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[theme music] >> Hello, I'm Greg Bonnell. Welcome to MoneyTalk Live, brought to you by TD Direct Investing. It's a new program broadcast daily on WebBroker. Every day, I will be joined by guests from across TD, many of whom you will only see here. We will take you through what's moving the markets and answer your questions about investing. Coming up on today show, we are going to hear from Michael Craig, head of asset allocation at TD Asset Management. He says investors are now facing two storms, inflation and slowing growth. In today's WebBroker education segment, Nugwa Haruna's going to walk us through the tools you can use to stay on top of corporate earnings season. Indeed, we are heading into yet another corporate earning blitz. Here's how you can get in touch with us. Email moneytalklive@td.com or fill out the viewer response box here on WebBroker. before we get to our guests, let us give you an update on the market. We are starting with a down note. What are we going to see in terms of earnings forecasts from companies considering the environment we are heading into. Right now, the TSX is down about a full percent, 197 points. You have China with rising COVID cases and concerns they are about what that can do for demand. We have crude oil, which has been a bit soft today. Let's check out Air Canada, some of the travel names on both sides of the border under pressure to start the week. Right now you've got Air Canada down to the tune of about four and half percent, 1606 and share. The tech names are also getting hit in today's trading action. We will take a look at Shopify and how it's faring right now in the TSX, Daniel Maltais percent, three bucks and $0.16 on the downside, 40 to 40. It let's check out the S&P 500, there's a lot of questions out there in terms of the earnings season we are heading into, not the court is behind your getting reports on but how corporate America views earnings going forward with everything we are facing now in the economy. We have the S&P 500, the broader read of the American market, down a bit more than a percent. We will check at the tech heavy NASDAQ, tech names under pressure on both sides of the border,it's down about 2% right now. As we said, trouble stocks on both sides of the border showing some pressure. Let's take a look at Carnival Cruise. Right now, we've got Carnival down about 5 1/2%, eight bucks and $0.51 a share. And that's your market update. Investors have been grappling with red-hot inflation and what it means for our portfolios. Our future guest today is saying another storm is making its way into the market. Joining us I was Michael Craig, head of asset allocation at TD Asset Management. Great to have you. > Great to be here. >> We are all well acquainted with the inflation story, when we go out and buy groceries and fill up the gas tanks. Tell us about another story. >> Inflation is about supply mostly. That's what come under pressure this year. To bring that down, you see aggressive hiking policy E in the Bank of Canada, the Fed, other central banks, hikes that we haven't really seen in about 40 years in terms of magnitude, and is going to have a material impact on growth. Certainly, the interest rates are hitting that parts of the economy, slowing them, and I don't think this is finished. We are now seeing these two things, we are having two cyclones collide. My sense is that inflation is the… The growth and recession stories going to be on people's minds for the next 6 to 10 months and already we might be in the technical recession in the US right now. >> The way you frame it, it might be one thing to see once were and pass in the new storm, which is slowing growth, come in, but you're talking about the storms colliding, that doesn't sound good. >> The challenge. . . it's a bit of a race now. On one hand, you got materially slowing economies and on the other hand you have inflation that is still quite sticky in some aspects of inflation aren't going to roll over anytime soon. For investors, the key saying, the decision right now is what is falling quicker? I think we'll have a better idea by the fall. It takes a few quarters typically for policy to start to tame inflation. I think we will have a better idea then. Until then, I think days like today, last week, markets were jubilant, but today not so much. We will continue to see a lot of volatility across equities, fixed income and currency. >> That something I particularly being curious about as I have done so much central-bank coverage over my career the fact that when you get used to either 25 basis points to the upside or downside to pending a what part of a rate hike or cut cycle they are on but you start getting these jumbo hikes, 50 basis points, 75. Does not have a quicker effect even if it's just psychological in a country? We do know it takes time for monetary policy to work its way through the economy, but these jumbo hikes, does Apple board some of that reaction? >> Economists textbook answer on this… Previously, you had those 25 basis points move because they were trying to tilted a little bit. They were trying to shock it, but gradually slow the economy down without causing recession. This time around, when economic historians back at this time, they will say that central banks made a mistake by being too slow and therefore had to catch up. Right now, it's a credibility issue. I actually think inflation is going to fall materially. But at what cost? How deeper recession will they need to create to see that happen? I would say certainly the part of the economy that have done well in a low rate world are tremendously