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[music] >> Hello, I'm Greg Bonnell. Welcome to MoneyTalk Live, brought to you by TD Direct Investing.
coming up on today's show, we are going to do a dive into the data that came out of Canada this morning that shows some gains for November. What could the bank of Canada make it all? Our MoneyTalk Analyst Centre guide to talk about it.
Plus TD economist Maria Solovieva looks at whether the Canadian consumers getting into the holiday spirit even with inflation still high.
And in today's a broker education segment, we are looking at ways to track global exchanges on the WebBroker platform. Jason Hnatyk of TD Direct Investing will join us.
Before that, let's get you an update on the markets. It's the last trading month of the year. Let's see what the TSX Composite Index is giving us.
Got some green on the screen, but 130 points to the upside or about two thirds of a percent. Among some of the most actively traded names, oil is stabilizing, bit of a rocky road yesterday. That OPEC meeting, will they or won't they, reports they were going to cut deep into her production and reports cast aside on that front. Today we are getting some stabilization in the price of crude and some of the big energy names.
Canadian Natural Resources, we will call that 2% to the upside. As spectrum auction yesterday that the street things went pretty well for the big telcos. They are all on the move higher today. Tesla leading up about 2 1/2%.
South of the border, Jerome Powell at a fireside chat in the past hours saying what we've already heard.
You want to talk about cutting rates, it's premature. We could hike again if we need to. Bond yields continue to pull back and the stakes. Continues to be it supportive of the equity market. You got the S&P 500 up almost half a percent.
Let's check in on the tech heavy NASDAQ.
We got some green on the screen but it's still a little tepid. 23 points, little more than 1/10 of a percent. Pfizer, some disappointing news out of the name. A lot of their competitors already have well established and marketed weight-loss drugs on the market. Pfizer has been trying to push a product in that space. They are pulling back on one of them right now.
At 2922, you got Pfizer down a little more than 4%. And that's your market update.
We got fresh numbers out of the Canadian labour market this morning, a gain of 25,000 new positions overall for November.
Joining us now is some analysis, MoneyTalk DIY editor Susan Prince and markets editor Anthony Okolie. Great to have you on the Friday panel.
>> Great to be here.
>> So who wants to run the numbers for us?
>> I could take a quick look at some of the numbers. The numbers were 25,000 jobs created. Pretty modest.
Markets were accepting 14,000. We did see an uptick in the unemployment rate to 5.8% and we have seen this increasing since April. When you look at some of the details, full-time employees, that was a big driver, particularly in the cyclical sense of the private sector. That fuelled a lot of that job growth as well.
That was a main driver there.
This is the strongest performance since October 2022 for the goods producing industry, followed by manufacturing and construction. We saw weakness in areas such as trades, services, finance, real estate and some of the things that were key and there were total hours worked were down and also wages were fairly strong although it was flatter in October.
>> Those of the numbers. Susan, what are we making of the numbers? Every number counts so much now.
>> It really does count a lot.
The data that's coming out, I feel like there's something for every type of economist you are.
On the one hand there's this, on the other hand there's this, and that's the case with the employment rate.
We take a look at the numbers are looking at in the numbers you been talking about.
We've got 25,000 net new jobs in so it's like, okay, that's a good sign. Job growth, employment is slowing. Here is where we start getting into some of the sticky stuff.
78,000 new population increase of 78,000.
So 25,000 net new jobs, population increase of 78,000 and labour force boost of 36,000 so even if you take the 36,000 and the 25,000 number, you can see where we are seeing a little bit of tightness.
It's a little harder to find a job.
And so the numbers are, we come to this hand and the other hand. On the one hand, those numbers are good because they are helping us tame inflation.
On the other hand, you may know someone who is having more difficulty finding a job, so you feel that. So these numbers are interesting for that dichotomy.
>> The Bank of Canada now has these numbers, the GDP numbers from yesterday for the third quarter, they have an interest rate decision next Wednesday.
They've been trying to cool the economy and tame inflation. What's the thinking, Anthony, in terms of the numbers even getting this week?
Could the BOC maybe not a clear mission accomplished but at least ease up?
>> When you take these two data points together, I think, according to TD Economics, they believe that the below trend growth we are seeing is going to continue over the next couple of months.
That should push inflation gradually board's the 2% target. They think these two data points will give the Bank of Canada and of time and confidence that they can pause at the next meeting and not raise interest rates. They think that this will give the Bank of Canada a few months before they start preparing the markets for rate cuts which could start as early as April 2024.
>> Yeah, that's been a bit of a shift from the bank here, first we were talking early summer and now we are talking into the spring. Before we move on from jobs, any final thoughts?
>> There were a couple of things that were interesting about this number. One of the things is disconcerting to me. If you take the GDP number, we just talked about the increasing population, so population increased 70,000, we are continuing to see that.
You take the GDP number and you divided by the increased population, what you get is declining GDP over the past 5/4. So you look at those numbers and there are some reasons to be concerned. Again, one hand, the other hand. Good for inflation, not so good when you are looking at GDP, the actual production and growth and that sort of thing.
They are numbers to pay attention to and figure out what that means to your household.
>> Okay.
So this week as well, the investing community lost a bit of a ledge with Charlie Munger, Warren Buffett's right hand man, passed away at the age of 99.
The Oracle of Omaha, his right hand man, they held court over the years. There were pearls of wisdom. Over the years, some interesting quotes.
>> Yeah.
You know the one I like best, which is, because they were very pragmatic about how they look at companies.
They did not get caught up in crypto currency and the tech bubble and that sort of thing. And one of the things that Charlie Munger said was, he was very critical of slicing and dicing and trying to overcomplicate a balance sheet and one of the things he said was, anytime you see earnings before interest, taxes depreciation or amortization, you can replace those words with, and I will paraphrase here, with rubbish.
I like that one. The other one I liked was on a more personal friend about how he thought about business. I will have to read this one. "It's remarkable about how long-term advantage people like us have gone to be by trying not to be stupid instead of trying to be very intelligent." And there sort of sense of, let's keep this simple, let's keep the analysis simple.
I think for investors coming back to that and looking at what you can do in your own by not over cultivating it just makes so much sense.
>> I like to hear that kind of thing about someone who is at the top of the investing world talking about simplicity.
When I first started doing this kind of stuff maybe 11 or 12 years ago because I had been a different kind of journalist up to a certain point before getting into business, you're like, it's earnings season, this seems simple enough, but I thought, am I not as smart as I think I am? It was all very confusing.
But now they are saying simplicity is always the key.
>> I think they were also very forthcoming about the mistakes they made as well and I think that honesty was so, that's something I appreciated as well is a young investor that they do make mistakes from time to time but they are focused more on the long-term and the simplicity of looking at the numbers.
>> Always a great chat on Friday. Thanks for joining us. Susan Prince and Anthony Okolie.
>> Thank you.
>> We are going to stick with the Canadian economy. You are going to recall that retail sales report last week suggesting consumers are still spending despite higher living costs.
How does that set us up for the holiday shopping season that is now upon us? It's December. Gotta get at it. Earlier I spoke with Maria Solovieva, economist with TD and spoke to her about consumer sentiment.
>> Well, if you look at the recent retail sales report, it was primarily driven by auto sales and also sales at gas stations.
If you remove those effects, then core measures were actually quite weak, and especially on the volumes basis-- so removing the price effects as well.
Consumers are really feeling the pinch and not feeling that great.
And the major reason is inflationary pressures.
Not everyone wants to spend more and buy less.
