Michael Craig

[music] >>hello, I'm Greg Bonnell and welcome to MoneyTalk live brought by TD direct investing. Everyday we joined by guests from across TD and many of whom you only see here. I will take it there was moving markets and answer your questions about investing. Coming up on today's show, I'm joined by Michael Craig head of asset allocation at TD asset management to discuss with the US midterms commune for the markets going forward. In today's WebBroker education segment, Kaitlin Cormier's initial taken research exchange trading funds on the WebBroker platform. Here's how you can get in touch with us. Email MoneyTalk live@td.com or below that of your response box under the video player here on WebBroker. We'll get to our guest of the day and give you an update on the markets. After a couple days again sitting at his midterms, but is give back today, of course we don't have a clear picture as of yet as to who will be controlling Congress as well to being counted, we have 140 point pull back on the TSX comps index and a little bit shy three quarters of presentencing downward pressure on the price of crude oil today, among the sectors that are giving back a little bit. Let's check out know this energy, and 1/2 cents a barrel in the stock almost down 4% at 2752, and at shopify has been giving some of that back in recent days, down almost 5% today at 4196 and south of the border, there are still counting votes it's a pretty key areas and the S&P 500 indicator of the American market giving back some of the Danes of recent days about 23 points at 3% and NASDAQ as we come to the end of earnings season, a lot of disappointments from some of the biggest tech names out there right now hundred 60 point deficit down a little more than a full percent. It was taken on Apple, talking about mega tech, some weakness in the same today under 36 bucks and change down about 2%. And that is your market update. The boats are still being counted, the reported red wave Republicans to gain control of the House and Senate has really materialized and I can have some impact on the markets and the economy going forward. Joining us now, we have Michael Craig, great to have you back on the program. We should be surprise given the last two elections in the states, wouldn't a clear picture, but it doesn't look like you have this red suite and what should investors be thinking about as you continue to count the votes? >> Particularly when you have a divided Congress, which is not going to happen, but you can get gridlock on policy going forward. I think for 2024, this sets up, and Republicans underperformed last night. You have a slowing economy, inflation being at a multi-decade hi the fact that they weren't able to do better as I think alarming for that party. It is also interesting to see where you've seen traditional GOP candidates do quite well and some were backed by Trump do quite poorly, I think the catalyst for who run for president in 2024 is shifting dramatically and the big winner last night was Florida, with a 20 point when and what has traditionally been a purple state and he is coming out as a clear winner last night. If he is looking in terms of the springboard for presidential ambitions, he has a strong one from last night's showing. >> So we could have some different players come across different ones and we thought we would get. In going forward, there are enough challenges for the economy right now and this country and south of the border, for inflation, how do investors view the political mix right now, is it the status quo? >> I will say that one of the real risks is that Republicans will probably take the house but not as many as a thought. in the last 10 years or so, when Republicans would run the house, the leadership there struggled to corral all the various sectors within the Republican Party. You had tea partiers and now you have MAGA candidates and I think it will be challenging for McCarthy to get that in an unified approach and for markets, the biggest risks is that you get to one of these circuses with the debt ceiling and all the shutdowns and noise and nonsense and the risk of a default in the US treasury and coming out of this the key risks we are worried about in terms of, that people don't fully understand the implications of going this way and what will do in the headache that will lead to in the market and increased medicine certainty. That is one thing and thinking to watch for the next couple years as we head into 2024. >> So this political uncertainty about still being counted and I'm sure concern for investors and into tomorrow morning is a way for key votes to be counted, would be worried but inflation anymore? >>in terms of additional fiscal federal spend, then the snow can happen in government spending is probably a good thing in terms of inflation because you need to take that demand off the economy. So, that will be a positive, or possible, but tomorrow support, these things are crazy right now. The value of the data in the grand scheme of things, it only gets huge. But the reaction tomorrow because we are so focused on data points and data points, and so, these are things where essentially we are going to see a downshift inflation what happens tomorrow or next month or next year. Who knows? But these reports are created a tremendous amount of volatility and quite frankly, if you told me right now with the report was, I'm not certain I know which way