Sam Damiani

[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're going to take you through what's moving the markets and answer your questions about investing.

Coming up on today's show, we are going to discuss the outlook for real estate investment trusts. TD Cowen's Sam Damiani joined us.

MoneyTalk's Anthony Okolie will look at a new TD Securities report on what is happening in the metals market. And in today's WebBroker education segment, Bryan Rogers will take us through how to make in kind transfer is using the platform.

Here's how you can get in touch with us.

Just email moneytalklive@td.com or fill out the viewer response box under the video player on WebBroker.

Before we get to all that and our guest of the day, let's get you an update on the markets.

We will start your home with the TSX Composite Index. It is a down day on Bay Street and Wall Street.

Nothing dramatic. 15 points off the TSX Composite Index, less than 1/10 of a percent.

Some of the most actively traded names today are energy plays.

I picked this one because it was in positive territory earlier in the session.

At four bucks and $0.69, you got Baytex down about four pennies.

Air Canada, $18.33, you are down about 1%.

South of the border, it feels like we are in wait and see mode after all the excitement about AI, the chipmakers dominated last week, we are back to worrying about inflation, we are getting the PCE tomorrow morning. There is not a lot going on.

At 5075, it's down to about 2 1/2 points or 56.

NASDAQ, nothing too dramatic, it's pulling back by 38 points.

One of the chipmakers, and video, it's down a bit. That's what happens, you put together a report and it shifts.

Nvidia now just about flat on the day, at $787 per share, is up slightly.

Rate sensitive sectors like real estate investment trusts have had a rough ride amid the recent central bank hiking cycle.

But what interest rate cuts expected by many this year, could things be turning around this year? Joining us now to discuss is Sam Damiani, Dir. for equity research at TD Cowen.

As investors, we often look to REITs. How have they been faring in this higher rate environment.

>> It has been tough. The REIT Index is down about 25% from pre-COVID. We made it all back by the end of 2021 but it has been, 2022 was a big down here and last year was flat but it masks the story of huge volatility. I think at one point the Index was down 25% and then up 25%.

Finish the year flat, we are is still down 25% from pre-COVID. The big challenge over the past couple of years has been rising interest rates.

>> You start thinking about REITs, you can break them down into office, industrial, residential, but when we talk about distributions, just like a yielding stock, if you are getting money market rates of 5%, that is a challenge.

>> That is a huge challenge. We looked at the Bank of Canada information and they did show the inflows into GICs and term deposit is about $250 billion over the last few years and if you layer on top of that money market funds, that's a massive flow of funds and obviously a big chunk of that would've come out of yield oriented sectors like REITs.

250 billion just into GICs and term deposits, maybe another 200 billion, who knows, into money market funds. Even a small fraction of that would have a massive impact on price and we are sure it has.

>> People look at distributions in one field.

Through the pandemic, offices struggled.

Has that become more challenging? First headwind was interest rates and then we think about how are we living life post-pandemic? Office seems to be the most glaring one.

>> Office is tough.

It gets a disproportionate amount of attention, especially when you turn on a US TV channel, you will see US commercial real estate in trouble but really what they mean as office properties.

The fortunate thing for the Canadian market is that the REIT Index today just has one REIT and it specializing in office properties.

85% of our coverage universe is shopping centres, warehouses and apartments and all those three sectors are doing much better than office.

The return to office, I think the outlook has gotten a little more clear.

There is a kind of consensus forming as to how it's going to evolve, but it's going to be a very bifurcated market and the good buildings are going to hold up just fine, some of them will do better than they would have pre-COVID but the bottom 10 or 20% of the buildings or the space in the market that becomes functionally obsolete and some will be converted to residential, some will be demolished or repurposed in other ways so it has been a challenging sectors we have seen distribution cuts out of that sector in particular over the last four years.

>> As we assess the health of the REITs as we had through this year, we have some earnings, I think we have them all in for the most recent quarter.

Are there themes we are picking up on?

>> Yes, the REITs tend to report quite late so we will be talking Q4 results in the middle of March, unfortunately, well into Q1.

Overall, it has been on balance good quarterly report so far. We were looking for 4 1/2% AF growth year-over-year.

>> That's funds for operations?

