Market Insights

[music] > Hello, I'm Greg Bonnell. Welcome to MoneyTalk Live, brought to you by TD Direct Investing. coming up on today show, Moneytalk's Anthony Okolie is standing by with the latest housing data and some of the country's biggest markets. we are set for another Bank of Canada rate decision next week. We will break it all down with Anthony Okolie in a moment's time. TD Securities Daniel Ghali will tell us about geographic shift taking place in the commodity space and what it means for investors. Plus, in today's WebBroker education segment, how do you research low volatility ETFs? Well, Hiren Amin, Senior client education instructor with TD Direct Investing is going to join us and give us the low-down. Before we get to all that, let's give you an update on the markets. This is the last trading day of the week.bit of a risk on sentiment on the TSX Composite Index. The US 10 year bond yield this week broke above 4%. 20,537, 200 point again, almost one full percentage Happify has been under pressure in recent days after his last round of earnings. It wasn't so much about the order behind about their self protection going forward seemed to disappoint the street. The stock did sell off. Today, it's up to the tune of about 4%, 58 bucks and change. SNC-Lavalin with its latest quarterly report, the loss did not widen, thedividend was maintained. It's flat. S&P 500, the story last year was aggressive rate hikes from central banks as we get in full swing into March here. Still pretty much the story. Trying to gauge the health of the US economy, labour market is still pretty tight and what the Fed does with all that information. We do have the S&P 500 today up about 4% after some pressure throughout the week and some choppy trading. The NASDAQ, let's see how risk sentiment is playing out there. It's very much in step with the broader market, up about a full percent. We are noticing the mega-cap tech names getting a bit of a bit today, including Apple, hundred and 49 bucks and change, almost up 3% of the day. That your market update. We don't have to go far in this country to strike up a conversation about the real estate market and where it has been headed amid all these aggressive rate hikes. We have new data out this morning from the largest market in the country, Toronto. It did show that houses on a month over month basis were up for the first time in here. Anthony Okolie's been digging into all the numbers and brings us the details. >> As you mention, first time, first month over month price gain in Toronto since we started hiking rates back in March 2022. When we look at the home price index, it excludes the highest value properties in the greater Toronto area, it came in at 1.09, just up over 1% month over month. This is still down about 19% from last year's peak. Keep in mind, TD Economics has this long view that home prices will experience a peak to shroud decline of about 20%. We are almost there. When we look at Vancouver, average home prices there came in just over 1.1 million. Up over just 1% month over month but down more than 9% year-over-year. Meanwhile, when we talk about sales volumes, Toronto, they are down nearly half are about 49% from February of last year. Now, the good news is that home sales were up month over month for the first time since August. In Vancouver, similar trends we were seeing there as well. Vancouver home sales were down by about half versus one year ago but up from January. Now, again, looking ahead, TD Economics believes that housing activity could bought about sometime in the first half of this year. >> If someone is looking for an explanation as to why the housing marketand whether it's year-over-year prices and sales oh, so dramatically, you don't have to go far. I mean, the Bank of Canada, all the aggressive rate hiking we got from central banks. We do have the Bank of Canada said it was on pause but we have a rate decision next week. What are the expectations there? >> Yeah, so I think that the expectations are for a pause. We got some recent economic data in Canada, the January CPI report showed inflation in Canada continues to cool. Fourth-quarter GDP was flat. Housing investment dropped in the fourth quarter by 8.8% because of those aggressive interest rate hikes. Putting a lot of it would be buyers on the sideline. So I think that the GDP report plus the inflation report gives the Bank of Canada some much-needed breathing room on for the rate hikes. TD Economics expects him to hold to maintain the raid and wait to see what the cumulative effect of the eight rate increases are having on the county. >> Fascinating stuff. Of course, we will have full coverage next week, I believe you will have an on the spot coverage. >> I will. I will be interviewing a Scott Colbourne with a reaction on the Bank of Canada interest rate. >> Scott's always got great interest rate. Will look forward to that. Thanks to Moneytalk's Anthony Okolie. It's not just housing that's been volatile, commodities have been under pressures of their own. While investors weigh the outlook for commodities amid fears of a recession in North America, there has been an interesting shift and the man taking place I discussed that shift earlier with Daniel Ghali, Senior commodity strategist