Market Insights

[music] Hello I'm Greg Bonnell and welcome to MoneyTalk Live brought to you by TD Direct Investing. coming up on today show: Money talks Kim Parlee will break down the big jobs numbers on both sides of the border in market reaction. We will have a look at whether oil production cuts from OPEC and its allies mean higher prices are here to stay with TD Asset Management Hussein Allidina. We will also hear from TD Asset Management head a public, Justin Flowerday on whether an earnings recession is on the horizon. Plus on today's WebBroker education segment, Nugwa Haruna will be on the shelf to show us the asset allocation tools available on the platform. Now let's get you an update on the markets. A deeper dive in just a moment's time with Kim's on-the-job numbers. We saw job editions on both sides of the border. You can see the TSX at 18,702, down 276 points a percentage and 1/2 to the downside. We are seeing money though moving into the crude oil space. American benchmark crude prices, names like Cenovus Energy in positive territory to the tune of 1.7%. Given back in some of the gold-mining names, after some gains earlier this week. We have Barrick Gold down to the tune of about 21 bucks and changes share. South of the border, the reaction to the jobs report,… The S&P 500 is under some pressure. Last time I checked, NASDAQ was even more to the downside, with mega Tech names feeling the pressure with the US labour market report, the NASDAQ down more than 3%. Let's check on Microsoft. Mega Names in the tech space, some pressure on this front. Microsoft down a little more than 4%. And that's a market update. Joining us now for a deeper look at the jobs numbers that we got and the market reaction is the host of money talk on BNN Bloomberg, Kim Parlee. Great to have you here. What you see at their question my >> Yeah well I mean you talked a bit about it Greg. In terms of the market reaction this morning in terms of jobs numbers and the headlines, 262,000 jobs created in the states depending on who you're listening to, consists as I think was around 252, 55. … Expecting 300,000 jobs created in the months of September. Unemployment rates just about 3 1/2%. So, interesting to see the numbers and what I will say is that as you can see on the screen, these numbers came in, you know, at consensus. But what they are not showing is a slowdown in the labour market. The reason we care so much or at least market watchers care so much about these numbers is one of the big contributors to inflation is labour inflation and of course that is something that the Fed is watching in terms of inflation and what's happening with rates right now too. So TD Securities came out and I think, this sentence kind of says it all: the strong reports should keep the Fed firmly on its hiking path." The idea that depending on different market watchers, what you are looking at this morning, I think it really, from TD Securities perspective, almost cements the idea that you will get a 75 basis points increase from the Fed at the next round. And that's part of the reason we are seeing what we are in the market now. On top of this too, I will add that it shows about the sticky inflation. Not the actual NFP numbers. They don't talk about commodities. But at the same time you got this labour inflation that seems to be a labour strength that is staying in place adding to the mix. You have some oil price movement to the upside which, again, increased inflation. I think it's bringing that sticky narrative back into the conversation. This is not so much maybe when the Fed is going to pivot, but rather when the Fed is going to pause. Because it looks like, at least from September's numbers, it is still a very tight labour market. >> Of course the jobs is a very key an important piece of data that comes in. Investors watch it so carefully. But we have a lot of other big data points on deck in the coming days. We know these markets have been volatile, cam, we talk about getting inflation numbers, retail sales numbers from day-to-day. It's going to be pretty interesting to track everything. >> Yes. Next week, to your point, we will get CPI numbers of the states. These are September numbers. So month over month, .3%, .2% increase in inflation. That core inflation number that people will be watching really closely. The minutes are coming up next week, retail sales will come out next week. Keep in mind the driver of the US economy so understanding what is happening there is going to be important. Actually, I think even more importantly, really interesting over the next 2 to 3 weeks, you talked to Justin Flowerday about this in the past while but it's the earnings numbers. Because with earnings comes guidance. We are going to start hearing for more companies about, you know, what is happening in the coming years. From many of the analysts I've talked to, we are coming to the end of the calendar in fiscal year. Coming up right now. So companies, fresh slate, starting in January, you might get a very different guidance going ahead in terms of job cuts and those types of things which again, will feedback into those numbers and go forward. So