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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 show, with the threat of a recession hanging over the markets, we are going to take a look at corporate earnings and what they are telling us about the economy. TD Asset Management Damian Fernandes will join us.
MoneyTalk's Anthony Okolie is going to give us a preview of what to expect from tomorrow's US inflation report.
And in today's WebBroker education segment, Caitlin Cormier is going to show us how you can find information about GICs using the law firm. 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 he gets our guest today, let's get you an update on the market action. We are seeing earnings heat up here in Canada.
it like to the states a little bit but now we are on about the same page.
The TSX Composite Index is down about 1/5 of a percent.
we have a lot of companies coming out with their quarterly report, Hudbay among them. Here's the streets reaction to what they are getting from Hudbay Minerals right now. It is not positive. At six bucks and $0.83, the stock is down about 3 3/4 of a percent. Sleep Country out with his latest results also increase the dividend. Investors liked what they are seeing and hearing today.
At 2568, you got Sleep Country up a little bit more than 7%. South of the border, you had the Fed Telus last week that there would be data dependent. Usually central bank are, but it seems now that the labour and inflation reports with this possible pause on the table could be more relevant. We are getting an inflation report tomorrow.
At the S&P 500 is down almost half a percent.
The tech heavy NASDAQ has beenpre-much in line with the broader market comments on about half a percent. It noticed some weakness in chipmaker Nvidia. It had quite a one recently and getting a little bit back today. At 284 bucks and change per share, it's a lot more than 2%. An aftermarket update.
Recession fears have been hanging over the markets for quite some time now, but what is corporate America telling us about the state of the global economy?
Joining us now to discuss is Damian Fernandes,portfolio manager at TD Asset Management. Great to have you back on the show.
what are corporations telling us?
>> That things are slowing.
But less than what people are forecasting.
When you look at the breadth of earnings season, and by the way, we are basically done earnings season, the only companies left of the retailers. There is a one-month lag. 90% of market In the S&P 500 have reported.
While earnings are negative, they are less negative and people were expecting and I can put some numbers into that.
people were expecting close to high single digit, like -9% earnings growth.
It's coming in at -3, four.
So materially, much better. And the topline is still growing because inflation is still growing.
So that help support the topline. So on balance, what we are finding is that this earnings season,it's surprising and how less bad it is.
People are asking when is this recession coming?
>> We've been waiting for a while now.
>> The people have to think about conventional recession and muscle memory.
It forces people to think about the most dramatic experiences. Most dramatic recessions we've had, the waiter the COVID recessions,this is much more conventional, think 91 or 2001 where some parts of the economy will slow in some parts of the economy will chug along and provide some impetus for growth.
>> In terms of what companies are telling us about what to expect going forward, I recall some of the big tech names saying they are will be slowing sales in some areas. It seems like they are preparing for a but are they overly dire? Or is the sort of what you would expect?
>> So you're today, what's been leading the market?
I'm sure only show you've talked about this, the saying stocks, saying bites back. But interestingly, those stocks, the secular growers, are showing the best earnings delivery. Right? We had Microsoft reporting earnings up seven, Microsoft is calling for up to 9% constant revenue growth, double-digit EPS growth.
Facebook was a surprise, met up.
Sorry, Facebook, so member the old ticker.
>> I still call it Facebook.
>> It's like muscle memory etched into my head.
Meta reported its call for revenues to be up high single digits next quarter. That's much better than people feared with the pullback in advertising. So I think that broadleaved parts of the market are growing nicely or are delivering earnings a little bit better than expectations and then there are some parts that are lagging.
>> One of the markets really waiting for in terms of a direction? We've had the recession fears for the longest time.
We've got a US Federal Reserve that might be on pause.
They are not using that word, but the street seems to be thinking, well, maybe they are done or maybe there's one more. What is the catalyst going forward?
>> I think what surprising people is, why isn't the market lower?
We talk about earnings, we've been talking about for a while. Actual company earnings are negative year on year. They are better but they are still negative.
And I think what people or at least my view is the reason the market has not fallen out of bed is because think about last year and what caused you to read for the Pepto-Bismol?
It was for things. It was accelerating inflation. It was Federal Reserve's that were tightening rates aggressively to address that inflation, genii out of the bottle. We actually had, we still do, but there was a war that let us use under commodity prices that exacerbated those inflation worries, and then finally the world's second-largest economy was still in a zero COVID policy, China.
As we look forward today, and the start of this year too, a lot of those 3 1/2 of those four things, sadly, tragically, there is still a geopolitical conflict, but every commodity price from WBTI to potash, to iron ore, is lower year on year. The second-largest economy is now accelerating as it wakes up from its COVID hangover, and inflation is falling.
Maybe doesn't get to the Fed's target of 2% but it is falling. So that puts the Fed out of the game.
so there are things to worry about. Look, I'm not… This isn't all blue skies ahead. We do have some worries.
But the main agitators of last year's market performance actually looks to be receiving.
>> The markets, we are told, are forward-looking instruments. So are they looking past perhaps a mild recession, a soft landing, whatever people are thinking it's going to be looking to the outside of it?
>> Yeah, that is the pivotal question.
Right now, I was talking about that it's still not sunny skies, blue skies ahead, it's because we are not sure about the magnitude of this drawdown, by that I mean the economic pullback.
We may be going into a recession, a soft landing. I think the market is pricing in a scenario where we are going into a soft issue landing, a shallow recession, where we can recoup last year's earnings by sometime next year. If this, what's happening with credit tightening in the US or something comes out of left field, if we have a much more dramatic pullback,dad's what would cause this concern in the market.
Something else and I'm looking at that's giving me a source of grief is probably the debt ceiling negotiations that are now down the pipeline.
All of these things can affect a regular slow down or run-of-the-mill pullback, shallow recession, and it could metastasize into something much deeper.
And that's when the market falls out of bed again.
>> The Fed watchers, obviously central bank watches the past year or for very good reason, this rate hiking campaign,but the market thinks that they are going to be turning pretty quickly from being very aggressive in terms of tightening policy to suddenly slashing rates.
How does that actually line up with reality do you think?
