Julien Nono-Womdim

[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.

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

Coming up on today show: we'll discuss whether the semiconductor stocks could be in for a solid performance this year.

TD Asset Management's Julien Nono-Womdim joins us. Our Anthony Okolie will join us when we look at a new report on how small businesses feeling about the economy. In today's WebBroker education segment, Nugwa Haruna is going to take us through how stock splits work and how you can find info about on the platform.

Here's how you get in touch with us. Email moneytalklive@td.com or still at the viewer response box under the video player on my broker.

before we get our guest today is gave an update on the markets. The bit mixed out there right now.

Not the TSX in modestly positive territory as we enter the lunch hour trading session. It had been way down earlier and stillHad some upside due to some of the mining stocks and a weakness in gold today. Right now, we are up we will call that 6 1/2 points, just three takes, nothing too dramatic.

You are seeing a bit for the lumber names. Favours turning towards them.

I chose Interfor to start the show. The initial you can for later in the program.

They are at 2586, up more than 11%. Some of the mining stocks are holding us back from a better showing in Toronto.

We've got Baruch down to the tune of 1.7%.

We are seeing some downward pressure on the price of gold. We are seeing a bit of a bid for the US today.

Check out the S&P 500, of course, Tesla reported after the closing bell yesterday.

Seem to live some sentiment across the board. Right now got the S&P 500 up to the tune of a little more than 1/3 of a percent.

The tech heavy NASDAQ, last time I checked, redoing a little bit better.

Indeed, it is up, we will call that, because it is, two thirds of a percent.

I will leave you with Las Vegas Sands. It wasn't a particularly impressive quarter. Management there talking about the China reopening, particularly Macau, the gaming Centre, posting some sentiment around the name.

Las Vegas Sands up five and will call it 1/2%. That's a market update.

After a tough run, semiconductor stocks have made some selling gains to start the year,But will that performance continue? We've got a lot of tech firms out there warning of a tougher economic environment. It joining us now is Julien Nono-Womdim, semi conductor analyst at TD Asset Management.

>> Hi. I brought a chart to illustrate that. The SOX indexes at 50% year to date, which is quite substantial. That's 10% outperformance relative to the S&P 500. More interestingly now, since the lows formed last year, semiconductor stocks-- As it stands today, most countries in the world are at or near contractionary levels from an economic growth standpoint, and there is optimism that in the months ahead, we will start returning to growth and that should be constructive for the sector.

>> Is at an example of the market being a forward-looking instrument? You talk about the PMI's,Manufacturing managers thinking that things are getting weaker.

You get warnings from central banks that the economy could get soft going forward and yet, and one more, you get warnings from big tech companies about job cuts, cost reductions. Yet, the semis rally. It is this a forward-looking play?

>> It absolutely is a forward-looking play.

Perhaps let's go back to last year. 2022, semiconductor performance from an industry perspective is quite good.

It's only through July, Q3 and Q4, where fundamental started deteriorating. And yet, the sector was down 35% on the air.

The market front ran the deterioration of the fundamentals last year.

And this year, the market is trying to do the same in the opposite direction, trying to front run the good news ahead.

>> Now, we are in the thick of earnings season as well.

I don't think we've heard from all the semi names. You would know better than me.

But what have we heard so far?

>> So far, it's been a reflection of what the market is telling us. Fundamentals are bad.

Q4 earnings were mostly in line with expectations, but Q1 is going to deteriorate. Q2 is also likely to deteriorate. This is happening across all and markets, perhaps with the exception of automotive's.

There are some trends that there alongside electrification and EVs that are supportive for the group, but nonetheless, fundamentals are weakening.

The companies are optimistic. They think that by the second half of this year, we should see a bit of resumption to growth partly aided by the reopening in China.

What I would say is the earnings estimates for the sector peaked in June 2022.

Since then, we've seen a 30% contraction in earnings estimates.

That is the largest estimate revision in over 10 years.

And so the market is starting to look past that and companies as well and are optimistic about the future.

>> Is that the biggest risk here?

That that optimism doesn't actually appear in the second half of the year?

>> That is certainly a risk.