there is still a lot to come. But I will say, right now what we are seeing as we are not seeing any softness of the labour market. Did you want to touch on some of the Canadian numbers to? They came in as well today. >> Likes to Canada. It's been a losing streak for this country and the world cares about what the Fed will do next and we as Canadians care about what the BLC. > We saw 21000 Jobs Created in September. Jobless rates staying at around 5.2%. To your point, we had gains as opposed to losses. So I know that's good news or bad news because again, the strength in the labour market is an issue that will be looked at here. James Orlando put it here in a very nice visual. James Orlando, from TD economics that is. It's clear that the labour market in Canada remains tight. Again, I don't think there's anything here that's going to have the bank of Canada make any changes, you know, to the Outlook based on what they said yesterday. So still a tight market. Unemployment rate in Canada, as I mentioned, fell about 5.2% and to echo the note that came out from TD economics today, it said to echo government comments from yesterday. Simply put, there is more to be done. I would say the number that came in today just reinforces that. >> Cam. Great to have you off the top of the show to break it all down for us. >> Pleasure. Thanks so much Greg. >> Kim Parlee, host of money talk on BNN Bloomberg. Plenty of fear is in the market as we approach the season with potential for an earnings recession. Of course that is economic growth slows. Justin Flowerday, Head of Public Equities at TD Asset Management, join me earlier to discuss. >> I think it's really important to take a step back and think about where it came from. We came from really good place. Earnings have been really resilient. Providing huge amount of cash flow for the energy sector. That's provided for the broader market earnings. We've seen companies do a pretty good job managing costs and that's been supported. the really great companies out there have been able to pass off revenue for customers. So that is provided a nice, steady earnings flow from here. Going forward, it's going to be tougher. we have seen the early signs of some cracks in the market. You've seen PMI's rollover. across the world. We've seen it weaker in the US and we started to hear some announcement from companies that are talking about things getting a little more difficult. >> A little more difficult. Let's dig into that. As we go through this earnings season, obviously companies will earn their way depending on what they show us. But are all the storm clouds gathering on the horizon in terms of an economic slowdown, recession, slaying inflation : will this just way in in the longer term question mark >> Yeah. I think it's happening isyou have that some a rally. That took away some of the edge for companies thinking "this is getting bad and we need to do something." . It allowed them to take some timeand say maybe things are not as bad. It turns out that rally dissipated. I think going into the end of the year, you have all the incentives for companies and management teams saying "look, we are seeing a challenging environment. . 2023-- as we're providing guidance and updates for 2023-- is not going to look like 2022. And we can start to begin to see the market take down expectations to a more reasonable level. >> Now I understand that your team's done some interesting work on the relationship between stocks and inflation, because of course that has been the key concern all year-- inflation, and what the central banks are going to do to try to slay it. >> Sure, yeah. No, we did a little study recently, because you hear a lot about, you know, inflation is really bad for asset returns and really bad for the economy, and we just wanted to put some facts around it. And it turns out inflation, if it's high and sustainably high, is not good for stocks and bond returns. And you'll see some negative real rates return if we're in a 6%, 7%, 8%, 9%, 10% inflation environment for a prolonged period of time. Deflation-- obviously not good. The sweet spot was 1% to 2 and 1/2% inflation. That's when equities do the best, and that's kind of where we've been living for the last decade or so. And then this last one, which is moderately higher inflation-- 2 and 1/2% to 4% inflation-- it was interesting because you saw stock returns of around 10% or a little under 10% in that environment, and bond returns of over 7%. So moderately higher inflation, which is where we think we're going to live for the next five years as the fed starts to crack the labor market and take some pressure off the economy. We think we'll be in that 2 and 1/2% to 4% range. It's not a bad world for stocks and bonds. >>Not a bad world for stocks and bonds. That's what we like to hear longer term as well. All of this volatility that we've seen-- you get the summer rally, you get a sell off on the back of that. September was miserable. Thank god September is over, from an investor's point of view, even though the weather's getting colder. Then you get a rally again. I mean, when you step back and sort of just try to take a breather from