with TD Securities. >> If you look at copper prices were gold prices for instance, most commodities are trading higher than what the economic lookout would be. Looking at leading demand indicators alone would suggest, when you look at gold prices, they are trading a lot higher than US 10 year real rateswould suggest. When you look at gold prices, they're trading a lot higher than US 10 year real rates would suggest. I think behind the scenes what's going on is that the East is driving the physical demand that is associated with these price dislocations. The West is losing control of the pricing mechanism because they tend to impact the investment landscape, and right now, it's not about investor flows. It's actually about the physical demand, physical supply, and the constraints globally that we've seen, which tend to be Eastern focused as opposed to Western focused. >> Physical demand? So who is out there in this market buying gold, that actually wants to hold physical gold? >> Yeah, I mean gold is a great example. It's really interesting. Over the last year, we've seen Turkey, for instance, emerge as one of the largest global buyers of gold. That is the retail segment. People are buying a lot of jewelry. People are buying a lot of bars and coins. But it's also their central bank, who actually emerged as one of the largest buyers of gold globally as well. If you look at how gold acts in local currency terms for emerging markets, it actually is a pretty amazing inflation hedge when inflation is particularly elevated or particularly low. We call it a tail hedge of inflation actually. So if you look at gold in those perspective, then it's not a surprise to see that Turkey, who's facing hyperinflation today, has been a massive buyer of gold. Elsewhere in the world, China has also been-- particularly their central bank-- has been a major buyer of gold. We've talked about this in the past. I think that's probably related to the shifting geopolitics, the need to diversify away potentially from US dollar reserves towards another reserve currency or reserve asset like gold that is really nobody's liability. That's a trend we're seeing, again, rise in the East. Qatar's doing the same. The GCC nations have been one of the larger buyers of gold over the last year as well, and all of this is really catalyzed by the war in Ukraine, which really resulted in a mind shift for a lot of these eastern central banks. >> Obviously, what we saw in Ukraine as well had a pretty profound effect in the early innings, at least on oil and gas, other parts of the energy space. And then you've got China reopening and trying to gauge the effect of how much, I guess, consumption demand they're going to have. How does that play into oil and gas, other areas? >> Yeah, it's a great question, and I actually think, now, you're starting to see evidence that the implications of China's reopening aren't broad based. When you look at-- overnight, there was the release of the manufacturing PMI of China. It was particularly strong. When you look at the details therein, it does suggest that it's not necessarily a domestic recovery in China. It's actually probably also associated with stronger demand in the West, which is actually, in turn, tied to the miracle weather that Europe has faced and particularly mild weather in the US as well. But leading demand indicators for metals like copper and aluminum still suggest a downdraft in demand, and I think what's really happening here is that we've seen stockpiling in a pretty significant way. Copper users, aluminum users are overstocked today, which tells you that they're going to consume less of this stuff over the next three to six months. The property sector is the caveat to that, I think, and that's probably a little bit more gradual, but we are starting to see some signs that it is going to start to recover. But again, that's going to take some time. >> When it comes, you mentioned copper, and whenever I hear copper now, I think about the electrification of everything, which people talk about. And often, from here in North America, we think of it as a North American story, whether it's Tesla or other companies. But obviously, China has a huge market for EVs and a huge domestic market, from my understanding, of people producing it. What is China's demand like for those EV electrification kind of metals? >> Yeah, I mean, China has been really leading the charge on the push for electrification. I think in 2019, electric vehicles were about 2% of auto sales in China. Today, they're closer to 45%. That dramatic shift was really subsidized by the government. Some of those tax incentives have went away, so we'd expect EVs to lose market share. But I think the big picture that is really under appreciated when it comes to the electrification trends that everybody in the West is looking towards is that China actually controls every single part of the supply chain that's necessary for the electrification to happen. So while this theme is often touted by the West, and thankfully so, the East is really the one who's controlling the supply chain there. So if you look at global capacity for the anodes and cathodes that go into making a battery, for example, 70% to 80% of that capacity is in China. The