>> Look at, I try to think about historical precedents.
And historical precedents, not being a fixed income expert but weighing in on this, the Fed normally tightens until something breaks. Well, guess what? They broke through regional banks and a global investment bank in this global tightening campaign.
Historically, when you think about what's happened, is after you've had a tightening campaign that has led to a financial crisis of sorts, the Fed is on a pause and I think that playbook probably applies.
In terms of Fed cuts this year, we will just have to see if the data plays it. If the economic data continues to show up like the earnings data which is not as bad as feared, maybe some of those cuts have to be walked back or maybe not and if the economic situation continues to slow.
But I think the initial part of your comment, the fact of the Fed being on pause or hold with the potential for cuts, I think that's very likely.
>> A fascinating start to the show. We'll get back to your questions on global stocks for Damian Fernandes in just a moment time. A reminder of course that you can contact us at 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.
Suncor energy is posting a 34% decline in quarterly earnings compared to the same period last year, when crude oil prices were substantially higher than they are today. The Canadian energy major is also citing increasing operating expenses and lower upstream production for the results were largely in line with the street estimates.
Right now you got Suncor down a very modest 1%.
got shares of SNC-Lavalin moving higher following his latest earnings report.
The engineering firm's project management and professional services divisions drove profit higher in its most recent quarter. And SNC-Lavalin says it strategic review remains ongoing.
Right now, the stock is up a little more than 10%.
Palantir says its new artificial intelligence platform will be available to some customers starting this month. The data analytics firm says it's a I platform has applications for both business and military defence. Palantir has also beat Wall Street expectations for its most recent quarter. Right now you got nine bucks and $0.40 on the shares, that's a gain of more than 21%.
a quick check in on the benchmark indices. We will start here at home in Bay Street with the TSX Composite Index.
Down a modest 37 point, a little shy of 1/5 of a percent. And the S&P 500, a day ahead of another inflation print coming from the United States, we are down a modest 17 points, a little less than half a percent.
All right, we are back with Damian Fernandes from TD Asset Management, taking your questions about global stocks. Plenty coming in. Let's start to get through some of them. What is your outlook for Canadian energy stocks?
>> Well, as a patriotic Canadian… [laughing] I remain constructive.
We started this conversation talking about an earnings pullback and I think the people are missing is separating cyclical from secular.
In the cyclical economic environment, we are going to slow down, potentially a recession.
Generally, late cyclical's, whether it's energy, materials, deep industrials, they all lag they decline.
Canadian energy stocks will see lower cash flow this year than last year. That's not surprised.
W BTI is 70 bucks and was 90 last year.
what you are seeing in Canadian energy stocks is that, and why they've lagged and energy stocks globally, is that we are likely going into a recession or a slowdown in that will impact cash flows.
But that's the cyclical.
The secular structural story is that these Canadian energy companies have found capital discipline.
And even right now with lower estimates on free cash flow, how much are going to generate this year, it is still quite attractive. It's high single-digit, double-digit rates. You look at names like C and Q, market to market where we are on the price of oil, it's still going to return a boatloads of capital back to shareholders in dividends and be profitable.
I think structurally was really happening is that the regulatory environment for allocating you capital, the lending that goes into it, it's becoming much more difficult.
You and I could launch an energy company tomorrow, which means the existing asset base, the companies that currently have assets that are generating profits and cash flows, has to be worth more because you can't create this.
The lending framework, risks around ESG are so much more prevalent. Structurally, I'm quite constructive because I think these assets are worth more, the assets that I used to for extraction.
>> We are seeing global energy a company's return money to shareholders with dividend increases, special dividends and share buyback.
As this set them up for longer-term challenges by not investing this money back into the companies?
>> They are investing but be more judicious about it.
If you think about prior cycles, what happened is every oil and gas management team would always talk about structurally energy prices are higher forever. They've had their comeuppance. Their brush with the Grim Reaper and saw negative energy prices so they are much more judicious in thinking about capital allocation. They have committed dividend growth policies.
They are using excess cash to buy shares.
They are investing but the hurdle will be much higher.
They are being rewarded for it. Companies that have a balanced capital allocation program, where they are investing some for growth but are also rewarding shareholders, this companies are seeing better stock price performance.
This is all motivation.
Before, in the 2000, we were being rewarded for new production growth.
That's not being rewarded anymore. Capital allocation is. The motivation is moved to that side.
>> That's a constructive thesis there on the story of Canadian energy. What's the biggest risk?
>> The biggest risk is we go into a much more severe recession.
if the prices of commodity is correct seriously and cash flow changes there will have to be revisions lower.
that will affect stock prices.
>> Another question now about global travel.
With the outlook for global travel companies like Royal Caribbean? It's a cruise line.
>> The cruise line.
They reported last week and the stock was up high single digits if memory serves, 3% when it reported, and was up because of a few things.
One, the pricing was actually quite firm. A lot of people want to go on a cruise after being locked up during COVID. Occupancy was above hundred percent.
The cruise ship was packed.
And they also found people on that cruise were spending more, so there on board spend.
That forced Royal Caribbean to actually, they were supposed to do something like three, 350 and earnings for this year. Day, after how successful Q1 what is, they raise that number to something like 480, like a huge 30% increase.
So Royal Caribbean's's stock moved on that. I think about travel, travel continues to be one of the more exciting places.
We talked about the recession, there are recessions in manufacturing, their recessions if you are tied to lending from banks, but we are not seeing recession in consumption services.
Travel continues to outpace. And Royal Caribbean benefits from that. I'm just… Just to take the other side of that though, Royal Caribbean is a highly leveraged cruise operation.
>> What is the risk here? People want to get out in the world.
Every time the wife and I get out in the world, it's a lot more expensive than it used to be, but after we went through, we go for it anyway. What's the risk it?
>> I think travel is fine but I think the company because of how dramatic COVID was, they took out a lot of leverage. Over 5 1/2 times leverage.
If this recession is more meaningful and people actually curtail spending, they won't be able to raise prices.
Occupancy will not be hundred percent and I've got this big debt burden. We much prefer travel companies that are capital light.
Think about booking.