the day-to-day, how should we be thinking about the market? >>Yeah, a few different things. I've talked about earnings. I mean, you have to always think about what does valuation look like? If you're ever making a buying decision to either buy the broader market or buy individual stocks, what's the valuation set up? And when you think about that, we started the year at over 20 times earnings for the broader market in the US. It may have been 22 times earnings in January. we have come down now to 16 1/2 times earnings. So that's more of a reasonable entry point and probably more more in line with historical averages. So you're not going to see, necessarily, a valuation headwind from here. Probably not a tailwind, either. And then the other way to look at it is stocks versus other asset classes. And one of the tools that we use to gauge how attractive that is is the equity risk premium, which essentially says you can invest in a guaranteed rate of return-- T-bill-- or you can invest in equities, which have, obviously, an uncertain rate of return. and,, how much will you get compensated it over time, you get a sense of what a fair equity risk premium is. Right now it's about 2.75%. Kind of in line with long-term averages. again, not much of a headwind or a tailwind either. >> As a storm cloud arises, the idea that the central banks try to bring inflation under control, they will tip us into a recession. First a soft landing, then us hard landing… A lot of people are in a pretty negative space. So if we did end up in a recession, what are the chances and what is it look like and how do we handle that as investors ? >> If we end up in a recession, the earnings will probably be down on a year-over-year basis. And so we need to have a reset of expectations. The Fed told us that they want to send us into a mild recession to try and make a nice balance there. Avoiding a deep recession. Obviously. And if we get earnings estimates coming downfrom 225 down to $215 from the S&P 500, that's okay. What we don't want to see is the types of things we saw in 2007 and 2008 or 2001 were use our earnings really, really come down a lot. And we think there is support for earnings to come down. But there is support for them to not get completely destroyed. So, for us is a lot about earnings and a lot of the pain has been felt. We are down for the year now. NASDAQ is 30% off. The S&P 500 is below 20% off from the beginning of the year. So the market has anticipated some of what we are going to see in terms of earnings declines in the next year. >> In terms of how to handle that environment, it sounds like we need to be nimble. >> Yes. If you say "I think this is going to happen and just ignore everything from this. On" you probably will not be to the place. >> Absolutely. There will be some companies that are not going to survive and are not going to do as well. Because they have been receiving capital essentially for free for the last five or 10 years. Liquidity is going to dry up so we spent a lot of time looking at quality and evaluating the companies that are going to be able to gain share throughout the next one, two, three years during a difficult environment in companies that are going to have price power. But it's going to be really important to avoid those companies that are going to have their funding dry up. Some of those companies won't survive and that can lead to a destruction of wealth that you're going to want to avoid. >> That was Justin Flowerday, Head of Public Equities at TD Asset Management. Now let's get you an update on some of the top stories in the world of business and take a look at how the markets are trading. Oil is enjoying its strongest weekly rally since early spring. That in the wake of OPEC's decision to cut production by 2 million barrels a day. Investors continue to wait tight supply against fears of an economic slowdown that could hit demand. And of course China's appetite for oil and the fate of its zero COVID policies are proving to be a bit of a wild card in this space. Right now we have a gain of West Texas intermediate that is quite handsome to the upside. Shares of AMD are in the spotlight today that after the chipmaker warned its third-quarter sales are looking weaker than earlier forecasts. AMD is pointing to weaker demand for personal computers and supply chain issues for this office on the top line. The news is also weighing on shares of competitors Intel and Nvidia amid concerns about a slowdown for the sector. Weaker demand and a strong US dollar are pressuring the earnings forecast at Levi Strauss. Inflationary years of a recession of consumers shifting spending dollars away from apparel items and towards household items. And the surgeon the greenback this year means overseas revenues are less lucrative as they are repatriated into US dollars. Let's check in the market now the TSX. We are seeing a surge in the price of crude. Somebody moving into the big energy names, overall it is a down session. 