Hussein Allidina

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

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

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

Coming up on today's show, we are going to be joined by TD Asset Management Hussein Allidina and we're going to discuss whether the recent move we are seeing higher in oil has a little more room to run and what's behind it.

In today's WebBroker education segment, Jason Hnatyk is going to show us where you can find commodities data here on the platform.

So here's how you get in touch with us.

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

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

We will start here at home with the TSX Composite Index.

You do have the price of crude oil continuing to push higher, a little shy of about $84 a barrel for West Texas intermediate, the American benchmark, at this hour. We have 57 points to the upside, about 1/4 of a percent on the TSX Composite Index.

Among the most actively traded names includes Baytex energy, energy plays, with the price of crude moving higher the energy names are moving higher. Baytex is of about 4%. Did notice earlier a bit of a flattening of gold today.

I wouldn't say it's a big pullback but let's put up on the screen. You're down about seven bucks an ounce or 1/3 of a percent. Some of the mining names under modest pressure.

Kinross at $7.57, down about 1%.

South of the border, the Woodstock of AI, and video holding court, and announced their new chip. Right now at 5151, the S&P 500 is up a modest two points, basically flat.

I bit of downward pressure on the NASDAQ last time I checked. Right now, indeed, it is down about 1/3 of a percent. Nothing too dramatic. We will talk about Nvidia later in the show and what they announce.

That stock is down modestly. So my competitors are down even more so. AMD is down about 6 1/2%.

And that's your market update.

Oil prices have been on the rise as geopolitical events grab the attention of investors, but is there more going on with the price of crude then just a risk premium?

Joining a centre discuss, Hussein Allidina, head of commodities at TD Asset Management. Always great to have you on the show. Welcome back.

>> Thanks for having me. Sorry I'm not there in person.

>> Not at all. You're looking great in the remote view.

Let's talk about what's been driving this recent breakout in oil. What's going on here?

>> And your leadership you mentioned geopolitical concern. That something that has been in the background definitely for the better part of the last five months and more recently with the increase attacks in the Red Sea but I think when we look at fundamentals, heading into the year, most market participants were of the view that we would see inventories building in the first quarter of this year.

The first quarter is not done but January, we saw… February has built. The most recent data shows that that inventory continued to drop. I think this is quite constructive.

We are seeing demand quite firm. I think I've got a chart that shows US demand and US gasoline demand is quite firm.

It is actually at levels that you would expect to see in the summer. We are not in the summary yet.

The man is quite firm. Only bring this together, it tends to painted tighter inventory picture than expected. The starting point was very tight. We thought we were going to get a build in the first quarter that did not materialize.

Because of that, the back gradation or the steepness in the crude market is still quite pronounced.

The curve is more pronounced.

This underscores the tight supply demand picture.

>> When we talk about demand, obviously there are concerns about global economies and high interest rates by the American economy has really held up in the face of her borrowing costs. Is that a big part of the story? You talked about that.

The American economy is pretty strong, the strongest in the world.

>> US demand is around 20 million barrels a day, the single largest consumer of oil.

The demand growth that we are seeing broadly speaking is coming from EM and that's been true in the last several years. EM has been weaker partly because of the weakness in China but that too is starting to change.

As gasoline demand rises more recently, I think that's providing broader participation in the market from the speculative community, which has been relatively lacklustre. I think we've got a chart as well that shows that and participation today is at levels that we last saw broadly speaking 10 years ago when the fundamental picture was not nearly as constructive as it is today. You asked me at the outset do I think that oil prices will continue to move higher.

I do think that we've got to appreciate that part of the reason that inventories are as tight as they are is because OPEC has reduced production. They reduced production which has led them to build spare capacity. I'm not in the camp that oil goes up north of 90, $95.

[image frozen] >> Obviously we are having some problems… Oh, you're back.

We lost you there for a second.

>> Sorry.

>> You talked about emerging markets and obviously there is demand there but you mentioned something pretty important, the fact that OPEC has held firm to its commitments to keep the supply side tighter than perhaps it needs to be. Walk us through that.