If you and I book a vacation, booking receives a fee.
Booking doesn't have to build cruise ships loves this >> Get all that seafood out.
>> Exactly, or potentially a risk on the ship. We would much rather be in businesses or even hotels who have an operating model where they don't own the hotels, think Hilton, but they provide the technological backbone for it and the services. We would much rather be the capital light who benefit from this return to travel rather than capital heavy.
>> Let's get another question. We touched on this briefly earlier but let's dig in deeper.
Do we need to prepare for any issues regarding the US debt ceiling?
>> Oh, yeah. That's… The last time that we were dealing with this as a real risk was in 2011.
If you remember in 2011,ultimately, I think this time around, we will come to an agreement because the alternative probably goes against the politicians number one goal, which is to get reelected. You don't get reelected by defaulting on the debt, which they won't do, or by stopping payments to Social Security or Medicaid that people required to live on.
You need a motivating force and historically that motivating force has been lower market.
In 2011, it was the markets throwing a tantrum that motivated politicians who were being intransigent to on negotiating the debt ceiling to actuallysit down at the table.
Congress passed platform.
There seems to be signs that the administration is willing to negotiate.
But to be clear, the tax receipts coming in much below forecasted.
So this isn't a we can wait until Q3 September, this is a we have to deal with this because the US will run out of money is sometime early mid summer.
>> You talked about the markets being a motivating factor. I thought about what happened I guess it was last fall in Britain, when the government had certain plans in the market said no, that's not going to fly in our eyes and then there had to be a government reaction to what they were saying.
> Yes, change in leadership, revision of the budget.
Market threw a tantrum and I'm hoping this time around that calmer heads will prevail where we will have negotiation before.
But the closer we get to this, the closer we get to this May June, July end datewhen the US will run out of money, the more forceful the market reaction will bewhich will, if history is an example, will force people to negotiate.
>> Interesting perspective on that one. I hadn't thought about from that angle. That's why we do the show.
Fresh angles.
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. Just email moneytalklive@td.com.
Now let's get to the educational segment of the day.
If you're looking to find information for GICs, WebBroker has tools can help.
joining us now to discuss Caitlin Cormier, client education parked at TD Direct Investing.
>> Talking about a lot of different things today including interest rates.
A lot of people are looking at GICs more actively than they have in the past.
Let's take a peak on WebBroker and see where you can find those interest rates and what GICs are available.
Someone to click on research up on the top left-hand side of the screen and were gonna go down to the very last option under investments which is GIC Rate Sheet.
first what I want to point out at the top is at the GIC order entry is available from Monday to Friday from 9 AM to 4 PM Eastern time except on statutory holidays.
Mostly on market hours, a little bit different. But during those hours, you can purchase GICs.
So the rate that you see are good for today. They are not good for any period past today and they can constantly be changing which is why they are only good for today. We have a tab here for each different type of GIC that we have.
The first option is a short-term GIC. These are GICs that areunder 365 days.
Anything under a year.
We also longer-term GICs which would be between one and five years.
You will also notice that we have a lot of different issuers under our long-term GICs. It's not just TD that you can purchase thefrom, you can purchase them from other issuers as well.
This comes in handy if you are concerned about CDIC, Canada Deposit Insurance Corporation. So that is each different issuer that we have here would be eligible to be an issuer. Under CDIC to be able to increase the amount of coverage you could have on your portfolio, that is something the right decision.
these columns signify how often the interest will actually be paid, whether you're going to have monthly interest, every six months, was a year or just continue to have your interest compounded on the GIC. The rates are slightly different if you are getting more frequent GIC interest payments and the longer term tends to be a little higher on most of these GICs. Again, you can go through any air.
There also cashable GICs so if you are looking for something with a bit more flexibility, there will be different terms for you can cash them prior to the maturity date. You can see that without flex ability comes a bit of a lower interest rate. So always we can benefit if there is something taken away. It's a little bit of a lower interest rate. And finally, we have market linked to GICs. These are hybrid type of GICs where they can offer a minimum amount of interest and that a potential bonus interest depending on how an underlying market index performs.
So definitely something for those that are looking for a little bit of a different type of product to look into.
But yeah, we have lots of different options and WebBroker where investors can come in and search the market and shop for all different GIC rate.
>> A great primer there on what GICs are available on the platform. Say someone is taking a look and they say, all right, maybe they want to purchase one of these. How do they go about doing that?
>> Absolutely, as you can always call the trading desk but it might be easier to go ahead and fulfil the trade on WebBroker.
so what we are going to do is we are going to hop back in on our GIC Rate Sheet and what you do in the case of purchasing a GIC as we would want to go through and actually choose, you will see that these are hyperlinks, so whatever interest you want to choose, let's just say we are going to go with home equity bank and we are going to go with three year compound interest. So I click on that, it's gonna show me the issuer, the annual rate, the minimum I have to invest new Abydos GIC and the maximum amount I can invest.
when it comes do, it's just going to pay cash into my account and it shows me my estimated maturity date. In here, I would just type in the amount that I want to invest in this particular GIC.I click preview order, it's good to give me a breakdown of everything I need to know before I submit and then I need to go ahead and make the purchase from there. Pretty straightforward as far as putting the order through.
As long as it's during those hours that we discussed, 9 AM to 4 PM Eastern time, you will be able to do this on my broker.
>> Rates off as always, Caitlin. Thanks of that.
>> Thanks, Greg.
>> Caitlin Cormier, client education instructor at TD Direct Investing.
And make sure to check out the learning centre in WebBroker for more educational videos, live, interactive master classes and upcoming webinars.
Before you back to questions about global stocks for Damian Fernandes, a reminder of how you 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 Damian Fernandes, taking your questions about global stocks.
This one of your says, I'm unsure if this question applies to today's subject matter, but they want to talk toothpaste.
I have owned to Proctor and Gamble for years.
Will he lead and get the respect that Colgate-Palmolive gets. Could you add a little lightning to the matter?
>> Toothpaste wars.
Great question.
So taking a step back, when I started off on the industry, I started off as an analyst, and with Colgate, this was going over close to two decades ago, they will say they want to grow the market by getting crushed by today.