same is true for battery cell production. The same is true for EV manufacturing. And even going further down the line, or earlier in that supply chain, the material processing capacity that is for things like copper, lithium, nickel, all of that-- or a big chunk of that-- is still in China. So I think this is something that is underappreciated because, as trade flows start to diverge, the West is going to perhaps need to build that capacity up themselves, and that's just something we haven't seen being done yet. >> As the world does work towards electrification, the argument is made, and it's a logical argument, that you're going to need oil, you're going to need gas for a while. To make this transition, you need it for a while. What do we think about oil demand in this climate? It seems like it's always a to and fro on any given day. >> Yeah, I mean, so from the cyclical outlook, you have to consider the fact that, over the next five years, China is overwhelmingly driving the demand growth for oil. Beyond that, India is really driving it, actually. So that has been the case for some time, but again, going forward, I think what is often missed is that over that same time horizon, five, 10 years out, North American demand and European demand is actually going to decline quite substantially. We're already starting to see signs of demand destruction in oil. That's people's preferences to buy hybrid vehicles, or fuel efficiency gains actually have been one of the largest contributors to demand destruction for oil, and EV sales as well, who are gaining market share faster than many had anticipated prior to COVID. But again, those shifting trade flows are pushing geopolitical relationships away from the status quo that we've been used to for the last 40 years, and towards a world that is potentially more multipolar, in which the need for diversifying away from US dollar reserves is growing and where gold definitely is already seeing some benefits. > That was Daniel Ghali, Senior commodity strategist at TD Securities. Now here's an update on the top stories in the world of business and a look at how the markets are trading. I want to check in on shares of Nordstrom. Of course, news after the close of markets yesterday that they are pulling out of their Canadian operations. The company basically said that he doesn't see a path to profitability forward when it comes to staying operating in this country. Of course, they are a US-based retailer. Today, the stock is up to the tune of 1 1/4%. I also want to check in on Dell. They reported after the close of earnings yesterday, right now the stock is modestly negative. Earlier it was the quarter that was behind them, but it was more so about the forecast of sales going forward for PC sales. We saw that big surge at the beginning of the pandemic. Apparently, Dell is saying they've noticed saying it demand in the PC market is soft, tepid forecast for the street. A quick check in on the main benchmark indices. We will start your own Bay Street with the TSX Composite Index. It is up to the tune of about 8%. says of the border, the S&P 500 is up a little bit more than percent. As investors hunt for yield, surprising segment of the ETF market is beginning to become popular. We took a closer look at the ETF trends in the space with Andres Rincon, head of ETF sales and strategy at TD Securities. I asked him about what his team looks at. >> So I head the ETF sales and strategy at TD Securities, and I overview a group of traders and also sales at TD when it comes to ETFs, specifically. In short, what we do is we're liquidity providers of ETFs. And some of you might wonder what that is exactly, but we are the ones that make sure of the market function. We come in every day, and we read markets on over 1,000 ETFs on a daily basis. And this goes across a variety of asset classes and regions and whatnot, so we're very active, and all of our traders sit in front of that screen all day, making sure that we make markets on the ETFs in Canada. So we are really a technology business in making sure that there's a bid and ask out there every single day. If I had to put it into perspective, let me step back for a second-- ETFs, the word ETFs. So the key word here is "exchange." So it trades on an exchange. And how does it trade on an exchange? You need actually liquidity providers. You need somebody to put a bid and an ask on the board, and we are the ones doing that, to a degree. So when you as an investor go and buy or sell an ETF, you're interacting with either another buyer or seller, or you're interacting with a market maker. And that's, in essence, what we do. We provide bids and asks on the board on many, many different ETFs across a variety of issuers and regions and whatnot. Another big area, or another big responsibility of our desk, is actually to create a redeem on the fund. If you look at the mutual fund space, generally there's only two participants. There's the buyer or seller, and then there is the fund. In the ETF world, there's actually a third participant, which is us, the AP, the approved participant. And our job, once again, is to make markets, and as we accumulate positions in these ETFs, we create a redeem in the fund. And we are the only ones that are allowed