Full episode: Market Call Tonight for Thursday, February 21, 2019
Greg Newman, director and portfolio manager at Scotia Wealth Management
Focus: North American dividend stocks and protection strategies
Late-cycle, impetuous V-shaped bounce, dead-cat bounce, bear trap, looming recession, end of the buy-the-dip bull market … these are just some of the descriptors I have heard over and over since early January about why one should not trust this rally.
Why is the cycle so late? Is inflation a problem? Have animal spirits boiled over? Where are the tremendous excesses that usually characterize the end of a cycle?
While the cycle is certainly far along, I am alert to the fact it could go on longer than the crowd seems currently positioned for. More supportive global monetary policy and an ease in tariff concerns can continue to drive the rally with valuations and interest rates at these levels. Earnings expectations are low and could improve with an ease in tariffs, a more patient Fed and with productivity gains.
Look for quality names that are compelling relative to their peers with a preference for dividend growth.
FedEx offers investors an attractive play on e-commerce and global growth while trading at a cheap valuation.
BROOKFIELD INFRASTRUCTURE PARTNERS (BIP_u.TO)
Brookfield Infrastructure offers investors an attractive play on global infrastructure development while earning an enviable distribution.
ROYAL BANK (RY.TO)
RBC offers investors an attractive long-term play on banking while earning a stable and growing dividend.
PAST PICKS: FEB. 23, 2018
- Then: $63.80
- Now: $71.60
- Return: 12%
- Total return: 16%
TD BANK (TD.TO)
- Then: $73.97
- Now: $76.33
- Return: 3%
- Total return: 7%
RESTAURANT BRANDS INTERNATIONAL (QSR.TO)
- Then: $75.30
- Now: $85.60
- Return: 14%
- Total return: 17%
Total return average: 13%