18,693, down 285 points, 1 1/2%. South of the border, of course the reaction to the US jobs numbers today, investors have decided to take it as a negative. that broader rate of the American market, a loss of more than 2%. Some of the mega tech names getting hit particularly hard south of the border. Things are finally looking up for the airlines and most COVID travel restrictions have come to an end and that travel chaos that we've seen in many of the airports through the Summer is easing. But will a possible recession on the horizon erect that rebound? David Mau, Portfolio Manager at TD Asset Management join me earlier to discuss. >> The beginning of the year, the spring was great, the Summer was even better. It looks like the third quarter that just ended a few days ago at the end of September is also going to be pretty strong. So based on, you know, the numbers that we are seeing what the airlines are telling us, you know, the fourth quarter, going into the holiday season is also looking very, very robust. Travel bookings, both for leisure and business, those fares are being snatched up and we know that ticket prices are basically higher than they were pre-pandemic. So all in all, it looks like a good year for the airlines. The outlook looks pretty decent. What is uncertain is what's around the corner in 2023. If we are headed into a recession, if this first wave of pent up travel demand has passed, what is that also mean for next year? I mean, the good news is the airline industry Association predicted 2022 would be the first year since the pandemic began that airlines would be profitable. So it is been three years since airlines have turned a profit and it looks like this year they will finally be able to do that. >> And when we think about a return to travel this year, it seems that the leisure travel was the first thing to resume. No restrictions people can fly where they want. Not having been anywhere for a while. Business lagged a little bit. Businesses now picking up two. How did those two different sort of silos of whether you are travelling for pleasure or business, react to bad economic times? Did companies cut back dramatically? >> Yes I think for regular leisure travel, you were either losing your job or getting fewer hours at work, you're also being impacted by high inflation, so prices for other things are going up, travel and vacations are one of the first things that you cut. Right? So that's obviously going to be impactful for companies. Right now we are seeing a lot of companies talking about starting to talk about rather, layoffs or cost-cutting measures. So that might even be more impactful for the airlines. Because travel is only a small part of the overall passengers but it is a big part of the airlines profit. >> Anecdotally, I have heard as far as the band goes right now, there are perhaps not enough seats to fill all that demand. People are saying "if you don't get on this flight, you can get on a later flight…". It seems they could benefit by bringing more seats online that sounds like a risky proposition given all the uncertainty. >> Yeah. And I think in general, North American and European airlines have kept their capacity lower than what it was prior to the pandemic. I think in most cases, airlines are flying 5 to 10% fewer flights than they used to. But those flights are full. They are more than 100% full. So what you just mentioned, flights being oversold and let's say there are 300 seats available on a plane, the airline will sell 310 seats and hope 10 people show up. But what we are seeing is that all 310 people are showing up. So there will be 10 unlucky people who paid for the flight and are knocking to get to her this was to go. So, as the airlines keep this capacity lower than what it normally was in the past, they are actually able to operate with fewer staff. We all know that airlines are short on staff both in the plains and on the ground. A lot of the pilots that left over the last two or three years have not come back to the industry. Some of retired, some have moved on to different careers and it's very long to train new pilots. There's a pilot shortage going on right now. If the airlines can manage fewer capacity levels and still make money and fly flights that are 100% whole, they will probably continue to do that for at least a little while. >> Does that put them in a better position in the event of a recession? It's in pretty well telegraphed. From the central banks, what they are trying to achieve, it's in pretty well telegraphed from the people who make economic productions that they think you cannot avoid a recession if the Fed or central bank are really serious of bringing inflation down. But if you get that warning, can you prepare for it as an industry? I just think about the pandemic now. Everyone including airlines are just blindsided by. >> Yeah. Everyone was caught off guard. But these lower capacity levels, when the downturn does come, the airlines will have less work in terms of producing a more capacity. So for now, it's probably a good thing. > Fuel costs. Obviously pre-pandemic times, talking with the airlines, we started to be worried about a huge expense for them. There has been a lot of, I guess, volatility in that space as well. Yesterday, we had Justin Flowerday in the program and he said "I can sit here and make