Ross Healy, chairman of Strategic Analysis Corporation
Focus: North American large caps

MARKET OUTLOOK

This month’s great news is that the Fed apparently caved in and quantitative tightening is out while quantitative easing is back in if necessary. Whether the reason is that President Trump has browbeaten Fed chairman Jerome Powell into submission or that the almost 20 per cent setback in stocks has terrified the central bank we may never really know. But what we do know and have suspected all along is that the health of the stock market is the key benchmark, the proof statement for the success of Fed policy, not to mention the success of the Trump “revolution.” At least those two are on the same page now.

While the Fed may have backed down now from its plans to raise interest rates at least two more times this coming year, it hasn’t necessarily affected or improved the outlook for the U.S. economy. To date (admitting that it’s early, in any case) we haven’t seen a bump in the earnings forecasts for the key indexes. Indeed, we’re still looking at a succession of modest earnings and sales revisions in a downwards direction: nothing splashy except in the odd case, but nonetheless a slow yet steady drip.

The bottom line is we wonder if the Fed is giving us the message that things are worse than we may think and that they’re getting ready just in case.

TOP PICKS

CIBC (CM.TO)

BARRICK GOLD (ABX.TO)

CASH

PAST PICKS: APRIL 19, 2018

ENBRIDGE INCOME FUND (ENF.TO)
Acquired by Enbridge on Nov. 12, 2018.

• Then: $28.44
• Now: $31.88
• Return: 12%
• Total return: 17%

SCOTIABANK (BNS.TO)

• Then: $76.39
• Now: $74.48
• Return: -3%
• Total return: 1%

ALAMOS GOLD (AGI.TO)

• Then: $7.01
• Now: $5.85
• Return: -17%
• Total return: -16%

Total return average: 1%

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