Juliana Faircloth

[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, we discussed whether a big pipeline of projects will be enough to overcome softening demand in the industrial space. At Juliana Faircloth, industrials analyst with TD Asset Management joins us.

MoneyTalk's Anthony Okolie will take us through what mood Canadian investors have been making with the latest TD Direct Investing Index. And in today's WebBroker education segment, Hiren Amin will take us or how you can research stocks by the market value using the platform.

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 our guest of the day, let's get you updated on the markets. We will start you at home with the TSX Composite Index. We have some green on the screen.

Fairly healthy. Hundred and 52 points to the upside were three quarters of a percent. Among the most actively traded names at this hour include Shopify getting a bit of a bid. We will start with Air Canada which is what's on the screen. 2511 for Air Canada, Europe a little more than 1%. Not sure if we can show you Shopify or not.

We will dance onto the American indices, straight to the S&P 500.

Shopify is one of the most actively traded names and it was up three or 4% last time I checked. South of the border, another read this morning and an encouraging sign that perhaps consumer prices and wholesale prices continue to ease south of the border.

Man, we are moving fast.

Am I going slowly? The NASDAQ is up hundred and 50 points are little more than 1%.

And Rivian Automotive,I 2524, it's on about 2 1/2%. And that's a market update.

Amid concerns of an economic slowdown, there has been a softening and industrial demand. But including to our feature guest today, the sector may soon be getting a liftas planned spending and projects Khazen. Joining us now to discuss, Juliana Faircloth, industrials analyst with TD Asset Management. Good to have you back on the show.

Thanks for having me.

>> There are rumours out about megaprojects, semis, EV plants, transition,.what's that about?

>> Megaprojects involve at least $1 billion of capital spending. So massive projects in the economy.

There have been estimates flying around out there that there have been $600 billion worth of megaprojects announced in the last 2 1/2 year, January 2021 in thepost-COVID time period, that's three times the normal run rate.

A lot of capital opportunity there. I think it's important to think about what's driving that. A few different things. The first is physical spending.

there has been the IRA, the CHIPS Act, the infrastructure and jobs act, all of these are supportive of these massive project.

The green transition, we talk about it all the time.

That's going to require significant investment in projects in the grid and our infrastructure to get our economy up to speed for where we need to be at for next generation fuels. I think as a geopolitical angle as well. We think about the political events that have taken place over the last couple of years,it's pretty supportive of this onshoring theme.

We see in the semiconductor industry move towards investing in North America. Those are massive projects. So all of that collectively is creating an outlook for a pretty good capital spending environment over the medium term.

>> Some big seems driving this, policy decisions from different levels of government.

Here and now, we are obviously worried about economic softening. We take a look at PMIs and indexes, our new orders declining?

How does this play into it.

This is mega, you said a billion and up.

>> Is a great question.

I think that's kind of the crux of the issue.

we have industrial p.m.

eyes which are in contraction.

That number was reported last month in the month of June. There was a decline month over month. We are at a 46 on that index.

Anything below 50 suggests contraction. So that is reflected and what we are starting to hear from industrial companies. The left company is are talking about the orders of slowing down or going negative.

Slowly we are hearing the commentary creep up about megaprojects and the spending that is coming and slowly moving into these industrial company backlogs.

So it's a bit of a fine balance that we are working with between secular growth opportunities and balanced with the cyclical opportunities.

And that has been a focus for industrial investors in the last little while.

>> When I think about those kind of big investments, ours some companies in the sectors seeing through… In the short term we have this, but in the long term this is where we need to be?

>> Exactly. That's kind of the general commentary we have heard from companies all through the last reporting season. I expect that will continue in the reporting season that's coming up in the next couple of weeks.

We are seeing a bit of slowing in the near term, but the backlog and interest in some of theseindustrial products and goods is slowly starting to build up and we will have to kind of see how that plays out over the near term.

>> The industrial space is a big one.

We are seeing this boon investment and megaprojects.

What types of industrial companies are benefiting the most?

>> I think there's a lot of opportunity for many industrial companies to benefit but if we think about breaking down pockets within the sector, capital expenditures and capital spending is generally positive for the capital goods portion of industrials, naturally.

If we think about what might, a megaproject might involve, step one could be hiring and engineering and construction firm that's essentially going to be your designer, your project manager, seeing through a megaproject.

Then you might have machinery companies selling construction equipment. Once shovels hit the ground, if we are thinking about electrifying the entire economy, electrical equipment provider should see a benefit as the electrical infrastructure will be going up.