If you think about the great financial crisis, earnings estimates fell by 100%.

You think about the early 2000's, earnings estimates fell by 60, close to 70%. The market is running bad news but it's a dynamic adjustment and as we go into Q1 reporting and Q2 reporting, we will have that her colour as to what the next 12 months look like and the market will readjust according.

>> We are talking semiconductors, these chips are in more of the things we use every day. But what about artificial intelligence?

A lot of headlines are on Microsoft, their investment in ChatGPT. I always want to say GDP. ChatGPT, all of this buzz around it. What could this mean of for semiconductors?

>> ChatGPT is an artificial intelligence based chat bought where people can ask questions and they get very detailed responses.

The technology has been around for a number of years now but it is the first time that it is available to the general public.

and I think that from a semiconductor perspective, it bodes well for the entire sector. These models that ChatGPT are based on, they require a lot of computer.

Open AI, the company that created ChatGPT, they are the first company, I believe, to have ever used more than 10,000 GPs, which are the chips that Nvidia produces, for training purposes.

If you think about memory, that's another area that's going to be in high demand as you need more data to feed into the models.

>> Does it take 10,000 processors for that ChatGPT to talk to me like a human?

Because I don't want to say that I'm smarter than it but I only have one brain.

>> It takes a lot of computer, Greg, it certainly does.

That, historically, the semiconductor industry has done a very bad job of forecasting long-term growth because there are always these and markets that open up. So in this case we are talking about chatbots, which can, over time, help businesses interact with their customers. There are other applications.

You and I have talked about them in the past. There are opening avenues for semiconductors to continue growing.

And I think this is yet another example that there are going to be opportunities within the sector to benefit from these structural growth drivers.

> So this is the future in the here and now. We know that cloud computing is a big, important part of the market. You think about Marcus off, what people want to know? The health of the cloud. Microsoft warned us earlier this week that they are seeing some slow down, some caution among their customers.

What could that do for to demand in the short term?

>> In the short-term, and we are starting to see it as, as I alluded to earlier, chip demand will certainly slow down.

However, there is a challenging and a fight between sort of existing demand and future demand.

We talked about ChatGPT. That underpins growth in the data centre world which is really what relates to cloud data centre hardware. There is going to be some cyclicality.

And I think what is important for us to contextualizes that semiconductors are more analogous to industrials and the artist software. They are the lifeblood of the economy. And when the economy is contracting, the demand for semiconductors goes down. When the economy is expanding, demand goes up and that is reflected in higher Spending by companies.

So in the near term, you are right that the slowdown in the cloud is going to impact semiconductor demand.

>> It's a fascinating space and a great start to the conversation of the show.

We are going to get your questions about semi conductor stocks for Julien Nono-Womdim in just a moment time, including his view on Qualcomm, Taiwan Semiconductor and Intel.

A reminder, of course, you get in touch with us anytime.

Email moneytalklive@td.

com or fellow that viewer response box under the video player on Whataburger.

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

Shares of Tesla in the spotlight today after the electric vehicle manufacturer posted record sales and earnings be it in its most recent quarter. Tesla is also giving investors an optimistic take on the man for this year.

on an investor call, CEO Elon Musk said that orders are coming in at almost twice the rate of car production.

The name is up to the tune of about 8% at this hour.

We've got Chevron boosting the dividend, announcing a $75 billion share buyback plan. The global energy major says the buyback program takes effect on April 1, and it will not have a fixed expiry date. The announcement comes ahead of Chevron's earnings review which is scheduled for tomorrow. The stock up a little more than 4%.

Mass flight cancellations over the holidays are hitting the bottom line at Southwest Airlines. The air carrier is reporting a net loss of $220 million for the quarter that covers that holiday period.

Southwest says it has also seen increased cancellations to start the year in the wake of what it called December's quote to operational disruptions." We will check in on the markets, start here at home on the Bay Street with the TSX Composite Index. You've got the mining stocks weighing on the market but it has found its way up, the TSX Composite Index up 1/10 of a percent. Fighting back against the weakness in some of the mining names. South of the border, the S&P 500, as we continue to but I just not only earnings but also slightly stronger GDP print for the GDP prints of the United States, nothing too dramatic but up almost 20 points or half percent.