>> OPEC has reduced production and because they have reduced production, that is obviously contributed to tightening balances.

What I was getting at is that I am not in the camp that oil prices necessarily go above 90, $95 per barrel this year because it would return production to the market if that were to happen.

As a commodity investor, I don't really need oil prices to move materially higher or there. With the back gradation I am collecting a 10% yield or carry and that's been engineered by the tight balance that we are seeing in crude and products.

>> Let's talk about investment in the sector.

Crude prices are going higher.

OPEC could open the spigots if they wanted to. But underinvestment in the sector, it's been an ongoing theme for as long as we've been doing the show, almost 2 years now, you've been a regular guest. We have talked about this and it hasn't changed much.

>> No. The truth is we have not been investing in commodities broadly, oil in particular, over the course of the last 10 or 12 years.

The growth that we saw last year in non-OPEC supply outside of the US shale production, which is a relatively short cycle, came from Brazil, Guyana and Canada.

Those are long-term projects, seven, eight, nine years, and many of those projects… If demand continues to grow which I believe it will, if economic growth continues to move higher, you're gonna need to investor going to continue to see tighter balances which will require higher prices to limit demand growth.

One point, Greg, last year the market got quite bearish on US production growth.

US production grows increased meaningfully in the fourth quarter.

I was on your show and I said part of that increase is likely private producers trying to pretty the pig, trying to grow production so that they could be bought out in the M&A space. If we look at the more recent data out of the US, production has actually dipped below, I'm not talking about January and what happened in Texas, talking about data in the last couple weeks, you're averaging around 13 million barrels a day which is about 200,000 barrels per day below where we were in the fourth quarter of last year.

So we really need to see an increase in investment because as demand continues to grow, the inventory picture remains quite tight.

>> What will it take to to get to that investment?

>> The problem is we are about the incentive price today but because of this focus on ESG and energy transition, equity shareholders have frankly lambasted their companies over the course of the last five, 10 years to stay within cash flow and return cash flow to investors. They continue to do that which is great in the short term for the equity investor but in the medium term, your energy companies look less like an energy stock because they are not spending in the upstream.

As prices continue to move higher in salability, you will see some incremental CAPEX but we are not nearly at the levels that we need to see given the dearth of investment over the course of the last 10 years, in my opinion.

>> How big that ride be over the next several years of investors are trying to weigh ESG, trying to energy transition, with the still present need for fossil fuels?

It doesn't seem like it's going to be a clean path. There is a handoff at one point, clear to the other side, saying were done, take it over. It's going to be messy.

>> I think the markets idea on how easy it will be to move from hydrocarbons to renewables is misguided. In the world as we know it, it has been built on hydrocarbon infrastructure in the last hundred years.

As it relates to the availability of EV charging capacity, we are seeing a slowdown in the developed world in the EV sales space because the uptick is slower, I don't think it's going to be clean.

I think these ideas… That the transition will be seamless is misguided and dangerous.

>> We are going to get your questions about commodities for Hussein Allidina in just a moment. And a reminder that you can get in touch with us any time. Just email moneytalklive@td.com or fill out the viewer response box under the video player on WebBroker.

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

Headline inflation cooled in Canada last month, coming in at an annualized rate of 2.8%. Economists were expecting a reading about 3% has motorists paid more the pumps.

While gasoline prices were higher, Statistics Canada out today with this inflation report says lower prices for wireless services and groceries help to ease the rate of inflation. Why do we worry about inflation so much? It impacts us as Canadians and households but it also means something for the Bank of Canada. TD Economics taking a look at all that is says while the report is a little bit of good news, it does expect the Bank of Canada is to wait until July before delivering an interest rate cut.

AstraZeneca agreeing to buy Hamilton, Ontario-based drugmaker Fusion pharmaceuticals in a deal valued up to $2.4 billion US. The deal will see the British-based company pay $21 per share for fusion with an additional 400 million contingent on hitting certain metrics and targets. Fusion is devolving a cancer treatment using radioactive isotopes.

