Michael O’Brien

[music] >> Hello, I'm Greg Bonnell. Welcome to MoneyTalk Live, brought to you by TD Direct Investing.

Every day, I'll be joined by guests from across TD, many of whom you'll only see here.

We will take you through with moving the market and answer your questions about investing. Coming up on today show, we are going to discuss why our future guest today says it may be short-term pain, long-term gain for investors, Michael O'Brien from TD Asset Management joined us.

And in today's WebBroker education segment, Caitlin Cormier is going to take us to the difference between market orders and limit orders and how you can use them on the platform.

So here's how you can get in touch with us. Just email moneytalklive@td.com or you can fill is that your response box under the video player on WebBroker.

Before we get to our guest today, let's give you a quick update on the markets.

The TSX has been modestly negative throughout the morning session, we are stilldown 55 points or a little more than 1/4 of a percent. Nothing too dramatic.

Seeing some weakness in industrials, some utility names and some of the energy names giving a little bit back today.

Crude prices just sort of steady levels. There was a big jump yesterday and now they are steady. Let's take a look at Cenovus as an example of what's happening in the space. Nothing too dramatic but a bit of a wait on the top line number, God Cenovus at 25 bucks and change, down 1.7%.

Hudbay Minerals making some gains earlier in the session, up to 2 3/4%, eight bucks and four cents per share. South of the border, the broader read of the market, the American market, the S&P 500 just sort of flitting on either side of positive and negative and nothing too dramatic there, goes positive, goes negative, right now it's a pretty modest four points, 1/10 of a percent.

A big anticipated to be from Jerome Powell today that he was giving in Sweden didn't really have a lot in there about the future passive monetary policy and also some commentary about it being a nothing burger. That's the kids say, and nothing Burger, when they are not impressed by something. Check out the tech heavy NASDAQ, pretty much keeping pace with the broader market and visa was making some gains earlier in the session.

Right now it's up a very modest bug 45 per share, not even a full percent. That's your market update.

Investors who were hoping for better returns this year may have to exercise some patience.

Our future guest today says our markets may have a tricky path ahead. Joining us now for more, Michael O'Brien, portfolio manager at TD Asset Management.

Michael, great to have you back this.

Last year, I don't even want to say the numbers.

It we just want to put it behind us as investors. What is the path ahead?

We can be forgiven for hoping for better times but you say it can be tricky.

>> I think better times are ahead, it's just we still have a bit of wood to chop would be the way I would frame that up. Obviously, last year, what caught us all by surprise was just how rapidly and how high interest rates were raised by central banks. The good news is we are getting closer to the end of that story. But now, the trick for 2023, when you think about it, is how can we get inflation back closer to that 2% target that central bankers are very clear they want to see?

And how can we do that without a big impact on company earnings?

That's a pretty tricky path to navigate, and so being realistic, I think there is reasons to be optimistic.

Inflation has been sort of coming off the peak.

It's moving in the right direction. I'm just saying I think we should be prepared for some bumps on the road here in 2023 because it's not an easy task to soft land and economy. It's not an easy task to bring inflation down without sending unemployment up.

So I think we just have to expect there's going to be some trade-offs as we go through this journey. And it's not, put another way, I haven't seen the all clear sign to back up the truck and load into the marketeer.

I think we still need to be very discerning, pick our spots and be disciplined about what we want to do.

The good part of this though, I guess if we want to sort of put a little bit of a positive spin on things is the next six, 12 months, it's going to be tricky.

But if I'm thinking it longer term, you know, three, five years, when I look at today's starting point where the Canadian market specifically sits, historically, the market should trade between 15, 16 times earnings, that's kind of the long-term norm.

Today, we are trading at like 12 1/2, so well below normal.

I think about the biggest part of our Index, the banks is a great example, historically, they trade 11 to 12 times earnings, today they are trading below 10.

So what I see and that is with today as a starting point and a little bit of patience, over the next three, four, five years, I think we can have a pretty positive view of where Canadian equities are going.

It's just in the short term there is still work to be done. Central bankers are not finished with their task.

And at some point, there are going to be some ugly headlines in the newspaper about unemployment rate taking higher or whatnot, so we just need to be ready for that.

>> The work that needs to be done, perhaps, the headlines haven't arrived yet.

I'm thinking of the labour report we just got out of Canada after all of those rate hikes of last year.