vulnerable, housing, finance, real estate, those parts of economy are vulnerable because people are seeing… When they start to reset those, they are going to see a higher material cost. that's like paying another new tax because you are hiding a materially a higher rate against your mortgage. >> Now given that there are some participants in the market, maybe even the bond markets, signalling that we are going to get these aggressive rate hikes, whether it's the Bank of Canada, the Fed, other central banks, it won't be long before they are cutting again. Is that a bit of an overoptimistic dream? It's going to get back for a while but then it will get easier soon. >> If you're at a dinner party and you want someone with a dark sense of humour, invite a blond person because they tend to be cynical. We are seeing it in other markets where the back half of 23, you see about 80 basis points of cuts. And what the bond market is telling you is the Fed is going to shift the economy and the recession to raise unemployment, create enough slack in order to bring down wage and other forms of inflation. If you are out of work, you're not going to go on a trip. You are going to spend less. You can't do much about supply. Supplies being affected by the word Ukraine, COVID policy in China, that will take time to adjust. And the expectations are we will see cuts. That's an expectation, it doesn't mean it will happen. But it's a bit ironic as we see these rapid rate rises that the forward-looking nature of the bond markets are saying… The economy can only stand so much before there is a material downtrend and then we will be back to cutting my fall 23. A lot of volatility ahead. If inflation stays sticky, which I don't think it will, but this is an industry of adjusting to new information, could be a challenging. If rates stay high for a longer period of time. >> Is there any chance, I guess there is always a chance, that central bankers can achieve the soft landing? That perfect form where they slow things just enough to bring everything back in balance without triggering a massive recession and big job losses? >> Based on what they are trying to achieve today, I think the real question is… is it a run-of-the-mill soft recession, or is it a deep one? I think that's more of the pressing question. The central banks would take that outcome. The question is does it go in more of a six or 7%… [video buffering] Get my weight and health and check in the next six months. Possibly, but unlikely. Yeah. >> I know you're talking about on that front. Before we finish our chat, I want to ask you about entering other corporate earnings season. A lot of the discussions he had on the showand that we have on the market seemed to be else's we are going to start hearing about earnings revisions to the downside. Is that too dour forecast? >> within our asset allocation team, we do a lot of what we call top-down analysis.we use purchasing manager indices, macro data to gauge where we think earnings are going. Our earnings models would say we are facing an earnings recession next year. They will be at best zero to negative. I think the market, you remember analysts don't like to move... [video buffering] I think it's 25%, it's hard to keep your credibility doing that. the selloff this year has been all valuations. Markets traded 21 Times in January and now they trade trade at 16 times earnings. That's unity valuation. I think the latter innings of his equity bear market will be berating lower earnings and that is absolutely likely. Energy probably does okay, but other parts of the market are going to see major negative revisions over the next 6 to 12 months. >> Great start to the show. We are going to get to your questions about markets asset allocation from Michael Craig from TD Asset Management in just a moment. You can get in touch with uswith questions at any time. Email moneytalklive@td. com or fill out the viewer response box under the viewerplayer here on WebBroker. I want to get you updated on the top stories in the world of business and a look at the market action. We've got shares of Twitter on the spotlight today. That is as investors digest the news that Elon Musk is dropping his $44 billion bid for the social media company. In a letter as part of a regulatory filing from Friday, musk said that Twitter made a misleading estimation of spam accounts. Twitter has said it iscommitted to closing the deal and will bring it to court. Musk has raised concerns about spam accounts on the platform for months and Twitter says they represent less than 5% of the users. Investors are weighing in on an abrupt change at the top of Suncor energy. Mark Little has stepped down asCEO over a fatality in Suncor's minds. Suncor said they fell short of safety commitments and recognize a critical need for change. Executive vice president of downstream operations Kris Smith has been named CEO. Since 2015, Suncor has reported 12 deaths added sites. Weeklong COVID lockdown in thehub of Macau have had a big impact. Many resorts are trading down. Las Vegas Sands down 9%. They announced they would close venues through July 18 as COVID cases continue to rise. The city which is a special administrative region of China is home to many casinos. We are starting on a down note on Bay Street and Wall StreetFor this Monday trading day. 18,818 on the TSX. We are down a little more than 1%. When that brought a read of the American market, the S&P 500 at this hour down to the tune of 1% as well, 3860. We are back now with Michael Craig from TD Asset Management taking your questions on the markets and asset allocation. Let's get to a few of them now. We have a viewer, we