Fusion on the news of this up 97% and then some.

I want to check in on shares of Nvidia.

They are the spotlight today. A lot of talk about Nvidia.

Company unveiling a new artificial intelligence chip at its developer conference, the Blackwell B200.

Check this out. The chip boasts 20 petaflops of FP 4 hp from 208 billion transistors. If you actually know what that means, you're a lot smarter than I am.

Heading into this conference, Nvidia was boasting about the power of this chip, and we were expecting them to announce it.

Nvidia is down about 1/2%.

Quick check on the markets. We will start from Bay Street with the TSX Composite Index.

We have energy prices moving higher. You got 51 points to the upside to the broader index, that's 1/4 of a percent.

South of the border, let's check in on the S&P 500. A little bit of weakness in tech today.

We are positive for the broader market read.

Just up 1/10 of a percent.

We are back with Hussein Allidina, taking your questions about quantities.

Let's get to them. First one here. What your electric copper?

>> Yeah, copper has been one of our favourites in 2024.

Primarily, I'm going to sound boring, because the supply side is quite strange.

Late last year, we saw production impacted in Panama, Cobre Panama mine closed.

We saw other producers downgrade production guidance.

That has contributed to setting the 2024 balance in a deficit. 2023, most folks thought 2024 was going to be winding down but that lost production has led to a deficit market for copper and if we look at what's happening in China over the last couple of weeks, we have seen TCR sees, what smelters pay producers for their order, they have fallen to very low levels and this underscores the tightness in the market. There was a meeting last week in China were smelters for the first time that I can remember are coordinating a reduction in production. This ultimately means less refined product and again underscores the tightness in the or market.

One of the pieces that will have to get going on the demand side to see copper move above 9000 sustainably is property and infrastructure demand in China.

Notwithstanding the intensity of copper use in the energy over half of the world copper demand is still used in China and historically that has been primarily for property and infrastructure.

We know the spaces have been weak. They are starting to improve on the margin.

If they start to improve meaningfully, copper moves I think materially higher for future years.

>> When we think about Cobre Panama, the election could change things. Is it hard to put that into the calculations or for all the headlines not that big of a driver?

>> It is a very big driver and if that mine were to magically come back online after the election, that would definitely challenge sentiment near term in the copper market.

You know this as well as I do, copper takes a very long time to bring to market so the issue even pre-Cobre Panama shutting down is that when we looked at the supply chain over the course of the next two, five and 10 years, especially in the context of growing EV and electricity generation demand, there are deficits.

We have not invested sufficiently over the course of the last 10 years to bring supply online. On the segment before we came back we were talking about Nvidia and AI, the amount of power that that space broadly speaking is going to consume is going to require power generation.

Power generation, regardless of the fuel source, whether it's nuclear, coal, Hydro, there is a tremendous amount of copper in the upstream and the midstream.

Copper is one of the commodities on a five, 10 year view that I am most constructive on both because of supply and demand.

>> Fascinating breakdown copper. Let's talk about an election closer to home, south of the border, the US election.

How could that impact commodities?

>> From an oil perspective, I think the consensus is that if we get a Trump presidency that it's potentially constructive oil near term because Trump will be more firm on Iran and Uranian sanctions. Last year, Aaron increase their production somewhere to the tune of 500 to 700,000 barrels per day which really contributed to softening balances on the margin. If Trump were to focus on those sanctions a little bit more than biting, that is probably constructive for oil near term. Medium-term, one could argue that Trump may, given his focus is not so much on ESG and the environment, maybe he allows US producers to grow their production more meaningfully, that said, Joe Biden, despite the rhetoric, has been pretty friendly towards oil and gas in the US. We have more oil being produced on federal lands today than we have had a very long time.

>> I think about the White House heading into an election and then coming out the other side of it, usually you made the electorate happy by breaking down prices, including energy.

I don't hear about much of that. Is going on behind the scenes?