>> Adjusted Funds From Operations, so it is a smooth that measure comparable across all rate so it takes out the noise that sometimes gets reported from quarter to quarter so on that measure, we are looking for the fastest growth in two years, so that is reflective of the interest rate headwind that has increased interest expense. That impact has started to taper off and so now the strong underlying property performances are able to flow through to the bottom line and to this growth we are looking to in Q4 and for the most part we are seeing more beats than misses. We are seeing results about 1% ahead of forecast, so that is good. A particular strength is being demonstrated in the apartment sector, particularly any apartment with Alberta exposure is seeing very strong demand. Big rental uplifts.

>> When we think about that rental space, we have had very robust immigration in this country so it always seems, it's interesting when you talk about real estate and the challenge of a higher borrowing environment, but we have other factors in play like a growing population that I think makes some of the sectors more interesting than others.

>> Over the last years, Canada's population is up 5% and that is an astounding number. It probably surprised every level of government.

I read the papers I conclude that the country wasn't really prepared for the level of population growth. The first thing people need is a place to sleep.

They needed to feed themselves and go shopping for the basic essentials so in apartment leasing and essential oriented retail property like grocery and shopping centres, we have seen very, very strong demand and rentals to a positive more than we have seen in a long time.

It is a strong tailwind for the sector.

This is offsetting the impact of interest rates.

I want to get back to that because we talk about the funds flow. Hopefully that reverts or stabilizes and eventually reverses.

The interest cost burden is significant but put it into context.

Our coverage universe saw interest expense equal to 28% two years ago and that has increased to 31%.

So interest expense has eaten up 3% of… Over the years. The good news is for our forecast which captures the consensus economics view of interest rates over the next four years, they don't see that interest rate going higher.

The REIT sector should be able to report accelerating bottom-line AF per-unit growth this year and next year.

>> Interesting perspective on there. For full disclosure on the companies covered by TD Cowen, see the link to the TD Securities website at the end of this program.

One more thing. This is the set up. You think we have peaked out in terms of the effect of interest rates. The market is pricing and interest rate cuts from the Bank of Canada and the Fed this year.

Once those begin, what are we thinking about in terms of the REIT sector?

>> It could be set up for a positive finish to the year and I say that because one of the biggest challenges has been the absolute level of interest rates and also the volatility.

It has resulted in many companies deferring capital decisions.

We talk about the leasing market for apartments, that is a no-brainer, if you will, but on the industrial and office sites, some companies are thinking about expansions or relocations but they don't really know what the cost of capital is so they are hesitant and as interest rate volatility settles out and even more so we start to see these cuts, I think you will have a return of confidence in businesses deploying that capital and that should resulted acceleration of expansionary moves by companies.

>> Fascinating stuff. TD Cowen covers boardwalk REIT. For more information on the companies covered by TD Cowen, see the link at the end of this video. We will get back to questions for Sam Damiani in just a moment time.

And a reminder that you can get in touch with us any time.

Just email moneytalklive@td.com or fill out the viewer response box under the video player on WebBroker.

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

The bargain hunters were out in force over the holidays when it came to clothing and accessories.

This is TJX, we are taking a look at. Up about half a percent, the parent company of company such as winners, marshals and HomeSense, they reported a 13% jump in sales for the fourth quarter that capture the holidays.

While inflation rate consumers have boosted the retailer's numbers, TJX is providing a cautious outlook for this year.

You put it all together and you were up a modest half a percent. It looks like Generation Z wants more than just swipe left and right from its dating apps.

Bumble is providing a disappointing sales forecast and plans to cut 250 jobs as the app struggled to attract younger users.

Bumble CEO says the industry hasn't seen true innovation in several years.

Bumble and its rival, match, have touted opportunities with generative AI, details are scant at this stage. Bumble at $11.57, down about 11%.

Shares of Beyond Meat in the spotlight today.

They are of about 45% right now. What's going on? The plant-based burger company details expectations for its most recent quarter and it is announcing a cost-cutting plan. Those kinds of things can get a stock moving but at the same time, Beyond Meat is heavily shorted as a name and today's price action does have the hallmarks of a short squeeze. At $10.89, that's a jump of 45%. Let's check in on the markets, starting on Bay Street with the TSX Composite Index.

A lacklustre day on both sides of the border.