get this question a lot in this environment, what is the outlook for GICs in this environment? >> First off, GIC, you are locking in your investment over a period of time. They have gone much higher. GICs are about as high as they been for some time now. When market selloff, and this year it's been equities and bonds, it is important to remember that your future returns are by definition higher. Markets go up 30%, you can expect typically returns to be muted going forward and same as when they selloff, they are expected to be higher. A typical bond fund today is yielding between four and 5%. That is way higher than it was this time last year. So GICs, you are earning more but you are locked in. I would always advise clients, for shorter-term cash needs, 6 to 12 months out, and make sense. But if you are looking to build wealth over a long period of time, they tend to fall short in that area. If you're looking for income tight needs, you might be looking at fixed income right now. It offers a higher yield and it gives options. You can always take your money back if you need it. In a highly volatile market, having the option to make decisions is critical. You want to have that. And you're basically giving that away when you buy a GIC longer-term because of that lack of options. If you are tired and you don't want to worry about it, it makes a lot of sense. We talked earlier about the bond market looking to cut next year, that will pressure GICs lowered next year. Our member that if you're trying to build wealth longer-term, they tend not to be the best choice. >> You're talking about fixed income looking more interesting. Is there any particular space and fixed income right now? >> We like government bonds, quite frankly. Canada is now trading through 3%, longer bonds trading at 330. The curve is flattening. if you get this scenario that you outlined earlier, it might actually be okay in this world of high volatility, is below inflation today, but he will be well above inflation in 12 months time. Corporate, you have to be careful here. On the investment side, Gilder backed up. They have it were softening on the spread, but on a corporate bond, you've got the excess yield you get paid for the risk of buying it plus the government yelled. You might lose a bit on the spread. It's not a bad place to look. High-yield, I'd be a little cautious. Yields a backs up a lot. There will be defaults through the cycle. I would say those places, you have to be careful about passive high-yield. The market is not superefficient, trading at high-yield bonds, understanding the trading structure is critical. You probably want financial management in that part of the market as you do with the… That we the key through the cycle. They're pretty good yields right now, you just want to make sure you avoid faults. In a passive fund, you will hit defaults by definition but an active one, you will be okay. A year ago, people… The big question was, where my going to get my yield? I've got it, but we had a very negative turn experience year-to-date and that's what has people shy but I would say it's as attractive now as it has been in the last 10 years. > Interesting stuff. All right. Fears of interest rate hikes of mortgage holders fearing renewals. One viewer setting in this question: is interest rate hikes of the Bank of Canada reach 2 to 3%, I assume they mean for policy rate or higher, what sort of increase could a mortgage renewal expect? I guess the fear is that when you finally get ahead of whatever fixed product you might be in right now or if you have a floating rate, you are feeling it already. >>Bank of Canada, as of this week, will be likely 250. We are already there. The market is expecting a little over three by the time they are finished. Then you would have otherwise been and then when you do go to renew, it's pretty big shock. This is something people are going to have to take into account when they are buying a house or building finances. They should assume that we are going to be in a world that doesn't have rates at zero permanently and act accordingly. So if you are stretching, you might want to think about having a buffer, a bit of conservatism is not a bad idea. On the fixed side… it has moved up a lot. I would be challenged to see it go a lot higher. At certain code, but massive downturn to previous years. If you think about it, everything you borrow represents about $10,000 a year in extra interest. It hurts if you are a buyer in one of the bigger cities of Canada Where the average house price now is $1 million. These are going to be a big challenge is to homeowners for the next while. Act accordingly. >> The run up we saw the before the pandemic, the big boost during the pandemic and now a higher mortgage rate environment, you have some people worrying about what that will mean the broader economy. >> It's huge. I would say a few things. Historically, when you've had this much of a moving commodity prices, the Canadian dollar has done well. The Canadian dollar has done well relative to non-US dollar pairs but the US dollar hasn't. I think that hesitation is the globe looking at Canada and saying how housing is a vulnerable part of our economy. We've had a major repricing higher up to the spring. Prices coming down is a good thing long-term. In our economy, something we need to address. The faster gets address, the more collateral damage it's going to create. Remember, for credit creation, the bulk of the collateral is typically your house. As house prices come down, credit creation comes down and we see a shock to the economy. As a country, we need to think about where we are going to grow and it