>> I'm sure it is and I think the challenges, from a US perspective, we can't release the magnitude of oil that we released from the SPR or in response to Russia's invasion of Ukraine. I'm sure there is some back channel conversation taking place to potentially encourage a production increase. It is unclear who the Saudi's wants and the White House so I can't with any conviction discount whether they will or will not, especially given the conflict we see happening in the Middle East today.

>> Interesting stuff that play there and stuff to keep an eye on. Another audience question for Hussein.

A viewer wants to know, many mining and energy stocks are liking the underlying commodities. How come?

>> I think a couple of reasons here.

And I think it depends on which commodity we are talking about.

But broadly speaking, we talked earlier about energy companies in particular are not spending incremental capital on growing their productive capacity and returning capital to shareholders. I think if we look at energy as a percentage of the SNC, it's probably around three, 4%.

The norm is between seven and 15%.

Investors have not been liking commodities. I think it's a symptom of the recency bias. Commodities have been challenged. We've been in an exploitation face for the better part of 10, 12 years.

I don't think consensus believes that commodity prices move higher.

I think those that are looking at the underlying balances may have a different view.

I had a chart earlier that showed the backwardation in the oil curve. Commodity stocks, broadly speaking, trade off the back of the curve because they are pricing the deferred price. When analysts are correlating the value of the companies, they are using the long-term price. The long-term price of oil has been between 60 and $75. That hasn't changed.

It is the tightness in the market that has been leading to this backwardation.

In an environment where commodities are in backwardation, commodities tend to outperform equities and as a released energy equities in particular because they are not increasing their commodity footprint. Over time, they are going to look less like energy companies unless they start growing their productive capacity.

>> Fascinating stuff.

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

we are going to get back your questions on commodities for Hussein Allidina and just moments time.

And a reminder that you can get in touch with us any time. Just email moneytalklive@td.com.

Now, let's get our educational segment of the day.

In today's education segment, we are going to take a look at where you can find commodities information on the WebBroker platform. Jason Hnatyk, Senior client education instructor with TD Direct Investing has more.

>> Great to be here, as always. Let's talk commodities here in WebBroker.

It's true that we can't trade commodities through TD Direct Investing. But that doesn't mean it's less important to keep an eye on them.

Maybe we are using them as a bellwether for the economy or maybe you have some exposure to companies that use specific quantities in your portfolio.

Let's jump into WebBroker. I've got four key areas that I can show you in the platform that can help you keep an eye on this commodity prices. The first and easiest one is going to be here on our WebBroker homepage.

You can see at the top of the page, default at the top is going to be gold as well as oil, both in US dollars.

The second place I would like to show you as we are going to bring you right to the research tab at the top of the page.

And we are going to go to the trustee overview page. There is a lot of great information here in commodities is part of it.

I want to first talk about the banner at the top or we can see that there are quotes on many of the major indices.

On the right-hand side, there is an edit button. If we choose edIT, it allows us to change any of those prices we are staying at the top to something that meets our needs.

If we are thinking commodities, if we change the TSX opposite, if I scroll down on this list, you can see there is a list of major commodities on their the bottom so maybe you want to check out West Texas crude. If I say that now, you will notice the commodity price has appeared on the screen. The third place I want to show is still on this overview page. I'm going to scroll down. We're going to look on the left-hand side.

Right below where the indices are, you will notice there is the commodity section that offers us both agriculture, metals as well as energy commodities.

Let's focus on West Texas crude. You can see the last traded price of the commodity, how much it is up or down in today's session, as well we get to see a view of where the commodity is trading in the life of the… It looks like West Texas is somewhere right in the middle.

The last place I want to show you, the fourth place, is a way for you to dig deeper and that's going to be under the research tab at the top of the page.

This time, under the markets column, we are going to choose reports.

There are two sections I want to highlight today.

That's on the right-hand side, we have our MorningStar sector reports.

If we scroll down, there are also the ink research report. These highlight specific sectors of the economy and they might be using the commodities that you are after.

Maybe you want to look at energy or industrials.