We are back now with Julien Nono-Womdim. We are take your questions about semiconductor stocks. Let's get to them.

First off the top, China's reopening. Will this boost the semis?

>> China reopening is quite interesting.

What we are seeing here is a slowdown in the US. We are seeing a slowdown in Europe. And there is optimism that China is going to take the baton and be another leg of growth.

But to take the smart phone market, in 2022, we saw a pretty significant contraction in that market, typically we sell about 1.5 or so billion smartphones a year.

That has contracted down to 1.2 or so.

And so with China particularly, their smart phone market was very weak because of the lockdowns.

And that should recover as they reopen and there is optimism around that it's well.

>> So that's one area. What about other devices? One that always comes to mind when we talk about semis, when China reopens, where could appetite be?

>> Bigger goods like automotive and areas like that because the lockdowns there were a bit different than the lockdowns here from the standpoint that they were a bit more strict. And so as they reopen, people are going to be thinking about expanding consumption. But the question is, does that consumption get impacted by using more services?

We saw when we have the lockdown to reopen in North America, people shifted a bit more to services and not as much into electronic goods.

So that will be something to monitor, but there certainly optimism that China will be up in terms of handsets, smart phones and general computing with their Internet businesses sort of expanding.

>> Got a question for you. Close the screen of the laptop, go out for dinner, forget about the laptop not being the one we want. We spent a lot of money on computers at the start of the pandemic.

We are forgetting those computers at three years old now.

>> Yes.

>> Let's get another question off the platform. We talked a little bit about auto in the context of China but this idea of the self driving car, when it arrives in these other automotive trends, could this be a bullish driver for semiconductor stocks?

>> Well, there is one and 1/2 to 2 times the semiconductor content in driverless cars. Obviously, the technology is still under development.

But even before we get so fully autonomous cars, there are different levels of driver assistance.

Over time, those are going to be semiconductor intensive.

So the addressable market for companies like Qualcomm, companies like Nvidia, in terms of getting their chips into cars is expanding and not just for autonomy, even for infotainment.

When you step into a modern car today… >> You get to the backseat, the kids have their own screens.

>> Exactly.

>> When we talk about the chip shortage that plagued the auto industry during the pandemic, used car prices were soaring, it hit inflation. Are we pretty much passed that story right now for the automotive industry?

>> We are probably 95% through that.

And as other and markets have softened, capacity has opened up and so there is really no talk about shortages anymore.

It's really in the rearview mirror.

And the question is as demand recovers, will we have enough capacity to sort of reabsorb that demand?

Interestingly, the foundry market is expected to be down only 3% in 2023, which is quite impressive when we consider that many and markets are suffering far more than that.

>> When we talk about self driving vehicles, obviously the processing power of the vehicle need to make those decisions for you. Even if I don't have a self driving car but I have an electric vehicle, wooden EV use more chips than a traditional combustion engine?

>> Absolutely. Absolutely, yes.

The multipliers, depends on the model, depends on many different variables, but ultimately is.

As you go to EVs and/or AV is, semiconductor content goes up.

From as little as $100-$200 in a traditional car to, all the way up to $1000 and some vehicles.

>> Interesting stuff.

My car is a little behind the times.

>> Yes.

>> 10 years old now. I was so impressed when you're talking about songs playing on the radio, but I think the world has moved on.

>> At some point, the car will be guessing what song you want to hear.

>> Don't want the AI getting involved in that. Let's take another question and now.

Can you get your take on an individual name, Qualcomm?

>> What was happening with Qualcomm is, as I said at the top the show, smart phone units have been declining for a couple of years now, partly driven by China being weak but also just globally cycles have landed from three years to four, maybe even extending into five.

And during the pandemic, there was some inventory billed for the company itself and now they are going through an inventory be stocking.

Q4 handset data suggests that Q4 is not going to be good. Q1 is likely going to be another D stocking phase.

The company reports in early February and my expectation is that they will continue to push towards D stocking but again, we are looking to our recovery of handsets in China.