the market is going to go. In October, there was a terrible inflation print, much higher than expectations in the market sold off afterwards for about half an hour and the rest of the day rallied hard. And so, you're getting really weird ebbs and flows right now based on the market and who's doing what and liquidity, domain number tomorrow and the reaction and it is hard to cost which way it will go just because of that degree of uncertainty right now. >> And you've been on the show number of times depending on where you're sitting, sometimes aftermarket selloff and we see a surge going higher and just want to gauge where we are right now. In the past, you've told me and correct me if I'm wrong that until this changes directions, when I went to see her really sustained trend on the upside. The Fed really hasn't changed where it is going and so you get these rallies, you can't really trust them. >> There are nuances! First of all, Bank of England and Bank of Canada and Bank of Australia and the Federal Reserve Bank of Australia have all really started to indicate that the path of hikes is going a moderate and that we are nearing a terminal rate, and the bank of Canada last month 50% was expected and the Fed's continued to drive forward and what is interesting is that last week your statement came out and they were saying: we acknowledge that there will be delayed impacts of tightening this, basically saying, we note that the brakes in the economy and it is like trying to stop a locomotive, it takes a few miles but it will happen. The market saw that as a positive in terms of raining in. And then he said everything he could to make sure the bond market stock market sold off because he is terrified that financial conditions would ease and there unable to get on top of inflation. This is where days later you see other Fed governors coming up and talking down that. I think you're going to see is that three months ago every Fed official was lying and the same question inflation, but now they're saying, well, labour-intensive softening and my district is not as soft as it was and they are getting a bit more nuanced. And we are within months as her into the end of this hiking cycle and I would expect to see material downshifts in the economic growth next year and that's a crazy idea, some inconsistent. Ultimately, I think you start to see some degree of stability in the bond market first. In our opinion, bonds offer better value right now than stocks. And starting to see that eventually, and the curb is very high right now and is far above the tenure and at some point that reverses and you get more stability in the short ends start to rally. And I will be okay were probably getting to the end of his equity market selloff and that means they won't rally, there's typically a lack of that. Once you start to see that, I could be more comfortable there were and at the end of this. Everything right now I think is just turning a bear market rallies and looking at your charts. You're basically going nowhere but with an overall trajectory of lower. I did that still continues into next year he at least of the stock markets. >> I nuanced point of view, anything else to keep an eye on in the upcoming terms? You get these tight moves in even judge based on where the market is going it's just a time of noise for the next little while? >>I was having a conversation with my group but things into the next year, and one thing you say shifting is the price of the US dollar. The US dollar is in a topping process it is a huge trip hire and the US dollar versus everything has been phenomenal this year, but is now to the topping process and a number of fundamental factors are starting to move against the dollar. I think we need to be mindful that a weaker dollar next you will have future locations on investment opportunities and risks for investment returns. Something where thinking openly about is how to think about that going into it. Right now we are illustrating this and it is rallied off what will likely be a multiyear low, trading at 115 and the yen is completely imploded this year. We are starting to see that topping process where you can see some strength in these currencies. And relative growth of these jurisdictions is starting to catch up to the US. I think this is not something for tomorrow, but going into next year, then the conversations we may have even a year from now, a weaker US dollar will be a part of that conversation. >> That the calendar for a year from now! Great start to the show it will get your questions for Michael Cragg in a moment's time. You can get in touch is a time by emailing MoneyTalk live@td.com or using the video box here in WebBroker. And will be updated on the tops or is the world of business and take a look at how the markets are trading. The parent company of Facebook is cutting 11,000 jobs as tries to rein in costs, the platform CEO Mark Zuckerberg made the announcement in the letter to employees and that the less amount to about 30% of the company's workforce. Zuckerberg says they're taking additional steps become a more leaner and efficient company including discretionary spending cuts and extending a metas hiring freeze into the first quarter. The shares of course been a depression this year as a company is attempting to focus the business on the so-called meta-verse. Shares of Disney in the spotlight today, the giant is disappointed the street with his