Full episode: Market Call Tonight for Friday, July 6, 2018
David Cockfield, managing director and portfolio manager at Northland Wealth Management
Focus: Canadian equities and ETFs
Canadian equity markets have recently returned to levels that were last reached in early January of this year. This occurred despite U.S. tariffs on Canadian steel and aluminum imports and counter tariffs imposed by Canada on American goods. It's unclear if recent events indicate the start of a full-scale trade war. The U.S. economy and corporate profits continue to show excellent growth, while the Canadian economic growth is slower. Against this uncertain background, North American equity markets are likely to move sideways. This sideways pattern may continue until after the U.S. midterm elections.
ISHARES S&P/TSX CAPPED ENERGY INDEX ETF (XEG.TO)
Last purchased in July at $13.11.
This ETF gives investors exposure to the Canadian energy sector. With the recent increase in oil prices, it offers a diversified approach to participate in the companies that will benefit.
Last purchased in July at $74.40.
This Canadian chartered bank stock has recently declined in price due to concerns about the potential impact of trade wars on earnings. Scotiabank the second largest bank in Mexico, which will likely be a major U.S. target in its trade war. While this is a risk, it's being overdone. The stock, with a yield of 4.1 per cent and a price-to-earnings ratio of 10.75, is a "buy."
Last purchased in July at $53.69.
BCE is the largest communication company in Canada, with an excellent growth record in earnings and dividend payouts. The threat of rising interest rates has caused the stock to decline. With a yield of 5.6 per cent, the stock offers an attractive yield for investors seeking income.
PAST PICKS: JUNE 23, 2017
- Then: $14.12
- Now: $12.92
- Return: -8%
- Total return: -2%
- Then: $30.07
- Now: $30.87
- Return: 3%
- Total return: 6%
- Then: $39.98
- Now: $54.20
- Return: 36%
- Total return: 42%
Total return average: 15%