Category Archives: news

March 2024

Market Update – March 2024

Posted on

Market Update                                                                                                                    March  2024

 

Click here to download/print the PDF

Market breadth has expanded since my last update.  More stocks are participating in this market rally.  In particular, the lagging Canadian market (TSX) in green above is starting to narrow the gap with the leading U.S. markets since mid-February. 

Here is market performance YTD:

Top spot goes to the broader S&P 500                +8.41%

Nasdaq (tech index)                                                       +7.8%

Canada’s TSX coming up in the rear                   +4.87%

81% of stocks in the S&P500 are now trading above their 200 day moving average.

68% of stocks in the TSX are now trading above their 200 day moving average.

In short, the market has continued to rally out of last year’s October lows, climbing the wall of worry from inflation, interest rates, trade, geopolitical tensions, election fears. 

Maureen Peters.

Most everyone is very familiar with our administrative lead, Maureen who has been with my team for seven years.  Maureen is retiring at the end of this month.  She has been an invaluable part of my team and will be missed as she prepares to greet another grandchild.  If you like hanging out on rock walls, you might bump into her at the climbing centre here in Victoria!  Best wishes for a great retirement Maureen!

 

 

Introducing Comet Tang.

Of course, our administrative team will continue with Stephanie Hunter and our newest team member, CometTang. Comet has a degree in Chemistry with a minor in Business, which has translated into great analytical skills.  He is tech savvy and we are enjoying his friendly nature and enthusiasm for our business.  Welcome Comet!

 

 

I have prepared this commentary to give you my thoughts on various investment alternatives and considerations which may be relevant to your portfolio. This commentary reflects my opinions alone and may not reflect the views of National Bank Financial Group. In expressing these opinions, I bring my best judgment and professional experience from the perspective of someone who surveys a broad range of investments. Therefore, this report should be viewed as a reflection of my informed opinions rather than analyses produced by the Research Department of National Bank Financial.

Best,

National Bank Financial

Rob Hunter

Senior Wealth Advisor

Sources:  Stockcharts.com, BNN, Bloomberg

National Bank Financial – Wealth Management (NBFWM) is a division of National Bank Financial Inc. (NBF), as well as a trademark owned by National Bank of Canada (NBC) that is used under license by NBF. NBF is a member of the Canadian Investment Regulatory Organization (CIRO) and the Canadian Investor Protection Fund (CIPF), and is a wholly-owned subsidiary of NBC, a public company listed on the Toronto Stock Exchange (TSX: NA).

This information was prepared by Rob Hunter, a Senior Wealth Advisor with National Bank Financial. The particulars contained herein were obtained from sources that we believe reliable but are not guaranteed by us and may be incomplete.

The opinions expressed herein do not necessarily reflect those of National Bank Financial. The particulars contained herein were obtained from sources we believe to be reliable, but are not guaranteed by us and may be incomplete. The opinions expressed consider a number of factors including our analysis and interpretation of these particulars, such as historical data, and are not to be construed as a solicitation or offer to buy or sell the securities mentioned herein. Unit values and returns will fluctuate and past performance is not necessarily indicative of future performance. Important information regarding a fund may be found in the prospectus. The investor should read it before investing.

The opinions expressed herein do not necessarily reflect those of National Bank Financial. Several of the securities mentioned in this article may not be followed by National Bank Financials’ Research department.

The securities mentioned (inclusive of option strategies) in this article are not necessarily suitable to all types of investors.  Please consult your investment advisor to discuss investment risks. All prices and rates are subject to change without notice. Stocks typically fluctuate in value. Stock values can go to zero.

Selling calls against stock (Covered Writing): Shares may need to be sold at the strike price of the option at any time prior to expiration. If the calls are assigned, further opportunity for appreciation in the underlying security above the strike price is foregone.

Risk/Reward of the strategy = Strike price minus the purchase price of the underlying plus the premium received from the sale of the call. The maximum loss is the same as holding a long position less the premium received.

The investment advice given only applies to residents of the provinces of British Columbia, Alberta, Manitoba, Saskatchewan, Ontario, New Brunswick and Quebec.

National Bank Financial is a member of the Canadian Investor Protection Fund.

      

November

Market Update – February 2024

Posted on

Market Update                                                                                                                    February 2024

Seven tech stocks are driving the valuation gains for the U.S. market.  In fact, the so called Magnificent Seven (ALPHABET (Google), AAPLE, AMAZON, MICROSOFT, NVIDIA, TESLA, META (Facebook)) recently accounted for half the valuation of the Nasdaq index. 

