.

And we are seeing that not just in major shopping in town centres but we are seeing, to your point, a number of condominium buildings or apartment buildings with those grocery stores or essential needs embedded within. And that leads to fulfilling other central needs. Those types of retailers, by that I mean grocery stores, drugstores, those performed very well in the pandemic and continue to perform.

We see capital values increase across that sector.

And so it really depends on the type of retail and those central retailers tend to be a little bit more recession proof than high luxury retailers who are being impacted by debt levels.

>> I think of the traditional shopping mall, how people always talk about we have this great anchor tenant, there is the investment thesis.

It sounds like it's more about location and a wide variety of offerings that keep people coming. If your anchor tenant doesn't appeal to a wide variety of shoppers, they will show up.

>> We have really evolved as a society over the last: 30 years away from department stores as the only sources of drivers of traffic to a mall to technology stores being big drivers of volume. So the notion of an anchor tenant, yes, has really evolved.

And you can extend that to say big grocery stores that have many things in them, not just food, they might have clothing, they might have a pharmacy, they might have a vision care Centre, they might even have a doctor.

So the notion of a grocery store has also evolved.

And when you think about, okay, who is driving traffic today?

It could be the grocery store, it could be the electronics retailer, it could also be a department store that's fresh and relevant. And so yes, that notion of the anchor tenant is quite different today and all those tenants use different amounts of space.

An electronics retailer leaves a lot less space might do more sales than the traditional department store.

So yes, how you configure that mall, how you offer a variety of different tenants to the community is really important as well.

>> Earlier in my broadcast, I made a joke abouthow convenient it is to get my shoes in the same places I get my apples.

Let's get to the next question. And of the pandemic, most of it behind us, the e-commerce big boom we saw, what does this mean for real estate?

>> Well, it has meant a huge demand for warehouse space across the board and we have seen that everywhere. If we look at the values of office retail, industrial, what's been the performer in the last couple of years?

Warehouses. That has been driven by our need to acquire things online recently more.

Well, we see in the last nine months with the reopening, with the restrictions mostly removed across the world, we have seen folks go back to the shopping malls and go back to the stores maybe not of the same volumes as 2019 but they are spending similarly.

What does that mean for e-commerce? Ultimately, we have seen a takedown. So a lot of major e-commercecompany is have said they might have bought up too much space or pursued a too aggressive expansion.

in Toronto, it's been 1% or less for the last few years.

A market where vacancy is 1% is a market where the demand is well in excess of the supply.

And we are still saying that.

But we have begun to see that change and so demand is beginning to decline a bit, not as much in Canada but certainly in the US and we think that might happen in Canada. We are seeing still supplied, not in large amounts of supply but still noticeable supply. So demand is coming down a bit, supply is bumping up a bit and you have some tenants that are saying they maybe were too aggressive.

And we've seen a growth in industrial real estate in the last few years looking forward, you might say, perhaps most of that growth has been realized.

Too early to tell definitively, but suffice to say hard to believe that the last three years in industrial real estate is going to be repeated over the next three years.

>> That makes sense. Always at home make sure you do your own research before you make any investment decisions.

We will get back to your questions for Colin Lynch on real estate in just a moment time. A reminder that you get in touch with us at any time.

Email moneytalklive@td.com.

Now, let's get to our educational segment.

If you want to make a trade on WebBroker, you might be wondering how to find out whether the trade actually went through.

joining us now with an explainer is Bryan Rogers, Senior client education instructor with TD Direct Investing. Bryan, great to see you. Let's start the week with you telling us how we know on this platform want to trade gets completed.

[inaudible] >> Sorry, I was talking to myself there, great.

>> I thought it was just me. There you are. Let's go.

>> I was going to say which there was fireworks or something that would go off when an order is completed but it's a bit simpler than that.

Maybe eventually we will get to that point. We talk a lot on the segments about entering orders such as market and limit and stop orders but we haven't looked it how to see that in order has been filled.

here's where you can see what happened with that order or make a change. If we go into WebBroker, I want to show you where you can find that.

It does usually guide you and want to place a trade, you know to order status and click the button right away. But if you did miss that, if you go to the trading tab, and I don't have any open orders in here right now so you have to use your imagination but you can see any orders you would have would be listed here.

So any orders that would be existing, you can filter them by open or filled orders. You can view any of the cancelled orders.

this is just a test account so there isn't anything here at the moment. And your historical orders are here as well. One of the common questions we get ispartially filled orders, if you open the section and see a partially filled order, you can change that order.