In thinking more about onshoring and some of those megaprojects related to building out more localized manufacturing, that should benefit automation companies, companies that sell equipment to factories.

It's quite broad, and I think that's part of the benefit of being a long-term investor. We have the opportunity to think through where we see the economics of megaprojects really accumulating and pick the pockets to play and as an investor.

>> Now there is one company that I think you want to highlight it in terms of the space, Eaton.

>> Eaton I think is a good example of what is going on and as straightforward example to think about. Eaton is an example that sells electrical equipment. They serve many and markets. They served utilities, data centres,buildings, residential commercial construction, they sell the electrical equipment that builds of that ever structure. The company has been growing their organic sales ahead of multi-industrial peers for the last several quarters and they have called it recently it in their most recent quarter that they see their and market growth it being a double what it was pre-COVID.so a big jump in the opportunity said that they see moving forward and that, again, is slowly going to move into their backlog, and from their perspective, play out in a strong organic growth over the medium term.

>> Some positive catalyst therefore the name. Any risks for Eaton or anyone else in the space right now?

>> Sure. There is always a risk from execution. A big drivera lot of these megaprojects is for school funding.

We know that things can move through government at a slow pace sometimes.

Sometimes they may not move through at all. That is a bit of a risk and something to keep on the horizon.

>> Now this obviously, if you see this investment move, megaprojects will benefit the industrial space.

What about the broader market?

>> With a big investment and capacity, we are expecting to see it in the medium term it should be good for the broader market.

If we are investing in capacity in North America, that should be positive for economic growth, positive for GDP and ultimately positive for corporate earnings.

At the same time, capital expenditure has an impact on free cash flow for companies.

As always, we will stay focused on identifying quality companies thathave a track record of strong capital allocation to try to pick and choose where management teams are going to be able to deploy capital and generate the best return for investors and the broader market.

>> Very interesting stuff.

We're going to get your questions on industrial stocks for Juliana Faircloth in just a moment time. A reminder that you get in touch with 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.

shares of Delta Airlines in the spotlight today.

there are carriers reporting record poorly revenue and earnings on the soaring travel demand. Delta is also benefiting from falling oil prices with fuel cost down more than 20%.

The airline is boosting its earnings forecast, saying the industry in the mid-innings of demand growth for travel.

Looking at shares of Corus Entertainment, they are getting a bit today. This one is up almost 17%. The cell follows news that the media company is selling animation software company Toon boom animation for some $147 million Canadian. While Corus shares have rallied in recent weeks, the stock is still trading more than 50% below last summer's levels.

Amazon says that more than 375 million items were sold through the platform over a two day prime day event. Amazon is not disclosing the revenue generated from those sales, but says the first 24 hours of prime day represented the single largest sales day in the company's history. Shares are at 133 bucks and change, a little more than 2%. A quick check in on Bay Street and Wall Street.

We will start with the TSX Composite Index. We have been on the screen, a triple digit gain of 163 point, a little shy of a full percent.

South of the border, admitted signs the pressures are continuing to ease in the world's largest economy, we do have the S&P 500 up 27 points, almost 2/3 of a percent.

We are back with Juliana Faircloth, take your questions about industrial stocks.

Let's get to them. Travel demand seems pretty strong. How are the airlines faring?

>> That's a good question and timely with Delta reporting this morning. The airline stocks have been doing quite well.

Thinking through what's driving back, if you look at earnings revisions, the airlines have, within the industrial space, seen the biggest positive earnings revisions over the last couple of quarters.

There's a few things driving that.

One would be better performance on the cost base. A big part of that is fuel, as you mentioned. So beyond the airlines control. But aside from that, they are managing costs quite well.

The other side of that is strong demand and probably more robust than expected demand for travel that has allowed the airlines to fly passengers on their vacations this summer but also charging them a much higher fee than what they normally would.

So those two elements combined, strong topline and a better cost management environment has been really positive for the airlines.

>> There had been some headlines, as we fully enter the summer travel season, and delays for various reasons. It doesn't seem to be anywhere near us as extreme as last summer. At the same time, are you keeping an eye on that or does the system seem to have passed that and will have things pop up from time to time?

>> We are getting a lot closer to a pre-COVID level of capacity for the system in general. We are still hearing about some delays. It has improved significantly from where we were. I would say last fall was kind of the peak of these challenges.

It has improved quite a lot. Labour availability has improved somewhat for the airlines which has helped. Something to what went forward but we are in a much better place than we were nine months ago.