Many are trading above rising analyst targets as momentum takes over.

Click here to download/print the PDF

My mind can’t help but think back to 2000 when Nortel alone represented 35% of the weight of the TSX here in Canada.  Back then, BCE owned part of Nortel so the combined weight of those two stocks was more than 55% of the TSX!  It didn’t last.

I fully believe that AI can be bigger than the internet.  However, at this juncture, one of two things will happen.  These companies will report incredible earnings this week – or miss expectations.  This happened with Tesla last week when it warned of weaker growth this year and the entire Nasdaq pulled back 5% on that news. 

Of course, while the hopes for change via technology are one thing, the other is direction interest rates. Technology stocks perform better with the hope of lower interest rates.  The Federal Reserve meets on Wednesday and while there has been plenty talk about lowering rates, that hasn’t happened – yet. 

The U.S. economy seems to be doing rather well despite public sentiment.  The measure by which the Federal Reserve measures core inflation is indicating that inflation has dropped significantly.  Unemployment in the U.S. is still quite low and the jobs report comes out Friday.  Maybe, the Fed might be less inclined to lower rates soon – if they don’t feel the need. 

In terms of the next few years, I don’t think it will matter much for technology stocks.  Near-term, I have less conviction.

TRYING TO BE RIGHT

Invest into smaller positions in this sector as earnings play out over the next few quarters to see if earnings are catching up with prices.  That way, you are not overweight if they pull back on an earnings miss.  On the other hand, if earnings are fantastic, you still have exposure.

TESLA    $190

< $38.30>  Recent premium available on the Tesla January 2025 $190 Call.

$38.30 represents 20% of the value of the stock.  If assigned, the profit would be 25.2%

The stock could drop $38.30 before it lost money.

*The volatility of this stock makes it good for illustrative purposes.  I am not recommending everyone owns TESLA.

I have prepared this commentary to give you my thoughts on various investment alternatives and considerations which may be relevant to your portfolio. This commentary reflects my opinions alone and may not reflect the views of National Bank Financial Group. In expressing these opinions, I bring my best judgment and professional experience from the perspective of someone who surveys a broad range of investments. Therefore, this report should be viewed as a reflection of my informed opinions rather than analyses produced by the Research Department of National Bank Financial.

 

Best regards,

National Bank Financial

Rob Hunter

Senior Wealth Advisor

 

Sources:  Stockcharts.com, BNN, Bloomberg, Globe & Mail, Yahoo Finance

National Bank Financial – Wealth Management (NBFWM) is a division of National Bank Financial Inc. (NBF), as well as a trademark owned by National Bank of Canada (NBC) that is used under license by NBF. NBF is a member of the Canadian Investment Regulatory Organization (CIRO) and the Canadian Investor Protection Fund (CIPF), and is a wholly-owned subsidiary of NBC, a public company listed on the Toronto Stock Exchange (TSX: NA).

This information was prepared by Rob Hunter, a Senior Wealth Advisor with National Bank Financial. The particulars contained herein were obtained from sources that we believe reliable but are not guaranteed by us and may be incomplete.

The opinions expressed are based on our analysis and interpretation of these particulars and are not to be construed as solicitation or offer to buy or sell the securities mentioned herein. National Bank Financial may act as financial advisor, fiscal agent or underwriter for certain of the companies mentioned herein and may receive remuneration for its services. Rob Hunter, National Bank Financial and/or its officers, directors, representatives, and associates may have a position in the securities mentioned herein and may make purchases and / or sales of these securities from time to time in the open market or otherwise.

The opinions expressed herein do not necessarily reflect those of National Bank Financial. Several of the securities mentioned in this article may not be followed by National Bank Financial’s Research department.

 

The securities mentioned (inclusive of option strategies) in this article are not necessarily suitable to all types of investors.  Please consult your investment advisor to discuss investment risks. All prices and rates are subject to change without notice. Stocks typically fluctuate in value. Stock values can go to zero.

 

Selling calls against stock (Covered Writing): Shares may need to be sold at the strike price of the option at any time prior to expiration. If the calls are assigned, further opportunity for appreciation in the underlying security above the strike price is foregone.

 

Risk/Reward of the strategy = Strike price minus the purchase price of the underlying plus the premium received from the sale of the call. The maximum loss is the same as holding a long position less the premium received.

 

The investment advice given only applies to residents of the provinces of British Columbia, Alberta, Manitoba, Saskatchewan, Ontario, New Brunswick and Quebec.

 

National Bank Financial is a member of the Canadian Investor Protection Fund.

