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Michael Bowman, Executive VP & Portfolio Manager, Wickham Investment Counsel FOCUS: North American Large Caps & ETFsMarket Outlook: We have been lulled into quiet markets for the past three years and investors have now witnessed a spike in volatility. The VIX index measures volatility and while it is now back down to 15, it was at 30 last week, which is still a far cry from the 90 reading back in 2008. I see this recent correction as nothing more than a technical correction and no bear market is in the offing. Bull market corrections are very short and very dramatic while bear market corrections are prolonged and torturous. We are entering a seasonally strong period with the US mid- term elections historically adding to the bullishness, and October sell-offs have usually been good buying opportunities. According to well respected Ed Yardeni of Yardeni Research, buying the dips remains in fashion. That’s because the news about the most worrisome issues of the past few weeks have become less worrisome, while stocks have gotten cheaper. The panic over Ebola seems to be subsiding as it becomes more apparent that the virus is not easily transmittable. The U.S. and Canadian economies continue to perform very well. Members of the Federal Reserve are chattering about possibly delaying raising the federal funds next year. The ECB has started buying Eurozone bonds sooner than expected. The region’s auto sales continue to recover. China’s economy is experiencing a soft rather than a hard landing. What’s not to like? Oil you say? Yes, the goo has become a slippery political football. It is a game of rock, paper scissors between the U.S., OPEC, and Russia. As for Canadian oil, we have had to endure a strong Canadian dollar between 2009 and 2013 while we watched other countries haul in $20 a barrel more than we were getting. Our oil sands suffered undue, and relentless criticism, and the Feds and the provinces were piling on the regulations with no referee. Through all that, and $40 a barrel back in 2008, we came out the other side, and we will again. What’s not to like? Top Picks:KKR & Co. (KKR.N) Westjet Airlines (WJA.TO) *Short* Kohls (KSS.N) Click here for more information on John Stephenson's top and past picks
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