These are ways for you to dig a little bit deeper, got a little more information so you're making informed decisions on the investments in our portfolio.

Lots to uncover. WebBroker has lots of information to keep you informed.

There you have it.

>> Our thanks to Jason Hnatyk, Senior client education instructor with 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.

Now before you get back to your questions about commodities for Hussein Allidina, a reminder of how you can get in touch with us.

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

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

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

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

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

We're back with Hussein Allidina, take your questions on commodities.

Let's look at the next one. Someone wants to know how the decline in electric vehicle demand is heading commodities.

>> Yes, that's been a point of focus particularly I think in the OECD. I think the weakness and EV demand is primarily a sort of US or at least OECD phenomenon. At the bulk of our EV penetration globally has come from EM and specifically in China.

Of course, as EV demand weakens, your uptake for copper in particular and aluminum on the margin decreases. I don't think that most folks who are modelling this are expecting the same pace of growth that we've seen in recent years as the space gets bigger. I don't think at this point it's an issue.

If we continue to CA falling interest in EV demand, that's going to be potentially challenging for the copper, aluminum, nickel thesis but what would be very constructive for the oil thesis because if I'm not driving a Tesla, my alternative is an ice vehicle.

>> Is not a hard thing to peg at this point, the narrative? A while ago the narrative was the whole world is going to EV and I have the big automakers saying, we think the consumer wants to mix, so here's our electric vehicles, here's our ice vehicles.

Is it hard trying to figure out what to you, three, five years from now they are trying to sell to the public?

>> I think so. As new technologies come out, the composition of ingredients that goes into those batteries or vehicles is going to change as well.

That presents another element of risk forecasting.

You and I have talked before but I've been doing this analysis for more than 20 years and probably for the last 10, 10 to 12 years not longer, reputable groups have said oil demand is going to be in five years or 10 years. All demand has not peach.

We reached a record high last year, and even with the emerging markets, China in particular is relatively weak.

I am more convinced that oil demand is going to be, more oil is going to be a feature of the economy that I am on the EV side but I do think that we have to you and will transition over the course of the next 10, 20 years, I just don't think it's gonna happen as quickly as some folks believe.

>> Let's take another audience question.

You just mentioned China briefly. Someone wants to know Chinese demand for commodities is looking any better?

>> It is.

If we look at energy, demand is improving.

But we are not looking at the type of growth that we saw during the 2006 through 2012 industrialization of China and we talked about this a little bit earlier in the copper segment, it's primarily because a very important component of the Chinese economy is property, real estate and infrastructure and property and real estate in particular is still quite weak but we are seeing slight improvement there. On the electricity grid, on the consumer spending front, things are looking materially better which is very constructive for energy, but we really need to see kind of the old economy stabilized in China to get constructive on the metals.

>> You mentioned broadly emerging markets earlier the show in terms of oil demand, is there a pickup there as well? Not that I imagine any of those countries can replace China's haft but what is the situation across the EM space?

>> If we look at India's oil demand, it's been quite robust. The strength has surprised me for sure. That strength continues to be present. It surprised me because we have to remember that in India, the price that we've been paying for oil, because of the weakness in the rupee, it has been close to the levels that they were paying in 2009 one it was $140 per barrel, not with standing the fact that they are paying prices near those levels, demand growth continues to increase.

The other area we have to watch, particularly as commodity prices continue to increase or remain firm, is demand from the Middle East and Latin America. This a high correlation between economic activity in commodity producing countries like the Middle East and Latin America and by extension their commodity demand and commodity prices. If they stay at these levels, you will see demand in these regions continue to grow as well.

>> Interesting stuff there. Let's take a question now on gold. The viewer wants to know if there is a short-term trade in gold. I will preface this by saying we can't give you trading strategies are on the platform.

But we can definitely talk what was going on with gold.

I do think old, and I've said this many times before, I think gold should have a home in Allport for those because gold is able to hedge the portfolio whether it's very elevated inflation or deflation unlike any other asset class. If you think about what gold has done over the last 12, 16 months, most folks modelling the price of gold will look at real race to the dollar and real rates because the opportunity cost of holding gold is the real rate, that increases meaningfully.