 


 

April

Market Update – January 2024

Posted on

Market Update                                                                                                                    January 2024

From July highs to October lows to a strong year end rally, this was the year in markets…

                                                                           2023

TSX (Canada)                                                   8.12%

SPX (US)                                                            24.23%

Nasdaq (US largely tech index)                   43.52%

The Best and Worst Performing Sectors in 2023 (visualcapitalist.com)

Click here to download/print the PDF

U.S. ten year treasury yields continue to recede and in sync, the U.S. dollar, as attention is focused on anticipated interest rate cuts.  I think for current market valuations to hold in the U.S. we will need to see those interest rate cuts become reality while earnings continue to grow. 

Here in Canada, markets managed to turn from a negative in October to a positive rally for year end.  However, the discount between the Canadian market and the U.S. remains the largest in decades.  Arguably, the weaker Canadian market may also be the best value proposition given attractive dividend yields and low valuations.

TFSA contribution room allowed this year moves to $7,000 in cash or equivalent value of securities.  Use your TFSA for growth stocks.  TFSAs are less conducive to monthly income needs as a result of the need to deregister each time you withdraw.    

It is not what you get – but what you keep.  Remember that dividends are taxed the least in taxable accounts, followed by capital gains (which are half taxable) followed by the worst taxation of any investment income – interest income.   Income from selling calls, is taxed as capital gains.

Graduated Federal tax rates:

  • 15% on the first $53,358 of taxable income
  • 20.5% on taxable income over $53,359 up to $106,717
  • 26% on taxable income over $106,717 up to $165,430
  • 29% on taxable income over $165,430 up to $235,675
  • 33% on any taxable income over $235,675

Graduated BC tax rates:

  • 5.06% on the first $45,654 of taxable income
  • 7.7% on taxable income over $45,654 up to $91,310
  • 10.5% on taxable income over $91,310 up to $104,835
  • 12.29% on taxable income over $104,835 up to $127,299
  • 14.77% on taxable income over $127,299 up to $172,602
  • 16.8% on taxable income over $172,602 up to $240,716
  • 20.5% on taxable income over $240,716

Alberta graduated tax rates:

  • 10% on the first $142,292 of taxable income
  • 12% on taxable income over $142,292 up to $170,751
  • 13% on taxable income over $170,751 up to $227,668
  • 14% on taxable income over $227,668 up to $341,502
  • 15% on taxable income over $341,502

I have prepared this commentary to give you my thoughts on various investment alternatives and considerations which may be relevant to your portfolio. This commentary reflects my opinions alone and may not reflect the views of National Bank Financial Group. In expressing these opinions, I bring my best judgment and professional experience from the perspective of someone who surveys a broad range of investments. Therefore, this report should be viewed as a reflection of my informed opinions rather than analyses produced by the Research Department of National Bank Financial.

 

Happy New Year!

Best regards,

National Bank Financial

Rob Hunter

Senior Wealth Advisor

 

Sources: Technical Speculator, Stockcharts.com, BNN, Bloomberg, Globe & Mail, Visual Capitalist 

National Bank Financial – Wealth Management (NBFWM) is a division of National Bank Financial Inc. (NBF), as well as a trademark owned by National Bank of Canada (NBC) that is used under license by NBF. NBF is a member of the Canadian Investment Regulatory Organization (CIRO) and the Canadian Investor Protection Fund (CIPF), and is a wholly-owned subsidiary of NBC, a public company listed on the Toronto Stock Exchange (TSX: NA).

This information was prepared by Rob Hunter, a Senior Wealth Advisor with National Bank Financial. The particulars contained herein were obtained from sources that we believe reliable but are not guaranteed by us and may be incomplete.

The opinions expressed are based on our analysis and interpretation of these particulars and are not to be construed as solicitation or offer to buy or sell the securities mentioned herein. National Bank Financial may act as financial advisor, fiscal agent or underwriter for certain of the companies mentioned herein and may receive remuneration for its services. Rob Hunter, National Bank Financial and/or its officers, directors, representatives, and associates may have a position in the securities mentioned herein and may make purchases and / or sales of these securities from time to time in the open market or otherwise.

The opinions expressed herein do not necessarily reflect those of National Bank Financial. Several of the securities mentioned in this article may not be followed by National Bank Financial’s Research department.

The securities mentioned (inclusive of option strategies) in this article are not necessarily suitable to all types of investors.  Please consult your investment advisor to discuss investment risks. All prices and rates are subject to change without notice. Stocks typically fluctuate in value. Stock values can go to zero.

