I try to tackle some of the confusing areas of the financial markets with some good interviews and articles this week. Never has there been such an array of opinions on what the market will do going forward, so I hope you find it helpful.
We have something we have not had for a while and that is a wide inverted yield curve (rates higher in the short term than the longer term). With another rate hike this week, it is a good time to get some good advice on any borrowing plans.
Eric Nuttall talks about the opportunities still in a declining oil price market, and Brian Belski gives his outlook for 2023.
I chatted with my local geopolitical expert, and he said to focus on two things. One, is the Russian Oil Price Cap and Peter Zeihan addressed that this week. Two, is the situation in Turkey to which he added this:
“With respect to Turkey, the U.S., NATO and ISIS, because of a terrorist attack attributed to the Kurdish PKK in Istanbul, the Turks are bombing and attacking the Syrian Democratic Forces (SDF) which are mainly comprised of Kurds backed by U.S. Special Forces in Northern Syria and Iraq. If Turkey attacks the SDF, then ISIS, whom the SDF are keeping in check (because U.S. forces are too thin on the ground) has a chance to re-emerge as a force in the region. There are camps full of ISIS fighters as well as their women and children who are becoming radicalized in the camps. NATO country Turkey will essentially be undermining fellow NATO ally, the USA. It says a lot about the Turkish government that they detest the Kurds more than ISIS.”
The people at SAXO and Standard Charter come out with some far-fetched predictions each year and with what happened in 2022, you cannot discount anything these days. The G&M summarized their predictions.
The housing issue is a challenge, and the CEO of CAP REIT says it is not a time to pick on the REIT sector. I also added the latest Saretsky report.
Jim Paulsen of the Leuthold Group is a wise soul, and he is one of the very few that is bullish for 2023. Macro Voices had Luke Gorman on, and he gives his take on the market and how the US Government will fund their debt issuance.
We had a cabinet shuffle this week in BC and the Vancouver-based Premier made a few changes.
I know the Indianapolis Colts wished they still had Andrew Luck as their QB, especially after that loss this week to the Cowboys. A story was finally published on why he retired during the peak of his career, and it is quite powerful.
Number 2 - If you didn't have energy stocks on your books this year, you massively underperformed: Eric Nuttall
Eric Nuttall, partner and senior portfolio manager at Ninepoint Partners, joins BNN Bloomberg to discuss the declining price of oil as it erases nearly all of 2022’s gains. Nuttall says that recent five-dollar swings have been ridiculous and that the market is greatly undersupplied. He gives his top stocks picks for energy players that will outperform in the new year. (likes CVE, Baytex, VET, Meg Energy)
Number 3 - Investors will pay for stability, this will bring them back to the U.S.: Brian Belski
Brian Belski, chief market strategist at BMO Capital Markets, joins BNN Bloomberg with his 2023 outlook for the U.S. and Canadian markets, and says North American equities are still the best assets in the world. He has a target of 4,300 for the S&P500 and 22,500 for the TSX and is a gold bull for next year as he expects assets to move to the precious metal from crypto. Belski also explains why he thinks consumer staples and utilities are not defensive sectors anymore, and why Blackstone (BX NYSE) is his stock pick at this time.
Number 4 - Peter Zeihan- Russian Oil Price Cap: Lasting Impacts
(Peter comments on that important Price Cap story with many read throughs to Turkey)
Number 5 - 2023 market predictions - when the outrageous and plausible blur
Read more on theglobeandmail.com…
SAXO
- A billionaire coalition which creates a trillion-dollar Manhattan Project for energy
- French President Macron resigning
- Gold rocketing to $3,000 as central banks fail on inflation mandate
- The foundation of the EU Armed Forces
- A country agreeing to ban all meat production by 2030
- Britain holding an UnBrexit referendum
- Widespread price controls being introduced to cap official inflation
- China, India and OPEC+ leave the IMF and agree to trade with a new reserve asset
- Japan pegging USD/JPY at 200 to ‘sort out’ its financial system
- A tax haven ban that kills private equity
STANDARD CHARTERED
- Brent oil falls below $40 a barrel
- The euro rallies to $1.25 on political stability and economic recovery
- The Fed cuts rates by 200 basis points in 2023
- The Nasdaq falls another 50% to 6000
- Dollar/yuan falls to 6.40
- Food prices collapse, fueling fears of deflation
- Gold rallies 30% as the collapse in crypto and firms spreads
- Republicans impeach U.S. President Joe Biden
Number 6 - More taxes on real estate investment trusts won’t solve the housing crisis
By pursuing the review and possible tax reforms, the government is discouraging investment in REITS. That has unintentionally turned off the taps for REITs to build and expand housing supply, as the shadow of possible reforms has created market uncertainty. It’s exactly the opposite of what Canada needs right now.
Read more on theglobeandmail.com…
Number 7 - Leuthold’s Paulsen Sees S&P 500 at 5,000 in New Bull Cycle
At a time when virtually all of Wall Street is on guard against a recession, Jim Paulsen of The Leuthold Group said stocks are about to rally at least 25% in the next year.
As Jim Thorne says:
“Old guys who have seen the cycles get it. Key point that he picks up on … typically, in the past yield curve inverts and market runs making a new high before pulling back. In 2022, market corrected 25% before inversion.We discount events so much quicker today. Effects of social media and ETFs.”
Number 8 - Macro Voices-Luke Gorman
MacroVoices welcomes Luke Gormen to the show to discuss whether the bear market rally in equities is over, whether inflation has peaked, and how the U.S. Government will fund deficit spending in an era when China and Russia are no longer ready buyers of U.S. debt issuance.
Number 9 - Eby's cabinet retains six Islanders, includes new attorney general, finance minister
The new cabinet, unveiled Wednesday, shows an effort to balance gender, ethnicity, regional representation and experience. Niki Sharma takes over as attorney general, and Katrine Conroy as finance minister.
Number 10 - Andrew Luck finally reveals why he walked away from the NFL
THE DAY AFTER he retired, Andrew Luck reached into the shower in the bedroom at his Indianapolis condo and turned the knob. He stepped back and waited for the water to get hot. It was the afternoon of Aug. 25, 2019, and he was in a fog over what he had done. When Luck had told Indianapolis Colts executives that he was going to walk away from football, they didn’t believe him. Couldn’t fathom it. “When you going to turn it on?” they asked two weeks before the season began. “I’m not,” Luck said. When he had told his teammates he hadn’t been able to live the life he wanted to live, they said they understood. Didn’t argue. They said they’d seen his pain and now sensed his relief. But his eyes dampened and his face reddened when he told them. He knew they wanted him for a shot at a Super Bowl, and he knew he wasn’t going to deliver. He also knew, no matter how guilty he felt, that he wasn’t going to change his mind.