Technically is run on the screen but you're done whopping four points, just to takes. South of the border, as the market awaits more clues on the path of inflation, the PCE coming out tomorrow, the Fed's preferred gauge, the S&P 500 is down a whopping 10th of a percent.

We are back with Sam Damiani, take your questions about real estate investment trusts.

What is your outlook for the distributions at the REITs generally? We are talking about yield bearing instruments. What is the forecast?

>> With the volatility and the rising interest expense that we referenced earlier, some reads have been particularly challenged.

The office sector in terms of top line of fundamentals and also interest expense.

There have been some cuts to COVID. Last year, we saw for distribution cuts/eliminations.

That's not fun but we saw nine distribution increases, so increases to decreases was a 2 to 1 ratio last year.

This year, we have already seen a handful of increases. We have seen to cuts already two.

I think you are seeing a further bifurcation but where we do see the strongest fundamentals from an operating perspective, there is good visibility in our perspective for continued steady modest distribution growth for a good chunk of our sector. We don't necessarily forecast them overall but we do probably have called quarter of our coverage universe this year.

>> People seem to want to go back to moles in great numbers. They don't seem to want to go back to the office in great numbers.

We had a simple exultation for that a couple of years ago, the pandemic, but once people are free to do whatever they want, some areas are benefiting over the others.

We thought we would be back at work and at the mall.

>> They are back in the mall and doing things, restaurants, travel. All that stuff.

I think what we saw coming out of COVID's people want to get back out and reengage.

The challenge with office is there is an ability to effectively work at least some of the time from home, not for everybody but for a lot of people.

But for shopping, socializing, playing, that does require in person socializing, trying on clothes, just getting out and doing something.

Put it this way. If you are living at home and working from home… >> You want to get out.

>> You want to get out.

We had a big washout of the weakest retailers at the beginning of COVID. And then we had a huge washout about 10 years ago, think of Zellers and target. But the tenant days of our shopping REIT universe is the healthiest it has been a 10+ years.

Every year you see some turnover, restructuring, foreclosures, we have not seen much of that.

But the space that has come available has been snapped up at higher rates.

It's a much better leasing backdrop for the shopping centres and we have seen in at least 10 years of not 20.

>> Interesting stuff indeed. Let's get to another question.

Do you see more merger and acquisition activity in the Canadian REIT space coming our way?

>> I think the answer is yes. Typically what we do see in our coverage universe is about two annually. We cover about three dozen rates but we've probably launched coverage on 100 REITs over our careers here at TD and they just keep getting taken over. The latest was Tricon.

Last year was pretty quiet. We had the Summit takeover announced at the end of 22.

Enclosed early last year. I think going forward, as the capital starts to form and decision-makers start to get a Chi and wants to put some money to work, I think you gonna see activity toward the end of this year. The best call is to assume a resumption of that sort of one to two per year. We've had one.

There is potential in the retail space, there is potential in the apartment and industrial space.

Even office, there is been capital forming in New York to buy up distressed office and today, you can buy like an office REIT with an applied Rate of eight or 9% which is double the Rate that you're buying an apartment at on the public markets.

So at some point, you say, is the risk fully pricing? It's a gamble. I'm not going to champion the office sector.

That's not what I came to do.

But it is interesting that we are starting to see capital form, including from the likes of Blackstone, Brookfield and others.

>> Another question. Someone wants to know what sector or names have like the most that might also have a strong outlook?

Who might be in the backwater but has potential?

>> Three stable sectors are 85% of our coverage universe. At the end of last year, what we did is we move residential from the top to the third in ranking because of valuation.

Today, for example, you can buy retail rates at a 7.2% implied Rate, apartment at 4.9, so that 230 basis point gap is an all time high and 10 years ago, that Was only 50 basis points.

So we think there is room for the implied Rates on retail to compress relative to apartments which would result in equity value going up. Year to date, we made that switch at the end of last year, year-to-date it hasn't worked out because of the strong performance in quarterly results from some apartment REITs but going forward, we see the momentum building for the shopping centre REITs, it has strong fundamentals and has kind of been ignored by the market to a degree and reading attention is going to be back at the shopping centre space by the end of the year.

>> People were watching right now might be new to you read to investing, real estate investment trusts. You talked about cap rates quite a bit.