to do that in the market on behalf of TD. We are the main market maker of ETFs, and we're considered the product experts when it comes to ETFs. >> I was going to say, in that market-making role, you're seeing the trends as they pass by your screen. So you got those eyes on it. So let's talk about some of those trends as a market maker. The hunt for yield-- obviously people are looking at yield in a different way now than they have in years. What does that mean for the ETFs? >> We've seen incredible growth in our space over the last few years, and yield has been one of the key areas. But I also wanted to touch on a couple of the other trends that we're seeing in our space. Number one, the majority of the floor is still in passive world, as you can imagine. ETFs, that's kind of the baby of ETFs. We're seeing a lot of money going into passive ETFs. But now we're also seeing a lot of money going to asset allocation ETFs, covered call ETFs, so on the topic of yield, and also fixed income is also another yield-centric product. In asset allocation, it is one of the main areas for ETFs, and these are relatively new ETFs. They launched-- call it five years ago or so. But they're seeing a ton of flow from advisors and seeing a ton of flow from mom and pop on the direct investing side. So it's a vastly growing area, and these ETFs, what they do really is they build an entire portfolio for you, so the one-stop shop, investing for you as an investor. So you have your-- let's say you can have your 60-40 or conservative growth, the whole spectrum. You can have it in ETF form. These are very, very popular. Now, you can also have covered call ETFs or any yield-centric ETFs, and these are very, very popular. We were talking earlier how a big part of the ETF space is now yield focus, especially for the direct investor. So covered calls is a great example of that. That's just a long call-- sorry, long stock and short call. But you also have boosted ETFs, which are very new in Canada. These are ETFs that give you a little bit of leverage, very, very small, and in some cases, they also do cover calls on those ETFs. These have become very popular because of their yields, sometimes 10%, 13%. That's very attractive to a lot of the investors. And we even have some new products called yield shares, which are doing the same thing but in a single stock, like an Amazon or an Apple, let's say. So these are really fascinating products that we're seeing here in Canada, and obviously you have fixed income-- >> How is Canada different than the US? Because in ways I feel like perhaps we have a bit of a different market than they do. >> Yeah, so relatively similar across the board in terms of coverage of the space, but we have a couple of areas that are really interesting. Number one, covered call, we were mentioning, about 5% of all the market in Canada. In the US, it's just 0.5%, so it's tiny in the US. Actually, we're almost the same size as in the US, and that's really fascinating how big it is in Canada. Crypto ETFs-- we have physically-backed crypto ETFs, which we don't have in the US, and you do have in Canada. Yield shares, I mentioned, is a new product that's only available here in Canada. But also there's a couple of different nooks here and there. You have actively managed ETFs are around 25% of the market in Canada. In the US, it's a very small portion, let's say. I think also, though, what's interesting is because we're in Canada-- we're not in the US-- US dollar-based or hedged products are also very big in Canada. >> I was going to ask you, I know that amid all of these very fascinating trends and everything that's happening, you've actually launched a new show. I think it's called Buyside Views. We want to show the audience a little clip of it, and then we'll come out of it and we'll talk a little bit more of the show. Let's show the audience. >> We think that the role of the financial advisor is only going to increase from here, and it's especially true for more affluent investors. I think that the financial advice is not going to get commoditized or robotized. And from that perspective, we see a lot of potential there, and again, a bit similar to what we did in Canada is the scale we can get. So you start with a series of independent, sizeable areas. But if you make them work together, the scale you have is better on a lot of fronts in terms of cross-sectional functions, but also in the way that you can approach external managers and get better terms. >> All right, Andres, so there you are in the anchor chair, the one asking the questions. Our conversation is a bit about the future of advice considering roboadvisors, all this chat about artificial intelligence. What kind of other things can people expect from the show? >> Basically we're giving our clients, our institutional clients, access to the different clients that we have here at TD, and we're allowing them to showcase their expertise and trends in the market. So we're going to see a lot more of that going forward. In this first case, we had CI GAM, the CIO, which is Marc-André Lewis, so we're very excited to see more of that. And these are publicly available, so you can have them on Apple Podcasts, Google Podcasts, and also Spotify, so we're really looking forward