cannot be reliant on building homes. We have way too much of our economy tied to this right now. It has to be adjusted. That makes a lot of sense. In this world, I don't think it makes nearly as much sense anymore. And I would be very cautious with my strategies not just now but as rates maybe get cut. We are going to have a much more volatile economic cycle in years to come for a variety of reasons. Be careful about leverage type strategies because they can create a lot of financial harm versus owning… Stocks and bonds can be risky, but you know on any given day with they are at. Once you go into illiquid asset, you are stuck with it and by the time you want to do something, you might not be able to… [video buffering] A reminder that you can get in touch with us at any time. Email moneytalklive@td.com. Now let's get to today's educational segment. Corporate earnings season can be a whirlwind for investors. Thankfully, WebBroker has some tools… That can make it easier to stay on top of everything is happening. Let's find out now how with Nugwa Haruna, Senior client education instructor at TD Direct Investing. Always great to have you. Let's jump in. How can investors track earnings season through the WebBroker platform? >> Hi, pleasure to be here. As you mentioned, it's earnings season and this can be a very busy period, both for investors as well as those who work in markets. For investors who are trying to keep on track with earnings announcements, they are able to do this when they go into WebBroker. So once I'm in WebBroker, I'm actually able to click on the research tab and on the market, I'm able to click on events. Depending on the kind of investor I am, more concerned with Canada or the United States, there is a variety for everyone. Today we will stick with US listed companies. Once here, I am able to click on the tab that says earnings announcements. This gives me a breakdown of companies that have earnings announcements today. Some of the information I will see on here will be estimates when it comes to the analysts consensus for these companies as well as with the earnings were for the previous year. So as an investor, this gives me an idea if there has been a projected earnings will for the companies and once again, I can act accordingly. As an investor, yes I might be interested in the markets as a whole, but I might also be interested in specific companies. So in that case, I'm actually able to click on a specific company. We will stick with what we have on screen here, and I can pull up more information about that specific company, what the earnings are for that company as well as what the projected earnings are the company in the next few years. So once I do that, was able accompany up, I be able to click on the tab that says earnings. Once here, I can see a breakdown of what the earnings have been in the last four quarters. This gives me an idea on if the company is experiencing earnings growth or decline in its earnings. I can also see what the estimated projection is by analysts for the earnings for that company. If I want to see a little more information, I can do that by pulling up different analyst reports. In this case, I can look at something like MorningStar. MorningStar will look at the financial statements of the company to create ratings for these companies. If I want to pull up his financial statement myself, I could do that as well. I could scroll down here and pull up the income statement for the company as well as the balance sheets. >> That gives us a great overview of earnings, events and estimates for company. What about the people that like to stay ahead of earnings news? What tools are there on the platform for that? >> For an investor who actually wants to stay ahead, this could help them with their trading decisions, investors can do this by actually setting up alerts. So an investor might not actually have the time to go ahead and have on a calendar when each company they are tracking has an earnings announcement, but they can use the alerts tool within WebBroker. So once you click on alerts, and investors able to receive these alerts by email or by push notification if they have a TD app installed. For the purposes of this example, as an investor, let's say once you have an idea on the events the company has coming up, I can click on the events tab and scroll down and actually decide to receive a notification for the earnings and give myself a head start. So once again, it will help me better place my trades. One thing an investor can do as well is set up and alert as well to receive a notification if there has been an estimated change when it comes to earnings for these companies, so the analysts have changed what their consensus is. So once again, make sure that this investor does not get caught off guard when making decisions. There's something for everyone in WebBroker. Thanks for having me. >> That was Nugwa Haruna, Senior client education instructor at TD direct investing. Let's take a look at some upcoming master classes the client education team is hosting this week, including a session on financial literacy, WebBroker demo and a class on technical analysis. Make sure to check out the learning centre in WebBroker for more educational videos and upcoming webinars. Before we get back to your questions from Michael Craig on asset allocation in the markets, a reminder of how you can get in touch with us. Do you have a question about investing or what's driving the markets? Our guests are eager to hear what's on your mind. Send us your questions. There are two ways you can get in touch with us. Email us any time via moneytalklive@td.com or use the