>> As per the central banks, they say that to get inflation under control, we have to… Slow the economy a bit. Can airlines go through that? We think about disposable income and what households are struggling with right now.

>> One of the risks to the airlines at the moment would be the broader economic backdrop.

If we get into a tougher environment, it's tough on consumers andthat strong pricing that the airlines have been able to command for their services will go away.

That's not necessarily going to be sticky pricing. It will be challenging to maintain such high prices if the consumer is in a weaker position.

>> Sticking with planes here beginning to the manufacturer's. If you are asking if you can provide your view of Boeing.

>> Sure.

It's a timely question. About a month ago was the Paris air show which is a huge industry event for the aerospace and defence industry.

A few kind of interesting takeaways from that as it relates to Boeing as well as Airbus. The demand environment for commercial airline, for commercial airplanes, is still quite robust. There was something like over 1200 orders placed throughout the week of the Paris air show.

That's quite a bit. I think the interesting part is the majority of those orders are placed for delivery and 2030 and beyond.

So it's shaping up to be an environment where Boeing and Airbus have a lot of visibility.

They both are essentially full through the remainder of this decade and we are already looking to 2030. These OEMs have a very long cycle business.

Clearly, they are filling their books after 2030. That helps provide some visibility for investors over quite a long period of time.

>> Boeing in particular has had issues over the years in terms of… Do you feel like they're working to those issues now?

>> They are moving through a lot of the issues that they have had. I would say there have still been the hiccups over the last few months. It does seem like a lot of the challenges are in the past and Boeing is now in a position of proving out a path of better and more consistent execution, deleveraging which is very important, they still have a lot of debt on the balance sheet, but things are moving in the right direction for Boeing.

>> A different question. FedEx and UPS. If you are wants to know if they are still worth having a look at given the pandemic e-commerce boom using? I talked in the newscast about Amazon saying they had a great prime day. I was looking for a certain pair of shoes and they weren't on sale so I didn't buy anything.

>> FedEx and UPS are in an interesting situation.

the stocks themselves are diverging a little bit lately.

A couple of reasons for that. One would be FedEx is going through a big restructuring and cost-cutting initiative.

So FedEx is a company and a stock where there is a bit of that self-help story, there opportunities within their control to improve the business, streamline the business and move margins, all while as we know it volumes for shipping and goods are in a bit of decline because the economy has shifted much harder towards services and airlines, away from buying so many goods, despite what Amazon says.

UPS, on the other hand, is kind of heading into the next couple of years in a better position, less self-help, less levers to pull. They are going through process now of negotiating with one of their large unions.

It's been a bit of a theme across the industrial spaces union negotiations. As we know, it's been a very inflationary time.

And the unions are hoping to maintain their standard of living with the pace of inflation.

So that's a discussion underway with UPS.

> Is there a sense in the industrials were among some of the shippers that what happened that UPS could become a bit of a template for the rest of the industry as other collective agreements come up?

>> I think it could be.

I would say there has been the US rails I think earlier this year or late last year.

They were working with a lot of their unions. In Canada, the Port of Vancouver, so the other West Coast portsoour having union negotiations at the moment.

So it's not a surprise to see this theme, just given the inflationary environment that we are in, but I think it's the direction of where conversations with very big unions like UPS's Union or the US rails union, a national union, when they are involved they can provide direction for unions and other parts of the economy as well.

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

We will get back to your questions for Juliana Faircloth on industrial stocks in just a moment's time.

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

just email moneytalklive@td.com.

Now let's in the educational segment of the day. If you're looking to research companies by their market value, WebBroker's tools which can help. Hiren Amin, Senior client education instructor at TD Direct Investing has more.

>> Hello and welcome to today's educational segment. We are going to be chatting about market capitalization and how you can research it.

Often times, if you've ever followed some kind of financial news blog that on market correction days, X and X stocklost $20 million today and you might be wondering, how do they figure that out?

How does a company lose that much? It has to do with market capitalization. It refers to how much a company is worthas determined by the stock market.

Additionally calculated by multiplying or dividing I should say, multiplying, not dividing, multiplying the stock price, market price, by the total number of outstanding shares. On the total number of outstanding shares is total common shares that are issued and actively held by both public investors as well as insiders as well. Market capitalization, how does this help us?

Why does an investor want to know about this?

