Market Outlook, August 22, 2016

Oil prices have risen somewhat; no higher than they were a couple months ago, but better than last week. The past week was negative for stocks, but of the one-step-forward-one-step-back variety. Canadian small caps continue to shine. And the Canadian dollar has picked up a little momentum in relation to the US dollar.

Interest Rates

yieldcurve

The 3 month T-bill rate is 0.45%, the 1 year T-bill rate is 0.53%, the 3 year government bond yield is 0.57%, the 10 year government bond yield is 1.04% and the long government bond yield is 1.66%. The yield curve is normal. Long government bonds appear very overvalued. There seems to be very little opportunity for profit in bonds. A safe haven, such as tangible assets (eg. precious metals, real estate, etc.), may be a better bet.

Expected (forward-looking) inflation is 1.39%. This is within the Canadian central bank’s target band of 1% to 3%.

The equity risk premium for large caps, in Canada, currently appears to be 3.03%. For small caps, it currently appears to be 3.12%.

Credit Environment

There is a clear preference among investors for long-term bonds (middle dial).
guageguage-1guage-2

Currency

The Brazilian Real (BZF), Japanese Yen (FXY), Australian Dollar (FXA), Canadian Dollar (FXC), Swiss Franc (FXF), Euro (FXE), Swedish Krona (FXS), and Singapore Dollar (FXSG) are looking strong relative to the US dollar.
The Canadian dollar has been appreciating compared to the US dollar.

Equities

Where does there appear to be more opportunity right now?
US stocks have the advantage over bonds:
guage-3
And Canadian stocks are outperforming Canadian bonds:
guage-4

Global Markets

Comparing national stock markets, Peru (EPU), Brazil (EWZ), New Zealand (ENZL), South Africa (EZA), Indonesia (EIDO), China (MCHI), South Korea (EWY), Turkey (TUR), Qatar (QAT), Thailand (THD), Taiwan (EWT), Russia (ERUS), Germany (EWG), Canada (EWC), India (INDA), Australia (EWA), Finland (EFNL), Belgium (EWK), Hong Kong (EWH), Japan (EWJ), Philippines (EPHE), Austria (EWO), Poland (EPOL), Mexico (EWW), Netherlands (EWN), USA S&P 500 (IVV), Ireland (EIRL), Israel (EIS), France (EWQ), Malaysia (EWM), Switzerland (EWL), Sweden (EWD), Norway (ENOR), Chile (ECH), Denmark (EDEN), UAE (UAE), United Kingdom (EWU), and Singapore (EWS) are rising, while other regions appear to be neutral or falling.

US Stocks

Yesterday’s closing price was 2,183.87. This is -0.29% lower than last week’s price (2,190.15), and 0.41% higher than last month’s price (2,175.03), and 6.63% higher than the price three months ago (2,048.04), and 12.25% higher than the price six months ago (1,945.50), and 13.02% higher than the price one year ago (1,932.24).The average P/E ratio of the S&P 100 (equal weighted) is 21.83. This implies the market is overvalued. There is likely an overly optimistic outlook and risks may be unduly discounted. This implies a forward capital return of 4.58% (before dividends).

The following stocks appear to present short-term (2-6 months) opportunities for price increase (buy high, sell higher):

  • Texas Instruments Incorporated (TXN)
  • Halliburton Company (HAL)
  • Biogen Inc. (BIIB)
  • Merck & Company, Inc. (MRK)
  • Caterpillar, Inc. (CAT)
  • Apple Inc. (AAPL)
  • The Priceline Group Inc. (PCLN)
  • Kinder Morgan, Inc. (KMI)
  • Amazon.com, Inc. (AMZN)
  • Raytheon Company (RTN)
  • Morgan Stanley (MS)
  • Abbvie Inc. (ABBV)
  • Amgen Inc. (AMGN)
  • Intel Corporation (INTC)
  • Qualcomm Incorporated (QCOM)
  • United Technologies Corporation (UTX)
  • Union Pacific Corporation (UNP)
  • Alphabet Inc. (GOOGL)
  • Fedex Corporation (FDX)