If you only brush once in a calming breath twice, you double market. Proctor is toothpaste and it's a few illusions. It is tied, a beauty products, it's households where is Colgate is oral supplies. A much more focused company.
So what you have is that Proctor sometimes wrongly, because there are so many different moving parts business, it is hard to see… I think both companies have been under pressure more recently just because they have a leg because of domestic competition or pricing. I think where it stands right now both companies, they are both consumer stable companies, varying high brand equity were people resonate with their product.
They have some degree of pricing power and they are benefiting from commodity prices being lower.
One of the main input costs.
I know Proctor probably versus the market hasn't kept up in the last few years abide in a portfolio, the portfolio cost, it's still a high-quality company that pays and raises its dividend every year like clockwork.
It has an expense productivity program in play. There's always a place for a period of let's talk about semiconductors now.
This is been a very interesting story in the space.
There was a time when Intel was the badge of honour.
Not so much now.
You believe that Intel will ever catch up to Nvidia or AMD?
>> Toothpaste to semiconductors. No, I don't.
I shouldn't say no I don't.
In the medium term, it's going to be very difficult.
Let's compare just those other names. They outsourced their production, AMT and Nvidia.
Intel makes its own tips and provides it for both the PC and server market.
The problem is Intel lost its leadership.
Like most things intact, you have these big companies that take their eye off the ball and then they lose it to a competitor and the competitor takes up the space.
Now Intel is playing catch-up for the last two years because the leading edge cutting chips it can't produce.
Playing catch-up requires investment.
for us, we follow the cash and Intel is going to lose money this year.
A lost body last year.
Intel is forecasted to lose $20 million in the next two years of cash flow.
The stock should be profitable as it tries to catch up to its lost technological edge.
So starting it off is always a difficult place to be.
Its main competitor that is a contract manufacturer, Taiwan Semiconductor, actually has a diverse customer base that they supply to.
It's profitable. It's got the lead.
I want to be a little cautious. Intel's main market is PC. PCs had a boom in the pandemic.
We had work from home, we had to upgrade our PC cycle because our old mothball PCs were no longer usable.
And the server market which also has a very profitable business, those chips are.
There are challenges in demand. There is obviously a technological leadership that is lost and there is not free cash flow for the next few years which, all of these things are not a recipe for success.
>> This next question comes out of this about artificial intelligence. You're not going to have that without semiconductive.
Please discuss the AI industry and the companies to follow?
>> That's a loaded question. There is a lot in there.
Picks and shovels are the way to go for a lot of things because you need them. The companies that create the chips are the base of the AI industry, Nvidia is a leader, they will benefit proportionally from AI. I think the AI industry right now, every single company is looking… You member 5G a few years ago.
Everyone was like, we are moving to 5G. It just fell off. There's a lot of hype around AI and I think there is actually very decent use cases.
Like what ChatGPT does.
AI can also be used for driving and now at anymore.
What we want to do is separate monies that are and just talk about AI but don't have a viable product from companies that actually have a pathway to modernization of AI. Whether providing picks and shovels like the chips or in Microsoft's case being able to think about how to implemented in a office productivity setups, that's the direction we want to go as opposed to tech companies saying I believe AI will transform a business without actually having a platform and how that's going to get to the end state.
Cash that reminds me of the early stages of another kind of industry where I'm not going to name them, a beverage company decided to rebrand itself as a tech company. It didn't make much sense and not much came out of that.
This question is actually for me.
Is that a pocket square in Greg suit or a piece of paper?
There is a keen eye out in the audience. This one today is a real pocket square.
But I've used that trip before. If you take a piece of paper we don't have pockets, you folded up and it looks just fine. When you go into an executive's office, my boss's office, with the sticking out of my jacket.
It's not good.
If you find yourself on television Anita pocket square in short order, that's what you can do.
A piece of paper will get you through just fine. We'll get back your questions for Damian Fernandes on global stocks and my wardrobe 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 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.
Just last week the US Federal Reserve raised its key rate by 25 basis points but there was enough in there to get people speculating in the markets that perhaps they would be on pause after this. The Fed said that data was going to be crucial. We got a crucial reading tomorrow on US inflation. Our Anthony Okolie joins us now with TD Securities outlook on what we might be getting.
>> TD Securities expects that core US prices are likely to remain as strong as the March figures and they expect a consecutive increase of interest month over month the core figure.
and the forecast.
But in a world that, when we started this conversation, the Federal Reserve raising rates, if companies are not generating profits are facing real pressure, contrast to LightSpeed, Shopify had a big day this last week after earnings because they said it's money-losing logistics business. They will move away from that right?
So people are saying there is a potential for Shopify to be profitable and generate cash.
I think LightSpeed needs that aha moment.
^...
¸I think the business, the payment business is highly competitive.
It has to show competitive advantage, being able to generate cash from this and maybe probably, also just, you know, not invest progressively because that's costing you money.
>> We can squeeze one more in.
We are almost out of time. (Greg reads the question) >> Well I guess, first of all, commercial real estate weakness is a problem. That's with the regional banks in the US, the eye of the storm, this more recent pullback have been under pressure because they have lent a lot to commercial real estate at Rates that were very low. Commercial real estate prices very high.
Canadian banks have exposure this because a lot of the big Canadian banks to have US businesses. But it's much less so than their US counterparts. Broadly diversified and the banks are part of it. There is lending in the commercial real estate, there might be commercial loans, the insurance balance sheets but in aggregate, they are much smaller as a total of the overall book of business. So, I think there is some real risks in commercial real estate in terms of pricing and in terms of where that is. Where the assets are likely to be marked. But as we bring that to the Canadian banking sector, insurance sector, Canadian financials, the exposure is much more muted which is a good thing.
>> Always a pleasure have you. Looking forward to the next time. Our thanks to Damian Fernandes from TD Asset Management.
Always do your own research before doing any research and stay tuned to our show tomorrow with Thomas Feltmate, Senior Economist at TD Economics.