So I think this is really driving the sentiment of the consumer, and we are expecting it to persist, because that pressure is not going away completely, at least for the time being.
Another reason consumers are a bit pessimistic, I guess, is the fact that the cost of borrowing is rising.
And in Canada, it's particularly affecting the mortgage holders, somebody who purchased houses and have a mortgage.
And that's been driving the sentiment as well, because consumers are seeing the impact. About 50% of consumers will actually see the impact of higher interest rates by the end of this year, and another 50% will see it gradually over the next three years. So in anticipation for rising costs, they also are cutting back on spending. And we can't blame them for that.
>> So this is the month that, as we head into December, where we're expected to spend, right? The holiday season.
Obviously, the households are in a bit of a tough situation. Does it make it hard, though, heading into December to try to gauge exactly how the Canadian consumer will react? Because I mean personally, I'll say discipline, rein it in this year, and then you lose your mind every year.
>> Yeah.
Well, you do want to spend for your loved ones. I think Canadians are going to be looking for the bargain. So fancy ties and Granny's pies-- maybe more Granny's pies, but fancy ties at a discount, potentially.
So I think we will see, probably after coming out of Black Friday and Cyber Monday with some of the discounts, I'm sure retailers will be gauging where consumer is spending, potentially increasing those discounts as well. But I think the sentiment is that you will continue to spend, but not at the same pace as before.
>> Yeah, I splurged on a $25 scarf for the Black Friday sales. And it's only because it got really cold in Toronto in the past couple days. So that's the Canadian situation. We know we have high household debt. We know we have higher borrowing costs and some concerns. What about the US? I mean, there seems to be a bit more resilience in that economy when it comes to the consumer.
>> Yeah, so there is definitely more resilience in the US. I would say if you look at the holiday spending, which basically excludes autos and trade at gas stations but does include e-commerce, those sales have been fairly strong-- stronger, much stronger in the US. Even in the last couple of years, they were almost twice as strong as in Canada.
So I think the US consumer typically spends a little bit more, and we are expecting more momentum in sales for the US consumer going forward in Q4 as well.
Year on year, we're expecting about 4.5% growth, whereas for Canada, roughly half of that in terms of the expectations for the Q4.
And that's typically what the case is as well, the difference between Canadian and US consumer. But you're right to say that there is more pressure on the Canadian consumer in terms of the cost of borrowing, just because they have the impact.
Canadians feel the impact of rising interest rates much sooner. And the higher levels of debt also will suppress spending going forward.
>> So if household debt and those higher levels keep us a little tighter with our cash this holiday season, what does it mean for the overall economy heading into 2024? Because if I'm not persuaded to spend big next month in December into the holidays, I definitely know I'm not going to be spending big through the first couple of months of the year.
It's usually the shelter-at-home kind of months.
>> Yeah, so the expectation is that Q1 of 2024 will be fairly weak, actually, both in Canada and the US, but in Canada, that much weaker because of those debt levels.
And we think that the higher cost of borrowing plus the higher levels of debt will drive that difference between Canada and the US consumer.
If you look at the very common measure of leverage debt-to-income ratio between Canada and the US, Americans have been deleveraging since the global financial crisis, whereas in Canada, we saw those levels drive up. And now because we have elevated costs of borrowing as well-- well, it's the same factor for the US. But the sensitivity is a little bit more for Canada just the way the mortgage market is.
So that, if you deduct it from incomes, and it drives the denominator lower, it keeps the levels of the leverage ratios elevated. And that's the major reason we have that wedge between Canadian and US consumer as well going forward.
>> How do we bring it all back to monetary policy? I mean, obviously, it's been a year and a half or more of aggressive rate hikes trying to tame the economy. The Canadian consumer seems to be tapped out, seem to be holding on to their cash.
That'll have an economic flow through, as you said, into next year.
I guess two-part question. Is the Bank of Canada done done, like really done? And if they are, when do they start cutting next year?
>> We do think that they are done. First of all, this slowdown in consumer spending is quite obvious, and it's what the Bank of Canada wanted to see. We also do have changes in the labor market. So the number of unemployed has increased from the lowest level by about 175,000. Also, job postings declined by about 25%. So those are kind of things that the Bank of Canada will be looking at.
Inflationary pressure still remains. It hasn't cooled to the same level as the Bank of Canada would like to see. So there is still more work. So the Bank of Canada will remain hawkish in their tone.
So they want to keep those financial conditions fairly restrictive. But at the same time, there is no reason to have another hike, in our opinion. We do expect the Bank of Canada will start cutting in the second quarter of 2024, so pricing in for that.
>> That was Maria Solovieva, economist at TD.
Right now, let's get you updated on the top stories in the world of business and take a look at how the markets are trading.
We have shares of Pfizer in the spotlight.
The pharmaceutical giant abandoning efforts to bring one of its weight loss drugs to market, it is citing high rates of adverse side effects. That said, Pfizer has another version of that drug and development and plans to release data on those efforts next year.
Market is reacting by sending their shares down by about 3 1/2%. Several competitors already have successful weight loss drugs on the market.
Let's take a look at Disney. It's making good on its promise to restore its dividend payout to shareholders. The entertainment giant says it will pay a dividend of $0.30 per share, payable next month. The move was signalled earlier this year but it also comes amid activist investor Tian Partners launching a proxy battle for seats on Disney's board. Right now in 1940, it's down by about .3%.
It appears the high cost of living is indenting demand for beauty products.
Shares of retailer Ulta Beauty are making gains on stronger-than-expected quarterly results.
The stock is up a little more than 11%.
Ulta Beauty is also seeing it seeing a strong start to the holiday shopping season.
Quick check-in on the markets.
First trading day of December, illustrating month of the year.
Not a bad showing. 136 points to the upside, a little more than half a percent.
South of the border, we heard from Jerome Powell earlier this morning at fireside chat. He hasn't been saying anything hasn't already said.
Cutting would be a little premature. If we need to hike again, we will. The bond yields continue to move lower. Taking a look at the US 10 year yield right now, 4.25%.
New economic data out of China highlighted challenges in the world's second-largest economy continues to phase. It struggled through a year of stagnant growth. So how are things looking for 2024? Earlier I spoke with Haining Zha, VP and Dir. for asset-allocation research at TD Asset Management about the state of China's economy.
>> I think the biggest disappointment for people is they underestimate the amount of damage done to the household balance sheet, and to the business in general.
So as soon as the economy opens up, the activity quickly shot up.
But then the consumer spending, in particular, went into a slump.
And the business, already fragile after the lockdown, seeing there is not enough demand, they are also pretty cautious in hiring. So in the end, the economic activity actually turned into a slump.
The second thing people underestimate is the amount of fiscal drag this year. So contrary to the US, which enjoyed a very positive, surprisingly positive fiscal upside, in China it's actually the opposite. Basically, the dynamic is once the economy recover, come out of the lockdown, the revenue of the government recover, but their spending actually slowed down, because many of the local and provincial government, they still have a lot of fiscal pressure. They have a lot of debt on their balance sheet.
And I think the third thing is in the real estate sector, because the pandemic has completely changed people's expectation on the housing price and the perceived supply and demand in the real estate market. And also the real estate developer, they are still mired in default and the restructuring process.
So that actually created a lot of sentiment hit in the real estate sector.
And also, after the overspending in the developed economy during the pandemic, the goods consumption is actually going into a slowdown for most of where the demand coming from. That's why you see the Chinese export is actually not doing well year-over-year. I think the latest print is about down 6% year-over-year. So all of these factors, when you add them together, it is a formidable pressure.
