Stan Wong's Top Picks: Booking Holdings, Ishares Global Healthcare ETF, Suncor BNN Bloomberg MARKET OUTLOOK: After a strong October, global equity markets have continued to advance in November. Solid economic data and healthy corporate earnings have helped push market sentiment and stocks higher. Positive seasonality trends have also helped equities. Looking at the S&P 500 Index, the fourth quarter has historically produced the strongest average quarterly returns for stocks with the highest positivity rate. However, COVID-19 trends in the U.S. and parts of Europe have taken a negative turn with cases and hospitalizations rising, causing investor concern over the potential for more economic restrictions and lockdowns. Persistent supply chain constraints and inflation pressures could also add to renewed bouts of market volatility. Input and end prices have climbed around the world, with commodity prices surging and U.S. inflation numbers hitting 13-year highs. In addition, concerns over the timing and magnitude of interest rate hikes and the tapering of asset purchases by the Federal Reserve Bank could keep equities in check. From an intermediate term perspective, the macroeconomic landscape continues to look favourable – enormous fiscal stimulus, low interest rates and high household savings rates provide a positive backdrop for the global economy. Arguably, the worst of the pandemic is behind us with vaccinations progressing around the world and being extended to children in many countries. To date, a total of more than 7.76 billion doses of coronavirus vaccines have been administered worldwide across 184 countries. In addition, highly anticipated antiviral pill treatments from Pfizer and Merck should help the fight against COVID-19. In Stan Wong Managed Portfolios, we continue to seek strong secular growth companies with high-quality attributes trading at reasonable valuations. We prefer cyclical over defensive equities and remain focused on an active stock, industry and sector selection strategy. From a geographic perspective, we like U.S. equity markets for its breadth and depth of high-quality names. We also like Europe given its relative valuation discount, broadening economic activity and recent pickup in investor inflows. In Canada, financial and energy stocks continue to look attractive. Aside from precious metals, we expect most commodity prices to remain firm as the global economy continues to expand. In our fixed income allocation, we are underweight government bonds in favour of inflation-protected bonds and short-duration corporate bonds.
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