Stan Wong's Top Picks: November 24, 2021
BNN Bloomberg
Top picks from Stan Wong, portfolio manager at Scotia Wealth Management
Stan Wong, portfolio manager, Scotia Wealth Management
FOCUS: North American large cap stocks and ETFs
MARKET OUTLOOK:
After a strong October, global equity markets have continued to advance in November. Solid economic data and healthy corporate earnings have helped push market sentiment and stocks higher. Positive seasonality trends have also helped equities. Looking at the S&P 500 Index, the fourth quarter has historically produced the strongest average quarterly returns for stocks with the highest positivity rate.
However, COVID-19 trends in the U.S. and parts of Europe have taken a negative turn with cases and hospitalizations rising, causing investor concern over the potential for more economic restrictions and lockdowns. Persistent supply chain constraints and inflation pressures could also add to renewed bouts of market volatility. Input and end prices have climbed around the world, with commodity prices surging and U.S. inflation numbers hitting 13-year highs. In addition, concerns over the timing and magnitude of interest rate hikes and the tapering of asset purchases by the Federal Reserve Bank could keep equities in check.
From an intermediate term perspective, the macroeconomic landscape continues to look favourable – enormous fiscal stimulus, low interest rates and high household savings rates provide a positive backdrop for the global economy. Arguably, the worst of the pandemic is behind us with vaccinations progressing around the world and being extended to children in many countries. To date, a total of more than 7.76 billion doses of coronavirus vaccines have been administered worldwide across 184 countries. In addition, highly anticipated antiviral pill treatments from Pfizer and Merck should help the fight against COVID-19.