>> I felt like in the early innings of the year for the first several months that every time you did see this indication, oh, perhaps China is not picking up the way we thought it was going to, and then the market participants say, well, just wait. Wait for the stimulus to come. And then there was little things, but it never really came. What do you think China was worried about in terms of, the economy is weak, let's just stimulate and get it back on track. Didn't really happen.
>> Right. I think there are two factors.
One, is China want to take a very measured approach, because they know there is a lot of leverage in the economy. So they want to reserve as much room as possible. And they want to carefully observe where the economy is going. And also, the second thing is, in the first quarter at least, you got a sudden burst of activity. So at that point, you really don't need to do that much.
>> Let's talk about then, those are the conditions that led to a disappointing year for China's economy, when we thought it would be a much different story. As we head into December and then get into 2024, what is China's economy looking like? What can we expect?
>> We are actually a little bit more optimistic. Right now, the economists' consensus estimate is in 2024, Chinese economy will grow by about 4.5% year-over-year. We actually think there is a mild upside on that. So looking at the same factors that when we review the 2023, for example, on the consumer spending, I think after consumer or the household restocking their emergency savings, and be very cautious on spending, the consumption the last few months is actually gradually picking up.
So in July, the retail sales consumption is at 2.5% year-over-year. Now, in October, it already recovered to 7.6% year-over-year. So even if you exclude some of the category that have unique dynamic, for example, auto or restaurant and food because of reopening, it is still pretty solid at above 6%. And not all of it is because of year-over-year base effect, because if you look at the October number last year, it was still not bad.
>> When you talk about that, that sounds like domestic demand sort of picking up the Chinese economy next year. You did talk about the fact that in the West, as we pull back on goods spending, move more of our money towards services, we're not buying as many as China's products. Could that be a wild card for next year, depending on how we land? I mean, there's a big debate, right? Was it a soft landing, a hard landing, no landing in Western economies on the other side of it?
Will our appetite for Chinese goods be a big driver?
>> Yeah, it certainly will-- could be a headwind, because right now, we are seeing US consumer is actually softening a little bit, given that the excess amount of savings is actually on the way down. But this year, the export base is already pretty low. So that constitutes less of a headwind for next year.
And also, there are some other domestic factor as well. For example, we talked about fiscal drag. Last month, China just approved 1 trillion RMB worth of special treasury issuance, which will be used for infrastructure spending. Counting its multiplier effect, it will constitute about 1.2% of GDP. So that is a big amount.
And also, many of the easing measures, they really kick in after the end of third quarter. For example, the lowering of the mortgage rate on existing mortgage stocks in our calculation that amount to about $400 billion RMB, which is amount to 0.3% of GDP. So essentially, all of those amount can be converted into spending, extra money in the consumer pocket. So that will also lend some support as well.
>> If we take all this and put it together, what could it mean for Chinese stocks for the market there?
>> Right. I think the read on the Chinese stock will actually be a lot more nuanced, because 20 or more percent of the weight in the index on the CSI 300 is in the financial sector. As we know, the real estate and financial sector, they still need to deal with a lot of the pressure.
So that part of the market might not perform as well as people expected. But they are starting at a very low valuation, basically 0.5% PB and a pretty good dividend.
So as long as the Chinese economy can hold on well, and maybe catch up in momentum, I think it is hard for me to imagine that they will have all of a sudden, big drawdown. But some of the other sectors, for example, EV and solar, they might have better dynamics next year.
>> That was Haining Zha, VP and Dir. for asset-allocation research at TD Asset Management.
Now, let's get our educational segment of the day.
Now when it comes to the markets, we focus a lot on North America but there are ways to track global markets on the WebBroker platform. Jason Hnatyk, Senior client education instructor is going to show us how to do it. Great to see you. Take away.
>> Great to be here as always, Greg.
We are as connected as ever across the world, whether or not it's from a social environment, whether or not we are thinking about economies as well as markets. We want to make sure that our investors. The broker have a way to stay tuned with what's going on around the globe. Let's jump into the platform and I will show you some strategies to help you keep abreast of all that information.
From the top of the page we will go to research and then under markets, we are going to click on the trustee overview tab. We are going to go ahead and scroll down and on the left-hand side of the page, we are looking for this market indices section. We will notice there are a bunch of indices we can look at but global markets is where we want to be today. Beneath the graph, we've got the number of the major world exchanges. Let's just take out the DAX from Germany.
We can see the last price on a particular exchange and what the change is for that given session and most importantly we can see this two-week bar that we got here so we can see the DAX is trading quite close to its highs for the last year's worth of time. So a good starting point for a deeper dive that you might want to do. To get a little bit more historical indication of where we are at, what we can do from here is we can go ahead and click on the name of the exchange and once we do that, we will have a pop up.
I would like to direct everybody's attention to the charts at the bottom.
Go ahead and load this chart. This will load the chart. For all of our technical analysts out there in the audience, you can go ahead if you are really looking to track the health of the German exchanges, we can put on any indicators or studies that apply to us.
When I want to show off to give us some good comparisons is the comparison functionality. We can now actually put on a chart the comparisons of all of the major global exchanges that are available on the platform.
We're gonna take the drop down and slide all the way towards the bottom. Keeping in mind that we've already got the DAX displayed on the chart, I will go in and throw in the CAC in France, we will throw in the FTSE in the UK, we will throw in the Asian exchanges as well.
We are looking to get a broader sense of the trend in the market.
One last thing I want to show off to everybody here is an opportunity to really filter the news. The way we can do that is by going back to research.
But this time choosing news and commentary.
The reason I want to everybody this is because at the top of the page, there is also a keyword search.
If we are really looking for a specific industry or sectors news, we confided here but we can also go ahead and sort geographically as well. I just search for China, we can identify key stories that are impacting their economy as well as markets in that geographical area of the world. Lots of information to help base are trading decisions on.
>> Definitely several avenues there for people to keep their eyes on global markets and global news. What if all through that people want to start searching for opportunities to get some forward exposure, how do you do that on my broker?
>> We have done our digging,We want to make some tangible changes to our portfolio, so WebBroker has opportunities to help you diversify through there.
One thing for the audience I want to point out, we have the convenience of trading all over North American exchanges in WebBroker, you can get access to international exchanges by calling our trade desk and getting to the proper areas.
But let's look at the tools for finding diversification in North American markets with an eye on global investments.
I'm going to bring us back to our research tab and we are going to go to you under tools to the screeners area. We've been here many times before but we are screening for stocks, we are skating for tactical events, mutual funds and ETFs.
Here we are looking at ETFs. I want to show everybody. We already have a screen created for the specific area. I want to scroll down and give you a little insight on them.
You got more fixed income if that suits your fancy, otherwise there are foreign equity ETFs available as well. I want to show everybody the way we can create our own custom screen because it's quite easy.
Going back to the top of the page, we have a great custom screen.
From here, the really easy way to get foreign exposure and ETFs is through our holdings allocation criteria filter. If we then choose the top regional holdings and add the criteria to our screen, we had the opportunity to pick geographical locations. Maybe you want to be focusing on Asia.
And Canadian dollar investments to get that exposure.
Scrolling down we can see on the left-hand side there are 157 matches meeting these two criteria. If I exclude mutual funds, so just looking exquisitely at ETFs, the matches have been whittled down to 55.
With a couple of clicks of the mouse, I've been able to identify opportunities that are there for Asian themed ETFs and once again you can continue to add extra filters to make this more of a specific list to you but you are on the right track using the screeners tool.
>> Great stuff as always. Thanks.
>> It's my pleasure.