a case for $60 oil and I can make a case for oil about $100. " How does the airline industry deal with that? >> A lot of the airlines will have some kind of commodity hedging program in place so they will have zippers of oil. But the thing is, not everyone doesn't and not everyone hedges 100% of their oil exposure. Because, like you said, the price could go up or it could go down. So the kind of want to be in the middle. They don't want to completely hedge and then miss out on potential upside of all prices coming down of oil prices coming down rather. Depending on whether hedging program is, some airlines would be more or less affected by the volatility in the oil prices. >> I understand you were on a trip to Europe recently. Obviously different geographies will feel different amounts of pain in a recession. Depending on what's happening geopolitically. In Europe, obviously, a pretty unique situation with the crisis in Ukraine. > Yeah. I mean, you know, European companies facing challenges that North American companies are facing now. High inflation, higher prices, higher interest rates. The one additional headwind that they have right now is their dependence on Russia for natural gas. Natural gas is a big part of what the use for heating and for running the factories. So, obviously with the sanctions on Russia right now, Russia not providing the same amount or same volume of gas that they did to Europe in general and Germany in particular, it is creating an additional headache and a lot of uncertainty for companies there. Not just for companies, for households as well. You know, they are unsure how they will heat their homes this winter. >> That was David Mau, Portfolio Manager at TD Asset Management. Delegates were educational segment for the day. On the chopping markets, you may consider adjusting the weightings in your portfolio and WebBroker as tools which can help. Nugwa Haruna, Senior Client Education Instructor at TD Direct Investing does this look at how to manage your asset allocation on the platform. >>They may consider asset allocation as well as does it diversification. The idea of utilizing these tools, it's a way that would help investors manage the risk when it comes to investing. Now, let's go into WebBroker and we will show you how investors can find the distant different asset classes they could they could potentially utilize when creating their investing portfolio. Under "accounts". Investors can click on asset allocation. The idea behind this being the different asset classes tend to respond in different ways to different market conditions. So investors once again, trying to manage the risk and potentially the volatility in their portfolio. Just consider asset allocation. Investors would be able to see, you know, what the breakdown is in terms of equities, asked income as well as cash equivalents in their accounts. Now, investors who want to have a better understanding of how these investment's work, maybe I'll do that by clicking on the help button. What this does is it gives investors a breakdown of these different asset classes as well as how they tend to respond in different market cycles. Now investors may actually have a question and they may say "what on of the time or the information to create a robust investment portfolio?" That's where investors could potentially consider using investment funds. So there are different asset allocations investment funds that are available to investors and they can select these funds based on what their investor profile would be. So let's take a look at where investors could find these different kind of investment funds. Under "research", under "investments" investors will click on exchange traded funds or "ETF's". We will use the mini screener tool which allows investors to use different criteria to select different kinds of Securities and under "ETF category", we are going to click on this drop-down and in this situation, let's click on exchange funds that have up to 50 to 70% when it comes to equities in that portfolio. And it shows us 22 matches. So I'm gonna scroll down to pull up these 22 exchange traded funds here. Then, investors will be brought to a page with a breakdown of these different exchange traded funds. One more thing to show us is if you actually want to see what exactly is each exchange traded fund holding, I'm gonna select one here on the screen. I'm going to go with MD IV once I click on it, I can actually click on "summary". The idea behind this is I actually want to see what the breakdown in the asset classes are. On this page, I can scroll down, focusing on the left side of the screen here. Then I can start to see what that breakdown is. So I can see that this particular exchange traded fund has about 60% of US stocks or equities including some non-US equities. It also has the holding of preferred shares, over 20%, preferred shares are a hybrid between stocks and fixed income Securities. As well as the US bond and some non-US bonds. Investors can see the different sectors. This specific exchange traded fund is invested in. They can see the geographic region and finally, investors are able to see what the top 10 