earnings report, higher programming and expansion costs which Disney plus streaming services did well in that division, fantasy plus actually adding more streaming customers than expected for this quarter. Disney CEO Bob Sheppard expects Disney to be profitable in 2024. Elon Musk has sold another block of Tesla's share in the wake of his 44 billion-dollar acquisition of Twitter, regulatory filing has shown that he sold nearly $4 billion in Tesla stock in a deal that closed late last month and the world's richest man began paring back is Tesla holdings late last year and sold more than $36 billion in shares. Let's take a look at the market action right now, will start right here on basted with the TSX comps index down about hundred 70 points and just a little shy of a percent and also substantial pressure on the price of crude oil and that the American benchmark crude right now is 86 bucks and change down to half percent. South of the border, there is still counting the ballots and we don't have a clear picture yet of the makeup of Congress and the markets are giving some of these gains in recent days at the S&P 500 down about 33 point down of just a full percent. And back now Michael Cragg and taking your questions about asset allocations and let's get to them. Any signs of the central banks are winning the fight against inflation? This is what it is all about in the end. Are they winning? Well, they will win. A few things here, on the good side things are slowing. When the Fed said yesterday, these grounding plans, there is just no volume and so the LA port of volumes has dropped dramatically and do that any kind of cascading in the index it is just going over, so consumption is going down. In the US, is labour. Not enough people and the unemployment rate picked up a little bit last week and even though October's job report is still turning 60,000, the household survey was still negative and historically, the household survey indicates this. I think, the crazy thing with this is that this inflationary period that we are in right now is really just come about in the last year. it's not just the lack of investment or what have you in their heirs we have invested as much, but I would say that this period of time and I think we have to have a commencement of humility about this because this hasn't been a shock, prior episodes we have a big trip in inflation, they don't go like this forever and when they come down they come down quite sharply, they're not symmetrical. I will be terribly surprised to see inflation materially lower in 12 months time. But, I would also argue that the volatility of inflation is going to be elevated for probably the next decade or so for a variety of reasons. Particularly, one of those reasons is our lack of commodity supply. We go through recession next year and we have a rebound and go back to trending growth which is a function of the growth productivity, so not very exciting. But we will reach a limit where there is not enough commodities to meet the demand and that demand, things like cars or building better cities to deal with climate change which I think is a real driver of commodities, it's going to be almost like is not a demand driven inflation so much as a lack of supply. These are our things are going to be challenges for decades. My sense is that once we go into recession, you'll see inflation come off pretty hard. We were just talking about meta, I can tell you right now there are many employees who are not asking for a raise, and while you have seen some areas of tight labour markets intact, we've seen quite a bit of layoffs now. I feel grimacing from in 2008 when the housing came to a bust and all these construction workers were out of work for you shortages of nurses and you can't take a construction worker and turn them into a nurses with a labour mismatch which can be problematic. There areas of the economy were starting to see weakness in employment particularly in technology and so, the overall picture is that is just not happening as quickly as people would expect. >> We'll take another question, is it better to be in defensive stocks with the yield like utilities or in the body space? >>well, you want to swing everything one way or another. Our view is that with investment-grade aggregates and bonds, yielding over 5%, to me that makes sense to be out there and earn a coupon and try to avoid the volatility. As a statement, we are playing defensive right now trying to protect capital wherever we can and realize these errors and that will be the way out for the time being to play it. And utilities will fall less than technology stocks and the bear markets just like real estate sectors and healthcare. They generally will outperform, but that will all go down and you will make money there. Whereas, I feel a little more comfortable that fixed income is likely near in the cop of bond yields and you're carrying, and nothing happens your 5% and if we go to a more severe recession, and yields rally there's opportunity there. >> Another question, energy is been one of the big winners in a tough year, is it too late to invest in the sector? Or have they missed the ride? >> Always tough, I was looking at this this morning, if you look at the US energy sector, it is up 65% this year. You know, he always have to ask yourself, am I chasing this and what is the rationale mark a couple things as energy, cash flow basis, they're making tons of