Usually you can change the price. You can change the quantity because will often happen is if you change it to a higher quantity for example, that's going to create a new order and generate another commission so you're going to be charged again. Or if you do get filled on a partial order and it gets filled across multiple days, there are instances where you could get multiple commissions on that too. Those are things to be aware of.

You can always call our contact centre if you aren't sure.

If you are just making a change on an order in the same day, there is no problem doing that. You can cancel your orders in this location and then you can go from there and do whatever you want to do next.

>> It's been my experience on the platform that with how they liquidate securities, it doesn't take all that long to sell but it can sometimes take hours or even days to complete some orders. How do you notified of that?

>> That's a great question.

First, you must ensure that you have your notifications enabled on WebBroker.

There is an area where you can get notified.

If you go to that order status which I've already shown you here, he can go do it manually. But once you place a trade, you will either get notified immediately if it goes to right away or you can set up a thing called notifications.

When going to do is right at the top right hand side, Seward says demo WebBroker right here, this would either be your name or your corporate account name or whatever it is. Click on the section. And then you would customize cycle. This will take you to a taboo right here.

It's the second one in. Trade notifications.

you want to make sure you have those enabled. So show trade notifications whenever an order is filled, partially filled or rejected.

so any of the message that you're going to get that would be related to a trade, you're going to have it set up to go either on the bottom left of the bottom right.

And it's going to have a little box that pops up right away when that happens.

If you go into, I think it should work from here, but if you click on the?, Anytime in WebBroker, another tip we always talk about is if you're not sure what they are talking about, you click on the?

On that page and will take information about trade notifications for examples. Notifications will fade away at a certain time that you said.

But this is what they look like.

If you had an order open that had been open for several days and all of a sudden this pops out of the bottom of the screen, you bought such and such shares, you will see a little icon like this on the bottom left or right.

Then you can go right order status and get more details.

>> Grates up as always.

Thanks for that.

>> Thanks, Greg.

>> Our thanks to Bryan Rogers, Senior client education instructor at TD Direct Investing. Make sure to check out the learning section on WebBroker for more educational videos, live interactive master classes and upcoming webinars. Before you get back to your questions for Colin Lynch, a reminder of how you can get in touch with us.

Give a question about investing or what's driving the markets? Argus 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@moneytalklive@td.com or you can use the question box right below the screen here on WebBroker.

Just writing your question and hit send.

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

We are back now with Colin Lynch, take your questions about real estate. Lots coming in. This one about China's reopening. Will this ease concerns about the real estate market over there?

>>well, certainly the reopening is positive for the Chinese economy. Certainly, if we can think about the experience that we have had in Canada, what we have seen is the ability for folks to get out to shop.

We had a very important holiday last week. What we have seen come out of that holidays that we've seen a lot more travellers, and on 2019 levels, little or travellers, a lot more spending and activity at tourist sites.

That's certainly a positive for real estate that serves that space.

And for offices, a lot more repopulation in the office is being anticipated before the holiday. When you look at transportation usage in major Chinese cities, it has rebounded. I would say it's a net positive for real estate that serves that economy. Also interesting is real estate outside of China.

So think South Korea, think Japan, that interacts with the Chinese economy in terms of whether it's inbound tourism, whether it's something else and looking for residential accommodation, with sorts of businesses and activities interact with the Chinese economy.

All I think are no positives for those economies in Japan and South Korea. I would also keep an eye on Australia, who will be net beneficiaries of the reopening.

>> Sometimes you hear reports on concerns, and or how found they are, that perhaps China is rebuilding.

What is the supply and demand like?

> It depends on the sector and concerns of been most pronounced on the residential sector. In particular residential builders being overleveraged and in terms of delivering product, delivering product without necessarily people to live in that product. I have certainly heard a lot of those concerns.

Certainly the Chinese government has in some instances intervened to support those builders.

But I would say that those concerns remain.

As it relates to some of the other sectors, whether it's industrial real estate, whether it's offices, it's less pronounced in terms of some of those concerns and particularly if you look at industrial real estate, those warehouses, there are not just local developers but international participants as well involved in the space. Certainly, in terms of the large international participants, their financial liability would be quite strong.

So I think there is a difference across the sectors, also important to know that in China is a lot of the… The real estate is limbless.

So it's government owned and whether you build a property, you are paying a lease to the government.

You have the ability to use that land for a period of time, whether it's 30 years or 60 years, but at the end of that period of time, that land can revert to the government. That's different than other economies like Canada which are more frequent economies. So when you buy building, you also buy the land underneath the building. That's an important consideration for that market is low.

>> Fascinating stuff.

You mentioned Canada there.

We have a question about the state of the Canadian residential real estate sector.

