James Telfser's Top Picks: November 24, 2022
BNN Bloomberg
Top picks from James Telfser, partner and portfolio manager, Aventine Investment Counsel
FOCUS: North American stocks
MARKET OUTLOOK:
While we are encouraged that central banks have begun to soften their language and that we might be past peak hawkishness, what remains to be seen is the damage done to corporate profitability from the previous tightening of financial conditions. Earnings in the third-quarter have mostly surprised positively, yet the bond market is still calling for a significant recession, as the entire yield curve remains inverted. While still heavily underwater, stocks and bonds have begun to inflect positively recently. In addition, gold is looking increasingly attractive as central banks globally purchased a record amount in the third-quarter, a trend which seems set to continue. While we believe the market is likely to continue to see heightened volatility in the near-term, and we are currently holding a higher-than-average cash weighting across portfolios, there are several companies that are performing exceptionally well even in the current uncertain environment. We are selectively adding exposure to both equities and fixed income as we sense that these opportunities could prove to be short-lived.
