Full episode: Market Call Tonight for Thursday, September 12, 2019
Christine Poole, CEO and managing director at GlobeInvest Capital Management
Focus: North Americal large caps
Markets are holding up remarkably well given the ongoing trade uncertainty, global geopolitical situation and contracting manufacturing activity in the global economy.
On the positive side, the service side of the economy and the U.S. consumer continues to be quite resilient thus far. This bodes well for the U.S. economy as consumers account for roughly two thirds of GDP. The employment situation in Canada and the U.S. also remains healthy.
Accommodating monetary policy by central banks globally is a tailwind for stock markets. Market direction in the coming months will largely be driven by developments in the U.S.-China trade war. A prolonged process will weigh on business sentiment and temper fixed investment outlays.
Economic growth is decelerating, but has yet to turn negative. While there are some flashing yellow signals, an imminent recession is not our base case.
ABBOTT LABS (ABT:UN)
Recent purchase at $81.50 range in September 2019.
Abbott is a diversified global healthcare company operating in four segments: Established pharmaceuticals (15 per cent of sales), diagnostics (24 per cent), nutritionals (24 per cent) and medical devices (37 per cent). Its products are sold in over 150 countries with 65 per cent of sales outside of U.S. and 41 per cent of sales coming from emerging markets. Abbott offers a dividend yield of 1.5 per cent.
PEMBINA PIPELINE (PPL:CT)
Recent purchase at $49 range in September 2019.
Pembina is a diversified energy infrastructure company that operates pipelines, natural gas gathering and processing facilities and midstream businesses. Pembina is well positioned in the prolific Montney and Duvernay shale regions, with secured projects in place to support its future cash flow growth over the foreseeable future. Pembina offers an attractive 4.9-per-cent dividend yield.
Recent purchase at $60 range in August 2019.
Unilever is one of the world’s leading suppliers of personal care (38 per cent of sales), food (24 per cent), home care (19 per cent) and refreshment (19 per cent) products, with sales in over 190 countries and reaching 2.5 billion consumers a day. Some of its global brands include Dove, Axe, Tres Semmes, Vaseline, Lipton, Knorr and Hellmans. With close to 60 per cent of its sales coming from emerging markets, Unilever is a natural beneficiary from the growing middle class in these regions. Unilever provides a dividend yield of 3 per cent.
PAST PICKS: SEP. 11, 2018
- Then: $73.37
- Now: $67.50
- Return: -8%
- Total return: -5%
ROYAL BANK (RY:CT)
- Then: $103.75
- Now: $104.18
- Return: 1%
- Total return: 5%
CHARTWELL RETIREMENT RESIDENCES (CSH-U:CT)
- Then: $15.13
- Now: $14.71
- Return: -3%
- Total return: 1%
Total return average: 0.3%