>> Jason Hnatyk, senior client education instructor at TD Direct Investing. Here's a look at some of the recent educational videos posted to the Learning Center, including someone who was able to retire at the age of 34. I'm far past that mark.
And make sure to check out the learning centre in WebBroker for more educational videos, live, interactive master classes and upcoming webinars.
It's December. New Year's around the corner. Before we shut the door in 2023, their soma important tax deadlines to consider. Nicole Ewing, Dir. of tax and estate planning at TD Wealth join me earlier to claim why now is the time to finalize plans for charitable donations, capital losses and RESP contributions.
>> So if, for example, you are using a fantastic strategy of donating publicly traded securities that had accrued gains on them, it wipes out the gain and you get the full fair market value for your donation, we need to be thinking about that well in advance of the December 31 date just to make sure we have time for settlement to have a chance to go through in time.
>> That's an important one in the charitable season. There is also a strategy around this time of year with some investors looking at their portfolio, some of their positions. Tax loss harvesting. Explain to us what we need to be mindful of.
>> Right. Tax loss harvesting, essentially, we are looking at our portfolios, identifying where you might have some losses that we want to trigger so we can use those losses to offset gains.
We can have a look through and see how our portfolio is doing but caution around currency and exchange rates because that's very important when we are looking at the cost base of fair market value of the securities. We need to be mindful of its US securities for example, we need to be looking at the US dollar rate compared to what you purchased is to add an WebSite now. Make sure we factor in the exchange rates so that we don't inadvertently trigger again when we are trying to be harvesting for losses.
Although gains aren't so bad either.
>> Something to consider there. I know from what I'm living through right now that postsecondary education is very expensive. I bought two sons right now in university at the same time.
RESP is, talk to me about those in the deadlines there.
>> So again, deadline of December 31.
What's important to think about here is that when you make those contributions to and RESP, up until the child or student is 15, you are eligible to receive a grant to back up two, 20% of your contribution, up to $500. So we are making a $2500 contribution, we get a $500 grant from the government. We do have the ability to carry that forward but only one year. So you can contribute $5000 the following year and be able to get that full $1000 grant but we need to be, have the account open and make those contributions in order to be getting those grants.
>> Have already listed a number of things in my calendar here. We have more to go through. TFSAs, tax-free savings accounts.
What do you need to know about both contributions and withdrawals?
>> This is a good news story. If you are thinking about withdrawing in the next couple of months, you might want to think about advancing that to take out the money now because your contribution room regenerates January 1.
So rather than dipping into funds in January and wanting to have the money to re-contribute later in the year, you would have to wait a full calendar year until January. If you're going to take money out, now is the time.
We have some great news on TFSAs. The contribution rate or limit is going up to $7000 in 2024 so that's an additional room that we can put our investments into these accounts and have that growth accruing tax-free. We can take the money out tax-free. Very, very efficient way of investing.
>> That's advice on what to put to work because those postsecondary educations are looking for more money for me in January.
First home savings accounts. This is a bit of a new one for people. What do they need to consider before opening one in the new year?
>> This is an interesting one because again, and of the year, December 31 is the relevant time period, but we only have the ability to carry forward the contribution room one year. So if you're not necessarily thinking about purchasing, you might be delaying, otherwise you might want to be think about some of the strategies that you can do but again, opening the account is going to give you contribution room for two years come January so making that contribution now or opening that account now will allow you to get the benefit of that two years worth of the contribution room for the first home savings account. If you wait until January, you'll have missed the opportunity to have this year's contribution room available but you can carry it forward to next year. Beyond that, you might want to be thinking about some other options.
>> Important to keep that in mind.
I feel like we are running the whole gamut of life here. Let's talk about people who turned 71 this year, the RRIFs, conversion deadlines, what's going on there?
>> Conversion deadlines are December 31 of the year in which you turn 71, so those who are 71 now need to be making decisions about what they are going to do with their RRSPs.
If you don't make the decision, the decision will be made for you. That entire RRSP will be included in your income. It will be sent out to you. So you want to be thinking about your options. You can convert it into an annuity, into a RIF, but we need to do that by December 31 of the year in which we turn 71. For those who haven't turned 71 this year, look at your RRSPs as well. Based on your income this year, maybe it's a little bit lower, maybe we want to be thinking about some drawing down on some of those RRSP funds a little bit earlier depending on what our retirement plans are, if we are in a lower tax bracket this year and we want to reduce the amount of mandatory withdrawals that are required to be taken once we are in a RIF.
>> All right, Nicole, the funny thing about deadlines is there are usually consequences for missing them, getting beyond them.
Something specific on the tax front, the interest rate on overdue taxes as of January 1. I understand it's going up.
>> It is going up.
As with a lot of rates when it comes to taxes, it's attached to the interest rates. As they climb, so too does the interest that the government wants and only think about late filing, the intention is to wants to discourage people from doing that.
As recently as the second quarter 2022, the overdue amount was 5%.
Some people sort of thought of that as may be a low-cost way of borrowing and putting their money elsewhere. It is going up to 10% as of January so late filing, I would suggest that it's not a great idea. This is in addition to the late filing penalty, so this is the amount on overdue taxes.
File your returns, get those in, stop the penalty that you would have for nonfiling but we have to be mindful that any late payments of outstanding taxes is at 10% as of next year.
>> All right, Nicole. We covered a lot of ground. You laid out nicely and clearly.
Still there is a lot here.
If somebody feels uncomfortable, should they be talking to somebody?
>> Absolutely. Work with your financial advisors, your investments advisors, your tax advisors. Make sure they are aware of your personal circumstances and the goals you are trying to achieve.
They can help you navigate all of these questions and find solutions that are best suited for you.
>> That was Nicole Ewing, Dir., tax and estate planning at TD Wealth.
Now, for an update on the markets.
We are having a look at TD's Advanced Dashboard, platform designed for active traders available through TD Direct Investing. Let's take a look at the heat map function here. It gives you a view of the market movers.
We will look at the TSX 60, sorted by price and volume. A lot of lumpiness yesterday when it came to the energy space. That OPEC meeting, some unclear signals and reports about what they're going to do in terms of production levels.
A little more stability today.
He called CNQ up a little more than 2%.
Some of the other energy names, including Suncor and Cenovus, up about 1%. It's interesting to see Telus, Rogers and BCE all putting green on the screen today.
There was a spectrum auction and is not the most exciting thing in the world but analysts were pleased. Apparently, they feel that these big telcos did not overpay in this latest round of spectrum auction so those names getting a bit as well. We are coming to the end of the big banks at least for this week, the big seven, at least six got in here in terms of earnings and today we are seeing national bank move higher to the tune of 4 1/2%.
I want to take a look south of the border, S&P 100, the first trading day of the month and the last trading month of the year. Got Pfizer to the downside.
Other companies already have successful weight-loss drugs on the market. Pfizer is shelving one affairs right now, so they might have more information for us in the new year about another version of that drug but the market doesn't like the sound of it. Got Pfizer down about 4%. Meantime, Tesla pretty much just flat. Cybertruck yesterday afternoon making its delivery debut, I guess you could call her, and the numbers aren't changing much. Ford and GM making some gains today.
You can get more information on TV Advanced Dashboard by visiting TD.com/Advanced Dashboard.
You want to stay tuned. We are going to be back on Monday with Hafiz Noordin, who will take your questions about all things related to fixed income. I talked with Hafiz the other day, November was a great month for fixed income.
There is perhaps more to come in the months ahead and in the new year. Get your questions in ahead of time. Just email moneytalklive@td.com. That's all the time we have today. On behalf of everyone who brings you the show on a daily basis, thank you and see you next week.