Also questions on this one considering the aggressive rate hikes we've seen that leading up to this point.

>> Let's look at parts of the residential market. Let's start with apartments.

Apartments, at the end of the day, really move based off demographics. And so what you see in the long term in Canada is tremendous population growth driven by immigration and that has ramped up in recent years. So I believe the new target for the federal government is close to half a million people.

And so that's significant and those people need a place to live and apartments are very relevant. If you look at all so the reopening that we have experienced over the last year and 1/2, folks have moved back into urban centres and we are seeing the net result of that.

Asking rents have grown dramatically relative to what we have seen, whether it's 2020 or even 2019.

That's on one side of the equation, the markets.we also have condominium units.

there has been significant growth and appreciation in condo prices over the last three, four, five years.

we have seen a bit of come off on that.

But if you look at where people bought condos relative to today's market price, a lot of people are still in the market. If you look at houses, single detached homes, those prices have come off more materially than the condominium space.

There, you seen a little bit more weakness and clearly asking prices are much higher.

There, you also have to look, as you would with Congress basis, at finance and it has become a much more challenging environment for somebody looking for a mortgage when the costs of gone significantly up in the proportion of variable-rate mortgages over the last three or four years has increased quite materially so a lot of folks are feeling the requirement for additional payments on their mortgage because of the rising rates.

Pricing is still elevated relative to 2019, so the down payment they have to put has also increased relative to 2019. So yes, there is some pain that consumers are feeling as it relates to the residential market for acquiring condominiums and detached homes.

That's different than the rental market where you've seen significant growth in rents because of the demographic growth inspired by immigration.

>> Another question but it's a great follow-up. It's like the viewer has a follow-up to we've been talking about here. The end of the rate hiking cycle. That was pretty clearly communicated by the Bank of Canada.

What does it mean?

>> It means more certainty. So when you have significant changes month over month and the cost of debt, it does mean, from a transaction market, people buying and selling real estate, it becomes a lot more challenging to build your financial models because the cost of debt is changing.

If you've normally financed something with 50% loan-to-value… >> Every six weeks.

Last year, it was every 6 to 8 weeks it would change.

>> It's quite challenging.

What we've seen is a drop in transactions.

A quite precipitous drop and it's understandable because we have a shift in the environment, the funding environment.

I think going forward with some stability in… Out of the Bank of Canada in terms of where they are in terms of the rate hikes, people can now begin to price in a little bit more certainty into some of the models that they build. Plus, the bond market in terms of whether it's five-year yields or 10 year yield, those yields are coming down which has made financing for commercial real estate a little bit more attractive than it was a month ago or three months ago.

So that's more constructive. That being said, the rates are clearly higher than they were in 2019. And so one has to look at the values. And ultimately they will begin to reflect the reality of a higher cost environment particularly for folks that use a lot of leverage on the properties that they tend to own.

So we are going to see that it, in my opinion, reflected in Canada as we have seen that reflected in markets like the United Kingdom and continental Europe and we are seeing that reflected in the US.

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

As always, make sure you do your own research before you make any investment decisions and 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.comor you can use the question box right below the screen here on WebBroker.

Just writing your question and hit send. We'll see if one of our guest can get you your answer right here at MoneyTalk Live.

arguably, the big event this week will be the Tuesday meeting of the Federal Reserve south of the border.

Coming out on Wednesday with the rate decision, they are praising in 25 basis points. As it happens, you will get the funds rates at a new 16 year high.

Our Anthony Okolie has been digging into all the intrigue.

What should we expect?

>> TD Securities is expecting a 25 basis point rate hike in line with market expectations. They also expect it to be hawkish in nature meeting they expect the Fed to continue suggesting that inflation remains to high and that communication will emphasize that the Fed is not done yet and plan to signal more hikes to come.

As a result, TD Securities is forecasting a higher terminal rate of at least 5 to 5 1/2, sorry, 5 1/4% later this year versus market expectations which is expecting around 4.9%, which is consistent with the range of 4.75 at the lower bound to 5% terminal rate.

Now TD Securities expects the market price of the terminal rates to drift higher as inflation become sticky all the way down and that may mean labour markets continue to remain pretty resilient. TD Securities also knows that while wage growth has slowed somewhat recently, it still remains quite elevated and that supply conditions in the US labour markets are so constrained and unlikely to be resolved this year. Just an example, the recent jobs opening and labour turnover survey in the United States for November showed available physician sitting above 10 million, slightly lower from October but again, companies are still looking to fill positions despite worries of a looming recession this year. Now, this is a closely watched survey by the Fed to look at slack in the labour market. They expect labour tightness to only start easing in the second half of the year, driven by expectations of a recession in the third quarter of 2023. Now, the key question that TD Securities poses is whether 5 1/4% terminal rate is sufficient to bring down inflation to the Fed's 2% target.