to that one. >> That was Andres Rincon, head of ETF sales and Saturday at TD Securities. Now, it's time for our educational segment. Let's continue our look at ETFs with Hiren Amin, Senior client education instructor with TD Direct Investing. Great to have you with us again. We want to look at researching low volatility ETFs. How do we do that? >> Yeah, let's get started. So the big question is first what are they? Low volatility ETFs are funds designed to fluctuate less than the overall stock market. They aim to provide market like returns while taking on less volatility in the overall market. In other words, they are giving you a smoother ride, being the shock absorbers whenever we had those big potholes in the way they achieve this is by investing in stocks that are less volatile as the name suggests. volatility references how much should you are stock swings against its average or mean price. So the makeup of these funds are really going to be from certain, consist of stocks from certain sectors that have exhibited less volatilityto the overall market, such as healthcare, the utility space and consumer staples. The idea of low volatility investing has been around for years. It's nothing new. But it really gained momentum and traction in the 2008, 2009 financial crisis. There were some financial investors that were really worried about stock market gains during that time and stock investors wanting to be more prudent with their investing. Low volatility funds delivers some better risk-adjusted funds over time than the market because you capture less on the downside. In other words, by losing less, you are winning more, which can lead to strong long-term growth performance there. Now, word of caution I should also mention is that with low volatility funds, they do not completely illuminate risk or prevent a loss during a downturn. They are defensively position to offer better protection during those market drawdowns. They also tend to underperform the overall market when it's doing well and exhibiting strong growth cycles. Now to get started for our investors who do want to look at low volatility funds, what we are going to do is jump into WebBroker. Once we are on WebBroker, we are going to click on our research tab and get over to our screen are still here first. What we have done is we've actually please set the screen appeared to save us some time and I'm actually going to walk our audience through the criteria that we have selected. Once we have the spiritual, we will head over to ETFs and I'm going to load up the low volatility's screener that we have. Before we load the results, let me show you the criteria we have chosen. We want to focus in on the Canadian landscape of stocks and ETFs. Then we have chosen the fund category. Under the fund category, low volatility ETFs are equity funds. What they invest and mostly it is stocks. We have picked the equity categories that were available to us in the Canadian space, so Canadian equity, global equity and US equity. We want to capture all that. Then we went to our ratings and risk section over here and these are going to be the hallmarks of what low volatility funds are. We have chosen standard deviation is our first measure. We talked about volatility a little bit and it tells about the swing that a stock exhibits against is average and the way to measure that is through standard deviation. So we are really looking for the lowest below average standard deviation on the stock. We don't want to experiences big swings. The other criteria we chose was beta. By the way, whenever you are choosing any of these criteria, if you want to get a refresher on what exactly they are, WebBroker does a great job of doing a quick explainer. The beta measures the volatility of the fund itself against the benchmark it may be tracking. For example, let's see the S&P benchmark is always going to be a one beta. So if you have a phone that's a 1.2, it would be a little bit more volatile than the index that tracks. So in this case, we want to have one that's going to be low to below-average with his beta. The final to be added are alpha and Sharpe ratio. Alpha measures the performance of the fund itself as measured against the benchmark. In other words, to put it in plain language, let's say a fund is tracking an index or do better than the performance of an index, lateen the S&P 500. Let's say what year the S&P does 10% growth performance of the fund returns 12%. In other words, the awful would be to if you take the difference between the two. So was able to beat the performance of the index attract. So we want to see if we can get better than average or average returns on the fund itself. Finally we have Sharpe ratio. This is a big thing. A lot of investors want to be able to capture those gains but minimize those losses. Sharpe ratio is a calculation that adjusts for risk one heading performance. We want to take on more performance without taking on more risk so we want the highest Sharpe ratio. If we populate our results over here, we can see there are a number of different funds that are going to appear. We have categorized it based on standard deviation to see the lowest and deviation point. I want to take our viewers through doing a comparison of a few