Well, first of all, it allows us to understand the relative size of the company when we compared against other companies. Second of all, it also measures the open worth of a company based on the market price and so this is essentially the market's perception of what the company should be valued and what investors are willing to pay based on the stock price. Let's go ahead and jump into WebBroker to exactly show you where you can find these numbers for yourself. So once we are in WebBroker, we are going to pull up the most common stock that is found on the S&P 500 or the largest Stock on that index at the moment, and it's going to be for Apple there.

Let's get this cued up here.

we will try this another way loaded up here. There we go.

We have Apple stock loaded up here. Once you are on the main stock profile page, you want to scroll kind ofjust a little ways to the bottom and get to this section that says fundamentals.

Here's where the evaluation is given to us.

Market, market capitalization, that's what it short for. It shows about $3 trillion on Apple.

Two figures below, as we have shares outstanding. This is where we talked of the total number of shares that are issued by Apple that is held by both insiders as well as public investors, so that 15.7 billion.

If you ever want to do this cancellation on your own, you just have to take this number, 15.7 billion, and multiplied by the current price of Apple and that's going to give you the real-time market capitalization price.

now this is known as the free float of a company. There are two type of issuances you might hear of: shares outstanding and free float. Free float is the most narrow measure of a company shares.

The only thing that it excludes from the outstanding shares is the company insiders share, so anyone who is a company insider or corporate holder, though shares would be excluded and only the publicly held shares would be considered. Why is this important and why are we telling you this?

The reason is many indexes actually use the free float as their calculation for the market. So you go to the research page and head over to indices.

The most notable one is going to be the S&P 500. This index uses the free float as the measure for its market capitalization.

We also want to talk about different buckets you could find market caps organized within. On the S&P 500, it's a large-cap or mega-cap index.

Those are companies valued between 10 and $200 billion and me how companies are $200 billion or more.

Besides the S&P 500, you also have the S&P 400 index as well. This is known as the mid-cap index. You can actually click on the index itself it will tell you that it's mid-cap, mid capitalization companies. Finally, you have the SNP 600 small-cap and it tells you exactly what it is, a small-cap index. This is for companies that are being valued between $300 million-$2 billion.

Now, if you want to do some research on your own or find out which what is ranked the highest in terms of market, you can do that yourself.

Scroll back up here. We are going to head over to the research tab. Under our tools, we will go into screeners.

There is a screener filter available for market capitalization which we are going to demonstrate.

Let's go into our screener function. This allows us to edit our self.

I will turn on bulk edit which allows us access to all filters. And when you clear any existing ones here.

If we go to more criteria, what I want to do is you can see under the company basics, we have market capitalization right over here.

I'm going to select that. What I want to do when I'm at the filters keep it broad for now. Let's look at just the US markets.

let's find out what is the highest ranked company by market capitalization. You have filters you need to adjust.

I've kept it to the minimum and Max to have of you. You can see now that Apple is ranked the number one stock based on market capitalization today at a value of 2.96 Chilean and then the rest of the stocks follow suit.

You can do this for any sort of index, be it a sector or industry as well. This is just a little bit how you can do some research using market capitalization and being able to evaluate when companies are going from growth stages from the small-cap phase to the mid-cap and large-cap as part of your research.

So to learn more about this topic and many others, please visit us at our learning centre on WebBroker as well is on the TD YouTube page.

That's going to be a wrap for market capitalization here today.

>> Our thanks to Hiren Amin, Senior client education instructor at TD Direct Investing. Now before you back to your questions about industrial stocks for Juliana Faircloth, 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 are back with Juliana Faircloth, taking your questions about industrial stocks.

Lots coming in, let's get to some of them.

How bad is the Port of Vancouver strike?

> When I think about the strike at the Port of Vancouver, what comes to mind would be the impact of the Canadian rails, a big part of the Canadian industrials Index. So it's quite a big deal.

There have been no shipments coming in through the Port of Vancouver or the port of Prince Rupert which is also in British Colombia since I believe June 30. It will have a bit of an impact for Canadian national and Canadian Pacific, a little more so for Canadian national. They have a higher percentage of their volumes originating through Vancouver and Prince Rupert.

So it may involve some tweaks to guidance as we move through earnings season over the next couple of weeks. We will hear from both CN and CPE in a few weeks and get a better understanding of what's going on in terms of the strike and where they see things going. It definitely will have an impact. Historically, real investors have tended to look through these types of situations over the long term, but it will definitely have an impact to this year's results for both Canadian rails.

> Is there a chance, they will settle it sooner or later and the real start playing catch up, we are trying to figure out if they have the capacity or have you lost that business? Coming out of the pandemic, people would say, people are getting their hair cut again.

