David Mau

[music] Hello I'm Greg Bonnell and welcome to MoneyTalk Live brought to you by TD Direct Investing. every day will be joined by guests from across TD, many of whom you will only see here. We we'll take you through with moving the markets and answer your questions about investing. Coming up on today show: we will discuss whether slowing global growth could put the brakes on a rebound in the travel sector with TD Asset Management David Mau who joins us. And in today's WebBroker education segment Caitlin Cormier will take us through how you can scream for growth stocks using the platform. Here's how you can get in touch with us your questions. Just email moneytalklive@td.com. or Philip at your response box right underneath the video player right here on WebBroker. And in the last quarter of the year, today, 19,186 of the TSX Composite Index, giving back on hundred and 84 points or a little less than 1% right now. Energy trades have been interesting. Of course with the big OPEC meeting. As the headline suggests, heading into it, about 2 million barrels a day. Not that much off the news but it is moving higher right now. We have American benchmark crude, West Texas intermediate … Now finding its way in positive territory as Suncor, pretty modest and has been a reversal on the trade. 44, 03 up $0.74 and 1.7%. of course some of the mining names, nothing too dramatic. You have Barrick right now down a little less than 1%. South of the border, let's check in the S&P 500, on the back of that strong today rally, to start the week. We are seeing some downside pressure, 3741, we will call that 50 points in the whole or 1 1/3%. Let's check in the tech names. Let's check the NASDAQ today. A little bit more giveback in this space. You recall some of the big names integrally rallying quite firmly on both sides of the border to start the week. Right now you have the NASDAQ down 1 3/4 of a percent. Let's check in on Twitter. Of course Elon musk, once again taking Twitter private perhaps. A little bit of pressure on the downside to that. 50, 85, down 2.2%. And that's your market update. Things are finally looking up for the airlines as most covert travel restrictions have come to an end and travel chaos that we sought many airports throughout the Summer has eased. But will a possible recession now on the horizon wreck that rebound? Joining us now is David Mau, Portfolio Manager at TD Asset Management. Good to have you back was David. >> Thanks for having me. >> Of course the airlines that hit very hard during the pandemic. Explosion of demand for Summer, chaos at the airport and everything seems to be going well for now. What we need to worry about going forward? >> You're right. The air travel is been very robust since basically the beginning of the year. The spring was great, some are is even better. It looks like the third quarter which started a few days ago and the end of September will also be pretty strong. So based on the numbers we are seeing and what the airlines are telling us, you know, the fourth quarter, going into holiday season is also looking very, very robust. Travel bookings both for leisure and business, those fares are being snacked up and we know that ticket prices are basically higher than they were pre-pandemic. So all in all, it looks like a good year for the airlines. The outlook looks pretty decent. What is uncertain is what's around the corner in 2023. If we are headed into a recession, if this first wave of travel demand has now passed, what is that also mean for next year? But, I mean the good news is the airline industry Association predicted 2022 would be the first year since the pandemic began that airlines will be profitable. So it will be three years since airlines have turned a profit and it looks like they will finally be able to do that. >> When we think about a return to travel this year, seeing that the leisure travel was the first thing to resume, easing restrictions saying you can fly here and here doing what you want to do because you haven't been there for a while. Business lagged a little bit. It sounds like business is picking up two. How did those two different silos, for business or pleasure travel react to bad economic times? Did come companies cut back dramatically? >> Companies did cut back erratically but for regular leisure travel, if you're getting fewer hours at work and you are also being impacted by high inflation, so prices for other things are going up, travel, vacations are one of the first things that you cut. So that's obviously going to be impartial. For companies, right now we are seeing a lot of companies talking about starting to talk about layoffs or cost-cutting measures. So that might even be even more impactful for the airlines because travel is only a small part of the overall passengers but it's a big part of the airlines profit. > Anecdotally, I've heard that as far as demand goes right now, there are perhaps not enough seats to fill all that demand. People are getting incentives to say "hey, if you don't get on this flight… " They could benefit by bringing more seats online but that sounds a risky proposition given all the uncertainty. >> Yeah and I think in general North American and European airlines have kept the capacity lower than when it was prior to the pandemic. I think in most cases, airlines are about five, flying 5 to 10% fewer flights than they used to. But those flights are full. There are more than 100% full. So what you just mentioned, flights being oversold, there are three