question box right below the screen here on WebBroker. Write in your question and hit send. We will see if one of our guests can get you your answer right here, at MoneyTalk Live. We are back with TD Asset Management's Michael Craig, discussing asset management and market allocation. We are talking about gold. The question is: is it time to buy gold? We can't give buyers recommendations on the program, but what do you think is the outlook for gold? >> Gold has been tricky this year. You have to look at it relative to your base currency. So the US dollar... [video buffering] Second, everyone always wants, when a question asked what's going to happen? Our job is to think about states of the world and what's the most likely in a given state. In a state of the world where hiking creates a deep recession that leads to a credit problem in terms of the lack of credit and going into a deep funk, gold should do okay in that world. Think of gold as part of your portfolio, it is a diversifying asset. You're probably good with it in equities. They have done okay. This is your hedge or an asset that does well in a certain type of world. That's kind of the view I would have on it. I don't think it's a bad idea. It's come off quite a bit. But you have to understand what you're buying it for. Ultimately, in that world, with what you said earlier about cutting, that's a world where gold is okay. But because we are now into a recession and seeing this policy… It's been a tough one this year. It's not traded well and so you have to be quite cautious and understand could it go to 1500? Absolutely. in the portfolio context, it makes some sense. >> Another viewer question about currency. The outlook for the Canadian dollar versus the US dollar. Of course, our most important pair considering they are our nearest trading partner for the near and medium term. >> CAD a has been 76 were $0.80. The action in the currency market this year has been a euro, Young, Sterling, which have all been crushed. Even though the CAD is a bit softer on the year, relative to other currencies, it's been a champ. Going forward, a few things, the housing risk is real. That's a real negative on our growth. The commodity risk over the next 10 years I think is quite bullish for the Canadian economy. Between issues with supply and issues with lack of investments, commodity prices are going to stay high as a means to slow growth and consumption because we don't have the excess capacity across commodities whether it be in the metals, energy, grains or agriculture. That's a bullish picture. I think that longer term, five years, the Canadian dollar is materially stronger than the US dollar. I think there are major problems in some parts of the US economy. I think there are huge problems in their political system. I think that makes Canada look attractive for billable investments. So six months, who knows? If we go into a harsher slowdown, Canada is probably cheaper. But long-term prospects for our country relative to our trading partners actually looks very bright. Therefore, I would expect to see, from a valuation basis, it's dirt cheap, but valuation of currency can persist for years. As our housing market cools and becomes less of a drag on the growth of our economy, I think a lot of upside in Canada, I wouldn't be shocked in the next years to see $0.90. >> We will have that conversation in a couple of years as the show matures. Let's get back to viewer questions. Would you deploy a new money here or wait? A lot of investors are trying to figure out this volatile environment, what to do with their money. >> This is all about framing. If you are investing a lump sum and it sound 5% tomorrow,Most would feel upset about it. I would say it really doesn't matter if you properly assess the timeframe that you're trying to invest in. For long-term capital appreciation, these are the environments where it feels… You should feel sick when you are making decisions right now because that probably is an indicator that it's the right decision to make over a 3 to 5 or 10 year horizon. Look at, equity valuations come down, I just talked about earnings being down one year, it's one year, not a big dear all, long-term prospects are looking good. Bond yields are high. When a valuation basis, we are in a better spot. Could we see another 10 or 15% downturn in the market? Sure. Do you want to leg in? Possibly. If you have a five or 10 year horizon, I think right now is actually a pretty interesting time to start point capital. >> Is interesting it that you say you should have that feeling becausea lot of people think that investing should be separated from emotion. >> Is really important… Those emotions you have a very human. He can't do anything about it. As an investor, you need to be aware of those things to recognize that you're probably either chasing, which is always dangerous, or you're going against the current and picking a reasonable spot for investment. It's really important to sometimes go against those things and really when you step back and think about what am I trying to accomplish? Is this long-term investment, trading? For longer-term investors, absolute. >> Energy was the clear winner in the earnings of 2022. The viewer is asking, is the running energy stocks done now the recession warnings are getting louder? >> It's become a lot more challenging for energy. The supply picture is challenging, which is bullish for energy companies, no question. If you are a traitor, you probably want to be cautious here because of the recession, if we do have a deeper recession, the man goes down. Demand for energy goes down. And that's typically the Delta in oil