Both those things would indicate or suggest that gold prices should be weaker yet gold prices have not performed and I think this is largely a reflection of physical demand, not necessarily from retail because if we look at ETF open interest it has been relatively weak. It is primarily demand from EM central banks.

EM central banks have been huge buyers of gold. 2020 was a record year for gold buying. 2023 was just shy of that from central banks broadly. I don't know how much gold China is going to buy tomorrow or India's going to buy tomorrow or Russia, Turkey and Russia will buy, but when I look at their reserves, they are still predominantly holding fiat currency and I think there is a concern growing about fiat broadly, and we preach diversification and asset allocation as religion. The academic work points to diversification. It doesn't make sense to me that EM central banks have all their assets in dollars or euros, and I do think that we will continue to see reasonable demand from central banks, particularly in the EM. If the Fed does cut rates has the market is pricing over the course of the year and that lends to weakness in the dollar, I think we would see support for gold but that's not what has been driving gold over the course of the last 12 months.

>> You talk to people being concerned about fiat currency. Are there some pockets of the market, if they are concerned about fiat currencies, they look to the religion of crypto? And people saying crypto as a substitute for gold, what do you make that argument?

>> I don't know that I fully understand crypto.

I'm convinced that crypto is not gold.

If you look at the way the gold trades and the way that crypto trains, bitcoin in particular, bitcoin looks to be trading like a very levered risk on asset.

If you look at the correlation between bitcoin and the NASDAQ, there's a very high correlation. Gold is not a risk on asset. Gold is a historic value. It is a hedge to unanticipated inflation. I don't think they are the same. I think people are talking about them but fundamentally I don't think they are the same yet.

>> Interesting stuff. We are going to get back to questions for Hussein Allidina on commodities and just moments time.

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

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

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

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

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

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

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

Evenings we are having a look at TD's Advanced Dashboard, platform designed for active traders available through TD Direct Investing. This is the heat map function, gives you view the market movers. We will start with the TSX 60 and go through price and volume.

We have the price of crude oil higher today. Let's start with energy space. A number of names in the green today.

Nothing too dramatic but following the push with oil higher. CNQ up almost a full percent, Cenovus Energy which is CVE, of about 1%. Suncor lacking a bit but still putting on about half a percent.

Some green on the screen and the financial space as well.

They are heavyweights when you talk about the point, topline TSX Composite Index number, we also have the price of gold down modestly. Following its record run of recent weeks. You got a bit of giveback.

Barrick Gold is down about 1%. South of the border, let's check in on the S&P 100.

He gives us a bit of a clear view of what's going on. We got the headline S&P 500 up modestly at the tech heavy NASDAQ down a little bit. Let's figure it was going on with those big themes.

You can see that Nvidia is holding the Woodstock of AI this week.

It's their developer conference.

Tech companies do it all the time. They unveiled a chip that is much more powerful than its previous chip.

Nvidia holding steady after a number pressure.

One of their competitors on the heels of that news down to the tune of more than 5%, that would be AMD. And the financial space south of the border as well putting some points on the table, including Bank of America, Morgan Stanley and shot to the upside.

You can get more information about TD Advanced Dashboard by visiting TD.com/Advanced Dashboard.

We are back now Hussein Allidina from TD Asset Management, taking your questions or quantities.

What if we get rate cuts, what would it mean for commodities?

>> If we get rate cuts, it would arguably be bearish for the dollar all else equal and bullish for growth. I think it might lend to an increase in inflation expectations as well.

We have seen inflation expectations start to move higher over the course of the last couple of months. All of those factors would be constructive for commodities.

Most commodities are priced in dollars, a weaker dollar, fundamentally a weaker dollar is constructive for commodities and an improvement and growth expectations because of weaker monetary and/or physical conditions would be positive for growth.