inert seats available in a plane, the airline will sell 310 seats and hope the 10 people don't show up. What we are seeing is that all 310 people are showing up and then there will be 10 unlucky people who paid for their flight and are knocking to get to where this was to go. So as the airlines keep this capacity lower than what it normally was in the past, they are actually able to operate with fewer staff. We all know that airlines are short on staff both in the plains and on the ground. A lot of the pilots that left over the last two or three years have not come back to the industry. Some of retire, so he moved on to different careers. It takes a really long time to train new pilots. There is a pilot shortage going on right now. If the airlines can manage the turn capacity levels and still make money, and fly flights that are 100% full, they will probably continue to do that for at least a little while. >> Does not put them in a better position if we do end up in a recession? From the central banks, but they are trying to achieve, it's been pretty well telegraphed for people who make economic predictions that they think you can't avoid a recession if the Fed is really serious about bringing inflation down. But if you get that warning, can you prepare for it in this industry? I think about the pandemic and how everyone, including airlines is just blindsided by it. > Everyone was obviously caught off guard. But these lower capacity levels, when the downturn does come, the airlines will have less work in terms of reducing even more capacity. For now it's probably a good thing. >> Fuel costs. Obviously in pre-pandemic times, we would be worried about the huge expense for them. There has been a lot of, I guess, volatility in that space as well. Yesterday, we had Justin Flowerday of the program and he said "I can sit here and make a case for Dixie dollar oil and make a case for oil above $100. " How does the airline industry deal with that? >> A lot of the airlines will have some kind of commodity hedging program in place. But the thing is, not everyone does it and not everyone Hedges 100% of their oil exposure. Because the price to go up or could go down. So they kind of want to be in the middle. They do want to completely hedge and then miss out on potential upside of oil prices coming down. So depending on the airline, and what their hedging program is, some airlines would be more or less affected by the volatility in oil prices. >> I understand you in on a trip to Europe recently, obviously different geographies will feel different amounts of pain and a recession depending on what's happening geopolitically. Europe, obviously has a pretty unique situation with the crisis in Ukraine. >> Yeah. European companies face the same challenges that North American companies are facing right now. Higher inflation, higher prices, higher interest rates. The one additional headwind that they have right now is their dependence on Russia for natural gas. Natural gas is a big part of what they use for heating and for running the factories. So obviously with the sanctions on Russia right now, Russia not providing the same amount of volume of gas that the did to Europe in general and Germany in particular, it's creating an additional headache. A lot of uncertainty for companies there. Not just for companies, for households as well. They are unsure how they will heat their homes this winter. >> Interesting start to the show. We will get back to your questions for David Mau in just a moment's time. Email moneytalklive@td.com and get in touch with us anytime with your questions or fill out that viewer response box under your video player right here on WebBroker. And now some of the top stories in the world of business and take a look at how the markets are trading. The sharp rise in borrowing costs continues to weigh on Canada's largest housing markets. New numbers from the Toronto Regional Real Estate Board showing almost 11% slide in the number of homes changing hands from August to September. And it appears homeowners in the greater Toronto area are reluctant to list their properties for sale with the local board saying new listings are at the lowest level for September since 2002. In Vancouver home sales were down almost 36% below the 10 year average for last month. OPEC and its allies have agreed to cut oil production by 2 million barrels per day. The largest production cut from the cartel since the early days of the pandemic. The decision comes despite pressure from the United States to produce more crude as central banks attempt to tame inflation. Washington is previously attempted to contain energy prices by releasing oil from its strategic reserves. Some fresh indications today of the continued strength of the US labour market. Payroll services firm ADP reports business is added 208000 Jobs in September. A stronger showing than expected by economists and job gains for August were revised upward. The ADP report comes ahead of the US labour market reports which is scheduled for Friday alongside the latest Canadian jobs report. Now the benchmark index in Canada trading. A little shy 1% for the TSX index. In the S&P 500, let's check on Wall Street right now. The same story. A bit of a giveback. That brought a reader the American market, almost 1% downside. We are back now with TD Asset Management's David Mau, taking your questions about global and industrial stocks. Let's get to a big one right at the top. What is your take on FedEx? In all the news we've had of them