Supersized rate hikes. The labour market is still very resilient.

What's happening there?

>> It's interesting to hit on that.

I think a lot of investors right now are scratching their heads because I think, collectively, we have all come into 2023 with a pretty similar playbook, which is the early part of the year will be difficult as all of these interest-rate increases hit the economy, but then things get better in the back half.

That was kind of the consensus view. Now I think we are looking around at each other saying, 100000 Jobs in Canada in December?

What was the US number, 300,000 or something?

Our session doesn't seem an imminent.

we are realizing this might take a little bit longer to pay out.

It's not this convenient six months difficult, the next six months great.

This could extend a little bit further.

So the glass half-full spin on this is I think we are seeing both in Canada and the US, consumers, households are much more resilient than maybe we gave them credit for. The glass half empty is this resilience is for saying, potentially forcing central bankers to be more aggressive than they otherwise would be, may be forces rates higher than they otherwise would need to go in order to create the same end result.

So in other words, could be a little bit higher interest rate environment for a little bit longer before it brings us to the eventual destination.

> So clearly, the big story of last year was inflation, the fight against inflation.

dominated all of our conversations about the economy and the market.

moving into this year, it's still sort of the dominant force. We get to a point in 2023 were we are looking at other things?

Or is it just these big macro challenges that we have to wade through for the next while?

>> I think we had an unprecedented boom in 2020, 2021 in terms of the stimulus, both fiscal and monetary, that was sort of the markets.

So I think it's only reasonable to think it's going to take more than nine or 12 months for that to dissipate.

So, you know, I think thosestill little bit of payback to come.

But yes, I think there's a good, you know, there are lots of reasons to believe that inflation may have already peaked.

It's trending in the right direction. I think there's lots of good reasons to believe that the peak in the central bank rate hike cycles is pretty imminent. You know, maybe not too many more hikes to go.

It's just, we are not there yet.

Once we get there, then there will be a whole new set of, whole new wall of worry to climb, but I think for the short-term, people are going to be glued to every inflation report.

People are going to be glued to every common out of central bankers melts, whether they are in Sweden or wherever they are.

That's going to drive the market in the short term. But yeah, I think that we can look forward to a new set of issues to worry about eventually.

> I was looking for a new set of things to celebrate, but yeah, there's always a set of issues to worry about.

When you talk about it being a tricky year and a tough one for investors, all that kind of stuff, how do you broadly play this kind of market?

Is it about patients, is it about not so much sitting on the sidelines but picking your moments?

>> Yeah, I think it's very much about taking your moments and also understanding what it is you are trying to accomplish.

I guess what I always try to tell myself is don't try to inspire myself.

Find the types of companies you want to own through the cycle and if all the noise and all the concerns and the worries have driven them to a point where you can buy them at a fair price today, sometimes it's as simple as that.

Go try to outsmart yourself.

At the same time, be aware of how much risk you are taking.

And so it could be a company that's very, very cyclical, whose earnings are highly at risk, or it could be a company who is viewed as a very stable company but their valuation is very elevated.

You have to be aware of the risks you are taking in your portfolio. Right now, that so I'm thinking through things.

It's more about, what is the balance, the risks that I'm taking in the opportunity, where is that balance?

Because there still part of the market where it's a little bit skewed to the downside.

Too much earnings risk, paying too much for it. But there are places in the market you can find where at least a portion of the earnings risks you are taking on the type of environment is already embedded in the share price.

>> Fascinating stuff and a great start to the show.

We are going to get to your questions about Canadian stocks for Michael O'Brien in just a moment time.

A reminder, of course, you in touch with us any time.

Just email moneytalklive@td.com or Philip that your response box under the video player your own WebBroker.

Right now, let's get you updated on some of the top stories in the world of business and take a look at how the markets are trading.

Bed, Bath and beyond is posting a wider than expected loss for the most recent quarter. The retailer which warned investors just days ago it was in danger going bankrupt has lost more than $1 billionin the past nine months of its fiscal year. It released the chief executive's officers said they are considering all strategic alternatives as part of their turnaround plan.

We see the shares were up modestly, 18 1/2% on the back of the earnings report. Let's talk about shares of Virgin orbit. They are feeling gravities whole after the satellites they launched from the United Kingdom did not achieve their target orbit. They said there was an anomaly that prevented the tablets from reaching their destination and they are evaluating that information still right now. They are down about 12%.