money and the cool thing about as an energy investor right now is that there, the money is in the maintenance And there's no expansion, there is no exploration. They're going to make a lot of money, you just have to be mindful that if we do go into recession, oil is probably going back to low 80s in high 70s and that is near term I think some risks, but as longer-term investment, is maybe in the early days for energy and not a long-term basis whether be oil or fossil fuel, is just no supply no supply coming and is a core manager, you have to sit back and just pay out cash and buy box stock and keep it simple. There is no competitive threat coming in, nobody starting a new energy company or fossil fuel company. His long-term good for energy but over the next six months or so, I will caution that we do have a recession expected and you should expect to see oil fall. >> A bumpy ride and it has been a bumpy ride already! And should always do your research before investing and you can get in touch with us anytime and just email MoneyTalk live@td.com and listed her educational segment of the day. ETF's are exchange traded funds and one asset class available to investors and WebBroker has tools which can help you research the space. Joining us now for more with Caitlin Cormier, a TD investing and Caitlin could have you back with us. Take us through it all! >> ETF's are great option for investment and there might be some specific criteria information that they are looking for when they're trying to dive into ETF's and it can be challenging to narrow down what is out there. Let's take a peek at the tools we have on WebBroker and let's see if we can narrow that down a little bit better. Let's hop in and were going to do is we're going to click on the research button under the tools category we want to click on it screeners, and when this comes up were going to click here on the ETF option. We have some pre-created screens you can absolutely take a look at in some specific areas for the purpose of today let's go ahead and create our own the screen, let's click create custom screen. That will bring us here to a page where we can actually select the specific information that we are looking for we're looking for an ETF. In this case, I'm going to go ahead and choose a couple different things here and the first thing I will do is click index and I know index in TS tend to be quite popular so when you go to click add criteria and what you say show only index funds. We are also going to go with, I went to choose underperformance tracking error and we're looking for an ETF that is actually being pretty close to the index that it is looking to track, so whatever is looking to track is staying pretty close and not veering too far off. The last thing I'm going to look at is under our rating and risk and I went to click on MorningStar rating and that is 1/3 party that rates mutual funds and ETF's. Maybe we are looking for something that is relatively high rating working for four and five star in this case and then I'm going to click to include mutual funds it is in this scenario I just want to see ETF's and I'm actually going to click Canada here. Just look at Canadian ETF's and you can use any criteria that you like me to click on any of the criteria it will give you an explanation of what that criteria means and you can add it. For today, just going to go ahead with these options because either 73 matches here. When I click, were going to view here and see what those matches are going to show us that information, the country that we chose and the MorningStar rating altogether on this page and you can go ahead and choose some different categories here to see additional information and lastly, I know Greg this is something you always remind me of, and always save the screen if you want to come back and we done all this work and created this screen and you can go in here and put index four and five star for example. And then click the save the screen button so we can come back to this and view it in the future if want to look at these results again. >> Yes I will go through and make a screen profile and then be like oh, I forgot again! Not forgetting is much that used to because of your reminders. So we are interested in researching ETF's in learning more about them how to do deeper dive into those funds? >> With a couple different options and the first option is to look up specific ETF or something that jumps out at us immediately and we want to jump into it, we can look at the overview we could also have a really good compare tool and if there couple to catch your eye and you want to narrow in on those, let's see what that looks like. Were going to go back to our screeners results page. And again, if I click on a particular ETF I can click on this summary button down here and I will take me to the overall page for the ETF, but in this scenario, we can do is I want to compare some similar ETF's and of course, often through similars I'm comparing apples to apples and to what I want to do in this case is someone to go under profile and in this case, I'm actually to go on equity style to reorganize the ETF's so that they are kind of in a similar ETF's categorize together. In this case, what I want to do is choose some S&P 500 Index ETF's and again, there are very similar in all based in the S&P TSX and US dollar, but either way, for the purposes of today I'm going to choose those five and when you