lately? > They reported their fiscal Q1, FedEx and it was quite a big miss. The results were disappointing. What came out of the results were that they are seeing, they are a package delivery company and they are seeing the volume of packages they deliver decline quite significant way. They were able to make up by recent prices but they are not going to be able to do that forever. You can only raise prices so much before demand destruction starts to set in. We are already seeing softening demand as volumes have come down. So, you know, what they've done is worryingly, they actually withdrew their guidance for the year. Which is always a bad sign because that tells you that the company themselves, they don't really know what can happen this year. But on the positive side, the other thing that they're doing is they've initiated some pretty big cost-cutting initiatives. Usually, when companies do that, that means they are trying to hunker down for a lot of uncertainty and a lot of downside. So that's kind of where FedEx is that right now. FedEx is usually very closely watched. Because they are an indicator of kind of a broader global macro conditions and demand. So with UPS reports and a couple of weeks, there will be a lot of eyes on that as well. >> Always fascinating with FedEx. If someone holds the name and they want to know what is happening in that company, those global bellwethers were FedEx says "things are not looking great", it's hard to imagine other companies saying things are just fine. We sort of have are on what's happening fully in the economy. So what should we be looking for from UPS or someone else to follow that kind of theme? >> I would expect UPS to show the same kind of trend of what FedEx is albeit a decline in volumes but made up for by higher pricing. But like I said, you know, the high pricing can't go on forever. You can only raise prices so much. As a volumes come down, I would also expect UPS to start looking at some cost-cutting initiatives. >> Interesting numbers to come out of the upcoming earnings season. Let's see if we have another question for the platform. Elon musk is always in the headlines. Maybe we can talk about what Tesla is up to? Can we get your thoughts on Tesla? >> Tesla has not reported the quarter but on Monday they reported the deliveries for the quarter that ended in September. The number was actually a little bit disappointing. I think they delivered about 344000 but they expected more. A lot of cars were actually stuck in transit and did not actually get delivered to customers. That's how they explained not selling the projected 370 000. But that if if that's all it was, it doesn't seem like there is too much to worry about around Tesla because the production came in. I think they produced about 365 000 units which is in line. So, if they had been able to deliver that full amount that they produced, the numbers would've matched up and they would not of missed. So as long as there is not a demand problem and it seems like there is not really a production problem, I think Tesla is going to be okay. >> Okay so as the business itself, I mention off the top that Elon musk is making headlines. Of course this week, he is back in the Twitter game again. As an investor in Tesla, did they have to worry about that noise off to the side? >> I think you always have to worry about what your CEO is doing. If he's doing stuff outside of the company that's in the news and could affect perception or sentiment, then it's definitely something you have to watch. >> A follow-up on Tesla but sort of expands the conversation but if you are wants to know what some of the other big automakers are up to and how well they are in a position to challenge Tesla with EV's. >> On the electrical vehicle front it seems like the European automakers tend to have a bigger focus on that's driven by government regulations and policies from admissions and so on. So of the big automakers globally, I think Volkswagen is probably going to be Tesla's closest competitor. Right now they have the scale, they have the distribution and if you look at Volkswagen's research and development and capital spending plans, they are going to put close to $100 billion into researching and developing electric vehicles in the next five years. Volkswagen, at least in Europe, actually sells more electric vehicles than Tesla does. They have already caught up in Europe. I think at this pace, based on what industry expectations are, Volkswagen will probably surpass Tesla in terms of volume of electric vehicles being sold somewhere by 2024, 2025. >> It sounds like there is a great deal of momentum in this space. Sometimes I think about economic contractions, tough times, recessions, as we push towards a greener planet, times it feels like some of those initiatives get put on the side burners. Saying we have a problem ready with the economy and we will get back to these loftier aims. Does that endanger the push for EV's? Or are we so far down the road right now the companies are saying that this is the future of automobiles. ? >> Everyone is pretty much committed to it right now. So there is no going back. If the government says they will relax and let everybody have five years to meet these requirements, I don't really see that happening. Especially in Europe. Maybe in the US. Depending on if Mr. Trump finds his way back into the White House as we know he did rollback some emissions regulations when he was Pres. a couple of years ago. But I really see that happen in Europe. I