>> When I think about the handsets I've owned, I'm not the first person to get the latest and the greatest because perhaps I'm not using the phone to the fullest functionality.

This also means that my iPhone 12 is pretty good for my purposes. Is that dangerous, the phones get better so you realize, if I'm just on Twitter and setting a few text messages, do I really need the one that can spin around and chat with me all the time?

>> Well, yeah, that's been the driver of the lengthening and refresh cycles.

The difference between generations in terms of performance is really not significant anymore. If you think about the first iPhone versus the third, there are material differences in performance, screen size, etc.

And so the willingness to upgrade has gone down from a consumer perspective. I would say that 5G adoption is a big tailwind for handset shipments.

Only 60% of global shipments last year were 5G enabled and over time that will increase, simply because Internet speeds on 5G can be up to 10 times faster than their 4G equivalent. So if your kids want to watch HD videos on their phones, 5G is a better offering.

>> That's an excellent point to because I think as stubborn as I might be about my technology being good enough for me, at some point, I think now in my refresh cycles I've realized how long is too long.

At the world has moved on without me and suddenly the things that I want to do on my phone, I can't.

>> Absolutely. We are shipping more data through devices now and so if you have an older device that is just not able to handle those speeds, your experience is not the same.

>> As always, make sure your own research before you make any investment decisions. We are going to get back to questions for Julie Godin at Nono-Womdim the on the semiconductor stocks in just a moment time.

A reminder, of course, you get in touch with us anytime with your questions.

All you have to do is email moneytalklive@td.

com.

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

Last year, we saw some of the biggest companies in tech, including Tesla, Shopify, Amazon, split their stocks. Joining us now to discuss how the splits actually work and how you can find information about them on the WebBroker platform is Nugwa Haruna, Senior client education instructor at TD Direct Investing.

Great to see you again. Let's start with people who perhaps are not quite aware of how the splits work.

What exactly is going on when a company split their stock?

>> Right. So it's always a pleasure being here, Greg.

a stock split is simply when a company breaks down its existing shares into multiple shares. So in other words, an investor may be looking at their portfolio and if you have one share, you could potentially end up with three shares of the same company.

Something investors want to be aware of is even when the stocks are splitting, it doesn't necessarily mean the market value is going up.

For example, if I walked into a bank with $100 bill and I walked out with five $20 bills, I still have $100, I have five bills now but it's still $100 and I can give those away more easily.

So essentially the reason why companies may decide to do stock splits could be because they may feeltheir stock prices are trading a little too high.

So if they want to make the stocks more accessible to investors, they may consider stock splits. Also, if they want additional liquidity, so you may find more people are able to enter positions, exit positions at the stock prices are lower, so companies may consider doing stock splits. Something investors want to be aware of is there is also reverse stock splits, so it essentially consolidations. This would be the opposite case where it's in my portfolio I have 20 stocks for a specific company, I could end up with one stock and the idea in that case being that companies may do this because the stock prices may be a little too low and they run the risk of being delisted from certain exchanges, so they may consider doing reverse stock splits to essentially increase the value of each share after it's been consolidated.

>> For as long as I've been doing this kind of stuff, Nugwa, that is the clearest explanation I've ever heard of the split idea. One $100 bill, split the 520s, you still of hundred dollars. That was good.

Now that we know about stock splits, we got this great explanation of what they are, it seems that investors want to know if they are researching a company whether there has been a split. How do you get that information on WebBroker?

>> Right. Thanks so much, Greg, that made my day. But you can find information about stock splits within WebBroker still a topic to WebBroker and take a look.

oonce in WebBroker, you are able to click on research, which happens to be our most favourite tab here. Under markets, you will goevents. Starting off, if you want to see stock splits happening across the board in a specific company, we will start off in Canada, we are going to click on look at today's calendar and we will see that there is one split happening today.

So I'm going to click on splits here. And I'm able to see that this corporation is having a reverse stock split because it is a 1 to 5. So essentially for every five stocks I own, I'm going to end up with one security. If I want to see additional information about US securities, I can go and click on the US flag. There are five stocks happening in the US today.