Client base as it's going to cut 20% of its workforce in another round of layoffs at the crypto firm. The company points what it calls a quote unscrupulous actors in the industry aiding the collapse of crypto exchange.

To the markets, we will start with the benchmark index here in Toronto, the TSX Composite Index, modestly negative for the session. We are hanging in there right now at about Down 45 points, just shy of a court of a percent. Since the border, we will check in because we've been on either sideof modest gains or modest loss. Right holding onto the modest gain with the S&P 500. It's up just more than two points, 66.

We are back now with Michael O'Brien, taking your questions about Canadian stock so let's get to them.

Let's start with a big one for the TSX treated with your outlook for the Canadian banks?

>>Good timing for that question. Yesterday, there is a bank conference here in Toronto where all six of the Big Bang CEOs came and gave their current outlooks.

I think everybody knows it's a challenging macro backdrop. The big questions really revolve around Will there be a credit cycle, how are the bank's loan books holding and do they have sufficient capital levels to get them through this is that any problems?

My take away from sitting there for six hours and listening to the mall, surprisingly, upbeat might be too strong a word but very confident that their loan books were solid. A lot of concern, a lot of questions around their mortgage books, residential Canadian housing.

All of the banks were quite adamant that they are seeing no cracks in their mortgage books today. Very strong pushback on that front.

They also felt pretty good about their capital levels which, obviously, the regulator had increasedcapital requirements recently which caused some concern, sort of putting some extra reserves aside for a potentially difficult environment.

The message that I was hearing was that they felt that they digested that and they could be the new targets that were set.

So they were reasonably constructive on that.

The one area they highlighted in terms of where would you get concerned? Where would the loan books start showing cracks? They circled back, they said, it's not about house prices. It's not about mortgage reset rates. It's all about the job market. It's all about employment.

So the message coming from them is, watch the unemployment rate. If that start sticking out, much more likely to see defaults, loan losses, but if the job market stays anywhere near as resilient as it is today, they don't see major problems with their loans.

>> Confidence in the mortgage book is interesting in the sense that the big pullback in both activity and even headline home prices from the peak of earlier last year does have people concerned about not being able to meet their obligations.

They feel like that's not so significant, they don't have to worry about it too much?

>> The CEOs disclosing pretty granular information about the composition of their mortgage book.

And so to answer your question, the segment of their mortgage customers that they feel are at risk, in other words, high loan to value variable-rate mortgages that have to be reset at a much higher level and poor credit scores, today is a very, very small portion of the book.

Like a low single-digit percentage of the mortgage books.

So they feel good that it's not a widespread issue.

The second interesting point that they made about how difficult will it be for households to absorb the new higher interest rates, one of the things they pointed to was if you remember back before the crisis, again, the regulator had put some pretty stringent rules in place for mortgage underwriting, one of which was the mortgage stress test.

And viewers member this, even though interest rates are very low, even though mortgage rates are very low, the regulator put in place a rule where banks had to underwrite their mortgages based on either 5.2% or the mortgage rate available +2.

And so what that meant in practice, one of the banks gave an example, the cohort coming up for renewal's, because of the stress test five years ago, they were underwritten between 5.2 and 5.

4%, whereas today the mortgage rate is just only a small amount about that.

So what they are saying there is they have already underwritten these loans based on an interest rate environment similar to where we are today.

That's not to say it's painless. What it does mean is, and I think the way it was described is likely you are going to see money that would have been spent in the economy on discretionary purposes, going to the movies, eating out at restaurants,buying clothes, a portion of that will be diverted to interest payments.

Which is good for the banks.

Their mortgages don't go bad. But it is a drag on the overall economy since it's money that would have been spent out there in other areas of the economy.

>> Look into another question now. What is your outlook for 2023 for oil and gas producers?

>> Oil and gas producers.

Obviously, oil prices have been very volatile and natural gas prices have been swinging around pretty wildly.

I'm going to set natural gas prices aside. They are very much driven by weather, and supplies a little bit easier to come by, particularly in North America. you can increase natural gas production pretty quickly as a producer if you think the incentive is there, but often… So natural gas is a little bit more volatile.

With oil prices today around $75 per barrel WTI, there's a lot of debate around that and so the people with a more negative take on where oil is headed, they will point to some very dismal economic outlooks, not just here in Canada, not just in North America, but globally.