holdings that the fund managers are holding in this exchange traded fund. So once again, investors are able to utilize these tools when they are looking to have some kind of diversification in their portfolio. As a way to potentially help them manage the risks of investing in the markets. >> That was Nugwa Haruna, Senior Client Education Instructor at TD Direct Investing. Make sure to check out the learning centre and WebBroker for even more educational videos, live interactive master classes and some upcoming webinars. Let's check in on the markets right now. both economies, jobless rates are pretty low. You of the TSX right now, 321 points, down 1.7% right now by my read at the lows of this session. You are seeing firmness in the price of crude. That does have some energy names in the upside but definitely pain in the tech trade today. A check on Shopify here at home. Almost 9 1/2% pullback for the name. Some of the mining names, remember that today rally we had to start the month of October and the fourth quarter of the year of the thought right now, $6.66 a share, down almost 5%. South of the border, here is the market reaction of course, this is the first as Kim Parlee was telling us at the top of the show of many key data points that we will be getting in the next several days and several weeks, whether the next inflation print out of the US economy, retail sales are all things going, watching very carefully as investors. Today's reaction of the jobs report, 263,000 positions. 3 1/2% jobless rate, and hourly earnings being up 5% over the year. Decidedly to the downside. 89 point deficit for the S&P 500, more than 2 1/3 of a percent. The tech space getting hit hard with the NASDAQ down to the tenant about 3%. Some of those mega CAP tech names. Amazon right now at 114, a little shy of 115 bucks a shared animal sport out percent. One bright spot in the market today is oil and oil is been on the rise after dipping below $80 a barrel just last week. Of course there are concerns about slowing growth. How will this tug-of-war between tight supply and potentially weak demand play out? Hussein Allidina, Head of Commodities and TD Asset Management gave us his outlook and reaction to the recent OPEC + production cuts. >> OPEC announced a 2 million barrels a day production cut which I think was larger than clearly the White House wanted. I think a little bit larger than what the market was anticipating. Relative to their actual production levels, many of these countries were not producing at the target levels. We talked about the issues around spare capacity. The actual cut is probably around the tune of 800,000 barrels a day. It is concerning given where imageries are. Frankly since the pandemic lows, they continue to draw demand. We know into the fourth quarter increases seasonally were kind of in a trough. Right now we are not driving as much and heating is much as we move into November and December. Dimension increase there. What keeps me up at night Greg, the concern is obviously the macro. The putting on how bad economic growth gets. That will have an impact on oil demand is a concern. Ultimately, we look at the balances, balances her tight. >> The White House is not happy. What can they do at this point? I can imagine it plays itself out… > If we look at the Biden administration in March of this year, they announced they were going to draw the equivalent of about 1 million barrels a day out of the SPR. If you look at conventional imageries, ignore the SPR, the picture does not look so bad. But if you look at the total picture and what's been coming out of the SPR, imageries aren't remarkably tight levels in the US. You know, to your question, what could Biden do? He could potentially announce a continued drawdown from the SPR. But we are getting to levels where it's quite concerning. There is some discussion about relaxing sanctions on Venezuela. Stories yesterday that came out with the White House is potentially considering relaxing sanctions on Venezuela to allow Chevron to increase production there. The truth is you will be able to get a supply response immediately. So it's a bit of a pickle for them. >> Great looking graphs. We to show the audience the inventory ones and we will talk on the strategic reserve and what they've been up to. Oil production levels in the states? >> Early this year, analyst estimates were that US production was going to grow by 1 million+ barrels per day. From start to finish. If you look at the graphics up the right now, we are up five, 600,000 barrels a day. Again, this talks to the shortages of labour. The shortages of material as well as the desire for many investors cannot see companies growing production because of the SG issues. So again, I don't, if we look at supply and demand whether in the US or globally, the fundamental picture is extremely tight. And continues to tighten. You know, I think the only reason that oil is trading at 80, 85, $90 a barrel and not higher, is because of this concern around what tomorrow brings. If you see a material contraction in economic activity, that will play into weak oil demand. However, when you look at the history of oil