A reminder that you can get a head start with your questions by emailing moneytalklive@td.com. That's all the time we have for. Thanks for watching and 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 show, with the threat of a recession hanging over the markets, we are going to take a look at corporate earnings and what they are telling us about the economy. TD Asset Management Damian Fernandes will join us.
MoneyTalk's Anthony Okolie is going to give us a preview of what to expect from tomorrow's US inflation report.
And in today's WebBroker education segment, Caitlin Cormier is going to show us how you can find information about GICs using the law firm. 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 he gets our guest today, let's get you an update on the market action. We are seeing earnings heat up here in Canada.
it like to the states a little bit but now we are on about the same page.
The TSX Composite Index is down about 1/5 of a percent.
we have a lot of companies coming out with their quarterly report, Hudbay among them. Here's the streets reaction to what they are getting from Hudbay Minerals right now. It is not positive. At six bucks and $0.83, the stock is down about 3 3/4 of a percent. Sleep Country out with his latest results also increase the dividend. Investors liked what they are seeing and hearing today.
At 2568, you got Sleep Country up a little bit more than 7%. South of the border, you had the Fed Telus last week that there would be data dependent. Usually central bank are, but it seems now that the labour and inflation reports with this possible pause on the table could be more relevant. We are getting an inflation report tomorrow.
At the S&P 500 is down almost half a percent.
The tech heavy NASDAQ has beenpre-much in line with the broader market comments on about half a percent. It noticed some weakness in chipmaker Nvidia. It had quite a one recently and getting a little bit back today. At 284 bucks and change per share, it's a lot more than 2%. An aftermarket update.
Recession fears have been hanging over the markets for quite some time now, but what is corporate America telling us about the state of the global economy?
Joining us now to discuss is Damian Fernandes,portfolio manager at TD Asset Management. Great to have you back on the show.
what are corporations telling us?
>> That things are slowing.
But less than what people are forecasting.
When you look at the breadth of earnings season, and by the way, we are basically done earnings season, the only companies left of the retailers. There is a one-month lag. 90% of market In the S&P 500 have reported.
While earnings are negative, they are less negative and people were expecting and I can put some numbers into that.
people were expecting close to high single digit, like -9% earnings growth.
It's coming in at -3, four.
So materially, much better. And the topline is still growing because inflation is still growing.
So that help support the topline. So on balance, what we are finding is that this earnings season,it's surprising and how less bad it is.
People are asking when is this recession coming?
>> We've been waiting for a while now.
>> The people have to think about conventional recession and muscle memory.
It forces people to think about the most dramatic experiences. Most dramatic recessions we've had, the waiter the COVID recessions,this is much more conventional, think 91 or 2001 where some parts of the economy will slow in some parts of the economy will chug along and provide some impetus for growth.
>> In terms of what companies are telling us about what to expect going forward, I recall some of the big tech names saying they are will be slowing sales in some areas. It seems like they are preparing for a but are they overly dire? Or is the sort of what you would expect?
>> So you're today, what's been leading the market?
I'm sure only show you've talked about this, the saying stocks, saying bites back. But interestingly, those stocks, the secular growers, are showing the best earnings delivery. Right? We had Microsoft reporting earnings up seven, Microsoft is calling for up to 9% constant revenue growth, double-digit EPS growth.
Facebook was a surprise, met up.
Sorry, Facebook, so member the old ticker.
>> I still call it Facebook.
>> It's like muscle memory etched into my head.
Meta reported its call for revenues to be up high single digits next quarter. That's much better than people feared with the pullback in advertising. So I think that broadleaved parts of the market are growing nicely or are delivering earnings a little bit better than expectations and then there are some parts that are lagging.
>> One of the markets really waiting for in terms of a direction? We've had the recession fears for the longest time.
We've got a US Federal Reserve that might be on pause.
They are not using that word, but the street seems to be thinking, well, maybe they are done or maybe there's one more. What is the catalyst going forward?
>> I think what surprising people is, why isn't the market lower?
We talk about earnings, we've been talking about for a while. Actual company earnings are negative year on year. They are better but they are still negative.
And I think what people or at least my view is the reason the market has not fallen out of bed is because think about last year and what caused you to read for the Pepto-Bismol?
It was for things. It was accelerating inflation. It was Federal Reserve's that were tightening rates aggressively to address that inflation, genii out of the bottle. We actually had, we still do, but there was a war that let us use under commodity prices that exacerbated those inflation worries, and then finally the world's second-largest economy was still in a zero COVID policy, China.
As we look forward today, and the start of this year too, a lot of those 3 1/2 of those four things, sadly, tragically, there is still a geopolitical conflict, but every commodity price from WBTI to potash, to iron ore, is lower year on year. The second-largest economy is now accelerating as it wakes up from its COVID hangover, and inflation is falling.
Maybe doesn't get to the Fed's target of 2% but it is falling. So that puts the Fed out of the game.
so there are things to worry about. Look, I'm not… This isn't all blue skies ahead. We do have some worries.
But the main agitators of last year's market performance actually looks to be receiving.
>> The markets, we are told, are forward-looking instruments. So are they looking past perhaps a mild recession, a soft landing, whatever people are thinking it's going to be looking to the outside of it?
>> Yeah, that is the pivotal question.
Right now, I was talking about that it's still not sunny skies, blue skies ahead, it's because we are not sure about the magnitude of this drawdown, by that I mean the economic pullback.
We may be going into a recession, a soft landing. I think the market is pricing in a scenario where we are going into a soft issue landing, a shallow recession, where we can recoup last year's earnings by sometime next year. If this, what's happening with credit tightening in the US or something comes out of left field, if we have a much more dramatic pullback,dad's what would cause this concern in the market.
Something else and I'm looking at that's giving me a source of grief is probably the debt ceiling negotiations that are now down the pipeline.
All of these things can affect a regular slow down or run-of-the-mill pullback, shallow recession, and it could metastasize into something much deeper.
And that's when the market falls out of bed again.
>> The Fed watchers, obviously central bank watches the past year or for very good reason, this rate hiking campaign,but the market thinks that they are going to be turning pretty quickly from being very aggressive in terms of tightening policy to suddenly slashing rates.
How does that actually line up with reality do you think?
>> Look at, I try to think about historical precedents.