And so we get a big global recession, there is concern that demand will be hit.

On the other side of the coin, people feel a little bit more constructive about the oil market, for they will point out that unless it's a really, really deep recession, historically, demand has been hit too much.

It will stall but it doesn't tend to decline a whole lot. Outside of events like the financial crisis in 2008.

And the second area where the Bulls will point to isupply is still very, very tight.

We haven't seen a big resurgence of production. Iand at the same time, relative to 2022 when China was locked down, China, the world's largest importer of oil, they are reopening it really fast.

There could be anywhere from 1 to 2 million barrels new demand coming back onstream from China as they dig their zero COVID policy and fully reopen the economy.

That's going to be a real tailwind going through 2023.

So when I size those up, my best guess is that unless we get a much more severe downturn than I am expecting… That's the big risk.

So we don't get that big, big downturn, I think that demand coming out of China as well as the end of strategic releases from the US strategic petroleum reserve, which sort of buoyed or kept a lid on oil prices last year, I think the backdrop is quite constructive for oil this year.

I'm positive on oil.

>> As always, at home, do your own research before you make any investment decision. We'll get back to your questions for Michael O'Brien on Canadian stocks in just a moment's time. Reminder, of course, get in touch with us at any time.

Just email moneytalklive@td.

com.

now let's get our educational segment of the day.

here's Caitlin Cormier, client education instructor at TD Direct Investing.

Caitlin, great to see you again.

I think we are looking at market and limit orders today.

Let's start off by saying, telling the audience how they differ.

>> Absolutely. So market and limit orders are some of the most popular order types for investors.

they are more basic. When we talk about the different types of orders, they are easier to understand. What kind of run through them quickly just to understand what they are and what the differences between the two are.

So I'm going to hop into WebBroker just kind of show a little bit around pricing.

So if we click on research and stocks, this is, of course, our homepage for research when it comes to any stocks.

We will just use for example Apple in the situation. So if we were looking to buy Apple todayand do a market order, with the most important thing for us to look at is would be the ask price. Here we can see the ask price of one 2899. And what that means is what investors are willing to sell the security to you for.

So the asking price is what you would pay in order to purchase the security.

Now, this price is constantly changing. As the market updates, we can to the price appear. It's at 12 2041.

If he could still refresh button it will update to whatever the current prices.

So we can always get an update that. So that's what people are willing to sell the security to us for. That would be the market price.

So if we were to place a market order today, we are not really sure what we would get to fill out order. It's somewhere around the ask price, but there's a little bit of uncertainty around the price that you're going to get for that security.

What is a priority when you are entering a market order is typically execution. So you have done your research, you found a security, you really want to go forward as either purchasing or selling this particular security, so completing the transaction is the most important priority to you.

The price is secondary.

So you have an idea what it is but there could be price changes, there could be a surge.

You don't have control over the price were getting for the securities are really order execution is primary, price is secondary.

When it comes to a limit order, while the ask price is still something to consider, the price that you are really focusing on is what you want to pay for this security. So in this case, prices the priority and what you pay for the security is absolutely the most important part of thistrade. So if we are placing a limit order, we might look at look at, as well as the ask price, we might want to look at the history of the security today, maybe how it's been trading over the past couple of days to see what sort of volatility there is because what we are doing is we are choosing what entry point we would like to go ahead with this purchase. So we are buying a security, we are saying, this is the most and I'm willing to pay in order to go ahead with this purchase. If we are selling, we are saying this is the minimum I'm willing to accept to part with the security. So for example, if we were to look at this security, we see that it's ask price is currently 129, we could say, I only want to sell it if it goes to 132. So if the price goes up to 130 so, I'd like to go ahead and sell the security. So we put a limit order in for that.

On the other side, we can say, you know what? We are only looking to go ahead with the purchase of the price drops to 127.

So again, we be saying that's the maximum we want to pay for the security and so we put a limit order in for 127. So keeping in mind with a limit order that price is priority, so the order execution is uncertain. We don't actually know what this order is going to go through. If the price is in actually hit that price we are looking for, so go down to that price for purchase or go up to that price for sale, then we may not actually execute the order. So that's one of the main differences. So market order execution is priority, prices secondary. With a limit order, prices priority, order execution area is not necessarily guarantee.

