Andrew Pyle's Top Picks: June 6, 2023
BNN Bloomberg
Top picks from Andrew Pyle, senior investment advisor and portfolio manager, CIBC Wood Gundy
FOCUS: North American equities
MARKET OUTLOOK:
In my opinion, U.S. and European stocks are looking overbought with little incremental positive news on the horizon, now that the U.S. banking sector appears to have stabilized and a debt ceiling deal has been signed. In fact, the negative view of stocks is symmetrical. To get the environment necessary for interest rates to be reduced by year-end, we will need to see a contraction in economic output in the coming months. The damage that would do to demand and revenues is not priced in. On the other hand, if we don’t get that pullback in activity then, by default, demand would be buoyant, which would keep inflation higher than the currently predicted trajectory. That means a likely further tightening by the Bank of Canada and U.S. Federal Reserve, which again would work against stocks.