think the probability that happening the US is also very low. >> I know you are not a mining specialist in terms of materials that these auto makers need to build electric vehicles, namely the batteries, we can see competitive environments going forward. I had other guests saying there was not a lot of investment in mining but will we do see is the ramp-up for the need for copper for electrification and every thing else. What will it mean on the automakers side? >> They will definitely compete for scarce resources. On my front, copper, other than lithium, copper is a very, very important input into manufacturing generally into batteries and electric vehicles. We know that there's gonna be a copper shortage in the next five or 10 years. So, you know, auto companies are going to really have to plan around with the demand and supply environment for coppers going to be. We know that it takes 10, 15 years for new copper mines to come into service. So there is a really long kinda runway to be able to get the demand but the runway, sorry, in order to get the supply, the demand is happening right now. >> Maybe you are minding specialist I don't know. Ha ha. That sounds like a good answer to me. >> As always, make sure you do your own research before making investment decisions. We will get back to your questions with David Mau in just a moment but a reminder that you can get in touch with us by emailing MoneyTalkLive@td.com. Now it's get to our education segment. If you're interested in growth stocks, WebBroker has tools which can help you narrow down your search. Joining us now for Maurice Caitlin Cormier, Client Education Instructor and TD Direct Investing. Caitlin, walk us through this. Firstly, what kind of stocks are we talking about here? >> Yeah. So growth investing is kind of a particular strategy. It's a stock buying strategy that investors can use and what they are looking for, companies that are expected to grow an above average rate compared to other industries or markets, as a whole. So growth investors tend to favour those kind of smaller, younger companies. They would have lots of room to expand. Increase profitability in the future. There is typically five factors that growth investors tend to look at when they are evaluating the stocks. Historically, future earnings growth, profit margins, return on equity and share price performance. So many of these stocks do tend to have a higher ratio because they may not have earnings yet. They are kind of that growth and development stage. Just jumping off. As well and they probably don't pay dividends because these companies are really looking to just continue to reinvest in technology and to be able to move forward and grow as a company and are less concerned about paying dividends to investment holders. >> Alright Caitlin. So we know we are looking for now. At some of the tools we have on WebBroker. To help us find these companies. >> Yeah. We will take a little journey here. We will happen to WebBroker and start with our screener tool as you mention. We are going to click on the "research" button here and we will go down to "screeners" under "tools". We will pick a custom screen and a different few things that will be applicable. First I will clear all of my preselected information here. I will click on "more criteria". As we talked a bit about earnings-per-share, growth, we will click there. Let's look at between a five and 15% earnings-per-share growth. That's what we want to see there. Let's also go in and choose the sector and industry. So technically, growth stocks tend to be in industries like technology. That would be a very popular place for us to see growth stock so let's choose that to help us narrow down and let's choose one final criteria here. Let's look at price performance. We are looking at companies that can grow their sure pricing. We want to make sure that they are moving in a positive direction. Of course there is always exceptions. But we are looking for something has a least a positive growth. We will started zero. Any stocks that have increased in price over the last 52 weeks. So we will click "close" here. Of course lots of other information that we can put in here. We are down to 18 matches already so that seems like a reasonable amount for us to start looking at. So we can see what the performances, what the return is been for the last 52 weeks as well as the earnings-per-share. Historical growth, and from here we can sort of drive a little bit deeper and can do additional research into these companies to see if they might be something that we like to look at investing in. Let's just randomly choose the first one here. If we click on the name of the company, we will get a little bit of information about what this company does. So we are not familiar with it, these do tend to be those mode during your companies. So we get information about them. Again, you can see why they are ranked number one here. We can also go to the overview here and find out more about this particular stock. Another thing we talked about about growth investing is kind of looking at that potential for the future. So to be able to kind of have potential earnings increased in the future. Earnings tab here, under the research tab, we can come to see what those potentials for earnings in the future look like. So we have a little graph here. It is a little bit small but you can see it here. But it is showing kind of what our estimated range for earnings, the current need and standard deviation is. So we are