Andrew Pyle, senior wealth advisor and portfolio manager at Scotia Wealth Management
Focus: North American stocks

MARKET OUTLOOK

GLOBAL EQUITY RESET

Without the coronavirus, the influence of last year’s rate cuts and quasi-resolution to the U.S.-China trade debacle would have shown up in both economic data and financial results this quarter. With the virus, there has been a definitive impact on both and we are going to see depressed activity in the indicators that are released into the early part of the second quarter. On the assumption that the virus will not become a pandemic, we could see a significant bounce-back in Q2 and Q3. This could see earnings estimates revised upward, which could fuel a second wind leg higher in stocks. This might be the last hurrah though, as volatility surrounding the U.S. election will likely return by the end of Q3. 

OIL PRICE REBOUND

If the coronavirus is contained, demand factors will slowly come back in favour of energy demand. This could take a number of weeks but we are also heading into spring, where seasonal demand influences will come to play. Crude oil futures support at $50 should have held, but the tests just below this level actually came off trendline support going back to early 2016. I would be overweighting energy stocks at this point for a move in crude back to the $65 area. This is why I still like Suncor at this point. Also note that a revival in commodities would also be a support to the non-gold materials group.

TOP PICKS

LOBLAW (L TSX)

SUPERIOR PLUS CORP (SPB TSX)

SIENNA SENIOR LIVING (SIA TSX)

PAST PICKS: FEB. 25, 2019

THE STARS GROUP (TSGI TSX)

• Then: $21.93
• Now: $33.42
• Return: 52%
• Total return: 52%

DOLLARAMA (DOL TSX)

• Then: $36.31
• Now: $41.69
• Return: 15%
• Total return: 15%

SUNCOR ENERGY (SU TSX)

• Then: $44.79
• Now: $40.32
• Return: -10%
• Total return: -6%

Total return average: 20%

TWITTER: @andrewpyle_PWM
WEBSITE: pylegroup.ca