click the compare button. This is going to take us to our direct comparison and were having all of these ETF lined up against one another and I can quickly buy or sell or remove any of these ETF's from my comparison any point in time. And I can really see the information side-by-side for each one of these ETF's and really have a good comparison of one to the other. Things like my and DR's are listed and I could come down a little further look at the return either annual or calendar returns and view those side-by-side. I can also look at different risks and I want to see different risk information and between a five and 10 year term. I've got lots of information that I can see on the screen and the last thing I can do is that there is a performance chart where can actually see the performance of these ETF's lined up on top of one another to see how they are performing in the past and really get a good idea. This tool really allows you to do quite a bit of extra research and portability to dive into once you done that screen to help you find the different bonds that you might want to do additional research into. >> Great stuff as always, thank you Caitlin for that. At TD investing and make sure to go on WebBroker for more interactive videos, master classes and upcoming webinars. Write about your questions will asset allocation with Michael Cragg, a reminder of how you can get in touch with us. Do you have a question about investing, or what is driving the markets? Send it to us here at MONEYTALK LIVE. You can send your questions two ways: You can send us an email anytime at MONEYTALK LIVE AT TD-DOT-COM. Or you can use the question box at the bottom of the screen right here on Web Broker. We'll see if one of our guests can get you answered your question on MoneyTalk live! Your touch with Michael with asset allocation and we have some fan man here, I'm a big fan of Michael Craig, are the problems facing big tech self-inflicted or not really an issue with the broader market? >>I don't think so, the problem with tech is that it started at a high allocation and it is all growth and what that means is they make money maybe they don't and there's an expectation of the make a lot of money in the future it would just move long-term durations up. So does longer-term interest rates and you can't really fault management, because every company will have its own issue. And that is not Google is not Apple and supply chains there, but a year ago they're all truly dollar companies and so some point the market is going to correct and when you look at the top 10 companies in the S&P 20 years ago, it changes over time as the economy evolves and I think this is a general rotation. One thing is to be careful of is you have these themes the decade that tend to detach from everything else and go supersonic, like Japanese stocks in the 80s or commodities in the 2000's, were probably coming out of another decade we have a sector that has had tremendous outperformance and of the display to continue with that leadership going forward. It's just a natural rotation as things have changed and are areas that are going to drive capital in the years to come. >> When you think about these big tech companies and these massive areas of growth, and when I think of the Apple device I have in my house or lots of certain streamers, to become part of the household budget. >> There is a saturation point with this is not a lot of growth left. I think another thing to his and an area with money in the private equity space, we are seeing things were getting funded that perhaps now don't make as much sense because we can go look, you can earn 4% reign of the Government of Canada and that's a risk free rate if you well. And all of a sudden, these business models have to readjust for the expectation you need a much higher return and therefore, may not be worth the investment anymore as opposed to previous years. >> And lots of questions coming in for MC as the audience calls you! Listing one but fixed income. Where to put new money in the long term hold for the fixed income space? >>I want to assume that the writers on the looking at a fixed income, but if you're a little older and more conservative, this totally makes sense within fixed income, counter to what people are doing right now, a lot of people are looking at short rates and short GICs and that is fine, barely getting that for couple of years. In a general bond fund and let's forget about high yield for moment I think will be an interesting place in about six months to nine months, but right now, investment-grade is giving you 5% so I would look for well diversified investment grade funds so your default risk is diminished. And you might have downgrades here and there, but whatever. And you're able to lock in yields for 10 years, right? 