And historical precedents, not being a fixed income expert but weighing in on this, the Fed normally tightens until something breaks. Well, guess what? They broke through regional banks and a global investment bank in this global tightening campaign.
Historically, when you think about what's happened, is after you've had a tightening campaign that has led to a financial crisis of sorts, the Fed is on a pause and I think that playbook probably applies.
In terms of Fed cuts this year, we will just have to see if the data plays it. If the economic data continues to show up like the earnings data which is not as bad as feared, maybe some of those cuts have to be walked back or maybe not and if the economic situation continues to slow.
But I think the initial part of your comment, the fact of the Fed being on pause or hold with the potential for cuts, I think that's very likely.
>> A fascinating start to the show. We'll get back to your questions on global stocks for Damian Fernandes in just a moment time. A reminder of course that you can contact us at 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.
Suncor energy is posting a 34% decline in quarterly earnings compared to the same period last year, when crude oil prices were substantially higher than they are today. The Canadian energy major is also citing increasing operating expenses and lower upstream production for the results were largely in line with the street estimates.
Right now you got Suncor down a very modest 1%.
got shares of SNC-Lavalin moving higher following his latest earnings report.
The engineering firm's project management and professional services divisions drove profit higher in its most recent quarter. And SNC-Lavalin says it strategic review remains ongoing.
Right now, the stock is up a little more than 10%.
Palantir says its new artificial intelligence platform will be available to some customers starting this month. The data analytics firm says it's a I platform has applications for both business and military defence. Palantir has also beat Wall Street expectations for its most recent quarter. Right now you got nine bucks and $0.40 on the shares, that's a gain of more than 21%.
a quick check in on the benchmark indices. We will start here at home in Bay Street with the TSX Composite Index.
Down a modest 37 point, a little shy of 1/5 of a percent. And the S&P 500, a day ahead of another inflation print coming from the United States, we are down a modest 17 points, a little less than half a percent.
All right, we are back with Damian Fernandes from TD Asset Management, taking your questions about global stocks. Plenty coming in. Let's start to get through some of them. What is your outlook for Canadian energy stocks?
>> Well, as a patriotic Canadian… [laughing] I remain constructive.
We started this conversation talking about an earnings pullback and I think the people are missing is separating cyclical from secular.
In the cyclical economic environment, we are going to slow down, potentially a recession.
Generally, late cyclical's, whether it's energy, materials, deep industrials, they all lag they decline.
Canadian energy stocks will see lower cash flow this year than last year. That's not surprised.
W BTI is 70 bucks and was 90 last year.
what you are seeing in Canadian energy stocks is that, and why they've lagged and energy stocks globally, is that we are likely going into a recession or a slowdown in that will impact cash flows.
But that's the cyclical.
The secular structural story is that these Canadian energy companies have found capital discipline.
And even right now with lower estimates on free cash flow, how much are going to generate this year, it is still quite attractive. It's high single-digit, double-digit rates. You look at names like C and Q, market to market where we are on the price of oil, it's still going to return a boatloads of capital back to shareholders in dividends and be profitable.
I think structurally was really happening is that the regulatory environment for allocating you capital, the lending that goes into it, it's becoming much more difficult.
You and I could launch an energy company tomorrow, which means the existing asset base, the companies that currently have assets that are generating profits and cash flows, has to be worth more because you can't create this.
The lending framework, risks around ESG are so much more prevalent. Structurally, I'm quite constructive because I think these assets are worth more, the assets that I used to for extraction.
>> We are seeing global energy a company's return money to shareholders with dividend increases, special dividends and share buyback.
As this set them up for longer-term challenges by not investing this money back into the companies?
>> They are investing but be more judicious about it.
If you think about prior cycles, what happened is every oil and gas management team would always talk about structurally energy prices are higher forever. They've had their comeuppance. Their brush with the Grim Reaper and saw negative energy prices so they are much more judicious in thinking about capital allocation. They have committed dividend growth policies.
They are using excess cash to buy shares.
They are investing but the hurdle will be much higher.
They are being rewarded for it. Companies that have a balanced capital allocation program, where they are investing some for growth but are also rewarding shareholders, this companies are seeing better stock price performance.
This is all motivation.
Before, in the 2000, we were being rewarded for new production growth.
That's not being rewarded anymore. Capital allocation is. The motivation is moved to that side.
>> That's a constructive thesis there on the story of Canadian energy. What's the biggest risk?
>> The biggest risk is we go into a much more severe recession.
if the prices of commodity is correct seriously and cash flow changes there will have to be revisions lower.
that will affect stock prices.
>> Another question now about global travel.
With the outlook for global travel companies like Royal Caribbean? It's a cruise line.
>> The cruise line.
They reported last week and the stock was up high single digits if memory serves, 3% when it reported, and was up because of a few things.
One, the pricing was actually quite firm. A lot of people want to go on a cruise after being locked up during COVID. Occupancy was above hundred percent.
The cruise ship was packed.
And they also found people on that cruise were spending more, so there on board spend.
That forced Royal Caribbean to actually, they were supposed to do something like three, 350 and earnings for this year. Day, after how successful Q1 what is, they raise that number to something like 480, like a huge 30% increase.
So Royal Caribbean's's stock moved on that. I think about travel, travel continues to be one of the more exciting places.
We talked about the recession, there are recessions in manufacturing, their recessions if you are tied to lending from banks, but we are not seeing recession in consumption services.
Travel continues to outpace. And Royal Caribbean benefits from that. I'm just… Just to take the other side of that though, Royal Caribbean is a highly leveraged cruise operation.
>> What is the risk here? People want to get out in the world.
Every time the wife and I get out in the world, it's a lot more expensive than it used to be, but after we went through, we go for it anyway. What's the risk it?
>> I think travel is fine but I think the company because of how dramatic COVID was, they took out a lot of leverage. Over 5 1/2 times leverage.
If this recession is more meaningful and people actually curtail spending, they won't be able to raise prices.
Occupancy will not be hundred percent and I've got this big debt burden. We much prefer travel companies that are capital light.
Think about booking.
If you and I book a vacation, booking receives a fee.