Selling calls against stock (Covered Writing): Shares may need to be sold at the strike price of the option at any time prior to expiration. If the calls are assigned, further opportunity for appreciation in the underlying security above the strike price is foregone.

Risk/Reward of the strategy = Strike price minus the purchase price of the underlying plus the premium received from the sale of the call. The maximum loss is the same as holding a long position less the premium received.

The investment advice given only applies to residents of the provinces of British Columbia, Alberta, Manitoba, Saskatchewan, Ontario, New Brunswick and Quebec.

National Bank Financial is a member of the Canadian Investor Protection Fund.


 

December

Market Update – December 2023

Posted on

Market Update                                                                                                                    December 2023

Both Canadian and U.S. markets have surged upward in November on anticipation that interest rate hikes may be over.  Earnings season has held some positive surprises including the consumer who is still spending.   Retail sales were stronger than expected in September and more so in October despite economists expecting – nothing. 

Click here to download/print the PDF

Canada’s market remains range bound but has rallied off the Oct 27th bottom in the TSX by 7.3%.  The TSX is +3.7% ytd.

The U.S. market has recovered from seasonal September and October pullback in markets.  The S&P 500 (SPX) has rallied off Oct 27th bottom by 10.7%.  The SPX is +18.75% ytd and within a few points of a new high. 

The Nasdaq (tech index) has recovered from seasonal September and October pullback as well.  The Nasdaq has rallied of Oct 27th bottom by 15%.  The Nasdaq is +36.15% ytd and the best performing market so far this year.

As quarterly earnings season draws toward a close, the Canadian banks start reporting next week.  Perhaps we see more dividend hikes.

TFSA contributions get a boost in 2024.

Individual contribution room jumps to $7,000 for 2024.

Leslie Vieites is Retiring Nov 30th!

I want to acknowledge Leslie’s contribution to my team since joining me over ten years ago, in May of  2013.  You may not know, but working with me was just the tip of the iceberg.  She has been working in the securities industry since December 1986 – for 37 years! Fortunately, she has spent most of her career with us at National Bank Financial – 21 years.  We are going to miss her but extend our very best wishes for a well-deserved retirement. 

I have prepared this commentary to give you my thoughts on various investment alternatives and considerations which may be relevant to your portfolio. This commentary reflects my opinions alone, and may not reflect the views of National Bank Financial Group. In expressing these opinions, I bring my best judgment and professional experience from the perspective of someone who surveys a broad range of investments. Therefore, this report should be viewed as a reflection of my informed opinions rather than analyses produced by the Research Department of National Bank Financial. 

 

Best regards,

National Bank Financial

Rob Hunter

Senior Wealth Advisor

Sources: Technical Speculator, Stockcharts.com, BNN, Bloomberg, Globe & Mail

National Bank Financial – Wealth Management (NBFWM) is a division of National Bank Financial Inc. (NBF), as well as a trademark owned by National Bank of Canada (NBC) that is used under license by NBF. NBF is a member of the Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Investor Protection Fund (CIPF), and is a wholly-owned subsidiary of NBC, a public company listed on the Toronto Stock Exchange (TSX: NA).

The information contained herein has been prepared by Rob Hunter, a Wealth Advisor at NBF. The opinions expressed do not necessarily reflect those of NBF.

The opinions expressed herein do not necessarily reflect those of National Bank Financial. The particulars contained herein were obtained from sources we believe to be reliable, but are not guaranteed by us and may be incomplete. The opinions expressed consider a number of factors including our analysis and interpretation of these particulars, such as historical data, and are not to be construed as a solicitation or offer to buy or sell the securities mentioned herein. Unit values and returns will fluctuate and past performance is not necessarily indicative of future performance. Important information regarding a fund may be found in the prospectus. The investor should read it before investing.

The particulars contained herein were obtained from sources we believe to be reliable, but are not guaranteed by us and may be incomplete. The opinions expressed are based upon our analysis and interpretation of these particulars and are not to be construed as a solicitation or offer to buy or sell the securities mentioned herein. The opinions expressed do not necessarily reflect those of NBF.

I have prepared this report to the best of my judgement and professional experience to give my thoughts on various financial aspects and considerations. The opinions expressed represent solely my informed opinions and may not reflect the views of NBF.

Several of the securities mentioned in this article may not be followed by National Bank Financial’s Research department. The investment advice given only applies to residents of the provinces of British Columbia, Alberta, Manitoba, Saskatchewan, Ontario, and Quebec. National Bank Financial is a member of the Canadian Investor Protection Fund.