Why watch cap rates?

>> The cap rate is the net operating income, the cash value. The lower the Rate, the higher the value. Those cap rates are heavily influenced by interest rates. There was an outlook presented yesterday for Canada and they are calling for cap rates to stabilize after a pretty turbulent couple of years.

To put some numbers to that, the overall cap rate in Canada, if there is one, a weighted average, has increased 110 basis points from 5.32 years ago to 6.4% today.

That's a lot. That's about a 15% reduction in the value were the multiples that the real estate would be valued at.

Growth can offset that but that's pretty big multiple compression in the real estate space.

Going forward, the lending markets are sort of coming back and just to put, obviously a capital-intensive industry, unsecured debt. The REITs have issued $1.6 billion of unsecured debt already this year and that's up from a very quiet sort of latter half of last year so you're starting to see the capital come back, the confidence come back. Obviously, we can make a definitive call but the signs are there for the potential for the market to recognize a greater level of visibility and comfort with some valuation upside after two years of downside.

>> Exciting stuff.

As always, make sure you do your own research before making any investment decisions.

we are going to get back to your questions for Sam Damiani on REITs in just a moment's time.

And a reminder that you can get in touch with us any time. Just email moneytalklive@td.com.

Now, let's get our educational segment of the day.

In today's education segment, we are going to take a look at how to make in kind transfer's on my broker.

Joining us to help is Bryan Rogers, Senior point education instructor at TD Direct Investing. People might be familiar with transferring cash to the registered accounts. We are coming up on a tax deadline but what about securities?

>> Yeah, Greg.

I think this segment today is a reminder for those procrastinators, my wife is an example, if you have cash in your account, you can move that still.

You have today and tomorrow to move that into your registered account.

If it's in your TD Canada trust bank account, you can move that over to your nonregistered account and then potentially directly into your RRSP. What we want to show today is that you can also, if you have securities and positions the in your account, you can potentially move those into a registered account and have that satisfy your contribution for this year.

I wanted to jump into a broker and show you where that is in case you haven't seen it before.

They made it easy to find.

Click on the accounts tab, go to transfer cash within TD, including contributions and TFSA withdrawals as an example. If I click on this, it will take me to the portal where I can go from my Canada trust account into certain accounts directly.

Into your RRSP. If you want to go from a nonregistered account, we have a few margin accounts in this test account, but if you have multiple accounts they will all be listed there, and that it could potentially go to your TFSA. There is no deadline on that, but for your RRSP, the deadline is tomorrow so if you want to get that cash in there, you could do that right from here as a cash transfer.

If you have securities in your account, go to the right hand side tab and now you're going to be able to select from accounts.

I have nothing in these so I can't display it but it's easy.

Once you select your account, what will happen is it will show if you have any eligible positions that can be moved over, it can be something about five minutes ago, it has to be settled stocks were ETFs, mutual funds, that you can move into the accounts and it goes by the last trades. When you move that in, the value will go by the last trade and it will show you the value they are contributing.

If there is anything complex like US securities, you can call our contact centre.

There may be a way for them to do that.

They have special ways behind the scenes that aren't available online. But right now, is just a Canadian position or stock or investment going into the RRSP, you can do that online.

>> Alright, so we've got this deadline tomorrow, but after that we will be in the thick of taxis in.

Tax implications. Are there tax implications if you are moving stocks in kind?

>> Yeah, that's a great point.

We want to make sure everybody is aware of this.

If you move a stock position, for example, you hold a TD stock and you had a significant gain on that, remember that it's just like selling the stock, so it's a deemed disposition.

You want to make sure you go into a broker and you know whatever type of gain or loss you had, if it's again it could still be beneficial because you have the contribution towards your RRSP. If you have a significant gain, this year's taxis and for 2024, you may end up having to pay capital gains on that position if you move it into the RRSP. If you have a loss, it doesn't matter. It's just that you can't carry that loss forward in against another position. You are sacrificing that loss.

Be aware of that as well.

If you have something with a minimal loss or gain, it might be worthwhile to look at that contribution.

