Full episode: Market Call for Thursday, February 27, 2020
Brian Acker, president, CEO, and chief investment strategist at Acker Finley
Focus: North American large caps
At Acker Finley, we’re still U.S. dollar bulls and have been over the last eight or more years. In early January, I suggested the global economy was experiencing what I called a “booming depression.” Well, with COVID-19 the world isn’t “booming” anymore. Global bond yields are shrinking fast, with the 10 and 30-year Treasuries yields hitting all-time lows. Canada’s 10-year bond yield hit 1.14 per cent Thursday morning.
We have to admit we felt a little uncomfortable about last week’s market performance. Equity markets, especially U.S. markets, hit all-time highs last week without a hint of COVID-19 reaction, even though we all could see the virus coming out of China. This week, I can say confidently we are now pricing the coronavirus into the markets. All eyes are probably on the U.S. Federal Reserve at present. Certainly world growth will slow significantly over the coming months, but expect central banks to turn on massive liquidity when COVID-19 seems to be peaking or under control.
With COVID-19 and the upcoming U.S. federal election, this will be an interesting next six months or so.
JOHNSON & JOHNSON (JNJ NYSE)
Last purchased at US$137.36 on May 14.
Model Price is $182.97, representing an upside of 27 per cent.
CISCO SYSTEMS (CSCO NASD)
Last purchased at $50.10 on Sep. 13.
Model Price is $65.05, representing an upside of 54 per cent
MERCK & CO (MRK NYSE)
Last purchased at $86.30 on Aug. 13.
Model Price is 123.73, representing an upside of 55 per cent.
PAST PICKS: APRIL 22, 2019
INTEL (INTC NASD)
- Then: $58.82
- Now: $57.58
- Return: -2%
- Total return: 0.4%
ORACLE (ORCL NYSE)
- Then: $54.62
- Now: $51.67
- Return: -5%
- Total return: -4%
MARSH AND MCLENNAN (MMC NYSE)
- Then: $93.35
- Now: $111.38
- Return: 19%
- Total return: 21%
Total return average: 6%