2021, 2022 commodities outperformed meaningfully and that is partially because inflation expectations surprise to the upside. 2023 commodities measured by the Bloomberg commodity Index were down seven, 8%.

That was the year where inflation expectations surprised the other way, inflation came in weaker than expected.

Inflation has been relatively anchored at three and change percent since June, July last year. A Fed rate cut might lend to an increase in inflation expectations which I think would be, from a macro perspective, constructive for commodities.

>> On the other side of that, we've been getting a question lately, not related specifically to commodities, but some viewers have been wondering, asking our guests, what we don't get any rate cuts this year for whatever reason? What would that mean for commodities?

>> Yeah, so, this is interesting. If we don't get rate cuts, I imagine that we are not getting rate cuts because either inflation is more elevated than the Fed and central bankers, broadly speaking, would like and/or growth is robust. Labour markets are tight, economic activity is strong. Those factors have been the factors that have been supporting commodities this far. Commodities have performed relatively well, notwithstanding the strength of the dollar, notwithstanding the tightness in financial conditions. So it's difficult to say and it seems a bit disingenuous to say that both scenarios would be good for commodities but it might be a scenario where the lack of a said, it is a reflection of a more robust economy which is good for commodities and it's not, if it's not good growth but inflation i.e.

stagflation, what asset do you own in a stagflationary environment? Is not equities and it's definitely not fixed income.

>> Let's get to another question from the audience.

We had someone writing in, what is your outlook for uranium? Someone also dissented in a question or comment talking about oil demand, he said it will peak for another decade or two.

This viewers see is the transition being too nuclear. That's an opening to talk about uranium.

>> There are two pieces there.

If I think about how oil is used, two thirds of the world oil demand is used in transportation.

If I am able to move away from using oil, gasoline, diesel and transportation and instead I moved to either hybrid vehicles or electric vehicles, I need to address where I'm going to get power for that demand. It's not a trivial amount of demand that would move to electric vehicles.

If we think about the power sat globally, today the power stack is coal, natural gas and on the margin, I stress on the margin, renewables.

Nuclear plays a meaningful role and part of the reason why we have seen uranium prices increase, not only Spot prices but importantly term prices which is where most of the activity is done, you seen this increase in uranium prices because there is a growing realization that if I am not using coal and there isn't sufficient wind, solar, as baseload and we are going to need to address baseload not only fire these teslas and these AI chips, nuclear is the one technology that we know works but we need uranium to fuel it.

I think this is why the outlook on uranium, again, a commodity like other commodities that has been neglected over the course of the last 15 years from a CAPEX perspective and has a relatively constructive demand outlook over the course of the foreseeable future, we cannot, Greg, have our cake and eat it too. We can't say we are not going to use oil and we are going to move to electricity generation and then the electricity generation is going to come from solar and wind, it simply doesn't work.

We don't know how to store powers that we need baseload generation. Your choices for baseload generation are coal, which is extremely dirty, oil which is extremely expensive power generation, gas or nuclear.

I think when we fast-forward five, 10, 15 years from now, baseload generation is met by both natural gas and hopefully Canada plays a role in the act, as well as nuclear.

>> Hussein, we are out of time for questions. Before I let you go, what do you have your ion heading deeper into the air when it comes to the commodity space?

>> I am optimistic that growth continues to increase, continue to do what he has done of late. I am worried that the impact of higher rates have not been felt throughout the economy. If we do, on the growth side, if we get synchronized growth which we have not seen in 10 years, we don't have the commodity supply to meet the demand that is associated with the growth of China, the growth in Europe and the growth in the US.

>> Always a pleasure getting your insights and catching up. Look forward to the next time.

>> Thank you for having me.

>> How are things due Hussein Allidina, head of commodities at TD Asset Management.

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

if we didn't get time to get to your question today, we will aim to get them into a future show.

Stay tuned for tomorrow show. Craig Hutchison, Dir. for equity research at TD Cowen will be our guest, take your questions about mining stocks.

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

That's all the time we have the show today. Thanks for watching. We will see you tomorrow.

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