looking at Q3 for 2022, Q4 for 2022 and forward into 2023. So it's giving us a bit of a projection into the future. Of that type of growth. And we can also go in and see things out of the fundamentals. We can see some information about this particular company as well as the financial statements which would be a good spot for us to see some backwards -looking information. To see what that growth in revenue has look like over time. Just in general being able to see some stuff that has happened in the past and how it has changed to moving forward if the company is making progress moving forward as far as their revenues and growth in deciding whether that's a company that you would like to invest in. So at the end of the day, growth investing is very subjective and there are a lot of different things that growth investors might want to choose to look at but this is just a little bit of a peak of some things we have available on WebBroker if that's the type of investing you'd like to look at. > Of course Caitlin and the mistake I have made far too many times is going there and getting an awesome screen together and I think "good work Greg, so cool". But I forget to save it. Always save it right? >> Absolutely, always click the save button at the top. So you can go back and look at in the future because it will always update as well. Any stocks that fall into that category and have had great growth, it will continue to update for you. So you always need the freshest stocks. That's a great tip. Make sure you do hit the save button. >> Let my mistakes be a lesson for others. Thank you Caitlin as always. >> Alright. Thank you so much. >> Caitlin Cormier Client Education Instructor at TD Direct Investing. October's investor education month. For the whole month, TD is offering access to on-demand videos and master classes. All designed to help you level up your investing IQ. And before we get back to your questions about global industrial stocks with David Mau, a reminder of how you can get in touch with us. Do you have a question about investing, or what is driving the markets? Send it to us here at Moneytalk Live. You can send your questions two ways: You can send us an email anytime at moneytalklive@td.com. Or you can use the question box at the bottom of the screen right here on Web Broker. Just type it out and click send. We'll see if one of our guests can get you the answer right here at MoneyTalk Live. We are back now with David Mau taking your questions about global stocks. What are your thoughts about Caterpillar? Will the slow down hit them? >> It looks like after their reports, the slowdown has begun. They were in line on revenues but only because they were able to raise prices. The machines they sell are starting to slow down. They cited US residential construction slowing, they cited China's weakening economy is a factor that slowed sales. We are also seeing global PMI's start to roll over now. Training at about 50. So that means there is, manufacturing looks like it's heading into a recession. Good news for Caterpillar though is that they do have a very robust order backlog so that helps him with the next 12 to 24 months. They are to have those orders in the book. So that's in offset. But, you know, it does look like things are certainly slowing down for CAT. They will give us more detail and what to look out for the coming weeks. >> So ordering still gives a bit of a cushion. But I think of a company like Caterpillar, just the size and the scope of what they build. It can't be easy for a company like that to have difficult economic circumstances. They have to sort of hunker down and brave until they get to the other side? >> Yeah like you said. A lot of things they build and sell, have very long leads. Some things are designed just for one customer. It's not something they can just turn on and off. So it does take a while. >> Here's another one. A bit of a follow-up. Someone wants to talk about DEERE. How would they fare through all this? >> That is actually a great long-term secular story. The focus for DEERE, obviously an agricultural equipment reducer. What they call precision agriculture what that means is they use data and artificial intelligence to make machines that help farmers improve yields. So, that could be, that could mean using less pesticides are using fertilizers more effectively or using water more efficiently. So instead of spraying the whole entire field, you were only putting those components, pesticides or fertilizers or water to the parts of the crops that needed. So, you can actually reduce all the farmers can reduce everything they use and still get a better yield on a given plot of land. So, you know, DEERE is adding a ton of value with their precision agricultural strategy. >> What about the supply chains coming out of the pandemic lockdowns? You hit the automakers pretty hard. What are for Caterpillar? DEERE? Were they hamstrung by the same things question mark> Definitely if you look at the transcripts and with the calls of what these managers are saying. They are definitely still being impacted by supply-chain issues. But, the supply chain issues do seem to be getting better but definitely where not back to normal. >> Talking about supply chains and moving goods, one at the rails? Are they benefiting from commodity demand? >> Yeah. I mean, so far this year, there has been a lot of strong demand for agricultural commodities. Things like potash. Canadian potash, as you know, Russia is a big exporter of potash. So obviously