I can take a look at these companies. You had mentioned that a lot of tech companies did stock splits last year or the year before. If you have a specific company in mind, you can type that name in here.

I'm just going to go Tesla. I want to pull up the Tesla stock that trades on the US exchange there.

Once I'm here, I'm now on the Tesla stock page itself.

Under the events tab, I'm going to click on splits.

So once I come over here, I'm able to see any stock splits that Tesla has had in the last year.

So I can see that August last year, Tesla had a 3 for stock split. So in this situation, for every individual Tesla stock I own, I ended up with three stocks.

you can also look at the charts. The charting tool is not just for technical analysts.

you can find information. If you are a fundamental analyst as well, you can use this will in WebBroker.

Once I'm here, I can select a length of time.

So I will just stick with three years right now.

But then I have the little drop down here that is called events.

Someone to click on that and I'm going to click on splits. Once I do that, you will notice that 2S is appeared on the screen. The very first one over here which tells me that in August 2020, Tesla did a five for one split where for every one share I had, I ended up with five and then two years later, in August 2022, Tesla did another stock split so for everyone stock I had, I ended up with three. One thing I will mention just a round up this session today is that for investors who have securities that may go through stock splits, they may end up seeing additional stocks in their portfolio. As we have mentioned, it doesn't mean that the overall market value will go up but what it does mean is that whenever there is a stock split, it could renew investor interest in that specific stock which could, at the same time, trigger a lot of volatility for that stock.

This is something that investors want to be aware.

>> Great stuff as always, Nugwa. I learned a lot from that one in our guests did too.

>> Thanks for having me.

>> Our thanks to Nugwa Haruna, Senior client education instructor at TD Direct Investing. Make sure to check with the Learning Center in WebBroker for more educational videos, live, interactive master classes and webinars. We get back to your questions on his semiconductor stocks for Julien Nono-Womdim, a reminder of how you get in touch with us.

Do you have a question about investing or withdrawing the markets? Our guests are eager to hear was on your minds and send us your questions. There are two ways you can get in touch with us.

You can send us an email any time at moneytalklive@td.com or you can use the question box right below the screen here on WebBroker. Just writing your question and hit send. We will see if one of our guest can get you your answer right here at MoneyTalk Live.

We are back now with Julien Nono-Womdim, take your questions about semiconductor stocks, so let's get back to them.

Our viewer is wondering what your take is on Taiwan Semiconductor.

>> Taiwan Semiconductorrecently reportedand they were more and less i line with expectations. They were calling for the business to grow slightly into 2023, which has been an outlier relative to the overall industry. And I think a couple of things. Number one, they are the overwhelming leader in contract manufacturing, so they have a large customer base and they are able to flex their leadership position. And number two, high-performance which is the chips that go into data centres have been growing.

It's no over 40% of the business, taking share from smart phones.

There are other areas like automotive set are growing.

The business is doing well.

Geopolitical risk, as we have talked about, persists.

>> When I think about a name like Taiwan Semiconductor, you talked about 40% of the business being in data centres, is important if you are screening to those names to try to think about okay, they are not just providing what kind of chip into what one kind of business and today have a diverse portfolio client?

>> It's very important to consider diversification in terms of the chips they provide for a couple of reasons.

Number one is an markets move at different paces.

The risk of disintermediation or obsolescence of a certain chip is always a problem.

And so yes, diversification is very important.

Not just from a diversification perspective but also for volatility purposes >> You mention political risk.

This next question is interesting in that context. Our viewer wants to know how are the Americans moves against China on semiconductor space impacting the industry?

They don't quite see eye to eye on this issue.

>> They don't and it has mostly impacted the semiconductor a human fabrication space.

With the US is effectively trying to do is to curtail the ability of advance equipment going to these producers. We have talked with the critical nature of semiconductors, the application for AI, etc.

So the fabrication market equipment was 90 million in the revenue in 2022 and 2023 is estimated at over 70 million or so.

Some of that decline has to do with demand.