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coming up on today's show, we are going to do a dive into the data that came out of Canada this morning that shows some gains for November. What could the bank of Canada make it all? Our MoneyTalk Analyst Centre guide to talk about it.
Plus TD economist Maria Solovieva looks at whether the Canadian consumers getting into the holiday spirit even with inflation still high.
And in today's a broker education segment, we are looking at ways to track global exchanges on the WebBroker platform. Jason Hnatyk of TD Direct Investing will join us.
Before that, let's get you an update on the markets. It's the last trading month of the year. Let's see what the TSX Composite Index is giving us.
Got some green on the screen, but 130 points to the upside or about two thirds of a percent. Among some of the most actively traded names, oil is stabilizing, bit of a rocky road yesterday. That OPEC meeting, will they or won't they, reports they were going to cut deep into her production and reports cast aside on that front. Today we are getting some stabilization in the price of crude and some of the big energy names.
Canadian Natural Resources, we will call that 2% to the upside. As spectrum auction yesterday that the street things went pretty well for the big telcos. They are all on the move higher today. Tesla leading up about 2 1/2%.
South of the border, Jerome Powell at a fireside chat in the past hours saying what we've already heard.
You want to talk about cutting rates, it's premature. We could hike again if we need to. Bond yields continue to pull back and the stakes. Continues to be it supportive of the equity market. You got the S&P 500 up almost half a percent.
Let's check in on the tech heavy NASDAQ.
We got some green on the screen but it's still a little tepid. 23 points, little more than 1/10 of a percent. Pfizer, some disappointing news out of the name. A lot of their competitors already have well established and marketed weight-loss drugs on the market. Pfizer has been trying to push a product in that space. They are pulling back on one of them right now.
At 2922, you got Pfizer down a little more than 4%. And that's your market update.
We got fresh numbers out of the Canadian labour market this morning, a gain of 25,000 new positions overall for November.
Joining us now is some analysis, MoneyTalk DIY editor Susan Prince and markets editor Anthony Okolie. Great to have you on the Friday panel.
>> Great to be here.
>> So who wants to run the numbers for us?
>> I could take a quick look at some of the numbers. The numbers were 25,000 jobs created. Pretty modest.
Markets were accepting 14,000. We did see an uptick in the unemployment rate to 5.8% and we have seen this increasing since April. When you look at some of the details, full-time employees, that was a big driver, particularly in the cyclical sense of the private sector. That fuelled a lot of that job growth as well.
That was a main driver there.
This is the strongest performance since October 2022 for the goods producing industry, followed by manufacturing and construction. We saw weakness in areas such as trades, services, finance, real estate and some of the things that were key and there were total hours worked were down and also wages were fairly strong although it was flatter in October.
>> Those of the numbers. Susan, what are we making of the numbers? Every number counts so much now.
>> It really does count a lot.
The data that's coming out, I feel like there's something for every type of economist you are.
On the one hand there's this, on the other hand there's this, and that's the case with the employment rate.
We take a look at the numbers are looking at in the numbers you been talking about.
We've got 25,000 net new jobs in so it's like, okay, that's a good sign. Job growth, employment is slowing. Here is where we start getting into some of the sticky stuff.
78,000 new population increase of 78,000.
So 25,000 net new jobs, population increase of 78,000 and labour force boost of 36,000 so even if you take the 36,000 and the 25,000 number, you can see where we are seeing a little bit of tightness.
It's a little harder to find a job.
And so the numbers are, we come to this hand and the other hand. On the one hand, those numbers are good because they are helping us tame inflation.
On the other hand, you may know someone who is having more difficulty finding a job, so you feel that. So these numbers are interesting for that dichotomy.
>> The Bank of Canada now has these numbers, the GDP numbers from yesterday for the third quarter, they have an interest rate decision next Wednesday.
They've been trying to cool the economy and tame inflation. What's the thinking, Anthony, in terms of the numbers even getting this week?
Could the BOC maybe not a clear mission accomplished but at least ease up?
>> When you take these two data points together, I think, according to TD Economics, they believe that the below trend growth we are seeing is going to continue over the next couple of months.
That should push inflation gradually board's the 2% target. They think these two data points will give the Bank of Canada and of time and confidence that they can pause at the next meeting and not raise interest rates. They think that this will give the Bank of Canada a few months before they start preparing the markets for rate cuts which could start as early as April 2024.
>> Yeah, that's been a bit of a shift from the bank here, first we were talking early summer and now we are talking into the spring. Before we move on from jobs, any final thoughts?
>> There were a couple of things that were interesting about this number. One of the things is disconcerting to me. If you take the GDP number, we just talked about the increasing population, so population increased 70,000, we are continuing to see that.
You take the GDP number and you divided by the increased population, what you get is declining GDP over the past 5/4. So you look at those numbers and there are some reasons to be concerned. Again, one hand, the other hand. Good for inflation, not so good when you are looking at GDP, the actual production and growth and that sort of thing.
They are numbers to pay attention to and figure out what that means to your household.
>> Okay.
So this week as well, the investing community lost a bit of a ledge with Charlie Munger, Warren Buffett's right hand man, passed away at the age of 99.
The Oracle of Omaha, his right hand man, they held court over the years. There were pearls of wisdom. Over the years, some interesting quotes.
>> Yeah.
You know the one I like best, which is, because they were very pragmatic about how they look at companies.
They did not get caught up in crypto currency and the tech bubble and that sort of thing. And one of the things that Charlie Munger said was, he was very critical of slicing and dicing and trying to overcomplicate a balance sheet and one of the things he said was, anytime you see earnings before interest, taxes depreciation or amortization, you can replace those words with, and I will paraphrase here, with rubbish.
I like that one. The other one I liked was on a more personal friend about how he thought about business. I will have to read this one. "It's remarkable about how long-term advantage people like us have gone to be by trying not to be stupid instead of trying to be very intelligent." And there sort of sense of, let's keep this simple, let's keep the analysis simple.
I think for investors coming back to that and looking at what you can do in your own by not over cultivating it just makes so much sense.
>> I like to hear that kind of thing about someone who is at the top of the investing world talking about simplicity.
When I first started doing this kind of stuff maybe 11 or 12 years ago because I had been a different kind of journalist up to a certain point before getting into business, you're like, it's earnings season, this seems simple enough, but I thought, am I not as smart as I think I am? It was all very confusing.
But now they are saying simplicity is always the key.
>> I think they were also very forthcoming about the mistakes they made as well and I think that honesty was so, that's something I appreciated as well is a young investor that they do make mistakes from time to time but they are focused more on the long-term and the simplicity of looking at the numbers.
>> Always a great chat on Friday. Thanks for joining us. Susan Prince and Anthony Okolie.
>> Thank you.
>> We are going to stick with the Canadian economy. You are going to recall that retail sales report last week suggesting consumers are still spending despite higher living costs.
How does that set us up for the holiday shopping season that is now upon us? It's December. Gotta get at it. Earlier I spoke with Maria Solovieva, economist with TD and spoke to her about consumer sentiment.
>> Well, if you look at the recent retail sales report, it was primarily driven by auto sales and also sales at gas stations.
If you remove those effects, then core measures were actually quite weak, and especially on the volumes basis-- so removing the price effects as well.
Consumers are really feeling the pinch and not feeling that great.
And the major reason is inflationary pressures.
Not everyone wants to spend more and buy less.
So I think this is really driving the sentiment of the consumer, and we are expecting it to persist, because that pressure is not going away completely, at least for the time being.