10 years of 5%. And I talked to a year ago and I said this would be available in a years time, you jump over it. And I was bonds and we have seen is the worst year in 100 years and everyone is saying, oh my gosh! If you went and bought a fund with new money today, all the bonds you're buying are trading below hundred. And so the returns that 5% is not can be taxed as income, one will be taxed as capital gain so not only are you looking at phenomenally high yields, much of that return is like to be taxed at an advantageous rate and these are things to think about as close to the alternatives right now in the GST market. I think your conserved investor and looking for a fixed income, I will get a broad universal based approach right now and that makes sense and trim it out to you can lock in that 5% for a long period of time. >> What's the biggest risk in that kind strategy? >> The biggest risk in the short term is that central banks just go wild and we just, wet overnight rates of 6% which I don't see happening, but there are people out there calling for that. I think it's crazy, but maybe it happens and they'll be really bad for the bond market. You get a very inverted curve and so I would assume that that would reverse. That is a risk for next year, but I don't think it's a high one. The longer-term risk is that central bankers for whatever reason say, you know what, I'm more concerned about jobs and inflation actually does become invented and inflation starts to move and continue to move higher than bond rates and that will be the worst case scenario where your return does not meet inflation plus. Right now it does in long-term inflation expectations are below expectations day but if that just attached to it that it will, it will be pretty bad, the ability investing in bonds in the 1970s when inflation was consistently higher. >> Let's take one but the commodities area, our commodity's place to be over the next five years with inflation where it is now? >> I spent the past years building a commodities air TD, so better be! We've got three fantastic commodity experts working my group right now. I tend to think that commodities go through these long cycles we go through. We don't have enough and we invest, and we overinvestment liquor. Of harvest we are pressed because of too much supply. We no longer invested, we now have demand that is moving from China as China's not assuming at the same rate as they have in the past, but we are getting these resources from other things. The demand is there but supply is not. And when you thrown ESG concerns and essentially, those commodity companies are nothing incentivized. Their shareholders are not pushing them for new production. So, you already see tight markets and commodity curves, with commodities or the physical and the derivatives market and we look at them across time. So, you can buy oil with three months delivery and to buy for a few months delivery. This further prices are trading below the current spot is which is an indication how tight the market is and the crazy thing is that in the last 10 years if you bought a basket of commodity Index, actually negative yield because you had that holding cost. Now that we are in backwardation, a basket of commodities, commodity Index acts yields 67%, so to me this is an incredible opportunity. You did an option if inflation stays kind of elevated you are and return on that and give surprise inflation like this year than you are to make money but you're paid to weigh because the backwardation in the market and it is like buying a home insurance for getting a check every month for hundred dollars. It's awesome. We think will be an interesting place to be and tremendous in terms of a portfolio. And just cautioned that commodities are volatile, both in a profile they create tremendous diversification benefits against traditional stocks and bonds. >> And with the risks of course with pure recession, risks with commodities. >> Yes, this is not for the faint of heart. You be really prudent and we know that they are risky. The decision is that you have to be cautious of his your sizing and make sure that you have the appropriate amount and understand the commodity markets go down by 50% in the markets and that's happened before is not that outrageous. Just be mindful that you do carry the type of risk in that asset class but again is to diversify or as a positive carry, so is quite interesting. >> And will direct your questions for Michael Craig an asset allocation just a moment and make sure you do your own research before you do any investment decisions and remind me to get in touch with us at any time. Do you have a question about investing, or what is driving the markets? Send it to us here at MONEYTALK LIVE. You can send your questions two ways: You can send us an email anytime at MONEYTALK LIVE AT TD-DOT-COM. Or you can use the question box at the bottom of the screen right here on Web Broker. They may still be counting the ballots and some hotly contested races in the US midterm elections, but of course, come tomorrow morning will be folks in the latest read on consumer prices for October and Anthony Okolie will be here to talk about what security says about it all. >> Now, casting the stills solid .4 over month gain and CPI is down from the gains that we saw in September and August an interesting headline inflation, they expect a . 