>> A great primer there for the audience on market and limit orders. Say someone want to enter these kinds of orders on the platform. How do they do that?

>> Yeah, so the order entry is an important part of this, how we actually navigate that.

So let's hop back into our example with Apple.

We can actually click this to buy or sell button right here to pre-fill some of our order entry tickets. This is going to bring it up, it's going to show us the symbol right here. So we already have that information about the quote here on the right-hand side.

So we can see the print ticker, how it's performed today, the ask price, all those sorts of things are available to us on the right hand side.

So the difference between these order types, we are still going to have the symbol, we are going to put our quantity of securities, whatever whole number, no fractional shares.

for Price type, we click market. The price is going to be whatever the price the shares currently trading at.

Again, we can click this refresh button at the bottom to continue to get an updated ask price. We are typically good just put it a market order for the day as long as it's in actively trading security. Chances are it will fill within the current trading a because you are just paying what people are willing to part with the security for. So then you just move forward with preview order.

Now, if it were a limit order, we have a secondary box that pops up which is our limit price. So again, if we are buying, our limit prices typically going to be lower than the current ask price. So again, if you want to wait until it's 127, we just simply type in our limit price, so that's the maximum we are willing to pay to buy the security, so will only fail if there are shares available at 127 or lower, so any amount below, nothing above that price. Then, we have to consider this time of course where we are saying how long do we want to leave this order open. So if we leave it open for today, if the price never hits 127, the order will be cancelled at the end of the day.

We could use a specific period of time, so we could use for example to leave it open for two weeks or a week or couple of days.

Or we could leave it open till cancel, which would be 90 days for Canadian securities and 180 days for US securities.

So good till cancelled is good until that period of time or until you choose to cancel that order.

So just keeping in mind, with this type of order, like you said, because it's not guaranteed to execute because of the pricing, you might want to consider a timeframe longer than a day in order for the price to have time to fluctuate to the price that you have for you limit price.

But also keep in mind that if it fills over multiple days, you could end up having multiple commission fees which can be a bit of a bird as well.

But just a couple different order types that you can use when you are going through in building your portfolio just kind of focus on what's most important to you in making a trade.

>> Great stuff as always, Caitlin. Thanks that.

>> Thank you so much.

>> Caitlin Cormier, client education instructor at TD Direct Investing. Make sure to check out the learning centre on WebBroker for more educational videos, live, interactive master classes and upcoming webinars.

Now, before we get back to your questions about Canadian stocks for Michael O'Brien, a reminder of how you can get in touch with us.Do you have a question about investing or withdrawing the markets? Targets are eager to hear what's on your mind, so send us your questions. There are two ways you can get in touch with us. You can send us an email anytime@moneytalklive@td.com. Or you can use the question box right below the screen here on WebBroker.

Just writing your question and hit send. We will see one of our guest can get you the answer right here at MoneyTalk Live.

We are back with Michael O'Brien, we are taking your questions the Canadian stock so let's get back to them.

There's one that's coming in the past couple of minutes.They are asking, which companies have the short-term potential that Mr. O'Brien mentioned?

>> Excuse me.

so in terms of trying reopening, depending on which markets you are looking at, different types of stocks can be very well, things like travel and leisure, apparel.

It in the Canadian market, the purest way to do that is… Whether it's your oil or gas producers, which we talked about a little bit earlier, were some of your base metals companies, your fertilizer companies in the material space, obviously they have tremendous leverage to China's economy and Chinese commodity demand.

The other side of that is that they are also very volatile sectors.

So you want to make sure that you've got the rate, that you are comfortable with the risk you are taking on.

But they obviously stand to benefit.

The other part of the market right now which, this isn't a China specific comment, it's just nice names I can sort of navigate a difficult economic environment better than most, you sort of swing to the other side where you get names like dollar M a, consumer discretionary company but it's almost like a staple because it has a very low dollar value.

It's not trading at the same discount, it's trading at a fair valuation, but it's business sort of powers through these types of environments more often than not, similar to our grocery stores like Loblaw and Metro.

And if you have a little bit more patience, I know the question was about short-term opportunities, I would say it's a good short-term entry point but it might take a little while to play out, again, going back to this financial.

We talked about the banks a lot. You're paying a very inexpensive valuation, good dividend yield, but there are other good financials names like some of the insurers like Sun Life, which is a nice insurance company, attractive dividend yield, very modest valuation at the moment.