I don't really have anything, let's jump into WebBroker for a second to show where you would find that. I don't have any positions in these accounts, it's just a demo account, but if we do go into the accounts, research or the accounts tab and then go to your holdings, what you're gonna want to look for is in the holdings tab, it's gonna be down here, just a section, maybe I can show you in the help Centre, there's a summary tab. It might be really hard to see for our viewers.

I will try to scroll a little bit.

What I wanted to highlight is there is an unrealized gain or loss section. That's where you can see if you have a bit of a gain or a loss and then you can find out if you will have tax implications for next year if you decide to move those positions in kind to your registered account. So that's really it. If you want to make sure you have the gain or loss, if you understand what that is, and then you can still move those positions in the next few days.

>> Great stuff as always. Thanks for that.

>> Thanks, Greg.

>> Bryan Rogers, Senior client education instructor at TD Direct Investing.

And make sure to check out the learning centre in WebBroker for more educational videos, live, interactive master classes and upcoming webinars.

Okay, we are back with Sam Damiani from TD Cowen, taking your questions about real estate investment trusts.

A couple just came in.

Jeff, good to hear from you.

Jeff wants to get your thoughts on Main Street equity.

>> Main Street equity, think of it as a mini boardwalk reach in the sense that it focuses on the Prairie provinces, mostly Alberta.

Relatively low yield, locate ratio, it's been around for a long, long time, and has compounded equity at a phenomenal rate. I checked my screen yesterday, it was around 170 bucks if I'm not mistaken.

It is benefiting directly from the accelerated population growth in the prairies, Alberta and Saskatchewan, and it has a position in Vancouver as well. We don't cover it, but it's obviously demonstrated a very strong ability to compound that growth and create value through its repositioning of apartments, it is an apartment REIT based in the prairies.

>> There are things going for the name.

What could get in the way of the name or someone similar to them?

>> There is huge population growth interprovincially that has benefited Alberta. That could change.

There is a less diversified economy at there. If the oil price crashes, that could impact it.

It has a relatively low yield so it's not going to get the same level of attention from yield investors. But it's been shown to compound at a high rate over time.

>> That's a good one to do more research on.

Another question. What's your outlook on Canadian apartment properties REIT?

>> My colleague covers that REIT and just reported good results last week. It is the bellwether in the Canadian apartment sector. It is on the SNP TSX index. It is participating in the market rent growth that we have seen across the board.

Given the time markets, we expect that to persist for the foreseeable future.

Financing rates hopefully pizza and coming down.

It's position to benefit from all that and they are slowly repositioning their portfolio, getting rid of some of the older 50-year-old buildings that were core maybe 20 years ago in cap rates history.

Management thinks that they can get a higher total on these new acquisitions than the ones they are selling that are 50 years old.

High grading of the portfolio, getting into more product that doesn't have rent control as well in some cases, so it's a good story. We like it. It's one of our top picks on the action list.

>> I'm going to ask you about the risks on that one as well.

>> Absolutely.

It's got leverage, just like every other REIT. The risks are I think the economy.

If the housing market really does come back, you could see people saying, I can afford to buy a house or condo, I'm going to move out.

There are obviously risks, but right now, the fundamentals are pretty strong for apartments at this point.

>> As always, make sure you do your own research before making any investment decisions.

will get another question here that just came in in the past couple of moments.

What options do class B and C office properties have in renovating or attracting tenants?

>> That's a tough one. Class B NCA, as I said, this going to be a certain portion, 10% or a little more of the office stock that is going to be obsolete over time.

There are options. Depending on where it's located, depending on the size of the floor plate, if it small enough, it could be repurposed as residential.

But if it's got a big floor plate, hard to reposition as residential, hard to reposition for other uses. If it is well located, there is an opportunity also to refurbish it and one of the office reads that we cover has done a good job of refurbishing properties around Bay Street.

They bring buildings into class I, they are desirable buildings especially for tech oriented tenants.

So there options but it really is going to be a lot harder going forward. The buildings need to be in the hands of an owner that is well-capitalized and has the patience and pockets… >> I imagine the Rino would not be cheap.

>> It's not cheap, it takes time and you're taking on risk. You can release it but often you are doing it on spec and I don't think a lot of people are doing that today.

>> You mentioned the size of the floor plate. When it became clear we had a surging population and a shortage of homes, people asked about repurchasing these buildings. But they were not built for that.

