North American equities are hovering near record highs despite elevated oil prices and ongoing uncertainty in the Middle East, with investors appearing to price in a path toward stability.
BNN Bloomberg spoke with Benjamin Klein, senior portfolio manager at Baskin Wealth Management, about market concentration in big tech, strong bank earnings and where he is seeing investment opportunities.
Key Takeaways
- Major indices are near record highs as investors look beyond geopolitical uncertainty and focus on underlying economic resilience.
- Market gains remain concentrated in large-cap technology, with strong earnings potential offset by concerns around capital spending and supply constraints.
- Semiconductor demand remains robust, supporting optimism for chipmakers despite ongoing shortages and capacity limits.
- U.S. bank earnings were solid, supported by trading revenue from market volatility and steady consumer spending.
- Consumer staples face ongoing pressure from weaker demand and pricing adjustments, while investors see stronger opportunities in AI-linked infrastructure and technology.
Read the full transcript below:
ROGER: Despite high oil prices and the lack of a peace deal in the Middle East, U.S. markets are sitting around record highs. Yesterday, the S&P 500 closed at a record high. The Nasdaq, the TSX, just a couple hundred points away from its peak, and seeing double-digit gains at times. Joining us now is Benjamin Klein, senior portfolio manager at Baskin Wealth Management. Benjamin, thanks, as always, for joining us.
BENJAMIN: Thanks for having me.
ROGER: When you look at what’s unfolding, we don’t have any kind of a peace agreement. We have a truce. People are treating it, though, like this is all over. Your thoughts on that?
BENJAMIN: I think investors are kind of latching on to some sort of clarity, some sort of sense of normalcy that we can get. The reality is we have no idea how long it’s going to take, what the treaty is going to look like when it happens. This could very easily still be in the early innings. I don’t think anybody knows.
ROGER: And are they baking in that this will be closer to being resolved rather than further away from being resolved? And when we do finally hear any kind of official statement, we won’t see much movement in the markets?
BENJAMIN: I mean, hard to tell. Obviously, the price of oil has been so volatile, and you would expect it to come down when and if there’s a deal, when and if oil becomes more able to freely move around. In terms of the markets, it certainly seems like things are closer to where they were at the beginning of the year, before the war started. But I think every investor has probably got a different idea of how long this is going to take and what the impacts are going to be.
ROGER: And through all of this, now that it’s kind of slowing, relatively speaking, slowing down, we’re starting to look back at big tech. It’s becoming sexy again.
BENJAMIN: Yeah, the market is still, I think, as everyone knows, extremely heavily weighted toward big tech. We think that big tech is still very attractively valued, just given the earning power, the earnings growth potential going forward. But there’s also skepticism out there about capital expenditure, how much they’re spending, memory shortages, chip shortages, energy requirements. We are still owners of big tech, and we still think there’s a bright future ahead, but it’s not necessarily all sunshine and rainbows.
ROGER: And what do you think of TSMC? They’re talking about their 2026 sales growth could be 30 per cent.
BENJAMIN: Yep.
ROGER: Is that a good sign, or are they being optimistic?
BENJAMIN: We think that there are every signs that demand is real. I mean, there are, as we know, enormous chip shortages, enormous inability to create all the chips for which there’s demand. We think that’s great for them. We are owners of TSMC, and on a valuation basis, just given their unbelievable earnings growth and unbelievable profits, you can argue the valuation is basically the same as it was 18 months ago. So we are very bullish on TSMC.
ROGER: And you mentioned capex. Is that the big potential headwind, or the big concern for a lot of people?
BENJAMIN: It’s a major one. I mean, we’re not talking about billions of dollars here. Of course, you’re talking about tens or hundreds of billions of dollars. And even for the big techs, even given their scale, given their size, that has a significant impact on their bottom line, and whether they’re able to earn a significant enough return on investment on that kind of outlay is obviously a big question in a lot of investors’ minds.
ROGER: So which way are you looking then? You mentioned you’re still into big tech. How are you approaching it?
BENJAMIN: So we think that, number one, it’s an attractive way to invest in what we would call AI infrastructure, as opposed to picking who’s going to be the best model, who’s going to monetize their model and their systems most effectively. We think that owning not just the big techs, but partly the big techs, is a way to have AI exposure without necessarily having to pick the winner, so to speak. You have Microsoft and Amazon providing the computing power on the back end. Google and Apple are going to be how AI gets into the hands of consumers. So we think it’s a way to add sufficient AI exposure without necessarily having the risk of OpenAI winning or Anthropic winning, or what have you.
ROGER: Want to move on to banks. American banks, their earnings this week — your thoughts on what you’re seeing? They’re pretty solid for the most part.
BENJAMIN: Yep. And like Canadian banks, although maybe to a lesser extent, they continue to benefit from market volatility. They benefit on trading revenue. And the more volatile the market is, tends to be better for banks, so they continue to benefit from that tailwind. Although, of course, who knows how long that’s going to last. And on the side of U.S. consumer spending, that’s been pretty solid as well. So we think the American banking sector looks pretty healthy to us.
ROGER: What do you like about them, and what’s maybe a concern for you?
BENJAMIN: Well, they’re a play on not only stock market health and volatility, but also on the U.S. economy as a whole. And if you’re skeptical about the U.S. economy — and I wouldn’t say we are — you might have concerns about whether consumer spending is going to decline and whether retail banking will decline as a result. But we are actually relatively low weight U.S. banking, though we think the sector is perfectly reasonable and investable.
ROGER: All right, and PepsiCo had its earnings out. It did okay, thanks to Frito-Lay, essentially.
BENJAMIN: Yeah, they’ve had to cut prices on Frito-Lay products, just given their inability to grow sales. Consumer staples have continued to be sluggish, and they’ve been sluggish for a while. Pepsi did raise prices — not on Frito-Lay, but other products — I think three or four years ago. They, like a lot of other food and beverage companies, are having headwinds from GLP-1. We actually own Coca-Cola, so we are interested to dig a little deeper into Pepsi’s results. But they’ve been fine. It was certainly not a disaster by any stretch.
ROGER: And with Pepsi, can you say, so goes Pepsi, so goes Coke? Or are they still different to a significant extent?
BENJAMIN: We think Coca-Cola is a little bit of a higher-quality business, and they’ve been a little bit more consistent. It’s arguably a bit more of a luxury good, as opposed to Pepsi, which is a little bit cheaper. But both companies, of course, are to a significant extent very comparable.
ROGER: All right. And let’s sneak in one more. Netflix has its earnings coming up, first one since they stepped back from the Warner Bros. deal. It looks like it may have been a good thing for them.
BENJAMIN: Yeah, whenever there’s a merger or potential acquisition, the big question is how much you’re going to pay. And if you pay too much and you’re not able to get a return on your investment, then you’re probably better off not doing it in the first place. So we’re looking for clarity and guidance from Netflix on what their content spend is going to look like going forward, what their overall strategy is going to be, and how they feel about missing out on that opportunity. We thought that if the price was reasonable, it could have been a transformational acquisition. But there’s obviously a limit to how much you’re willing to pay, and it seems encouraging that they weren’t taking a “no price is too high” approach. We’re interested to see what Netflix has to say.
ROGER: All right, we’ll wrap it up there. Benjamin, thanks, as always, for joining us.
BENJAMIN: Thank you.
ROGER: Benjamin Klein, senior portfolio manager at Baskin Wealth Management.
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This BNN Bloomberg summary and transcript of the April 16, 2026 interview with Benjamin Klein are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