Booking doesn't have to build cruise ships loves this >> Get all that seafood out.
>> Exactly, or potentially a risk on the ship. We would much rather be in businesses or even hotels who have an operating model where they don't own the hotels, think Hilton, but they provide the technological backbone for it and the services. We would much rather be the capital light who benefit from this return to travel rather than capital heavy.
>> Let's get another question. We touched on this briefly earlier but let's dig in deeper.
Do we need to prepare for any issues regarding the US debt ceiling?
>> Oh, yeah. That's… The last time that we were dealing with this as a real risk was in 2011.
If you remember in 2011,ultimately, I think this time around, we will come to an agreement because the alternative probably goes against the politicians number one goal, which is to get reelected. You don't get reelected by defaulting on the debt, which they won't do, or by stopping payments to Social Security or Medicaid that people required to live on.
You need a motivating force and historically that motivating force has been lower market.
In 2011, it was the markets throwing a tantrum that motivated politicians who were being intransigent to on negotiating the debt ceiling to actuallysit down at the table.
Congress passed platform.
There seems to be signs that the administration is willing to negotiate.
But to be clear, the tax receipts coming in much below forecasted.
So this isn't a we can wait until Q3 September, this is a we have to deal with this because the US will run out of money is sometime early mid summer.
>> You talked about the markets being a motivating factor. I thought about what happened I guess it was last fall in Britain, when the government had certain plans in the market said no, that's not going to fly in our eyes and then there had to be a government reaction to what they were saying.
> Yes, change in leadership, revision of the budget.
Market threw a tantrum and I'm hoping this time around that calmer heads will prevail where we will have negotiation before.
But the closer we get to this, the closer we get to this May June, July end datewhen the US will run out of money, the more forceful the market reaction will bewhich will, if history is an example, will force people to negotiate.
>> Interesting perspective on that one. I hadn't thought about from that angle. That's why we do the show.
Fresh angles.
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. Just email moneytalklive@td.com.
Now let's get to the educational segment of the day.
If you're looking to find information for GICs, WebBroker has tools can help.
joining us now to discuss Caitlin Cormier, client education parked at TD Direct Investing.
>> Talking about a lot of different things today including interest rates.
A lot of people are looking at GICs more actively than they have in the past.
Let's take a peak on WebBroker and see where you can find those interest rates and what GICs are available.
Someone to click on research up on the top left-hand side of the screen and were gonna go down to the very last option under investments which is GIC Rate Sheet.
first what I want to point out at the top is at the GIC order entry is available from Monday to Friday from 9 AM to 4 PM Eastern time except on statutory holidays.
Mostly on market hours, a little bit different. But during those hours, you can purchase GICs.
So the rate that you see are good for today. They are not good for any period past today and they can constantly be changing which is why they are only good for today. We have a tab here for each different type of GIC that we have.
The first option is a short-term GIC. These are GICs that areunder 365 days.
Anything under a year.
We also longer-term GICs which would be between one and five years.
You will also notice that we have a lot of different issuers under our long-term GICs. It's not just TD that you can purchase thefrom, you can purchase them from other issuers as well.
This comes in handy if you are concerned about CDIC, Canada Deposit Insurance Corporation. So that is each different issuer that we have here would be eligible to be an issuer. Under CDIC to be able to increase the amount of coverage you could have on your portfolio, that is something the right decision.
these columns signify how often the interest will actually be paid, whether you're going to have monthly interest, every six months, was a year or just continue to have your interest compounded on the GIC. The rates are slightly different if you are getting more frequent GIC interest payments and the longer term tends to be a little higher on most of these GICs. Again, you can go through any air.
There also cashable GICs so if you are looking for something with a bit more flexibility, there will be different terms for you can cash them prior to the maturity date. You can see that without flex ability comes a bit of a lower interest rate. So always we can benefit if there is something taken away. It's a little bit of a lower interest rate. And finally, we have market linked to GICs. These are hybrid type of GICs where they can offer a minimum amount of interest and that a potential bonus interest depending on how an underlying market index performs.
So definitely something for those that are looking for a little bit of a different type of product to look into.
But yeah, we have lots of different options and WebBroker where investors can come in and search the market and shop for all different GIC rate.
>> A great primer there on what GICs are available on the platform. Say someone is taking a look and they say, all right, maybe they want to purchase one of these. How do they go about doing that?
>> Absolutely, as you can always call the trading desk but it might be easier to go ahead and fulfil the trade on WebBroker.
so what we are going to do is we are going to hop back in on our GIC Rate Sheet and what you do in the case of purchasing a GIC as we would want to go through and actually choose, you will see that these are hyperlinks, so whatever interest you want to choose, let's just say we are going to go with home equity bank and we are going to go with three year compound interest. So I click on that, it's gonna show me the issuer, the annual rate, the minimum I have to invest new Abydos GIC and the maximum amount I can invest.
when it comes do, it's just going to pay cash into my account and it shows me my estimated maturity date. In here, I would just type in the amount that I want to invest in this particular GIC.I click preview order, it's good to give me a breakdown of everything I need to know before I submit and then I need to go ahead and make the purchase from there. Pretty straightforward as far as putting the order through.
As long as it's during those hours that we discussed, 9 AM to 4 PM Eastern time, you will be able to do this on my broker.
>> Rates off as always, Caitlin. Thanks of that.
>> Thanks, Greg.
>> Caitlin Cormier, client education instructor at TD Direct Investing.
And make sure to check out the learning centre in WebBroker for more educational videos, live, interactive master classes and upcoming webinars.
Before you back to questions about global stocks for Damian Fernandes, a reminder of how you 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 Damian Fernandes, taking your questions about global stocks.
This one of your says, I'm unsure if this question applies to today's subject matter, but they want to talk toothpaste.
I have owned to Proctor and Gamble for years.
Will he lead and get the respect that Colgate-Palmolive gets. Could you add a little lightning to the matter?
>> Toothpaste wars.
Great question.
So taking a step back, when I started off on the industry, I started off as an analyst, and with Colgate, this was going over close to two decades ago, they will say they want to grow the market by getting crushed by today.