Now, given how sticky core services are, TD believes their wrists around their 5.25 terminal rate projection is skewed towards a higher terminal rate.

>> There are so many fascinating things about the Fed when it makes this kind of decision, especially after the kind of year we've had.

It's the sheer breadth of asset classes that can move off of this decision. Let's talk about the US dollar. A very strong currency last year, a lot of questions this year about where it's headed.

>> The US dollar has slid to a seven month low against a basket of international currencies.

It's fall off its peak back in September.

Now cooling inflation has weighed on the US dollar as markets are anticipating that the Fed will eventually back off its aggressive rate hikes. Now, TD Securities believes that the US dollar looks stretched at this point and they also believe that while the US dollar rallies they need, they remain bullish on the medium-term because the bond yield cap has been lifted.

>> The decision comes after the show on Wednesday.

I know you have things lined up in the afternoon.

>> Absolutely, I will be interviewing James Marple's, Senior economist at TD Bank right after that, for his reaction on the Fed's decision.

>> Getting all worked up and it's only Monday. Thanks Anthony.

Money talks Anthony Okolie. A quick check in on the markets.

Let's start in with the TSX Composite Index. A bit of a lacklustre start to the week. Down about 59 points,about 1/3 of a percent. One of the bigger movers in the session was under some pressure, down about 2%.

CP rail was making some gains at the open and is still moving onto those at 1.7%. South of the border, investors clearly waiting for Wednesday. A bit of giveback after some of the rally activity we saw at the end of the week last week. The S&P 500 down we will call that three quarters of a point. The tech heavy NASDAQ under a bit more weight, down about 1 1/3% we will call that and Microsoft, some of the mega-cap tech stocks down today, not saying it to dramatic, down about 2% of Microsoft.

We are back now with Colin Lynch, head of global real estate investment at TD Asset Management. We are taking your questions on real estate. This one just coming in fresh off the platform.

How long do you think the drop in residential prices is going to continue?

This was a pretty dramatic turnaround in the last year.

>> Yeah, it was significant.

We have to put it in context. We had quite a material run-up in residential pricing in many markets across this country. But yes, it has been a turnaround.

Hard to pin an exact date but we anticipate we will see it, a little while of further declines.

Several months, I would say, the reason being when you have rate hikes, it takes a while for those rate hikes to work their way through the economy.

If you look at it in the context of getting residential mortgage, you might get a rate 100 days ago and you might still be able to act on that rate today. That rate might be very different than what you would get if you were to go out for a mortgage starting today.

So there are still purchasers that have rates that aren't fully reflective of today's pricing and so use that as one example to say it does take a little while for the impact of rate hikes to make their way fully through the market.

So I know that there has been a little bit of stabilization depending on which markets you look at from a residential perspective but I would certainly anticipate that we will have a few more months of price adjustments to go before perhaps we level out.

> We have run out of time for questions from the audience. Before I let you go though: in addition to your expertise on global real estate, which I ask you questions about, in a former life and at a forward job, you and I used to chat about something that you are actively involved in, the Black opportunity fund.

What's going on?

>> Yes, it has been quite inspiring. We have made a lot of progress so that's been very positive.

For context, over 400 volunteers right across the country are involved in the fund and we've had over 40 corporations, hundreds of individuals provide contributions.

Most important though is that we've been able to provide support. And so last week, we announced 13 recipients, they are food entrepreneurs, think restaurants and organizations that serve us in the food spectrum and provided 13 grants to businesses and we announce those last week. We are just about to open applications for grants for organizations serving us in the arts and culture's face and also the criminal justice base.

So that funding that actually comes from TD, who has been a very strong supporter of the Black opportunity fund. We just open our offices actually in the TD Centre as well.

But we continue to make a lot of fantastic process all throughout. We've had great take up for a program wherein people apply for loans and are denied by various banks, we provide them grants on the condition of participating in education programs on how to grow and scale businesses. We've had tremendous take-up of that.

And so a lot of good things and more announcements to come.

So very excited all the progress so far.

>> Always such a pleasure to have you here.

I look forward to the next time.

> Thank you.

Thank you for having me.

>> Our thanks to Colin Lynch, head of global realist investments at TD Asset Management.

stay tuned, tomorrow, Ben Gossack will be our guest taking your questions on income investing.

You can get a head start with your questions. Email moneytalklive@td.com.

That's all the time we have for today.

Take care!

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