How would you even this office carve it up for residences?

>> If they were built in the last 30 or 40 years, no way.

Right at the corner of King and Young, there is an old building, classic, ornate building, small floor plates and they put an application to converted to residential. The city initially wanted them to retain some office space in the building and then through some negotiation they got the city to give the green light and so H&R is going to convert the entire thing to residential. So there are opportunities out there.

>> Interesting stuff. Another question from the audience.

Someone wants to get your take on the industrial REITs in this environment.

>> Industrial is one of our preferred sectors.

We moved residential to the third place, retail and industrial are preferred.

The supplies tapering off very quickly.

Even though demand has slowed, vacancy rates are up a little bit.

There's pretty good visibility into the supply tapering off because nobody is starting a lot of new construction over the last couple of years, going back to the interest rates and capital constraints we talked about before.

We have pretty good visibility into an environment where the vacancy rate stops going up, starts going down and we start to see market regrowth resume.

That is kind of our call on the industrial space.

We think it's, and the valuations really come back so it's an opportunity to maybe switch out of some apartments exposure and look at some industrial reach exposure that has come off of valuation and the fundamentals are mostly intact.

>> When we think about industrials, a lot of people think about e-commerce. That was a big thing during the pandemic. When I think about reshoring and other things happening to industrials, I imagine it's more complex than, our people buying stuff on Amazon that's being shipped from a warehouse?

>> There are multiple demand drivers.

Reshoring, supply chain resilience, every few months we are seeing a new area where the supply chain is getting disrupted.

There is more of that, definitely.

We think that's got a good runway of growth, good visibility on demand. Not without risk. There are some technologies that could disrupt the need for the logistics base, for example, so we are watching that.

We think the overall fundamentals of the industrial sector are good.

The industrial property sector are good.

And the fundamental reason is we build one of these warehouses, it takes a ton of acreage and the cities in Canada are running out of that acreage so we can see a diminishing amount of ability to deliver the product and meet the demand and that's going to end up resulting in price pressure in favour of landlord's going forward.

>> TD Cowen covers Canadian apartment properties REITs and others. For more information and a link to the companies covered by TD Cowen, a division of TD Securities, can be found at the end of the video. We will get back to question for Sam Damiani on REITs 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 get in touch with us at any time.

Do you have a question about investing or what's driving 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 write in your question and hit send.

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

In recent years, there's been a lot of enthusiasm around demand for metals because of the electric vehicle, the energy transitions, disappointing economic activity in China and Europe has kept the market contain. Meantime, oil prices holding firm amid more toxic production cuts by OPEC and its members. Put it together and TD Securities has a take on commodities.

Anthony Okolie is breaking it down for us.

>> We will start with copper where the prices of the metal have rallied recently but commodity demand excitations have only stabilized instead of providing the fundamental tailwinds necessary to support the rally in prices according to TD Securities. New sanctions on Russia contributed to a rise in metal supply risk premia.

Under the hood, TD Security says the recent rally and copper remains vulnerable to adversarial flows. Copper, like other metals, oil, steel, nickel, are impacted by demand from China with China accounting for more than 50% of global demand for metals, the pessimistic demand sentiment surrounding China's economic engine has likely contributed to weakness in metal prices. Looking forward, TD Security says that with China's National People's Congress on the horizon next week, the market view remains that there will be cautious monetary and fiscal policy rather than large-scale stimulus.

If activity rebounds on the heels of targeted government stimulus, the demand rebound for copper and other commodities could be fuller. Turning to silver, silver is notably underperforming gold, despite a strengthening fundamental outlook.

Gold has been resilient, highlighted by substantial buying activity from physical markets, likely tied to strong Chinese demand beyond the typical seasonal peak associated with Chinese new year.

The softness in silver, TD Security says, contrasts sharply with strong Indian silver imports in January, indicating demand in the East remains robust despite recent downside in prices.

Finally, crude oil prices are holding firm as the Red Sea disruptions and talk of OPEC and its members making cuts have sparked a recent rally in prices. However, with the risk off tone dominated market, the Gaza cease-fire talks ongoing as well as further inventory builds, the upside momentum for prices are expected to maintain.

TD Securities believes that a temporary cease-fire is unlikely to erode the risk premium built into oil prices until there is a more permanent resolution on the conflict.