A good quality company. To the types of companies with a more bullish backdrop, you tend to have to pay up to buy those types of names. Here, you might have to wait a little bit of time to get that return, but the entry price is quite attractive for a number of those names.

>> Is the biggest risk with many of those names about the patience game?

>> It's a human tendency.

the real answer is, do you need that money in the next three months? If you don't need that money in the next three months, you can afford to be patient.

If someone is waiting to get paid, then you better have it ready to go.

> I am thinking for the longer term.

>> So coming back to the bigger point, thinking about investing environments like this onewhich is volatile, it's always to maintain that sense of balance. Whether you call it a barbell or just a nice balanced approach, it's okay to buy some stocks that are little more volatile as long as you are being compensated to take that risk.

At the same time, it's always nice to have some of those steadier names in your portfolio to kind of balance things out.

>> Let's take another question, this one about the macro interest that we have. The Bank of Canada, do you think they are going to be in a position to lower interest rates this year or next?

>> In a position to lower interest rates… This is what investors who want to have a more bullish outlook on the market for 2023 and the bond market for quite some time have been… You know, assuming or pricing in a scenario where interest rates can go a little bit higher over the next three, six months. But then central banks are cutting rates by the end of the year.

And so that's more of a good news story for the bond market than it is for the stock market because what would cost central banks to be cutting in the back of the year?

It's probably a more significant downturn that we are inspecting today.

Some ugly economic news.

So just be careful what we wish for. But that is certainly an expectation that's fairly widely held. I think if you listen to what central bankers are telling us, they are telling us a very different story.

And so I guess it's up to all of us to judge who was going to be right on this, but what central bankers are telling us flat out is they intend to raise rates higher than they are today and then keep them there for an extended period of time, i.e. no rate cuts in 2023.

What would force their hand? The benign solution would be if inflation conveniently comes back to trim without much pain. I don't think that's a realistic assumption.

The only reason they would switch is, like I said, if it's a much more pronounced downturn then we are expecting today, significant job losses, significant increases in the on employment rate, that would force her hand.

>> We will get back to your questions for Michael O'Brien on Canadian stocks in just a moment's time. As always, make sure you do your own research before making any investment decisions.

And a reminder that you can get in touch with us at any time. Do you have a question about investing or withdrawing the markets?

Our guests are eager to hear what's on your mind, so send us your questions. There are two ways you can get in touch with us.

You can send us an email anytime at moneytalklive@td.

com or you can use the question box right below the screen here on WebBroker.

Just writing your question and hit 10.

We will see if one of our guests can get you the answer right here at MoneyTalk Live.

We were just talking about the Bank of Canada, of course all of those rate hikes of last year clearly taking a toll on the housing market. But then the question becomes, are we nearing the bottom?

What happens in 2023? Anthony Okolie joins us now to look at TD Economics provincial housing economic outlook.

>> TD Economics is predicting that Canadian home sales will bottom sometime in early 2023.

They are also forecasting the Canadian average home prices are projected to bottom out this year as well.

From peak to trough, they believe that Canadian prices will drop approximately 20%.

They say that this timing is consistent with the Bank of Canada's tightening cycle, which is expected to end with an additional 25 basis point rate hike later this month.

Even if activity doesn't bottom in the next few months, TD Economics believes that sales levels will stay depressed and they believe that 2023 will bark the weakest sales year since 2001, more than 22 years. The reason is because Canada is experiencing, in their view, the poorest home affordability since the late 1980s, early 1990s, especially in provinces like Ontario. In one of the previous notes, they provided an example in which they said that a household living in the GTA earning a medium-high household would have togives approximately 56% of their pretax monthly income to afford a mortgage. Rates are continuing to rise which will likely widen this affordability. TD Economics expects the biggest home price declines in the Atlantic region, as well as Ontario and BC.

As the next chart shows, Nova Scotia New Brunswick and Ontario house prices are expected to fall more than 11% this year.

TD Economics says that the drops in Ontario and BC home prices will more than reverse gains that were made earlier last year, which isn't the case for the Atlantic provinces.

TD Economics also expects less average price declines across the prairies and Newfoundland and Labrador this year, again because of better affordability conditions in those provinces. TD Securities also says that if high rates and economic weakness results and forced home selling by household, the price growth forecast could be weaker than they expect. Greg?

