Chris Blumas’ Top Picks: April 13, 2022
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Top picks from Chris Blumas, portfolio manager, Raymond James Investment Counsel Ltd.
Chris Blumas, portfolio manager, Raymond James Investment Counsel Ltd. FOCUS: North American large cap stocks
MARKET OUTLOOK:
All eyes are on the U.S. Federal Reserve as it tries to combat high inflation and engineer a soft landing for the U.S. economy. Inflation pressures were expected to moderate this year but Russia’s aggression in the Ukraine and the prospect of further lockdowns in China have created additional supply chain pressures that could be more enduring in nature.
While high energy prices, rising interest rates, and lower government aid will undoubtedly hinder future economic growth, consumer spending is likely to remain strong over the near term. Consumer spending is the largest component of US GDP (~70 per cent in 2021) and is being fueled by robust household savings, low unemployment levels, and rising wages.
Against this economic backdrop, the Federal Reserve has started an abrupt monetary policy “U-turn” by reversing course and initiating plans to shrink its balance sheet and increase interest rates. With the ratio of wealth-to-income at an all-time high (~25 per cent above its prior peak) and aggregate credit growth expected to remain weak, the more speculative pockets of the financial markets could be vulnerable to a correction as liquidity is removed from the financial system.
With low nominal interest rates and negative real returns, investors holding cash and low yielding fixed income securities risk a loss in purchasing power over time. While putting investment dollars to work in this uncertain environment can be challenging, equities still look like an attractive asset class for investors. Going forward, I think investors should remain well diversified and defensively positioned. Some areas of the equity market that look to offer attractive value include select technology companies, diversified REITs, and financial services companies.
Defence Minister David McGuinty says the federal government is giving a big boost to the munitions industry to build up the domestic supply of heavy artillery shells.
Defence Minister David McGuinty says the federal government is giving a big boost to the munitions industry to build up the domestic supply of heavy artillery shells.
The Bank of Canada today held its target for the overnight rate at 2.25 per cent, with the Bank Rate at 2.5 per cent and the deposit rate at 2.20 per cent.
Saskatchewan’s government is planning to table a deficit budget today in a move that Premier Scott Moe says protects public services.
Culture Minister Marc Miller says the government must have a serious conversation about AI systems’ use of news.
Delta Air said on Tuesday it expects first-quarter profit within its initial forecast range but raised its revenue expectations on strong demand, amid high jet fuel prices due to the conflict in the Middle East.
The United Arab Emirates briefly closed and then reopened its airspace Tuesday, temporarily halting flights in a crucial travel hub, as the country’s military said it was facing incoming attacks from Iran.
Prime Minister Mark Carney met with British Prime Minister Keir Starmer on Monday, and while both remarked the world has become a more challenging place since their first meeting a year ago, neither named a specific issue in their public remarks.
Japan plans to start releasing oil from its stockpiles on Monday to soften the shock from the U.S.-Israeli war on Iran, a stark reminder of the oil crisis half a century ago that prompted Tokyo to create reserves.
Warner Bros emerged as the biggest winner at the Academy Awards on Sunday, though the mood was clouded by its pending US$110 billion sale to Paramount Skydance, a deal reshaping Hollywood’s studio landscape.
Every day more than $4 billion worth of goods cross the United States’ borders with Canada and Mexico – U.S. auto parts headed for car factories in northern Mexico, cartons of Mexican avocados bound for California supermarkets, Canadian aluminum destined to become cans of Campbell Soup.
Prime Minister Mark Carney met Monday with Prime Minister Keir Starmer in London, and while both remarked the world has become a more challenging place since their first meeting a year ago, neither named a specific issue.
Conservative Leader Pierre Poilievre has unveiled a new auto plan that aims to secure tariff-free access to the U.S. market.