different low volatility funds against the broad market index there. I'm picking the four I see from the list and we are going to go to our comparison tool. I'm going to load up the performance chart and we are going to first look at the last year. 2022 was a bit of a turbulent year. We also want to benchmark it against the broader market to see how it did stack up to the overall market. We can see on our graph over here that 2022, this is capturing the entire market, the 5000 universal stocks we have, it was underperforming to say the least and we can see these coloured lines which represent the low volatility funds, they were not performing as badly during the market downturns. There was a bit of an inversion here where we had the broader market in negative territory and the low volatility were able to have positive returns. But if we look at a three year window when we had that Bull Run happening, we concede the broader market definitely outpacing the low volatility funds. So while they did leg on the performance, they returned positive performance. That's a little bit on low volatility funds, food for thought for investors who may be risk-averse especially in the markets we are going through. >> Great stuff as always. Thanks. >> Are welcome. >> Hiren Amin, Senior client education instructor at TD Direct Investing. And make sure to check out the learning centre in WebBroker for more educational videos live, interactive master classes and upcoming webinars. There's been no shortage of headlines in the rail sector recently, but is there opportunity for investors in the face? I spoke earlier with Juliana Faircloth, industrials analyst at TD Asset Management about the outlook for the sector. >> So I think starting with why is the rails a place that investors might gravitate towards in the first place is probably an interesting place to start. There's a lot of reasons to like the North American rails-- not necessarily always the case. If we go back kind of 50 years ago, it was a very regulated industry, very competitive. There was dozens and dozens of small rail networks operating across North America. In 1980, the industry was deregulated, which sparked a huge consolidation wave, a lot of price competition, not necessarily a great time to be an investor in rails back then either. That started to stabilize, I would say, in the early 2000s, and the industry became quite investable through the implementation of something called precision scheduled railroading, which was pioneered by someone named Hunter Harrison. All that really means is a simplified operating model for the rails, leaving trains on a fixed schedule rather than at sort of random times at different days of the week. That's left a pretty attractive industry, so there's high barriers to entry. There's no new cross-continent rail networks being constructed, pretty limited competition. There's now just six class one rails left today in North America. Generally, the industry grows kind of alongside economic growth with GDP, and there's potentially some longer term opportunity to regain some share that was lost to trucking over decades of consolidation period. >> In the shorter to near term, if we're talking about a very-- because I have watched the rails over the years for that very reason, really tied to the economy and how things are going. We can't decide, I guess, as investors, or even pundits can't decide, is there going to be a recession, or are we already in a recession. Will it be soft? Will it be hard? What kind of landing are we going to get? Is that's something you need to be aware of in the near term if you're thinking about the rails? >> Absolutely. So again, since it's quite an economically sensitive sector falling within industrials, volumes are very tied to GDP growth and general economic growth. So the path for the broader economy is certainly important over the near term for the rails, and so something that investors should be watching closely. >> You talked about consolidation over the years in the railway sector. Of course, we have a deal that's been around for quite some time. What's the latest on what's happening with CP? >> Absolutely. So yes, the CP acquisition of Kansas City Southern has been topical for a couple of years now. We're in the very late stages of that development. The Surface Transportation Board, which is the regulator for North American rails, is in the very final stages. We really should be expecting a decision imminently. It could be within the next couple of days. So that is kind of the situation for Canadian Pacific, and again, that's quite a transformational deal for the industry and for Canadian Pacific specifically. It will create the only single rail network that joins Canada, the US, and Mexico. So there's all sorts of opportunities that we can think of that that would stimulate for Canadian Pacific. >> Yeah, when you take a look at the map of it, it's quite the footprint that would come on the other side of that deal. Does that leave much opportunity going forward in this space for any other mergers or consolidation? Are we sort of seeing all the marriages we're going to see for a while, do you think? >> I would say it's probably pretty unlikely to see any large-scale M&A within the rails. This