Another reason consumers are a bit pessimistic, I guess, is the fact that the cost of borrowing is rising.
And in Canada, it's particularly affecting the mortgage holders, somebody who purchased houses and have a mortgage.
And that's been driving the sentiment as well, because consumers are seeing the impact. About 50% of consumers will actually see the impact of higher interest rates by the end of this year, and another 50% will see it gradually over the next three years. So in anticipation for rising costs, they also are cutting back on spending. And we can't blame them for that.
>> So this is the month that, as we head into December, where we're expected to spend, right? The holiday season.
Obviously, the households are in a bit of a tough situation. Does it make it hard, though, heading into December to try to gauge exactly how the Canadian consumer will react? Because I mean personally, I'll say discipline, rein it in this year, and then you lose your mind every year.
>> Yeah.
Well, you do want to spend for your loved ones. I think Canadians are going to be looking for the bargain. So fancy ties and Granny's pies-- maybe more Granny's pies, but fancy ties at a discount, potentially.
So I think we will see, probably after coming out of Black Friday and Cyber Monday with some of the discounts, I'm sure retailers will be gauging where consumer is spending, potentially increasing those discounts as well. But I think the sentiment is that you will continue to spend, but not at the same pace as before.
>> Yeah, I splurged on a $25 scarf for the Black Friday sales. And it's only because it got really cold in Toronto in the past couple days. So that's the Canadian situation. We know we have high household debt. We know we have higher borrowing costs and some concerns. What about the US? I mean, there seems to be a bit more resilience in that economy when it comes to the consumer.
>> Yeah, so there is definitely more resilience in the US. I would say if you look at the holiday spending, which basically excludes autos and trade at gas stations but does include e-commerce, those sales have been fairly strong-- stronger, much stronger in the US. Even in the last couple of years, they were almost twice as strong as in Canada.
So I think the US consumer typically spends a little bit more, and we are expecting more momentum in sales for the US consumer going forward in Q4 as well.
Year on year, we're expecting about 4.5% growth, whereas for Canada, roughly half of that in terms of the expectations for the Q4.
And that's typically what the case is as well, the difference between Canadian and US consumer. But you're right to say that there is more pressure on the Canadian consumer in terms of the cost of borrowing, just because they have the impact.
Canadians feel the impact of rising interest rates much sooner. And the higher levels of debt also will suppress spending going forward.
>> So if household debt and those higher levels keep us a little tighter with our cash this holiday season, what does it mean for the overall economy heading into 2024? Because if I'm not persuaded to spend big next month in December into the holidays, I definitely know I'm not going to be spending big through the first couple of months of the year.
It's usually the shelter-at-home kind of months.
>> Yeah, so the expectation is that Q1 of 2024 will be fairly weak, actually, both in Canada and the US, but in Canada, that much weaker because of those debt levels.
And we think that the higher cost of borrowing plus the higher levels of debt will drive that difference between Canada and the US consumer.
If you look at the very common measure of leverage debt-to-income ratio between Canada and the US, Americans have been deleveraging since the global financial crisis, whereas in Canada, we saw those levels drive up. And now because we have elevated costs of borrowing as well-- well, it's the same factor for the US. But the sensitivity is a little bit more for Canada just the way the mortgage market is.
So that, if you deduct it from incomes, and it drives the denominator lower, it keeps the levels of the leverage ratios elevated. And that's the major reason we have that wedge between Canadian and US consumer as well going forward.
>> How do we bring it all back to monetary policy? I mean, obviously, it's been a year and a half or more of aggressive rate hikes trying to tame the economy. The Canadian consumer seems to be tapped out, seem to be holding on to their cash.
That'll have an economic flow through, as you said, into next year.
I guess two-part question. Is the Bank of Canada done done, like really done? And if they are, when do they start cutting next year?
>> We do think that they are done. First of all, this slowdown in consumer spending is quite obvious, and it's what the Bank of Canada wanted to see. We also do have changes in the labor market. So the number of unemployed has increased from the lowest level by about 175,000. Also, job postings declined by about 25%. So those are kind of things that the Bank of Canada will be looking at.
Inflationary pressure still remains. It hasn't cooled to the same level as the Bank of Canada would like to see. So there is still more work. So the Bank of Canada will remain hawkish in their tone.
So they want to keep those financial conditions fairly restrictive. But at the same time, there is no reason to have another hike, in our opinion. We do expect the Bank of Canada will start cutting in the second quarter of 2024, so pricing in for that.
>> That was Maria Solovieva, economist at TD.
Right now, let's get you updated on the top stories in the world of business and take a look at how the markets are trading.
We have shares of Pfizer in the spotlight.
The pharmaceutical giant abandoning efforts to bring one of its weight loss drugs to market, it is citing high rates of adverse side effects. That said, Pfizer has another version of that drug and development and plans to release data on those efforts next year.
Market is reacting by sending their shares down by about 3 1/2%. Several competitors already have successful weight loss drugs on the market.
Let's take a look at Disney. It's making good on its promise to restore its dividend payout to shareholders. The entertainment giant says it will pay a dividend of $0.30 per share, payable next month. The move was signalled earlier this year but it also comes amid activist investor Tian Partners launching a proxy battle for seats on Disney's board. Right now in 1940, it's down by about .3%.
It appears the high cost of living is indenting demand for beauty products.
Shares of retailer Ulta Beauty are making gains on stronger-than-expected quarterly results.
The stock is up a little more than 11%.
Ulta Beauty is also seeing it seeing a strong start to the holiday shopping season.
Quick check-in on the markets.
First trading day of December, illustrating month of the year.
Not a bad showing. 136 points to the upside, a little more than half a percent.
South of the border, we heard from Jerome Powell earlier this morning at fireside chat. He hasn't been saying anything hasn't already said.
Cutting would be a little premature. If we need to hike again, we will. The bond yields continue to move lower. Taking a look at the US 10 year yield right now, 4.25%.
New economic data out of China highlighted challenges in the world's second-largest economy continues to phase. It struggled through a year of stagnant growth. So how are things looking for 2024? Earlier I spoke with Haining Zha, VP and Dir. for asset-allocation research at TD Asset Management about the state of China's economy.
>> I think the biggest disappointment for people is they underestimate the amount of damage done to the household balance sheet, and to the business in general.
So as soon as the economy opens up, the activity quickly shot up.
But then the consumer spending, in particular, went into a slump.
And the business, already fragile after the lockdown, seeing there is not enough demand, they are also pretty cautious in hiring. So in the end, the economic activity actually turned into a slump.
The second thing people underestimate is the amount of fiscal drag this year. So contrary to the US, which enjoyed a very positive, surprisingly positive fiscal upside, in China it's actually the opposite. Basically, the dynamic is once the economy recover, come out of the lockdown, the revenue of the government recover, but their spending actually slowed down, because many of the local and provincial government, they still have a lot of fiscal pressure. They have a lot of debt on their balance sheet.
And I think the third thing is in the real estate sector, because the pandemic has completely changed people's expectation on the housing price and the perceived supply and demand in the real estate market. And also the real estate developer, they are still mired in default and the restructuring process.
So that actually created a lot of sentiment hit in the real estate sector.
And also, after the overspending in the developed economy during the pandemic, the goods consumption is actually going into a slowdown for most of where the demand coming from. That's why you see the Chinese export is actually not doing well year-over-year. I think the latest print is about down 6% year-over-year. So all of these factors, when you add them together, it is a formidable pressure.