they have been cut off from exploring potash rather exporting potash to the rest of the world. The demand for Canadian potash is been very strong. We had a really good grain harvest in Western Canada this year. So, there's a lot of grain that is going to move this year versus last year where the grain harvest was badly affected by weather. So there's going to be growth in that area as well. The other thing is coal is starting to see a bit of a resurgence. As we mentioned earlier, is a bit of an energy shortage around the world. Some places where they would typically not used coal have now resorted to looking at coal again for energy. We are starting to see shipments of coal. They have been on a long-term secular decline for about 18 months ago where those shipment volumes have started to decline. > There are things at the rails need to move. At the same time, inflationary pressures across the industry… We have workers more and paying more for this and this we can discharge our customers more? >> Yeah, so far it looks like they have been able to raise prices enough… And those are things like flatscreen TVs they get from Best Buy or, you know, home needs that you get from Home Depot. So if we are headed at the beginning are headed into a severe consumer recession, those volumes will probably fall off a lot. That's something definitely to continue to watch. >> We are talking about a bit of a security there. Obviously in the mind of our viewers. Next question: what's your view on energy security as an investing theme? >> For us in North America I don't think it's a huge deal at the moment at least. But in Europe, especially this winter, if things are looking a little bit, I guess scary. There has been talk of rationing energy in Europe. So if you are a company in Europe and the government comes and says "you know what? You guys, instead of running your plan five days a week you are only can he be allowed to run in three days a week because we have to ration this energy so people can heat their homes or people can continue to go about their daily business so we are cutting you back from five days to three days." That is incredibly hard for a company to manage because they can't plan for the future. They don't know if things will get better, worse. A company won't know how much raw materials to order, how many employees they need. They can't tell their customers about lead times and delivery times. So that uncertainty is a very big negative. Not just financially and operationally, but investors will look at that uncertainty in price and into the stock and that usually will lead to a lower valuation. >> Interesting times indeed. We will get your questions with David Mau in just a moment's time. As always make sure you do your own research before you make any investment decisions. A reminder you get in touch with us at any time. Do you have a question about investing, or what is driving the markets? Send it to us here at Moneytalk Live. You can send your questions two ways: You can send us an email anytime at moneytalklive@td.com. Or you can use the question box at the bottom of the screen right here on Web Broker. Just type it out and click send. We'll see if one of our guests can get you the answer right here at MoneyTalk Live. Despite the recent pullback in Canada's housing market, housing affordability still remains out of reach for some middle and low income buyers. But is this causing a widening of well inequality in Canada? Anthony Okolie joins us with more. >> Thanks Greg. Counter to public perception, real estate values in Canada have not actually contributed to a widening in the inequality gap according to TD economics. In fact, rising homeownership among the lowest wealth Canadians has helped reduce the wealth gap between 2005 to 2019. In fact, during this period, the share of 1% and 10% of the wealth, the wealthiest Canadians fell during the same period. Now rising homeownership at the bottom, Canadians between the ages of 25 to 34. In income of these younger households is actually higher versus the average low wealth household. As my first graph shows, these young households have seen their incomes rise between 2005 2019. Exceeding the average low wealth households. TD economics also notes that these younger households have also benefited from parental wealth transfers. In the report, TD economics highlights a 2020 Survey in Ontario which showed that 41% of parents with children under the age of 38 actually helped them buy a home with the average gift exceeding $73,000 and the average loan exceeding $74,000. So despite the advantage, the disclosed the decline in housing affordably resulted in higher leverage for these homeowners. As my next chart shows. Mortgage debt of these young homeowners in the bottom 30% actually increased during this period. And exceeds the average mortgage debt. The reason why these households, this is a reason why these households have not bumped into a TD economics calls the low wealth category. TD economics says that with affordability at the worst levels in decades, households lacking a higher income or money from the parents will face higher barriers to homeownership. Rising interest rates will only exasperate exacerbate this wealth inequality over time. For example TD economics notices that a house in the medium Toronto area with medium income would need to dedicate 56% of the pretax monthly income to mortgage payments in order for the average priced home. That's assuming the buyer has enough money and has put down enough