> Is there path forward for these two countries to come to more of an agreement or is this kind of an entrenched thing as the world's 2 largest economies had to go head-to-head to on issues that will be with us for a while from an investor perspective? Data from an investor perspective is hard to say and it's hard to determine if the tensions are going to escalate moving forward. Part of that is driven by the current administration in both countries. It is going to be driven by future administrations in both countries.

we don't know what those look like yet.

What I will say however is that the semiconductor industry is critical to everything that we do and so we have to find ways to remain optimistic about the state of the world and the state of the industry because it is critical.

>> With that kind of uncertainty, obviously, because you don't know how those relations play out over the next while, are there companies that are better navigating this issue, that are better insulated from these disagreements?

>> That's why I and we believe in an active approach to thinking about the space because it is dynamic and then companies that are insulated today versus companies that are going to be insulated tomorrow are different.

So for instance, Texas Instruments is a US-based company and manufacturer. One could argue that they are relatively insulated because of their US domicile in most of their operating activities.

However, part of the interesting dynamic in the semiconductor industry is that the overall supply chain is linked.

Chips are really tiny so they are very and expensive to transport.

so over time, in a world moving towards globalization, the companies across the world became more interlinked and today we are having to untie some of those links and that will take time.

>> Interesting stuff. Let's get another question now, this one about Intel. This one is interesting. It's all about the turnaround story, right? At least for a while. Is this turnaround still on track?

>> It will take time for us to determine whether or not the turnarounds on track and the reason is twofold.

Firstly, right now, the PC market is going through a pretty severe downturn.

In Q4 alone, PC shipments were down close to 30%, so that means that for the year, we will probably see for 2022, we will have seen in over 20% contraction in PCs and that's a big and market for Intel.

And funding growth on the back of a business that it doesn't have the cash flows for you to fund those Dollars is challenging.

So that's one area.

In the second what is that technology roadmap that they are developing is a multiyear process. We won't know if they will reach technology leadership before three, four, five years.

>> What was at the cost and that leadership over the years? There used to be a time when Intel was the badge of honour for your PC. Apart from even a slump in PC sales, what was about Intel that made them… If they are turning things around, they must've lost their way somewhere.

>> They lost their way from a couple of dynamics, one being they relate to adopt extreme ultraviolet lithography. TSMC was a competitor and was sooner to make that option and so they simply fell in the cadence of developing faster and faster tips.

It's the old age, the winner got a bit lazy, so to speak.

>> We have seen that tactic a number of times. We will get back to your questions for Julien Nono-Womdim and on semiconductor stocks in a moment. Make sure you do your own research before you make 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? Argus are eager to hear what's on your mind, so Sen. questions.

There are two ways you get in touch with us.

Email is anytime at moneytalklive@td.com or you can use a question box right below the screen here on WebBroker.

Just writing your question and hit send.

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

We've got a new read on how Canadian businesses, small businesses, are feeling about the economy going forward.

There might be a little bit of optimism in this report.

Our Anthony Okolie has been digging into the record and brings us the findings.

>> Yes, small business confidence in Canada improved modestly in January as worries over inflation eased a bit. The latest CFIB or business barometer optimism index for the next 12 months edged up about half a point to just over 51 Points in January, that slightly above expansionary territory. Anything above 50 shows that more businesses are feeling confident then negatively about the next few months. Now, the immediate three month outlook also improved several points to about 47 index points. But again, that puts it in retractionary territory. That when we look at pressures, there are costs that continue to be a pain point. Two thirds of respondents said the cost of fuel and energy was a challenge for their businesses.

Of course, rising interest rates are also still a concern.

This came… Pausing further rate hikes.

But we saw this year and increase of businesses worried about cost.

That is unchanged from December but is still at an all-time high for the index.

Now, there was some good news in the survey regarding the labour market, indicating the hiring challenges did ease somewhat in January. And the percentage of the respondents reporting lack of skilled labour contributed to lack of growth fell to less than 50% in December. In addition to that, supply chain issues continue to fall if you are firm saying that shortages of inputs are restraining their businesses.

And finally, plans for wage increases over the next 12 months was unchanged from December at about 3%. That's down from a peak in June which was close to 4%. So overall, small businesses started the year on slightly better footing. Greg?