>> That's the scenario that people hope to avoid.

With the depressed real estate market this year, is there some sign of a rebound on the horizon and when would it come?

>> TD Economics believes the rebound in home sales will return sometime in 2024. By then, they believe that the inflation picture should be contained. The Bank of Canada is expected to move rates back from restrictive territory. Regionally, they expect a mild outperformance in the prairies and Newfoundland and Labrador. Again, those regions continue to benefit from the afford ability.

They believe that in provinces like Ontario, BC and much of the Atlantic, they will see restrain growth again because of affordability conditions there.

>> Thanks for that.

Everyone is always interested in where this market is heading. MoneyTalk's Anthony Okolie.

A quick check in on the market. We will check in on the TSX Composite Index. We have been modestly in negative territory through today's session.

We are just sitting there, about 33 points in the hole, shy of 1/5 of a percent. Nothing too dramatic. We've seen a bit of weakness in some of the big energy names.

Crude seems to be stabilizing around these prices after the big gains around the start of the session yesterday. Some of the industrials are weak too, weighing all that topline number.

But nothing too dramatic to the downside, 33 points in the hole.

We are back now with Michael O'Brien from TD Asset Management, taking your questions about Canadian stocks. Someone wants to get your take on the Canadian telecom companies.

>> Obviously some big development coming down the pipe there with the Rogers-Shaw merger proposal which it feels like that was announced a million years ago.

I think it's been 2+ years. Potentially coming down to the finish line very soon.

So obviously, quick recap, the competition Commissioner oppose the deal. Rogers and Shaw proposed a remedy for that whereby they would sell the Shaw Freedom mobile to Videotron, the Québec-based competitor. That went right through the tribunal, competitive tribunal, which ruled in favour of Rogers and Shaw.

There was an appeal, if we get to the point, hopefully coming soon, where the decision is finalized and the merger is approved, which appears to be the case, that's very interesting for the wireless competitive dynamics across the country because one of the things that happened when the Rogers-Shaw merger was announced, the company began to pull back aggressive financial support of building out their wireless business.

You saw a reduction in the wireless competitive intensity, particularly in the markets where freedom had a decent presence, being Ontario, Alberta and BC.

If freedom is sold to Videotron, the owners of Videotron have made no bones about it, they are going to compete hard.

They are going to try to win subscribers, they're going to try to offer some lower-cost packages. And so that could change the competitive dynamic in wireless, which is obviously the most attractive business line for all the telecom companies is their wireless business.

So what we could see is a bit of a shift from what was a very benign competitive environment in 2022 were you also had tailwinds from the reopening and resumption of business travel and immigration of foreign students, 2023 could be a bit more difficult competitive environment. So I think over time, 1/4 competitor in those markets isn't terribly disruptive but in the short term, I think it's a little cautious in the 2023 won't be the stronger the 2022 was for the wireless needs.

>> We run our time for your questions out there. But I want to get your final thoughts before we say goodbye.

We started off talking about the fact that we were happy as investors to get the last year behind us.

We can be forgiven for being hopeful that this year will better but you say that this year could be tricky and caution is needed.

>> Like I said, the job isn't finished yet.

The central bankers have a job. They told us very clearly they need to bring inflation back down and they are not going to stop until it does.

so I think we just need to be respectful that this is a process that will have to play out and we are not there yet.

But like I said at the beginning of the show, if you take a bit longer term perspective, markets have reset quite away and assuming that this isn't a multi-year affair, assuming that central bankers accomplish the task and this is in fact a shallower, briefer downturn and some of the uglier outcomes we've had, like 2008, then today's starting point isn't so bad.

We just, you know, the longer you are in the market, the better your chance of success and I think this is a great example of that where we just have to get in companies we like, try not to call every wiggle in the market and just wait for better days, because they will come.

> Always a pleasure to have you here.

Looking forward to more appearances.

>> Thanks for having me.

>> Our thanks to Michael O'Brien, portfolio manager at TD Asset Management. Stay tuned, on Wednesday, Michael Craig, head of asset allocation at TD Asset Management will be our guest taking your questions about asset allocation.

A reminder that you get a head start on this questions.

Just email moneytalklive@td.com. That's all the time we have for the show today. Thanks for watching, and we'll see you tomorrow.

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