prices. To look, that next six months, I think it's not clear. Longer-term, look, shareholders of energy companies not being rewarded for new investment, these things are going to be cash machines and you certainly don't want a marginal player because you need to think about ESG risks now because if they are not managing their carbon emissions, which is going to be increasingly priced, that's a problem. But airing on that, think this will be an area where you will see a tremendous amount of cash flow being sent back to shareholders because other than maintenance, with, there is much else to do. Even with the rally this year, still a very small part of the S&P, obviously a bigger wait in Canada. Right now, that weakness he said, there is some recession fears, there also some people selling the winners because they are re-ordering their portfolios so there are a lot of technical factors. >> That's Michael Craig from TD Asset Management, take your questions on the markets and asset allocation. As always, do your own research before making investment decisions. Our minor you can get in touch with us here at any time. you have a question about investing or what's driving the market? Our guests want to hear what's on your mind. Sen. question. There are two ways to get in touch. Email us via moneytalklive@td.com. Or use the question box right below the screen here on WebBroker. Just write in your question and hit send. We will see if one of our guests can get you your answer right here at MoneyTalk Live. the Bank of Canada is set to deliver its latest rate decision on Wednesday. Anthony Okolie a joins us with what to expector what the market is expecting. >> The Bank of Canada will stay the course and hike its target rate 75 basis points this Wednesday, this move will come after Friday's jobs report which showed a cooler labour market across Canada in June with employment falling by 43,000 jobs. Despite the decline, the Labor Department is tight according to TD Economics with hourly rates up by 5.2% year-over-year which is an acceleration from May 3 .9%. This echoes results from the Bank of Canada's Business Outlook Survey. TD Economics also expects that risinginflation expectations continue to drift higher according to TD Economics. The Bank of Canada will have to go even further in order to bring it under control. Just a couple of other points from the Outlook, TD Economics expect a further rotation away from durable goods moving to services in the third quarter of this year. They think the impact of higher mortgage rates will slow down residential investment significantly this year as well is into 2023. Of course they see the Bank of Canada hiking rates to a terminal rate of about 3 1/4 by the end of 2022. >> Any thoughts here on these higher policy rates? What will they mean for real interest rate? > I think real interest rates are what really matters to Canadians for investing in savings decisions. Will interest rates adjust? They have recently turned positive according to TD Economics. For fixed-rate borrowers, what this means is higher inflation actually reduces the future stream of interest rate payments. Unfortunately for savers, higher inflation actually eats into the nominal return. So if there is one silver lining here, TD Economics believes that as the higher expectations… It's going to make borrowing more attractive today. > Great stuff as always. Great to have you back. >> My pleasure. >> MoneyTalk's Anthony Okolie. Let's check in on the market action. First trading day. Heading into a new earnings season. Concerns out there that we will hear about earnings revisions to the downside, concerns about China and their COVID situation. Down to the tune of about 1% on Bay Street with the TSX Composite Index, 18,818. Tech is getting hit on both sides of the border. We showed you Shopify earlier, we got lightspeed commerce at 2585 a share, down almost 5.8%. I was noticing that even though gold is not up to much today that some of the gold-mining names are making a move now. Kinross has gone flat on the session at $4.35 on the screen right now. Not sure without telling me. Checking the S&P 500, the broader read of the American market, and see what's happening on Wall Street. Got the S&P 500 now down by about 1%. The tech heavy NASDAQ being hit harder at the gates this morning, down to the tune of about 1.9% for the NASDAQ 100. We will show you Twitter in the market reaction, the news broke after the closing markets on Friday as we are heading into the weekend. Regulatory filing and the letter in there that Elon Musk intends to drop his bid. Twitter says it will fire back on that front. A lot of uncertainty around the story clearly and Twitter shares are now at 33 839, down a little more than 9%. We are back now with Michael Craig, head of asset allocation at TD Asset Management. A viewer question here about… You mentioned a little about clinical risk. What's the risk the US midterm elections are going to post to the markets? > I think you go into a divided house. Congress is probably going Republican and the Senate there's a chance, which means you get two years of good luck. I would look to the 24 cycle is where the risk is going to arise. Markets don't know if I is running again. It's unclear about who's going to be on the Republican ticket. You're obviously seeing quite a bit of really challenging discourse across American society right now. I think this is going to be the most nastiest election cycle we've seen in our lives is >> And that's saying a lot, considering where we've been in recent years. >> The 1930s as the last time we saw this nasty. That's coming. The world is not gonna like it. It will have… The second order effects will be interesting. 