Brian Acker's Top Picks: March 14, 2023

Brian Acker, president, chief executive officer and chief investment strategist, at Acker Finley

FOCUS: North American large-cap stocks 

MARKET OUTLOOK:

For the last 10 years, I have been recommending U.S. dollar-dominated assets for Canadian investors. Over the last year and a bit, we have seen this recommendation pay off for investors. We still see upside momentum for the U.S. dollar and will continue to recommend this position for the intermediate term.

The last 48 hours have seen extraordinary activity by the U.S. government. Investors have known that over the last year, western central banks have substantially increased short-term interest rates to slow the unwanted inflation from previous monetary activity due to the COVID-19 pandemic. This substantial tightening of over 400 basis points in a relatively short time span has substantially tightened financial conditions enough to start impacting lending institutions and especially banks. During an emergency meeting on the weekend, the U.S. government effectively guaranteed all bank deposits in every lending institution in the realm because two banks were declared insolvent and shut down. Deposits, at all commercial banks, are over $17 trillion dollars. We will see if this is enough actions by regulators to calm down the initial panic that ensued over this financial news. As with past appearances on Market Call we are calling for caution on behalf of investors.

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TOP PICKS:

Invesco DB US Dollar Index Bullish Fund (UUP NYSEARCA)

Investors should have a large proportion of the investable assets in U.S. dollars

iShares 20 Plus Year Treasury Bond ETF (TLT NASD)

Sprott Physical Gold Trust (PHYS TSX)