You're not gonna get your hair cut 10 times because you can get it cut during the pandemic, it'll just happen once. How does that work for rails?

>> I think for the moment there is something like 64 ships sitting outside the Port of Vancouver waiting to move through the ports and be moved onto the Canadian rails, so there will be a bit of a catch up. It's probably less lost business and more of a catch-up but that can be logistically challenging, to work to that level of a backlog if the strike proceeds for many more days.

The backlog could get quite significant.

If we think about what happened a year or a year and 1/2 ago at the LA Long Beach port, that was very disruptive from a logistics perspective to the entire supply chain across North America, so if this prolongs for much longer, it could be challenging.

>> What is your outlook for the rails I guess beyond the Port of Vancouver situation?

>> It's also good timing for that question. Both CPE and CN have held an investor day in the last few months. CP just a few weeks ago and CN a few months ago. I guess I could start with CN. They have guided to medium-term growth of 10 to 15%.

they outlined several opportunities that they see to bring on more volumes onto their network.

Whether that's through expanding some of the ports, bringing on new manufacturing facilities, strong bulk commodity business which the Canadian rails are known for, so quite a strong outlook over the medium term. CP, as we know, has now closed on the acquisition of Kansas City Southern, so that's quite a big opportunity to work through emerging those two real networks.

at their investor day, they outlined a doubling of EPS by 2028.

They see a good growth opportunity coming from the strategic benefit of that joint network between Canada, the US and Mexico.

>> Do you expect more consolidation or purchases or is that phase over?

>> I think that's over from a regulatory perspective. I don't see much more in the way of large acquisitions between the class one rails at this point.

What we are seeing is partnerships between other bills. Stan has outlined partnerships of some of the outer rails to beef up their network to be competitive with the the CP Kansas City Southern combined network.

>> That can be a bit of a tongue twister.

What's the potential impact of artificial intelligence on the industrial space?

>> that's a really interesting question. I mean I would take a step back and think about the industrial space as kind of any other business.

so if you think about the potential impacts of AI, there is the revenue side, whether that is improving the productivity or effectiveness of the products you sell, whether it's being able to better target customers using data and artificial intelligence to determine what customers you should be marketing what to do, the cost decided to take out potential costs by automating things or leveraging AI to improve your cost network, the industrials benefit from both of those angles in general.

There are some interesting things starting to trickle out. Not so much on the large language model processing ChatGPT side of things.

But a company like Deer is in the process of building out there… Technology that uses machine vision to essentially put eyes on a tractor where sprayer at a farmers farm. It will move through the field and identify crops versus weeds, only spray pesticides on weeds, you ultimately end up with a higher crop yield, better quality food if you have less pesticides on your food, we all would love to see that. So that's an example of something that's kind of coming in the here and now from a product improvement perspective in industrials.

There are tons of different ways that I see this kind of benefiting the sector.

>> Interesting stuff indeed.

We will get back to your questions for Juliana Faircloth on industrial stocks in just a moment's time.

As always, make sure you do your own research before making any investment decisions. and a reminder that you can get in touch with us at any time. Do you have a question about investing or what's driving the markets?

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

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

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

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

The TD Direct Investing Index for the month of June has been released.

MoneyTalk's Anthony Okolie has been going over the numbers and joins us with the details. Anthony.

>> Thanks, Greg.

The big take away in June is that self-directed investors were feeling more bullish. Here are the details. Let's start with the overall TD Direct Investing Index for the month of June2023. The range is -100 for very bearish to +100 for very bullish and it came in at +19 in June, that's up a whopping 36 points month over month, meaning self-directed investors were feeling more bullish. It also marked the first time in five months that sentiment turned positive.

Next, let's look at the components that make up the DII. Overall sentiment was overall bullish across the board. We saw a jump of chasing trends of +8, indicating that self direct investors bought stocks in a rising market.

looking at flight to safety, the measure came in at +5, rising 11 points month over month and noting bullish sentiment. Keep in mind, a more negative value means risk off more actual flight to safety.

When we break things down by sector, sentiment was broadly neutral to bullish.

However sentiment for technology was again the highest across-the-boardat +12, up two points month over month. Now, some market observers had said that stocks had been riding the AI craze and prospects of a less aggressive Fed.

Similar to me, large-cap attack and semiconductor names were some of the most heavily traded stocks, including Nvidia, AMD, apple and Shopify.