6% jump month over month which would be the largest month over month increase in four months. Now, I brought a chart showing the security expectations and they don't see any relief in energy prices this time around. Reason being of course that Americans are paying more at the pumps last month and gas prices were up nearly 4% of the per month in October and that is the first increase since June. Now looking beyond energy, the cost of housing of course is a major component in the CPI and core CPI as well and TD security expects shelter costs continue to add to price pressures and we are still seeing robust rents and owners of equivalent rents as well but to expect further acceleration on a month by month basis. That is not in the report that shelter costs represent the largest risks to the forecast. On the other hand, TD security expects use car vehicle prices which as we've seen them increase over the past year, but they expect them to fall for the fourth consecutive month in October and that represents a two point and present month over month drop in course used car prices have been dropping due to slowing demand and of course, rising interest rates. TD securities also referred to the used vehicle value index in the report and this is a gauge of the wholesale market prices for used vehicles in the index actually dropped for the fifth straight month. All in all, the month over month rejections rather do imply that inflation likely slowed at a year-over-year basis in October with both core and headline inflation easing from September figures. >> I know that on the train tomorrow, I'll be waiting for that report. And if it comes in harder than expected, what is in the federal do about that? >> It could be interesting about the Fed has suggested that they would downgrade this, but TDs suggested the base for this hike has risen and certainly the markets are pricing in looking ahead to 2023, the marks are pricing and at 60% probability and up 50% basis point move in February and TD securities believe that that probably could move even higher. >> An interesting day, thank you for that Anthony! Let's take a look at how the markets are shaping up right now. After a few days of gains, 19,500 and the TSX comps index down about hundred 60 points, a little shy of a full percent and reducing downward pressure on accrued today, an American veteran on crude and as well as in Canada's energy, let's check out Crescent point energy and sale staring right now, 10 bucks and $0.68 down almost 5% on the hour and the TC energy, this is start moving in the opposite direction despite the price of crude at 3% right now and a few things going on including looking to sell about $500 billion in assets and repay debt with that and funds new projects and so different driver behind this name today. It's as the border, circum-S&P 500 doesn't count those votes and get a clear picture of the Congress will apply going forward at the S&P 500 giving back from the gains of recent days. Down about 37 points to shy the full percent and tech heavy NASDAQ under some pressure today and let's check in on that one. That about hundred 34 points, 1 1/4% and platforms talking about cutting a sizable amount of its workforce at the tune of 30% of the employees at Facebook and moving in the direction of meta-, parent company Facebook and we have about hundred and change about half a percent and were back with Michael Craig from TD asset management and some questions to get through. If inflation drops sharply, our view is asking, if inflation drops sharply once the economy slows what sectors will benefit? >>Oof! It all depends why inflation is dropping sharply. We see a modest increase in employment, and were not on the dire straits economically. And you probably just generally speaking voicing more cyclical names do well. Before falling sharply because were in a deep recession, bonds are going to be where the action is and stocks are going to continue to fall and please start to see some balance. Don't move too quick because if you're seen that happen because racing tremendous job losses, awnings are going to suffer and is going to be a tremendous volatile. And ultimately, as you get stimulus from ultimately lower rates, the cyclical part of the market will run and generally it is let out by higher beta names and that is where the action is, but there are a lot of ways we get to that viewer's question and I think it's important to understand why you got there because it is a different outcome on how the market behaves afterwards. I want to squeeze in one last question and I don't know where this reaches on the "oof" index... >> For the stock market probably not. As I get the pictures you should prepare stock markets and when you're talking about bottom, it is also the conversation at the dinner table, nobody really knows but we have to have an opinion. Just looking at that right now, as we touch the bottom or the S&P, overlooking at and hitting the 5500 range a few times are now but the balance higher cues being lower and lower and report have some resolution at 3500 technically and 3500 breaks, that opens up the pre-COVID highs of market at three 3400. It is very much an estimate, but 3200 S&P sticks my head is where I could see it heading. But, really depends on the trajectory of earnings now and if we see earnings rollover and the Fed still stays tight, then lower 3000 in the S&P is not unsolvable and were talking 10 to 15% from here, not the end of the world, but I think were in the recovery phase of the stock market. So be careful. >> Great to get your insights, Michael, thanks for joining us today. And stay tuned, we will be back with you tomorrow giving you the highlights of the week and also analysis of the latest US inflation report that Anthony was telling us about. And on Monday, Peter Hodson the founder and head of research at 5i will be our guest and taking your questions will mid-cap stocks. And you can get a head start getting those questions in if you just email MoneyTalk live@td.com. This all the time we have for to show today. Thanks for watching and we will see you tomorrow! [music]