>> I felt like in the early innings of the year for the first several months that every time you did see this indication, oh, perhaps China is not picking up the way we thought it was going to, and then the market participants say, well, just wait. Wait for the stimulus to come. And then there was little things, but it never really came. What do you think China was worried about in terms of, the economy is weak, let's just stimulate and get it back on track. Didn't really happen.
>> Right. I think there are two factors.
One, is China want to take a very measured approach, because they know there is a lot of leverage in the economy. So they want to reserve as much room as possible. And they want to carefully observe where the economy is going. And also, the second thing is, in the first quarter at least, you got a sudden burst of activity. So at that point, you really don't need to do that much.
>> Let's talk about then, those are the conditions that led to a disappointing year for China's economy, when we thought it would be a much different story. As we head into December and then get into 2024, what is China's economy looking like? What can we expect?
>> We are actually a little bit more optimistic. Right now, the economists' consensus estimate is in 2024, Chinese economy will grow by about 4.5% year-over-year. We actually think there is a mild upside on that. So looking at the same factors that when we review the 2023, for example, on the consumer spending, I think after consumer or the household restocking their emergency savings, and be very cautious on spending, the consumption the last few months is actually gradually picking up.
So in July, the retail sales consumption is at 2.5% year-over-year. Now, in October, it already recovered to 7.6% year-over-year. So even if you exclude some of the category that have unique dynamic, for example, auto or restaurant and food because of reopening, it is still pretty solid at above 6%. And not all of it is because of year-over-year base effect, because if you look at the October number last year, it was still not bad.
>> When you talk about that, that sounds like domestic demand sort of picking up the Chinese economy next year. You did talk about the fact that in the West, as we pull back on goods spending, move more of our money towards services, we're not buying as many as China's products. Could that be a wild card for next year, depending on how we land? I mean, there's a big debate, right? Was it a soft landing, a hard landing, no landing in Western economies on the other side of it?
Will our appetite for Chinese goods be a big driver?
>> Yeah, it certainly will-- could be a headwind, because right now, we are seeing US consumer is actually softening a little bit, given that the excess amount of savings is actually on the way down. But this year, the export base is already pretty low. So that constitutes less of a headwind for next year.
And also, there are some other domestic factor as well. For example, we talked about fiscal drag. Last month, China just approved 1 trillion RMB worth of special treasury issuance, which will be used for infrastructure spending. Counting its multiplier effect, it will constitute about 1.2% of GDP. So that is a big amount.
And also, many of the easing measures, they really kick in after the end of third quarter. For example, the lowering of the mortgage rate on existing mortgage stocks in our calculation that amount to about $400 billion RMB, which is amount to 0.3% of GDP. So essentially, all of those amount can be converted into spending, extra money in the consumer pocket. So that will also lend some support as well.
>> If we take all this and put it together, what could it mean for Chinese stocks for the market there?
>> Right. I think the read on the Chinese stock will actually be a lot more nuanced, because 20 or more percent of the weight in the index on the CSI 300 is in the financial sector. As we know, the real estate and financial sector, they still need to deal with a lot of the pressure.
So that part of the market might not perform as well as people expected. But they are starting at a very low valuation, basically 0.5% PB and a pretty good dividend.
So as long as the Chinese economy can hold on well, and maybe catch up in momentum, I think it is hard for me to imagine that they will have all of a sudden, big drawdown. But some of the other sectors, for example, EV and solar, they might have better dynamics next year.
>> That was Haining Zha, VP and Dir. for asset-allocation research at TD Asset Management.
Now, let's get our educational segment of the day.
Now when it comes to the markets, we focus a lot on North America but there are ways to track global markets on the WebBroker platform. Jason Hnatyk, Senior client education instructor is going to show us how to do it. Great to see you. Take away.
>> Great to be here as always, Greg.
We are as connected as ever across the world, whether or not it's from a social environment, whether or not we are thinking about economies as well as markets. We want to make sure that our investors. The broker have a way to stay tuned with what's going on around the globe. Let's jump into the platform and I will show you some strategies to help you keep abreast of all that information.
From the top of the page we will go to research and then under markets, we are going to click on the trustee overview tab. We are going to go ahead and scroll down and on the left-hand side of the page, we are looking for this market indices section. We will notice there are a bunch of indices we can look at but global markets is where we want to be today. Beneath the graph, we've got the number of the major world exchanges. Let's just take out the DAX from Germany.
We can see the last price on a particular exchange and what the change is for that given session and most importantly we can see this two-week bar that we got here so we can see the DAX is trading quite close to its highs for the last year's worth of time. So a good starting point for a deeper dive that you might want to do. To get a little bit more historical indication of where we are at, what we can do from here is we can go ahead and click on the name of the exchange and once we do that, we will have a pop up.
I would like to direct everybody's attention to the charts at the bottom.
Go ahead and load this chart. This will load the chart. For all of our technical analysts out there in the audience, you can go ahead if you are really looking to track the health of the German exchanges, we can put on any indicators or studies that apply to us.
When I want to show off to give us some good comparisons is the comparison functionality. We can now actually put on a chart the comparisons of all of the major global exchanges that are available on the platform.
We're gonna take the drop down and slide all the way towards the bottom. Keeping in mind that we've already got the DAX displayed on the chart, I will go in and throw in the CAC in France, we will throw in the FTSE in the UK, we will throw in the Asian exchanges as well.
We are looking to get a broader sense of the trend in the market.
One last thing I want to show off to everybody here is an opportunity to really filter the news. The way we can do that is by going back to research.
But this time choosing news and commentary.
The reason I want to everybody this is because at the top of the page, there is also a keyword search.
If we are really looking for a specific industry or sectors news, we confided here but we can also go ahead and sort geographically as well. I just search for China, we can identify key stories that are impacting their economy as well as markets in that geographical area of the world. Lots of information to help base are trading decisions on.
>> Definitely several avenues there for people to keep their eyes on global markets and global news. What if all through that people want to start searching for opportunities to get some forward exposure, how do you do that on my broker?
>> We have done our digging,We want to make some tangible changes to our portfolio, so WebBroker has opportunities to help you diversify through there.
One thing for the audience I want to point out, we have the convenience of trading all over North American exchanges in WebBroker, you can get access to international exchanges by calling our trade desk and getting to the proper areas.
But let's look at the tools for finding diversification in North American markets with an eye on global investments.
I'm going to bring us back to our research tab and we are going to go to you under tools to the screeners area. We've been here many times before but we are screening for stocks, we are skating for tactical events, mutual funds and ETFs.
Here we are looking at ETFs. I want to show everybody. We already have a screen created for the specific area. I want to scroll down and give you a little insight on them.
You got more fixed income if that suits your fancy, otherwise there are foreign equity ETFs available as well. I want to show everybody the way we can create our own custom screen because it's quite easy.
Going back to the top of the page, we have a great custom screen.
From here, the really easy way to get foreign exposure and ETFs is through our holdings allocation criteria filter. If we then choose the top regional holdings and add the criteria to our screen, we had the opportunity to pick geographical locations. Maybe you want to be focusing on Asia.
And Canadian dollar investments to get that exposure.
Scrolling down we can see on the left-hand side there are 157 matches meeting these two criteria. If I exclude mutual funds, so just looking exquisitely at ETFs, the matches have been whittled down to 55.
With a couple of clicks of the mouse, I've been able to identify opportunities that are there for Asian themed ETFs and once again you can continue to add extra filters to make this more of a specific list to you but you are on the right track using the screeners tool.
>> Great stuff as always. Thanks.
>> It's my pleasure.
