Cole Kachur, portfolio manager, senior investment manager, Wellington-Altus Private Wealth

FOCUS: North American Stocks and ETFs

MARKET OUTLOOK:

With continued strength in the equity markets, we believe that we have entered a new bull market which started in October 2022 and should continue for another 18 months. What we have seen so far is a typical post-correction rebound with equity indices rallying approximately 30 per cent from their 2022 lows. This aligns with our firm’s call from June of last year, and we expect market strength will continue and push U.S. indices past all-time highs and into the 5,300 range on the S&P 500 by the end of 2024. A significant number of money managers have missed this rebound and will be chasing returns through the end of the year. This “dash for trash” is positive for small cap indices and disruptive and high-growth technology. Markets have “melted up” over the past 10 trading sessions and seasonal weakness in August and September is something to be cognizant of. I wouldn’t be surprised if markets take a breather and have a small pullback during the next two months, but any dip should be bought as markets will likely move higher over the next 12 to 18 months.  It is our expectation that technology will continue to lead the market rally but market breadth is improving and more companies are participating in the uptrend, which is positive for the sustainability of this rally.

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TOP PICKS

Advanced Micro Devices (AMD NASD)

We like the chip space and think that AMD is one of the leaders in the space. There is a lot of hype around AI and AMD is positioned to see meaningful revenue generation from that segment of their business in the future. The stock has taken a pause and is consolidating in the $117 range, which we think is a good opportunity to start accumulating shares. It’s a competitive space but AMD holds up well against the competition and I would look for the stock to move towards $150 or higher in the next 12 months.

Amazon.com (AMZN NASD)

Amazon continues to impress with solid financial results, focusing on cost reductions, which has helped the bottom line. The stock bottomed in early January and the chart is showing some similarities to the decade long breakout that started in 2009. Amazon continues to be the e-commerce leader but is seeing tremendous growth in its other ventures, such as AWS. Ecommerce trends and bargain hunting shoppers should continue to benefit Amazon, regardless of economic conditions. I see the stock moving back towards all-time highs over the next 12 to 18 months.

iShares Russell 2000 ETF (IWM NYSEARCA)

With major indices nearly at all-time highs, small and mid caps are the catch-up trade and should follow the large caps into the end of the year.