Investment Q&A

Q: Hello 5i Team
Thank you for the ongoing guidance .My question is about the last two days rally, do you see it as longer term rally or will it be short lived?
Thanks

Q: In the next two quarters, earnings will likely deteriorate in both the US and Canada as the effects of the fastest rate hikes in history start to apply. If these earnings seasons are ugly, will the market decline further? Or is the positioning of the fed (potentially pivoting/easing/stopping rate rises) more important than this?

Q: Hi there,

I am sitting on about 35% cash currently that I accumulated in mid August before the indexes rolled over (SPX ~4200). Obviously no one knows where the bottom is, but if you had to make an educated guess, where do you think the SPX will bottom out and when? What strategic would you use to deploy cash? Would you DCA over a couple tranches?

Thanks!

Q: With tax selling season coming though a lot of selling have already happened. This also coincides with the FED's next Interest rate change, November seems gathering a lot of dark clouds. It just feels that the rest of the year is wasted and preventing a Santa Claus rally not much will happen from now to the end of the year.

What do you think? How do you see the rest of the year unfolding?

Thanks for your precious advise in these dangerous times.

Yves

Q: With brisk FED tightening creating havoc in global currency and bond markets, do you see a slowdown in QT and/or rate increases? While delivering a muted effect on inflation itself, FED actions seem poised to tip off other crises in the world's financial system....is BNS at particular risk because of their emerging market exposure?

Q: If Russia drops a nuclear bomb in Ukrainian territory ( a scenario becoming more likely every day ), the question of whether a company’s stock has a compelling P/E ratio is irrelevant.

Forget inflation, forget Covid, forget Trump, forget budget deficits, forget supply chain. Follow Russia/ Ukraine.

Please help me to decide not to sell everything, stock up on cans of beans and head for the hills.

Thanks
Derek

Q: Hi, Thanks for today's Market/Portfolio Update, specially the explanation of inverse relationship between value of USD (DXY) and risk assets ( S&P 500, TSX and Stocks in general). Do you think, the market bounce on Wednesday, was for no fundamental/technical reasons, but was a reaction to news from UK of BOE market intervention through Bond buying to support the fledgling economy and a one day breather to unstoppable US Dollar ascent ? Based on this thesis, besides other technicals, would it be prudent to keep an eye on USD uptrend breaking down, before entering into new long positions. Mr David Burrows of Barometer Capital was on BNN recommended to stay on the sidelines, until the market downtrend breaks and at least 2 days of Buying with High Volume is confirmed with follow through for 5 days. Their firm has 30% cash ( due to Stop Loss liquidations in Tech/Financial and others sectors). They own only defensives like Energy, Utilities and Telcos with 0% Tech. Does this strategy make sense, in your view, as most of us are almost fully invested presently as well as in past ? That seems to be the case for past several weeks and months - we buy/add to positions and stocks only get cheaper over following days. BTW, stocks with higher yields in sectors like Utilities/Telcos/Pipelines continue to get decimated - even though, bond yields declined over past 2 days - Any comments , please ? Thank You

Q: A recent story on CTV news had the following:

I don't think that we're in a recession just yet, but I do think that one is on the horizon," David Doyle, the head of economics at Macquarie Group, told BNN Bloomberg. "Our baseline is that Canada will enter a recession in the first quarter of 2023.

Macquarie Group, an Australia-based global financial services provider, estimates Canada will face an approximately three per cent contraction in gross domestic product (GDP) and a five per cent rise in its unemployment rate during the predicted recession.

We actually think it will be pretty severe in Canada," Doyle said. "I think the die has been cast on this front. Because inflation has become so elevated, and unemployment was allowed to fall so low, I think a recession is almost inevitable at this point.

1. Do you agree or disagree, and why?
2. And if there is a chance of a "pretty severe" Q1 2023 recession in Canada, how would you position your equity investments? Go to cash? Go to certain sectors? go to the USA?

thank you for your excellent service.

Q: Do you concur with David Rosenberg's comments in the FP today stating that inflation is not our current problem but rather a lack of liquidity and forced sales of quality assets?

Carl

Q: What happens to the market if nuclear weapons are used in Ukraine.

Q: Morning 5i team,
The Canadian dollar is down about 10% over the past year.
Does it make sense to convert Canadian to US dollars to purchase US securities at this time? The securities may have to increase 15 to 20% just to make up the exchange rate.

Thanks for your opinion

Joe

Q: Everyone, stocks go up and stocks go down. Own the best and wait for the dust to settle either way. I have been through the tech crash, a few financial crashes, the COVID crash and now we are going through the Putin war crash. I have also been there during the market rallies. Stuff happens and believe that holding for a long time is better than picking the right day or days to invest in the market - time in market beats timing the market every time. Take care and see you on the other side. Clayton

Q: Hi Team,
This is more of a general question/ observation of todays price action. On a very negative day yet again, across all major index's where it seemed almost everything is down, some of my worst performers which I thought would be down even more yet were actually positive on the day. In specific (RBLX,SHOP,SQ,TOI (almost NVDA...was positive for a while). Anyways, should we read much into this? Is this a sign that some of these beat down names may actually be flirting with bottom? Or is is just wild trading and a one off perhaps? Your thoughts would be appreciated. Thanks

Shane.

Q: Hi 5i, looks like markets are going to take out June lows. With all the talking heads talking about more pain to come, what does your gut tell you?

Thx again for all your advice.

Q: Everyone, Now that the fed has raised rates, what do you see the market doing the the next year. Clayton

Q: I have been a canadian equity owner only but am buying a number of US large caps for the first time. With the US dollar being as strong as it is right now, would you hedge these purchases using the NEO exchange. I am in my early 70s

Q: I'm perplexed by these "defensive" stocks. Both are breaking down with the market. Shouldn't food and insurance companies fare better? They haven't and now I wonder when the market turns if growth companies will fare better and lead the market higher (eventually). So what's in store for these companies going forward? Throw in the towel and put into growth companies?

Q: Nouriel Roubini (Dr. Doom) is forecasting a hard landing for a 2% inflation target rate with the S&P being off by as much as 40% and referred to the levels of debts of corporations and governments.

Even half that is nerve racking. Can you please give your thoughts and opinion on the matter?

Carl

Q: Hi 5i, why has the price of gold dropped since Aug 2022, and where do you see it going from here (and why?) Thank you.

Q: I noticed an interesting thing the other day, with the CPI announcement in the US causing a sudden severe tech market downdraft. Tech stocks such as Amazon went down about 6% and have stayed there. Smaller Canadian tech stocks didn't however. I hold both Converge and Topicus and they are both trading higher than they were two or three days ago. Does this decoupling mean that smaller Canadian tech stocks may have bottomed? Ie. all of the weak shareholders have been flushed out and mostly long term holders now hold the shares?