>> Jason Hnatyk, senior client education instructor at TD Direct Investing. Here's a look at some of the recent educational videos posted to the Learning Center, including someone who was able to retire at the age of 34. I'm far past that mark.
And make sure to check out the learning centre in WebBroker for more educational videos, live, interactive master classes and upcoming webinars.
It's December. New Year's around the corner. Before we shut the door in 2023, their soma important tax deadlines to consider. Nicole Ewing, Dir. of tax and estate planning at TD Wealth join me earlier to claim why now is the time to finalize plans for charitable donations, capital losses and RESP contributions.
>> So if, for example, you are using a fantastic strategy of donating publicly traded securities that had accrued gains on them, it wipes out the gain and you get the full fair market value for your donation, we need to be thinking about that well in advance of the December 31 date just to make sure we have time for settlement to have a chance to go through in time.
>> That's an important one in the charitable season. There is also a strategy around this time of year with some investors looking at their portfolio, some of their positions. Tax loss harvesting. Explain to us what we need to be mindful of.
>> Right. Tax loss harvesting, essentially, we are looking at our portfolios, identifying where you might have some losses that we want to trigger so we can use those losses to offset gains.
We can have a look through and see how our portfolio is doing but caution around currency and exchange rates because that's very important when we are looking at the cost base of fair market value of the securities. We need to be mindful of its US securities for example, we need to be looking at the US dollar rate compared to what you purchased is to add an WebSite now. Make sure we factor in the exchange rates so that we don't inadvertently trigger again when we are trying to be harvesting for losses.
Although gains aren't so bad either.
>> Something to consider there. I know from what I'm living through right now that postsecondary education is very expensive. I bought two sons right now in university at the same time.
RESP is, talk to me about those in the deadlines there.
>> So again, deadline of December 31.
What's important to think about here is that when you make those contributions to and RESP, up until the child or student is 15, you are eligible to receive a grant to back up two, 20% of your contribution, up to $500. So we are making a $2500 contribution, we get a $500 grant from the government. We do have the ability to carry that forward but only one year. So you can contribute $5000 the following year and be able to get that full $1000 grant but we need to be, have the account open and make those contributions in order to be getting those grants.
>> Have already listed a number of things in my calendar here. We have more to go through. TFSAs, tax-free savings accounts.
What do you need to know about both contributions and withdrawals?
>> This is a good news story. If you are thinking about withdrawing in the next couple of months, you might want to think about advancing that to take out the money now because your contribution room regenerates January 1.
So rather than dipping into funds in January and wanting to have the money to re-contribute later in the year, you would have to wait a full calendar year until January. If you're going to take money out, now is the time.
We have some great news on TFSAs. The contribution rate or limit is going up to $7000 in 2024 so that's an additional room that we can put our investments into these accounts and have that growth accruing tax-free. We can take the money out tax-free. Very, very efficient way of investing.
>> That's advice on what to put to work because those postsecondary educations are looking for more money for me in January.
First home savings accounts. This is a bit of a new one for people. What do they need to consider before opening one in the new year?
>> This is an interesting one because again, and of the year, December 31 is the relevant time period, but we only have the ability to carry forward the contribution room one year. So if you're not necessarily thinking about purchasing, you might be delaying, otherwise you might want to be think about some of the strategies that you can do but again, opening the account is going to give you contribution room for two years come January so making that contribution now or opening that account now will allow you to get the benefit of that two years worth of the contribution room for the first home savings account. If you wait until January, you'll have missed the opportunity to have this year's contribution room available but you can carry it forward to next year. Beyond that, you might want to be thinking about some other options.
>> Important to keep that in mind.
I feel like we are running the whole gamut of life here. Let's talk about people who turned 71 this year, the RRIFs, conversion deadlines, what's going on there?
>> Conversion deadlines are December 31 of the year in which you turn 71, so those who are 71 now need to be making decisions about what they are going to do with their RRSPs.
If you don't make the decision, the decision will be made for you. That entire RRSP will be included in your income. It will be sent out to you. So you want to be thinking about your options. You can convert it into an annuity, into a RIF, but we need to do that by December 31 of the year in which we turn 71. For those who haven't turned 71 this year, look at your RRSPs as well. Based on your income this year, maybe it's a little bit lower, maybe we want to be thinking about some drawing down on some of those RRSP funds a little bit earlier depending on what our retirement plans are, if we are in a lower tax bracket this year and we want to reduce the amount of mandatory withdrawals that are required to be taken once we are in a RIF.
>> All right, Nicole, the funny thing about deadlines is there are usually consequences for missing them, getting beyond them.
Something specific on the tax front, the interest rate on overdue taxes as of January 1. I understand it's going up.
>> It is going up.
As with a lot of rates when it comes to taxes, it's attached to the interest rates. As they climb, so too does the interest that the government wants and only think about late filing, the intention is to wants to discourage people from doing that.
As recently as the second quarter 2022, the overdue amount was 5%.
Some people sort of thought of that as may be a low-cost way of borrowing and putting their money elsewhere. It is going up to 10% as of January so late filing, I would suggest that it's not a great idea. This is in addition to the late filing penalty, so this is the amount on overdue taxes.
File your returns, get those in, stop the penalty that you would have for nonfiling but we have to be mindful that any late payments of outstanding taxes is at 10% as of next year.
>> All right, Nicole. We covered a lot of ground. You laid out nicely and clearly.
Still there is a lot here.
If somebody feels uncomfortable, should they be talking to somebody?
>> Absolutely. Work with your financial advisors, your investments advisors, your tax advisors. Make sure they are aware of your personal circumstances and the goals you are trying to achieve.
They can help you navigate all of these questions and find solutions that are best suited for you.
>> That was Nicole Ewing, Dir., tax and estate planning at TD Wealth.
Now, for an update on the markets.
We are having a look at TD's Advanced Dashboard, platform designed for active traders available through TD Direct Investing. Let's take a look at the heat map function here. It gives you a view of the market movers.
We will look at the TSX 60, sorted by price and volume. A lot of lumpiness yesterday when it came to the energy space. That OPEC meeting, some unclear signals and reports about what they're going to do in terms of production levels.
A little more stability today.
He called CNQ up a little more than 2%.
Some of the other energy names, including Suncor and Cenovus, up about 1%. It's interesting to see Telus, Rogers and BCE all putting green on the screen today.
There was a spectrum auction and is not the most exciting thing in the world but analysts were pleased. Apparently, they feel that these big telcos did not overpay in this latest round of spectrum auction so those names getting a bit as well. We are coming to the end of the big banks at least for this week, the big seven, at least six got in here in terms of earnings and today we are seeing national bank move higher to the tune of 4 1/2%.
I want to take a look south of the border, S&P 100, the first trading day of the month and the last trading month of the year. Got Pfizer to the downside.
Other companies already have successful weight-loss drugs on the market. Pfizer is shelving one affairs right now, so they might have more information for us in the new year about another version of that drug but the market doesn't like the sound of it. Got Pfizer down about 4%. Meantime, Tesla pretty much just flat. Cybertruck yesterday afternoon making its delivery debut, I guess you could call her, and the numbers aren't changing much. Ford and GM making some gains today.
You can get more information on TV Advanced Dashboard by visiting TD.com/Advanced Dashboard.
You want to stay tuned. We are going to be back on Monday with Hafiz Noordin, who will take your questions about all things related to fixed income. I talked with Hafiz the other day, November was a great month for fixed income.
There is perhaps more to come in the months ahead and in the new year. Get your questions in ahead of time. Just email moneytalklive@td.com. That's all the time we have today. On behalf of everyone who brings you the show on a daily basis, thank you and see you next week.
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