Now if we did a little bit deeper into trading styles, active traders, these are investors who have over 30 trades in the past three months, were the most optimistic at +18. Long-term investors with a buy-and-hold style with up to 29 trades in the last three months or less optimistic at +1.

Finally, we look at trading activity based on investor age, Gen X, those born between 1965 to 1980, remain the most optimistic, increasing their score to +6. While boomers, born between 1946 to 1964, so the biggest improvement in sentiment overall to +3, that's up a sizable 14 points month over month. The most heavily traded stocks by boomers included Shopify, TD Bank and Tesla, which is popular across every age group.

And those are your highlights for June.

Those are your TD direct investment highlights for June 2023.

Greg, back to you.

>> Very interesting set. Thanks a lot, Anthony.

MoneyTalk's Anthony Okolie.

Let's get you updated on the markets.

We are having a look at TD's advanced dashboard, a platform designed for active traders available through TD Direct Investing. This is the heat map function, gives you a view of the market movers.

Right now we are taking a look at the TSX 60, screening for price and volume. What story is it telling us? We've got green on the screen. Shopify up a little more than 5% at this hour.

If we move over a little bit, we see a mixed picture and energy space. Suncor down modestly, very modest gains among some of the energy names. In the corner you've got a different kind of energy name, Cameco, which is up to the tune of about 3 1/2%. This is a uranium player but some of the other names include Suncor under some pressure.

We don't only have to look at the TSX 60.

The heat map function lets us scroll through a number of options. I want to take a look at the S&P 100 right now. You can see that the tech names are getting a bid in this environment.

You can't Google up to the tune of more than 4 1/2%. Right next to it I believe you've got Amazon coming off of its Prime Days, up a little bit more than 2%. But there is a bit of pressure to the downside in some names. Right over the side of your screen, you got EXO M, that would be Exxon, the energy major, down almost 2 1/2%.

You get more information on TD advanced dashboard by visiting TD.com/advanced dashboard.

We are back now with Juliana Faircloth from TD Asset Management. I got a question about the outlook for the waste management sector.

>> Yeah. The waste sector, long-term investors love the waste sector. It is a sleepy, somewhat boring sector. We've got companies that grow pretty consistently alongside GDP, alongside broader economic growth.

Layer on a bit of a consolidation story.

We know waste connections has been active in rolling up the space over the last many years and has grown to quite a big position there.

GFL another Canadian name has also it being a ruling up the space with a bit more leverage on the balance sheet to do so. I think the outlook remains pretty similar.

the companies will grow alongside economic growth and I don't think the opportunity to continue rolling up the space has deteriorated whatsoever. So we will continue to see those companies execute on that playbook over time.

>> How does an economic slowdown affect them? Because the amount of waste we generate in society, whether GDP is strong or weak, I am still making a mess and that needs to be cleaned up and taken away, but does it sort of followed that economic sector?

>> There is industrial waste that's a little more tied to the economy, but you are right, it's resilient.

There is always garbage. There is always recycling.

And the waste companies benefit from that.

And other benefit they have is a pretty good track record of taking pricing. So while volumes may fall off slightly alongside the broader economy, the companies have historically done quite a good job of maintaining positive revenue growth by raising prices to manage that.

>> We are out of time for taking questions from the audience.

Before I let you go, I want to circle back to the top of the conversation. Investors were taking a look at the industrial space, you said there's a bit of push and pull.

>> That's the threading the needle that investors are doing.

There are secular opportunities out there that have a lot of merit and they are out there. Something like 600 billion, me it's a trillion, maybe as 300 billion, is a large number of opportunities and projects supported by not just one underlying trend, there are many that are funneling together to create this interesting time but for capital spending. At the same time, the question is out there that the broader market is grappling with: Will there be a recession, will there be no recession, will it be shallow or deep? And the industrials, as a cyclical sector, certainly will be impacted by that as well.

>> Always great having you here, great to hear insights. Looking forward to next time.

>> Thanks.

>> Thanks to Juliana Faircloth, industrials analyst with TD Asset Management.

Always do your own research before making investment decisions.

Stay tuned.

We will be back tomorrow with an update on the markets.

It's the kick-off to earnings season on Friday with some of the big banks reporting, so there will be plenty to go through. On Monday, Nugwa Haruna, Senior client education instructor with TD Direct Investing is going to be our guest taking your questions about how to better utilize

WebBroker platform. A reminder that you can always get a head start with your questions. Just email moneytalklive@td.com.that's all the time we have for the show today. Thanks for watching. We will see you tomorrow.

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