Stan Wong, Portfolio Manager, Scotia Wealth Management
Focus: North American large caps and ETFs
Top picks: Eli Lilly, Goldman Sachs, Taiwan Semiconductor Manufacturing Company
MARKET OUTLOOK:
Equity markets continue to benefit from several supportive forces including resilient corporate earnings, strong liquidity and favourable seasonal trends. More than 80 per cent of S&P 500 companies beat third-quarter earnings expectations, underscoring durable profitability. U.S. money market assets have reached a record US$7.5 trillion, representing substantial dry powder that may rotate into equities as interest rates decline, and confidence improves. Corporations have also executed meaningful share repurchase activity, supporting earnings-per-share growth. Seasonality remains constructive, with the fourth quarter historically one of the strongest for U.S. equities. Expectations for further monetary easing reinforce the backdrop, with markets anticipating another 25-basis-point U.S. Federal Reserve rate cut in December.
In the United States, economic conditions are cooling gradually, while underlying fundamentals remain stable. The unemployment rate has edged higher and job creation has slowed to a more sustainable pace, indicating improved balance in the labour market. Inflation continues to moderate, though it remains slightly above the Fed’s two per cent target. Valuations are elevated, making selectivity important. We favour high-quality businesses with consistent earnings power, strong balance sheets, and durable competitive advantages. A lower interest rate environment generally supports longer-duration growth assets, particularly in areas of long-term secular innovation such as artificial intelligence, cloud computing, and semiconductors. Looking ahead, S&P 500 earnings are projected to grow nearly 13 per cent in 2026, reinforcing a constructive medium-term outlook.
At The Stan Wong Group, we emphasize high-quality large-cap equities alongside short- to intermediate-term government and investment-grade corporate bonds. Our approach is data-driven, diversified and valuation-disciplined, with a focus on businesses that offer durable cash flow, competitive strength and strong earnings growth. This framework, integrated within each client’s total wealth plan, helps maintain portfolio alignment and risk control through changing market conditions.
- Market-moving news, fast: Get the BNN Bloomberg App now
- Sign up for the Market Call Top Picks newsletter at bnnbloomberg.ca/subscribe
TOP PICKS:
Eli Lilly (LLY NYSE)
Eli Lilly is a global pharmaceutical leader focused on innovative treatments in diabetes, obesity, oncology, and neuroscience. Fiscal 2026 revenue is forecast to approach US$76 billion, supported by strong demand across its expanding portfolio of high-impact therapies. Earnings are projected to grow at over 20 per cent annually, driven by rapid adoption of its breakthrough metabolic and cancer drugs, expanding margins, and resilient global demand across multiple therapeutic areas.
Lilly’s success in diabetes and weight management has been transformative, establishing it as a leader in one of the fastest-growing areas of healthcare. Its growing oncology portfolio—featuring promising treatments in breast, lung, and blood cancers—further strengthens its competitive position.
This month, Lilly (and Novo Nordisk) announced an agreement with the U.S. administration to lower obesity-drug prices across several channels in exchange for expanded Medicare access and a temporary tariff grace period. The initiative should improve affordability, broaden patient access, and support long-term prescription growth. Meanwhile, ongoing investments in manufacturing and distribution capacity are enabling Lilly to meet accelerating global demand and maintain reliable supply across key markets.
As a cornerstone of the modern biopharmaceutical industry, Lilly is positioned to benefit from powerful long-term trends, including aging demographics, rising healthcare spending, and advancements in biotechnology and personalized medicine. With disciplined research and development (R&D) investment, strong cash generation, and a robust balance sheet, Eli Lilly is well positioned to deliver sustained revenue growth, expanding profitability, and long-term shareholder value.
Goldman Sachs (GS NYSE)
Goldman Sachs is one of the world’s premier investment-banking and financial-services firms, with leadership across advisory, trading, asset management, and wealth management. The firm oversees about US$3.45 trillion in client assets under supervision, underscoring its global scale and deep relationships with institutional and private clients. Fiscal 2026 revenue is projected to exceed US$62 billion, supported by improving capital-markets activity, solid trading performance, and continued growth in management and performance fees. Earnings are expected to grow roughly 15 per cent annually, reflecting operating leverage, cost discipline, and stronger deal flow.
After a challenging stretch for investment banking, activity is improving alongside easing interest-rate expectations and renewed equity and debt issuance. Goldman is sharpening its focus on high-return core businesses, expanding its asset- and wealth-management divisions while winding down less strategic consumer initiatives. Its strong balance sheet, broad client base, and leading market position provide a solid foundation for higher margins and improving returns as conditions normalize.
As a cornerstone of global finance, Goldman Sachs also stands to benefit from a more business-friendly Republican administration, where potential deregulation and lower corporate taxation could stimulate business investment, lending, and capital-markets activity. Over the longer term, aging demographics, rising global wealth, and growing demand for alternative investments should continue to drive fee growth and advisory opportunities. With disciplined cost control, steady share repurchases, and a dividend yield near 2 per cent, Goldman is well positioned for sustained profitability and long-term shareholder value creation.
Taiwan Semiconductor Manufacturing Company (TSM NYSE)
Taiwan Semiconductor Manufacturing Co. (TSMC) is the world’s leading semiconductor foundry, commanding about 70 per cent of the global market and serving as a critical supplier to many of the largest technology companies. The firm produces advanced chips that power artificial intelligence, data centres, smartphones, and automotive systems. Fiscal 2026 revenue is expected to approach US$150 billion, supported by strong global demand for high-performance semiconductors. Earnings are projected to grow at nearly 30 per cent annually, reflecting expanding production capacity and continued efficiency gains.
TSMC’s customer base includes many of the world’s most prominent technology leaders — Apple, NVIDIA, AMD, and Qualcomm among them — all of which rely on TSMC’s industry-leading manufacturing to produce their most advanced chips. The company’s dominance in three-nanometre and progress toward two-nanometre production provide a significant competitive advantage and reinforce deep, long-term partnerships with major clients. TSMC is also broadening its global presence with new fabrication facilities in the United States, Japan, and Europe, improving supply-chain resilience and aligning with government initiatives to strengthen domestic chip production.
As the backbone of the global semiconductor industry, TSMC is positioned to benefit from powerful long-term trends, including accelerating AI adoption, growth in cloud data centres, and rising semiconductor use in electric and autonomous vehicles. With unmatched scale, technical leadership, and disciplined capital investment, the company is well placed to deliver sustained revenue growth, expanding profitability, and long-term shareholder value.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| LLY NYSE | Y | Y | Y |
| GS NYSE | Y | Y | Y |
| TSM NYSE | Y | Y | Y |
PAST PICKS: NOVEMBER 7 2024
CATERPILLAR (CAT NYSE)
Then: US$408.21
Now: US$574.50
Return: 41%
Total Return: 42%
NETFLIX (NFLX NASD)
Then: US$796.54
Now: US$1157.40
Return: 45%
Total Return: 45%
ISHARES CORE S&P MID-CAP ETF (IJH NYSE)
Then: US$65.61
Now: US$65.33
Return: -0.4%
Total Return: 0.8%
Total Return Average: 29%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| CAT NYSE | N | N | N |
| NFLX NASD | Y | Y | Y |
| IJH NYSE | Y | Y | Y |
