Brian Madden's Top Picks: November 21, 2023
BNN Bloomberg
Top picks from Brian Madden, chief investment officer, First Avenue Investment Counsel
FOCUS: North American equities
MARKET OUTLOOK:
Stock markets find themselves on much stronger footing in November after three back-to-back months of drawdowns in August, September and October. The proximate explanation for the renewed enthusiasm for stocks is the increasing confidence investors have that the U.S. Federal Reserve and the Bank of Canada are done raising overnight interest rates. We concur with this view but remain mindful of risks to the economy and the outlook for corporate earnings, noting that Canada’s economy is in a confirmed recession by the conventional yardstick, with gross domestic product (GDP) having slipped in two consecutive quarters starting in April. Overall reported earnings growth during the latest quarter remains positive, although growth in Canada is more sluggish than in the United States, where some of the global giants and secular growth themes remain very much in gear, despite increasing evidence of pressure on consumer and household spending, particularly in more discretionary categories. Our portfolios accordingly have measured exposure to a number of these companies and themes and also remain well-positioned in defensive and economically resilient sectors and companies on both sides of the border.