>> Interesting stuff. Thanks, Anthony.

>> My pleasure.

>> MoneyTalk's Anthony Okolie.

And now for an update on the markets.

We are having a look at TD's Advanced Dashboard, platform designed for active traders available through TD Direct Investing. This is the heat map function, it gives us a nice picture of the market movers. We are looking at the TSX 60, sorting by price and volume.

We are in the thick of bank earnings season in Canada.

Oil is up modestly and national getting a boost of a little more than 3%. Not a lot to talk about on the screen. A bit of weakness in Shopify and tell us and some of the mining names. South of the border, it feels like a real wait-and-see environment this week after all the excitement around AI and Nvidia last week, we are back to wondering about interest rates and the Fed, when they are going to cut. The PCE is going to land tomorrow, that is the Fed's preferred measure of inflationary pressures. It's a mix day.

Some techniques under pressure. Tesla getting a modest bid.

You can find more information on TD Advanced Dashboard by visiting TD.com/advanceddashboard.

We are back with Sam Damiani from TD Cowen, talking REITs. Let's get to another question.

Someone wants to know the best way to play retail shopping centre real estate?

Here on the platform we cannot give investing advice but we can definitely talk about retail and what's going on.

>> We are seeing strengthening fundamentals. We talked about this, in a shopping centre space for leasing. The strength is being seen in grocery anchored shopping centres and is obviously again with population growth, people need a place to sleep and a place to get their food and essentials. That is more directly correlated with population growth.

In addition, there has a ton of new supply.

There's a good supply demand balance.

Within that grocery anchored sector, the purest play on that would be First Capital REIT but other ways to play it include real can and smart centres as well, choice properties, there are multiple ways to play it.

To get the full benefit of the strength in the leasing environment, you'll get more leases maturing, renewing and resetting limit market rents, you want to look more to First Capital or real can to take advantage of that, to benefit from that tailwind so those are two names to look at to participate in that growth.

>> We all need to eat. I took my two university aged sons back to their schools last week after reading me. I took them shopping, thought I'd fill the fridges, I spent 400 bucks.

What are the risks?

>> E-commerce penetration continues to grow.

The good news is that it seems to be growing at an overall market rate. It is no longer meaningfully penetrating but it is growing.

Listen, our population growth is not going to grow at 3+ percent a year, it's slowing already and fast forward two years from now, we could be back into the sub 2% population growth, one and 1/2 is the long-term average and if we have dad and we have it coinciding with maybe some new supply, other sources of e-commerce penetration pickup, anything to change but right now for the next two years, it seems like a pretty good environment but it is a sector with small businesses as well so some of the smaller business tenants get into trouble as well.

>> We have run out of time for viewer questions.

Before you leave, thoughts about what we should be thinking about? If you are interested in the REITs space or an investor, looking at 2024, what's on the horizon?

>> It's all about rates.

We want to see rate volatility ease. We want to see those cuts materialize.

If you want to price that interior outlet, I think you can do well in REITs.

The overall economy is obviously important but don't focus only on what you see in the headlines because the population growth is a meaningful offset, and that is just stepped up demand in a meaningful way to put negotiation favour in the landlord across many areas. We have started to see money market funds come back intervenes and other yield oriented sectors.

I would say that REITs are a small part of the overall index. On the heat map, I didn't see a real estate company.

>> They were down there but not taking up a lot of space.

>> I think they are about 2% of the TSX but their impact on the overall economy is about 10 times that. It's a relatively underrepresented sector on the TSX. I'm an analyst covering the space, I've been in the sector for 30 years, I would say it's important for people to consider having exposure to real estate.

>> Great to have you on the program.

I hope you come back.

>> It's been a pleasure.

>> Our thanks to Sam Damiani, director of equity research at TD Cowen.

Make sure you do your own research before making any investment decisions. For more information and a link to companies covered by TD Cowen, a division of TD Securities, can be found at the end of this video.

Stay tuned for tomorrow show. On Thursday, Marie Ferguson, analyst at Argus Research, will be our guest talking about US utilities, REITs and income stocks.

You can get a head start on your questions, just email moneytalklive@td.com.

That's all the time we have for the show today. Thanks for watching. We will see you tomorrow.

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