money to pay down payment. So TD economics says it is too simplistic to define Canada's wealth inequality as rich versus poor. In fact over time, it's proven to be homeowner versus non-homeowner. >> Obviously a generation of people coming up that wants to get educated in the workforce and saying what are my chances to own a home? What can be done for the non-homeowners? >> No quick fixes to this in the short term at least. They say that look there's lots of government initiatives out there right now to address housing issues that should be accelerated and evaluated. They point to things like first-time homebuyer incentive or the tax-free first homeowners savings account. They also talk about policies that could improve the outcome for long-term winters. But, TD economics says the more the government should ensure existing policies don't disproportionately benefit wealthier Canadians and actually, you know, increase the wealth divide over time. >> Thank you Anthony. MoneyTalk Live's Anthony Okolie. Let's check back on strong economic rally at the start of the week. We are getting some of it back. You have the TSX with hundred 64 points. A little less than half percent. Just sort of sitting at the level of the lunchtime session. We did notice that some of the energy names getting back some of the recent gains. Starting to make gains. This will be on the party, we showed with the top of the show, they managed to flip in positive territory. Just a little under pressure. Nothing too dramatic. Just $0.49 a share. A little shy of a full percent. The mining stocks, also in giveback mode after that strong today rally. Kinross down 2 3/4 of a percent. South of the border, let's check in the S&P 500. We saw long yields move back in the past couple of days. Some discussions around what the Fed might do next. It gets money moving in different directions based on different themes and theories. A little bit of the giveback today as well. 3755, down a little shy of 1%. The cruise lines today getting maximum again they made yesterday. If you recall, Norwegian has dropped COVID rules. You have carnival right now it seven bucks and $0.22 about half about almost 7% to the downside. We are back now is David Mau from TD Asset Management with your questions. Here's one of the supply chain issues that we heard earlier in the year. We heard a lot and how do we resolve this? >> Things have gotten better but deftly not resolved. I think we have a chart here. > We do yeah. We have something to show the audience. The shipping costs are huge for a certain period of time aren't they? >> What this chart shows is the price of shipping one standard 40 foot container from the port of Shanghai to the Port of Los Angeles. You can see in the years leading up to the pandemic, it was largely hovering around $1300 to ship one container. At the peak of the pandemic in 2021, it got to over $12,000 per container. So, if you think about that, you were a small or medium-size business or company in the US and you are importing either raw materials or finished products from China, maybe you import 10 containers a year, prior to COVID, that would cost you $12,000. In the height of COVID, it would've cost you $120,000. So you can imagine what that does to your profit margins. You know, it's going to make some businesses uneconomic. That rely on imports. But thankfully you can see the line is come down quite significant way. We are now down from down below $4000 per container but that still more than double what it was. So transport costs are still elevated, I would say. Not nearly as much as before but still elevated compared to history. So, that's a good indication that supply chains or tensions rather heavies. But it will take time for supply chains to get back to normal. >> Fascinating graph. We have time to squeeze in one more question. This one is about the retail space. How about Nike? >> Nike had tough results. Earlier, last week I believe, they reported their quarter ended in August. Inventories were up significantly. their inventories were about 65%. That means consumer demand to soften. Nike said that increase inventories was due to customers over ordering and the supply chain not being smooth. There is a lot of delayed shipments that were probably ordered 3 to 6 months ago they're starting to hit the shelves now. So that's how they explained the rise in inventories. But what that means is they will have to start discounting their products. Because it's going to be last season's products in a few months. So that's not great for Nike's margins. Because they're going to have to discount more products and at a greater discount level than they would've originally planned to. So that will hit profit margins. And now, we've got people paying very close attention to other apparel companies like under Armour and Adidas. Not just apparel. The general retail guys like Target, Home Depot, Walmart. They will be watched when they report their third-quarter results. >> Nike is the preferred footwear of my two teenage sons. At first I said they had enough shoes. And now with discounts… David always a pleasure to have you here we hope you come back soon. > Thanks. > I was David Mau, Portfolio Manager at TD Asset Management. Stating for tomorrow show, Hussein Allidina will join us taking your questions about commodities. A reminder of course that you get a head start with those questions by emailing moneytalklive@td.com. That's all the time we have for the show thanks for watching and see you tomorrow. [music]