>> The big question is always the economy. The Bank of Canada yesterday, in addition to that rate hike that we call, they give us new economic perspectives there. The market has been concerned about pullback and a recession depending on how deep it will be. What are the companies thinking about the economy for that, if it'll affect their sales?

>> I think many of the small businesses may in fact actually they did see some improvements in supply chain backlogs but they are worried about the lack of domestic demand which was, as the survey showed, did rise into January.

As you mentioned, great, the Bank of Canada expects the economy just like the first half of the year is higher borrowing costs will continue to squeeze Canadian finances and her consumer spending and business investment.

When looked at the survey, most businesses expect weaker sales in the year ahead, again because they see a lack of consumer demand going forward. TD Economics says that this is actually in line with their economic outlook with growth in consumer spending expected to slow this year.

That, again, will hurt business profitability in 2023.

>> It's great to get those insights people.

People talk about the corporate names but forget that small businesses are major employers in the country.

Great stuff, Anthony Okolie.

Let's take a look at the markets now and see what's going on on Bay Street. Let's see if it's positive or negative.

there are gains, they are modest, they are up a little more than 1/10 of a percent. We were seeing some strength in financials earlier getting weighed down byweakness in the material stocks, the mining foundations. We are definitely seeing a bid into some of the lumber names.

Canfor is also a pretty strongly to the tune of 8%.

My eyes aren't what they used to be. I think it's a present. Basically Street sentiment is turning in favour of some of these lumber names today. Let's check in on the minors. B2Gold was down earlier in the session and it is down by 2 1/2% to five bucks and $0.45 per share.

South of the border, a slightly stronger-than-expected read from the US economy and their GD report.

Got Tesla impressing the market with its earnings as investors continue buying into corporate America.

There is some momentum as the upside, up 22 points, little more than half percent.

Tesla, course, being those names. This is a tech play having influence over the NASDAQ and the sentiment there.

A bit firmer here, up almost a full percent, a 100 point gain on the session.

We will show you the stock and see how it is performing on the back of that better-than-expected quarter. They are up 8.7% on Tesla.

We are back now with Julien Nono-Womdim from TD Asset Management, we are talking semiconductor stocks.

We've seen some recent volatility and crypto. What does it mean for the semiconductor stocks?

>> Well, in the prior crypto cycle in 2020, we saw demand demand skyrocket on the back of crypto mining.

Should crypto regain momentum I would expect demand to resume.

>> For the people who don't mind crypto, because I understand it's become a significant expense, is that technology change at all?

If someone wants to mind crypto, do you need a big warehouse a machine?

>> If you want to do it in an efficient way you need custom chips to do it. There are crypto currencies like a cerium that have transitioned to different protocols so the process of mining, the crypto is chaining but ultimately it would bode well for semiconductors.

>> I wish I could mind crypto on this thing while I was mining the show. I would not. We have run out of time for questions but let's circle back to the top of the show.

You were laying out the chart you showed to the audience the performance for semi names heading into a year where people are worried about the economy, how should an investor be thinking about the space?

>> For now, bad news is good news. Fundamentals are deteriorating.

The market is acclimated to the fact that 2023 and certainly the first half is going to be bad.

There is optimism, as I said, that the second half as economies around the world start recovering, as China reenters the fold, as industrial activity picked up, that should bode well. So the risk to be cautious about is whether or not that second-half recovery that the market has started to price in doesn't actually materialize. And if it doesn't, that means that we may go back to a place where semiconductor stocks are challenged.

>> Exciting stuff as always, Julien. Thanks for taking the time to join us today.

> Thank you for having me.

>> Julien Nono-Womdim, semiconductor analyst at TD Asset Management. As always, at home, make sure you do your own research before you make any investment decisions.

Stay tuned.

We'll be back tomorrow with highlights from our best interviews of the week. On Monday, we will talk real estate with Colin Lynch, he is head of global real estate investments at TD Asset Management.

I know I have a lot of questions for him. I know you have a lot of questions for Colin as well. A reminder that you can get a head start getting those questions into us.

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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