David Burrows, president and chief investment strategist at Barometer Capital Management

FOCUS: North American large caps


MARKET OUTLOOK:

Barometer continues to be positive on the outlook for equities and commodities as a way to benefit from a reflating economy. In particular, Barometer is building portfolios to deliver dividend growth to our investors to help offset the rising cost of living. We continue to have very little fixed income or bond proxy, high dividend telecom, staples, utilities or REITS exposure. Our market breadth models used to assess market health most recently turned positive at the end of October and continue to be constructive as market leadership has continued to broaden. Not only is the U.S. broadening, but we are seeing positive conditions in international markets.

While some key tech leaders continue to be important, we have a very targeted underweight in the sector since December favouring large over weights in financials, industrials, energy and materials. The global economies continue to be resilient and Chinese stimulus will likely be an additional tailwind. After the most aggressive global tightening cycle in 20 years, both the Purchasing Managers' Index and Institute of Supply Management data recently returned to expansionary readings showing the resilience of the global economy. While this delay reduced the number of expected rate cuts, as long as corporate earnings estimates continue to be revised positively, equities should continue to be favoured. While many are awaiting a U.S. Federal Reserve rate cut, the fact that economic conditions remain strong, delaying cuts is a good thing.

  • Sign up for the Market Call Top Picks newsletter at bnnbloomberg.ca/subscribe
  • Listen to the Market Call podcast on iHeart, or wherever you get your podcasts

TOP PICKS:

David Burrows' Top Picks

David Burrows, president and chief investment strategist at Barometer Capital Management, discusses his top picks: JP Morgan, Alamos Gold, and Imperial Oil.

JP Morgan (JPM NYSE)

We have moved from 40 years where the borrower was in control, to likely 20 -25 years where the lender will be in control. JP Morgan is the premier bank in the world. The best balance sheet, the best management, the best technology platform and with their flexibility, will be able to take advantage of future opportunities in banking, capital markets and consolidation of weak regional banks. The company has raised its dividend twice this year and likely will continue to grow the dividend double digits over the next several years.

Alamos Gold (AGI TSX)

A multi-asset, cashflow-generating gold producer with mines in stable jurisdictions. 

Imperial Oil (IMO TSX)

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
JPM NYSE Y Y Y
AGI TSX Y Y Y
IMO TSX Y Y Y

PAST PICKS: January 29, 2023

David Burrows' Past Picks

David Burrows, president and chief investment strategist at Barometer Capital Management, discusses his past picks: Canadian Natural Resources, Teck Resources, and iShares MSCI Japan ETF.

Canadian Natural Resources (CNQ TSX)

  • Then: $85.66
  • Now: $107.43
  • Return: 25 per cent
  • Total Return: 27 per cent

Teck Resources (TECK.B TSX)

  • Then: $54.37
  • Now: $63.89
  • Return: 17 per cent
  • Total Return: 18 per cent

iShares MSCI Japan ETF – (EWJ NYSEARCA)

  • Then: US$66.17
  • Now: US$70.34
  • Return: 6 per cent
  • Total Return: 6 per cent

Total Return Average: 17 per cent

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
CNQ TSX Y Y Y
TECK.B TSX Y Y Y
EWJ NYSEARCA Y Y Y