demand, there is only a couple of occasions in the last 50 years were demand has demand declined rather in absolute terms. That's been around the pandemic in the financial crisis in an earlier in the early 80s around the Iraq war, the mid-seventies around the embargo. If you believe in GDP growth, you have to believe that oil… It is the oil that is firing up the GDP. This chart, viewers can see US implied oil demand. It's in the average range. Of where we have been for most of the year. Weaker than 2019 but not capitulating. And I think, without capitulation in oil demand, our inventories are headed to procure it precariously tight levels. >> Once you get into the oil trade and you understand terms like… These terms start getting thrown around, walk us through this next picture. >> This is super important. Particularly for commodity investors. Backwardation is a term that is referred to when the forward price of whatever commodity you're looking at today, we are looking in oil, when the you forward price is trading at a discount to the price today. Today the price is trading at a premium. So notwithstanding the fact that the flat price that you see on the screen has come off from the hundred plus that we were out in the Summer, the backwardation the market remains as pronounced. Refiners, those that actually consume well, to make the end product that you and I consume, are still willing to pay a material premium to have at all today. Versus waiting till tomorrow when they can get a discount. This underscores the tightness in the market. If imageries were not tight and not drying, you would see that backwardation fade and potentially move into… Ultimately that backwardation is staying as pronounced if not more pronounced which I cannot underscore how tight the balances. >> This last picture to show the audience, why you show us the plays in the oil trade? >> Again, worried about economic activity. As we head into, you know, the fourth quarter and into 2023, but if you are constructive while like I am, that speculative length is a very low level. It's encouraging. You are seeing a tremendous withdrawal in the market from noncommercial partners. The fact that SPEC length is low is encouraging. >> So in terms of the greater risk, we touched on some of them obviously. But OPEC recently did have… What about the Russia situation? In terms of their supply of crude it to the world? >> Great question. They are sending less natural gas to Europe but Russian exports of crude oil this year have actually been higher than they were in 2021. December 5 is an important date because that is when we are supposed to see sanctions on Russian crude. As it has not happened yet. I think about the checklist of where we are heading, the Russia situation is either flat or positive for oil prices because you will easier see the same amount of crude that doesn't import or you will see less. When you look at the SPR that we talked about, those sales conveniently around the midterms in the US, a million barrels a day of supply coming out of reserves available to the market. Seasonally by demand, increases moving into the fourth quarter and we talked about that at the start. China has been largely absent from the market. This year, demand in China is weaker than it has been at any point since 1991. If China reopens, imagine you see incremental demand in China. So the list of things that are positive for oil are definitely longer than the lists that are concerning which is again, economic activity. >> That was Hussein Allidina, Head of Commodities and TD Asset Management. A quick check in on the markets before we say goodbye for the week. It was such a strong start for the month of October and the fourth quarter and those back-to-back rallies to start off the week. We have some downside pressure. Jobs Friday on both sides of the border. Our big take away is that both economies, the unemployment rate is still quite low in both economies. Definitely something for the central banks to chew over when they try to decide how much more aggressive they need to be on borrowing costs going forward. Here in Bay Street, 18,641, the TSX down 337 points, 1.8% of the downside. You are seeing however, a bit of strength in the oil trade. You do have American benchmark crude up almost 5%. On this session. The S&P 500, reacting to jobs Friday, right now down to and 1/2%. Some of the maggots CAP tech names are under pressure, Microsoft, Amazon… Let's check in on the NASDAQ. Let's see how it's bearing with that broader market. Down to half percent. We have the NASDAQ down. A bit of drama there. My screen it's down 3 1/2%. You just have to take my word for it. Our programming though, there will be no show on Monday of course as we celebrate the Thanksgiving long weekend. We are back on Tuesday. Our guest will be Scott Colbourne, Managing Director for Active Fixed Income at TD Asset Management. He wants to take your questions about fixed income. So you want to get them into us. You can wait till the show starts, feel free to get a head start by emailing us your questions that moneytalklive@td.com. That's all the time we have today have a great long weekend. [music]