May

Market Update – November 2023

Posted on

Market Update                                                                                                                    November 2023

Seasonally, September/October tend to be the worst months for the market in the calendar year historically and this year was no exception.  That said, the first week of November proved to be the best week for the TSX since 2020.  Sentiment about central bankers being finished raising interest rates proved positive news for markets along with mix of positive earnings surprises as companies report their quarter.

Click here to download/print the PDF

Canada is having a rough time.  Productivity is now the lowest in G7 (about zero) and we just increased our money supply by nearly one third over the last three years.  That is likely telling if you have any sense of a declining standard of living.  We also lack capital investment.  At an economic presentation I attended last week with our Chief Economist, he explained CPP, The Canada Pension Plan has $200 billion allocated in equities around the world and only $10 billion is invested in Canada.  Just $1.7 billion is invested in Alberta. 

My challenge is to balance the need for income with growth in a portfolio.  Canada has a positive history as a dividend paying market.  While growth in Canada is currently flat, I have found exposure to the larger and more diverse U.S. market a great catalyst to portfolios.

By the way, the kind of sideways market illustrated above is usually great for covered call writing as we approach large call option maturities in December and January. 

I want to remind you about the positives of dividend stocks in this environment.  For starters the yields are fantastic relative to fixed income.  Dividends are also taxed at the lowest rate where fixed income (interest) is taxed at the highest rate.  Most importantly, dividends tend to grow in stocks with a history of dividend growth.

Last update, I included a chart on National Bank (NA). 

Investors tend to sometimes forget that dividend growth stocks tend to keep raising their dividends – as many of the banks have done this year despite weakness in the Canadian market.  Anyone who purchased National Bank at $39 ten years ago, today has a dividend yield of approximately 10.46% In a taxable account the dividend tax credit would make that an approximate pre-tax interest equivalent yield of 14.6%.   Not bad, despite banks pulling back near-term about 17% this year. 

Market volatility is normal in the stock market.  Accept it.  Think two years – not two weeks.

Rising interest rates may be squeezing the economy in part – which is the intention of central bankers, but most economists expect interest rates to fall in the first half of the next year.

Best wishes as we head into winter. 

I have prepared this commentary to give you my thoughts on various investment alternatives and considerations which may be relevant to your portfolio. This commentary reflects my opinions alone, and may not reflect the views of National Bank Financial Group. In expressing these opinions, I bring my best judgment and professional experience from the perspective of someone who surveys a broad range of investments. Therefore, this report should be viewed as a reflection of my informed opinions rather than analyses produced by the Research Department of National Bank Financial. 

 

Best regards,

National Bank Financial

Rob Hunter

Senior Wealth Advisor

 

Sources: Technical Speculator, Stockcharts.com, National Bank Economics, Bloomberg, Globe & Mail

National Bank Financial – Wealth Management (NBFWM) is a division of National Bank Financial Inc. (NBF), as well as a trademark owned by National Bank of Canada (NBC) that is used under license by NBF. NBF is a member of the Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Investor Protection Fund (CIPF), and is a wholly-owned subsidiary of NBC, a public company listed on the Toronto Stock Exchange (TSX: NA).

The information contained herein has been prepared by Rob Hunter, a Wealth Advisor at NBF. The opinions expressed do not necessarily reflect those of NBF.

The opinions expressed herein do not necessarily reflect those of National Bank Financial. The particulars contained herein were obtained from sources we believe to be reliable, but are not guaranteed by us and may be incomplete. The opinions expressed consider a number of factors including our analysis and interpretation of these particulars, such as historical data, and are not to be construed as a solicitation or offer to buy or sell the securities mentioned herein. Unit values and returns will fluctuate and past performance is not necessarily indicative of future performance. Important information regarding a fund may be found in the prospectus. The investor should read it before investing.

The particulars contained herein were obtained from sources we believe to be reliable, but are not guaranteed by us and may be incomplete. The opinions expressed are based upon our analysis and interpretation of these particulars and are not to be construed as a solicitation or offer to buy or sell the securities mentioned herein. The opinions expressed do not necessarily reflect those of NBF.

I have prepared this report to the best of my judgement and professional experience to give my thoughts on various financial aspects and considerations. The opinions expressed represent solely my informed opinions and may not reflect the views of NBF.

Several of the securities mentioned in this article may not be followed by National Bank Financial’s Research department. The investment advice given only applies to residents of the provinces of British Columbia, Alberta, Manitoba, Saskatchewan, Ontario, and Quebec. National Bank Financial is a member of the Canadian Investor Protection Fund.


 

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