will, again, bring the class one rail count down to just six rails operating in North America in a lot of instances, kind of depending on the region and the area within the network. One rail is really only competing with one other rail. So from a competitive perspective, you're probably unlikely to see anything of that size again. >> OK, apart from corporate activity, M&A activity, of course, we have seen derailments, as well, most recently one in Ohio, I believe, that caught a lot of attention because of just the massive burn that was involved. I mean, what do investors need to think about when they see headlines like that? Because those aren't positive headlines for the space. >> Definitely not. It's a very unfortunate situation. Just for a bit of context, so a Norfolk Southern train derailed early in February in Ohio, as you mentioned. It happened to be carrying hazardous chemicals that were then burned and has had a tragic impact on the environment and on the community there. In terms of what caused that, the investigation is still underway trying to determine whether that was a mechanical error or operational. Was it human error? That is yet to be seen. For investors, I think what's important to consider is there will likely be a regulatory impact from this type of event. I believe, last night, there was a piece of legislation kind of put in front of the house related to rail safety that will call for additional safety measures, a higher degree of fines going forward for any large rail wrongdoings. So it's definitely a cost to think about going forward for all of the rails. And then safety has always been a big priority for the rails, and it should be a priority for investors. It's something that we have engaged with management teams on in our discussions and is part of our investment process, and so that should be a consideration for all investors. >> We've covered a lot of ground, and there's even more ground to cover in terms of the headlines around the rails recently. Now, I'm thinking of the headlines we saw just in recent days about Union Pacific, an activist investor pushing for change there and, seemingly, getting some change at the very top. >> Yes, so you're right, no shortage of headlines within the rails. So on Sunday, an activist investor in Union Pacific sent out a presentation and a letter calling for a change of management. Later that day, Union Pacific sent out their own press release saying, we've been working on succession planning and hope to have a new CEO in place by the end of 2023. A bit of background, what drove that-- Union Pacific in the context of the US publicly listed rails has a advantage network. It's a longer length of haul, which means there's less competition from trucking, and the business mix is pretty nicely diversified between intermodal, which is consumer-facing volumes, industrial volumes, and commodities-- so a nice balance there. I would say, in light of that advantaged network, the management team has not executed up to the company's full potential. So that's what kind of opens the door for these types of activist investors. It's a great reminder that, of course, when we look at any company, understanding the management team, their track record, their skill, and level of execution is always important. The rails is a particular industry where we have seen management changeovers drive very significant improvements in operating results and very divergent stock outcomes. So very curious to see who ends up in the seat at Union Pacific. >> That was Juliana Faircloth, industrial analyst at TD Asset Management. Before we say goodbye for the week, let's check in on the market.There some green on the screen. Not a bad way to go out. 226 points to the upside on Bay Street with the TSX Composite Index, that's good for a gain of more than 1%. Noticing some of the mining names getting a bit today. Kinross Gold may bid off the highs from earlier. Still in positive territory. Also want to take a look at Suncor, some of the energy names were rebounding in recent days. At 4798, God Suncor up one and 1/2%. South of the border, let's check in on the S&P 500, that broader read of the American market. We got some indication this week though the labour market is still pretty tight south of the border. We did have the US 10 year bond yield earlier this week getting about 4% and holding. I want to check in on the tenure, it has dropped modestly below that 4% level. It seems to be sending some relief into the equity side of the market. 44 points, we will call that, to the upside, a little bit more than a full percent for the S&P 500. The tech heavy NASDAQ, how is it varying? A little bit better. Risk appetite is up today and the check names. Gotta hundred and 55 points the upside, 1 1/3%. We check on Apple earlier in the show, the mega-cap names, Amazon as well of benefiting from this sentiment, it's up a little bit more than 2%. Of course, we go off the air for the weekend. We'll be back on Monday with Derek Burleton, deputy chief economist at TD. We will be taking all your questions about the economy. You can get a head start on this question. Just email moneytalklive@td.com. That's all the time we have for the show today. Thanks for watching. We will see you next week. [music]