10 years ago, in Europe, the issue was that you couldn't get alignment in policy, fiscal policy, issues in Ireland and Greece. If anything is out of this, I think you actually get more alignment within European countries which is interesting. It will be interested to see how our country trades off. We certainly have lots of kind of animosity right now across various political groups. I think it's important to watch what's happening in the US and to check ourselves in terms of we do want to be there as well and really think about that. So these things sometimes, you know, when it gets too easy, that's when problems occur. When things get volatile, that's one cool head start to prevail and start thinking about working on these things. It's almost like marriage. I think that's what comes out of this. Until we get there, we will have to go through pretty nasty campaign, particularly in 24. 24 is going to be really, really pivotal, I think, when I think about the election calendar. >> Volatility, politics, we have another viewer question talking about tech. Is tech interesting after the steep selloff? >> A few things on tech. It's an interesting question. I would think that when we do find a bottom in the market, it will be tech that leads us out. It's hard to pinpoint when that happens, but look for a bottoming process. You mentioned earlier that sometimes you can do technicals. Tactical generally tell you what the market is thinking and when tech stops making new lows, I think what you're seeing is the market starting to clean up the last marginal seller and you're getting set up for better markets ahead. So is it early? Probably a little bit. It starting to trace out okay. Why do you buy growth? You by scarcity. Why is energy rallying this year? Because it is scarce. As we get to the challenges with inflation and start recognizing growth as being a scarce resource again, which basically has driven markets for a long time now, then tech will do quite well. I would say focus on tech with real businesses like concept tech, text that can earn a cash flow repeatedly versus tech that might do something someday maybe, so be careful. I would stay away from speculative tech because I don't think we're going back to zero. Speculative tech did well in zero industry environments when you discounted zero. In a world where rates are still positive or barely, you want to make sure you go into establish tech, real businesses that generate profits. be mindful of what you are looking at and don't chase the concept stuff. >> And do the homework. here's another question about China. China's cutting rates. Is that an interesting place to look right now? >>a few things. First, China has been a tough market. 21 was challenging. This year has not been great. They have a very different approach to COVID. There is a lot of volatility in China today because of lockdowns and so this will eventually disappear, but it isn't going to be a straight ride. Putting that aside, I fully agree with the viewer. They are looking to stimulate growth. If it wasn't for zero COVID policy, I think Chinese stocks would be higher. You have a bit of a headwind, but I do think it's interesting. I almost look at China as being a completely different world to invest in. Much of it is very unrelated to what's happening in North American and European markets. So it's a great piece to your portfolio. Don't get carried away. Governance isn't what it is in North America, so be mindful of that. But we do say that China is looking more interesting than not, absent these COVID policies which have been a real challenge with Chinese investing. >> We talked a lot of themes. Any final thoughts for the audience? >> It's always good to put things in perspective. So today, bonds are off to the worst start in almost hundred and 50 years. Stocks have been a lot of fun. You might be looking at your portfolio and thinking, you know, am I going to… My done with this? MIO? I would say these types of things that occur, they set up for better investing. After. First off, my sense is that is not gonna happen in the next six months but we are at a better point in the markets in terms of evaluations. Secondly, the biggestmistakes investors every day was they react to yesterday's news and not think about tomorrow's or what they are trying to achieve. Always think about what it is you are trying to do. What are you trying to solve for? Many times, we get talked into things, neighbours buying XYZ you're some hot saying or crypto or whatever and we get sucked into things. And that's when you lose money. What you want to think about is what you are trying to achieve. You got your money that you have to be cautious of. You've got some speculative money where you might be looking at things that are more highflying. That's fine. Just make sure that you understand. That's just the nature of speculative investing. And recognize what you're trying to solve for would be… If I were to give advice to anybody, it's that. We focus on what you're trying to do, not on what do I need to do right now, with the trade. That's typically not a great way to manage money. >> Great chat. Really enjoyed it. Come back soon. >> My pleasure. >> Thanks to Michael Craig, head of asset allocation at TD Asset Management. Stay tuned for tomorrow, Andriy Yastreb from TD Asset Management. He will take your questions on energy stocks. You don't have to wait until we start the show tomorrow at noon Eastern time, you get them in any time via moneytalklive@td. com. That's all the time we have for MoneyTalk Live today. We will see you tomorrow. [theme music]