If you only brush once in a calming breath twice, you double market. Proctor is toothpaste and it's a few illusions. It is tied, a beauty products, it's households where is Colgate is oral supplies. A much more focused company.
So what you have is that Proctor sometimes wrongly, because there are so many different moving parts business, it is hard to see… I think both companies have been under pressure more recently just because they have a leg because of domestic competition or pricing. I think where it stands right now both companies, they are both consumer stable companies, varying high brand equity were people resonate with their product.
They have some degree of pricing power and they are benefiting from commodity prices being lower.
One of the main input costs.
I know Proctor probably versus the market hasn't kept up in the last few years abide in a portfolio, the portfolio cost, it's still a high-quality company that pays and raises its dividend every year like clockwork.
It has an expense productivity program in play. There's always a place for a period of let's talk about semiconductors now.
This is been a very interesting story in the space.
There was a time when Intel was the badge of honour.
Not so much now.
You believe that Intel will ever catch up to Nvidia or AMD?
>> Toothpaste to semiconductors. No, I don't.
I shouldn't say no I don't.
In the medium term, it's going to be very difficult.
Let's compare just those other names. They outsourced their production, AMT and Nvidia.
Intel makes its own tips and provides it for both the PC and server market.
The problem is Intel lost its leadership.
Like most things intact, you have these big companies that take their eye off the ball and then they lose it to a competitor and the competitor takes up the space.
Now Intel is playing catch-up for the last two years because the leading edge cutting chips it can't produce.
Playing catch-up requires investment.
for us, we follow the cash and Intel is going to lose money this year.
A lost body last year.
Intel is forecasted to lose $20 million in the next two years of cash flow.
The stock should be profitable as it tries to catch up to its lost technological edge.
So starting it off is always a difficult place to be.
Its main competitor that is a contract manufacturer, Taiwan Semiconductor, actually has a diverse customer base that they supply to.
It's profitable. It's got the lead.
I want to be a little cautious. Intel's main market is PC. PCs had a boom in the pandemic.
We had work from home, we had to upgrade our PC cycle because our old mothball PCs were no longer usable.
And the server market which also has a very profitable business, those chips are.
There are challenges in demand. There is obviously a technological leadership that is lost and there is not free cash flow for the next few years which, all of these things are not a recipe for success.
>> This next question comes out of this about artificial intelligence. You're not going to have that without semiconductive.
Please discuss the AI industry and the companies to follow?
>> That's a loaded question. There is a lot in there.
Picks and shovels are the way to go for a lot of things because you need them. The companies that create the chips are the base of the AI industry, Nvidia is a leader, they will benefit proportionally from AI. I think the AI industry right now, every single company is looking… You member 5G a few years ago.
Everyone was like, we are moving to 5G. It just fell off. There's a lot of hype around AI and I think there is actually very decent use cases.
Like what ChatGPT does.
AI can also be used for driving and now at anymore.
What we want to do is separate monies that are and just talk about AI but don't have a viable product from companies that actually have a pathway to modernization of AI. Whether providing picks and shovels like the chips or in Microsoft's case being able to think about how to implemented in a office productivity setups, that's the direction we want to go as opposed to tech companies saying I believe AI will transform a business without actually having a platform and how that's going to get to the end state.
Cash that reminds me of the early stages of another kind of industry where I'm not going to name them, a beverage company decided to rebrand itself as a tech company. It didn't make much sense and not much came out of that.
This question is actually for me.
Is that a pocket square in Greg suit or a piece of paper?
There is a keen eye out in the audience. This one today is a real pocket square.
But I've used that trip before. If you take a piece of paper we don't have pockets, you folded up and it looks just fine. When you go into an executive's office, my boss's office, with the sticking out of my jacket.
It's not good.
If you find yourself on television Anita pocket square in short order, that's what you can do.
A piece of paper will get you through just fine. We'll get back your questions for Damian Fernandes on global stocks and my wardrobe 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 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.
Just last week the US Federal Reserve raised its key rate by 25 basis points but there was enough in there to get people speculating in the markets that perhaps they would be on pause after this. The Fed said that data was going to be crucial. We got a crucial reading tomorrow on US inflation. Our Anthony Okolie joins us now with TD Securities outlook on what we might be getting.
>> TD Securities expects that core US prices are likely to remain as strong as the March figures and they expect a consecutive increase of interest month over month the core figure.
and the forecast.
But in a world that, when we started this conversation, the Federal Reserve raising rates, if companies are not generating profits are facing real pressure, contrast to LightSpeed, Shopify had a big day this last week after earnings because they said it's money-losing logistics business. They will move away from that right?
So people are saying there is a potential for Shopify to be profitable and generate cash.
I think LightSpeed needs that aha moment.
^...
¸I think the business, the payment business is highly competitive.
It has to show competitive advantage, being able to generate cash from this and maybe probably, also just, you know, not invest progressively because that's costing you money.
>> We can squeeze one more in.
We are almost out of time. (Greg reads the question) >> Well I guess, first of all, commercial real estate weakness is a problem. That's with the regional banks in the US, the eye of the storm, this more recent pullback have been under pressure because they have lent a lot to commercial real estate at Rates that were very low. Commercial real estate prices very high.
Canadian banks have exposure this because a lot of the big Canadian banks to have US businesses. But it's much less so than their US counterparts. Broadly diversified and the banks are part of it. There is lending in the commercial real estate, there might be commercial loans, the insurance balance sheets but in aggregate, they are much smaller as a total of the overall book of business. So, I think there is some real risks in commercial real estate in terms of pricing and in terms of where that is. Where the assets are likely to be marked. But as we bring that to the Canadian banking sector, insurance sector, Canadian financials, the exposure is much more muted which is a good thing.
>> Always a pleasure have you. Looking forward to the next time. Our thanks to Damian Fernandes from TD Asset Management.
Always do your own research before doing any research and stay tuned to our show tomorrow with Thomas Feltmate, Senior Economist at TD Economics.
A reminder that you can get a head start with your questions by emailing moneytalklive@td.com. That's all the time we have for. Thanks for watching and we will see you tomorrow.
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