Andrew Pyle, senior wealth advisor and portfolio manager at Scotia Wealth’s The Pyle Group
Focus: North American stocks

MARKET OUTLOOK

I believe we are in no man's land with respect to stocks. The experiment with economic re-opening hasn't yet been given enough time for investors to evaluate its success or not. There is still a risk a spike in COVID-19 cases that's deemed to put undue pressure on health care capacity could cause re-opening to be scaled back. If that turns out to be sizable, whether in the U.S., Canada or elsewhere in the globe, then this pushes out the full recovery time horizon, potentially turning a two-quarter recession into something that is more protracted. Even if the experiment proves successful, we are still going to encounter issues with respect to the Street in the next earnings season. If recovery is on track and companies continue to hold back on guidance, I believe the market will lose patience and take profits.

Therefore, we are entering a period of the next five weeks where I doubt that momentum accelerates. It’s more likely that we see consolidation with the S&P 500 trading between 2,800 and 3,000 points. The TSX has been more troubling with the lack of interest in banks and we have a troubling pattern of lower highs in the index since the end of April.  Trend line resistance by the end of this week is around 14,911, so failure to break out to the upside could see us re-test the 14,500 area.

Beyond COVID-19, investors need to be conscious of the fact that we are transitioning from the panic phase of the pandemic to the U.S. presidential election and the recent escalation in U.S.-China tensions will have a greater impact on growth and corporate profits than what we saw last year.  It is very likely that markets will be faced with two negative outcomes at the end of the year: the election and a possible second or third wave of the virus.

TOP PICKS

Andrew Pyle's Top Picks

Andrew Pyle of Scotia Wealth shares his top picks: Brookfield Infrastructure, Bank of Montreal and Loblaw.

BROOKFIELD INFRASTRUCTURE PARTNERS (BIP-U TSX)

BANK OF MONTREAL (BMO TSX)

LOBLAW (L TSX)

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
BIP-U Y Y Y
BMO Y Y Y
L Y Y Y

 

PAST PICKS: MAY 29, 2019

Andrew Pyle's Past Picks

Andrew Pyle of Scotia Wealth reviews his past picks: The Stars Group, the XHC and Dollarama.

STARS GROUP (TSGI TSX)
Sold on Oct. 2, 2019 at $26.81.

  • Then: $22.28
  • Now: $37.05
  • Return: 66%
  • Total return: 66%

ISHARES GLOBAL HEALTH CARE ETF (XHC TSX)

  • Then: $46.38
  • Now: $54.01
  • Return: 16%
  • Total return: 18%

DOLLARAMA (DOL TSX)

  • Then: $43.00
  • Now: $45.16
  • Return: 5%
  • Total return: 5%

Total return average: 30%

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
TSGI N N N
XHC N N Y
DOL N N Y