5 Responses to “Tech Talk for Wednesday June 26th 2024”

1. Bman/Van Says:
   June 26th, 2024 at 12:05 pm

   Ron

   While the US financial have been performing better than CAD, looks like they both have hit the wall short term. Given the summer setup, I am going to wager for CAD banks to break down in Q3 mostly on BMO, CM, BNS and TD. While the graph looks to have 5-10% downside, if we don’t hold those levels then 25-30% are real potential outcomes. Do any of these banks catch your eye for grater potential downside?

   Thanks

2. Larry/ON Says:
   June 26th, 2024 at 4:02 pm

   Watching the Barometer Capital Management webcast yesterday David Burrows made the point that the first two weeks of July tend to be one of the strongest periods for equity markets. They are cautiously optimistic of a continuation upward rather than any kind of breakdown as market breadth as somewhat widened.
   Bman/Van – The lead article in the Globe investing section is BofA’s caution on Canadian banks. Why buy Canadian banks in a weaker economy when you can buy US banks in a stronger economy with JPM being the go to name?
   “We continue to see US large-cap banks (GSIBs) offering a better risk/reward relative to their Canadian peers. While relative P/E valuation looks discounted (9.4x CAD vs. 10.6x US), we see higher interest rates as posing a structural headwind to the growth outlook for the Canadian banks. On the other hand, the competitive positioning of the largest US banks has arguably improved relative to pre-pandemic years, which should allow them to better capitalize on potential growth opportunities …”

3. Bman/Van Says:
   June 26th, 2024 at 4:14 pm

   Hi Larry

   The ask earlier was who has the greater downside for financials. I believe we are getting ready for a correction / downdraft in the market for the next 2-3 months based on what the technicals are flashing (and supporting graphs). Given the weak performance of industrials, financials and cyclicals and the expected weaker economic news focusing on the financials for a short/put option strategy which would potentially go long with shares/calls if we see a good washout. While the US financials look enticing, I am more inclined to trade the CAD banks as it gives me the choice of CAD or USD currency (so I can control the currency risk), are less well known in the US (so more likely to be a miss calculation) and have oligopolistic tendencies in CAD which will keep those profits higher than if there is a recession in either country. I may consider a JP Morgan or Goldman if the washout is particularly bad (P/E between countries negates), but its not a likely outcome at this point.

   Thanks

4. Bman/Van Says:
   June 26th, 2024 at 4:16 pm

   On another notes, have not been very impressed with David Burrows in the past. He talks a good game but does not back it up in performance or past picks on BNN so I tend to discount more what he is saying than other investment managers.

5. still_learning Says:
   June 26th, 2024 at 6:39 pm

   re #4:

   Bman/Van, I feel the same way about Burrows. Bernie/Leth