These stocks appear to be priced attractively from a long-term (3-5 years) perspective (buy low, sell high):

  • General Motors Company (GM)
  • Ford Motor Company (F)
  • Metlife, Inc. (MET)

Canadian Stocks

Yesterday’s closing price was 14,687.50. This is -0.61% lower than last week’s price (14,777.00), and 0.84% higher than last month’s price (14,565.80), and 5.52% higher than the price three months ago (13,919.60), and 14.63% higher than the price six months ago (12,813.40), and 9.74% higher than the price one year ago (13,383.70).The average P/E ratio of the TSX60 (equal weighted) is 24.56. This implies the market is overvalued. There is likely an overly optimistic outlook and risks may be unduly discounted. This implies a forward capital return of 4.07% (before dividends).

The following stocks appear to present short-term (2-6 months) opportunities for price increase (buy high, sell higher):

  • Encana Corp. (ECA.to)
  • Teck Resources Limited (TCK-B.to)
  • First Quantum Minerals Ltd (FM.to)
  • Silver Wheaton Corp. (SLW.to)
  • Agnico Eagle Mines Limited (AEM.to)
  • Barrick Gold Corporation (ABX.to)
  • Yamana Gold Inc (YRI.to)
  • Blackberry Limited (BB.to)
  • Franco-nevada Corporation (FNV.to)
  • Kinross Gold Corp. (K.to)
  • Saputo Inc. (SAP.to)
  • Restaurant Brands International (QSR.to)
  • Crescent Point Energy Corp. (CPG.to)
  • Cdn Natural Res (CNQ.to)
  • Bombardier Inc., Cl. B, Sv (BBD-B.to)
  • Cenovus Energy Inc. (CVE.to)
  • Husky Energy Inc. (HSE.to)
  • Cgi Group Inc., Cl.a, Sv (GIB-A.to)
  • Transcanada Corp. (TRP.to)
  • Snc-lavalin Sv (SNC.to)

These stocks appear to be priced attractively from a long-term (3-5 years) perspective (buy low, sell high):

  • Power Corporation Of Canada, Sv (POW.to)

Other Assets

Crude Oil (HUC.to), Base Metals (ZMT.to), Silver (HUZ.to), US stocks (SPY), Canadian stocks (ZCN.to), Natural Gas (HUN.to), Global Infrastructure (ZGI.to), World stocks (VDU.to), International stocks (XIN.to), Canadian Universe Bond (XBB.to), and Canadian Real Estate (XRE.to) are performing better than cash.
The gold price is falling, which may indicate bullishness toward stocks.
The oil price is rising, which increases manufacturing input costs and energy costs and may slow economic expansion.

Portfolio

A theoretical portfolio, split evenly between gold (IGT in Cdn$), real estate (XRE in Cdn$), Canadian stocks (XIU in Cdn$), US stocks (XSP hedged to Cdn$), international stocks (VDU in Cdn$) and bonds (XBB in Cdn$).

As of today, the theoretical portfolio would hold:

  • One unit (20%) real estate
  • One unit (20%) Canadian stocks
  • One unit (20%) US stocks
  • One unit (20%) international stocks
  • 1 unit (20%) bonds

Market Outlook, August 15, 2016

Interest Rates

yieldcurve

The 3 month T-bill rate is 0.47%, the 1 year T-bill rate is 0.52%, the 3 year government bond yield is 0.54%, the 10 year government bond yield is 1.04% and the long government bond yield is 1.64%. The yield curve is normal. Long government bonds appear very overvalued. There seems to be very little opportunity for profit in bonds. A safe haven, such as tangible assets (eg. precious metals, real estate, etc.), may be a better bet.

Expected (forward-looking) inflation is 1.38%. This is within the Canadian central bank’s target band of 1% to 3%.

The equity risk premium for large caps, in Canada, currently appears to be 3.05%. For small caps, it currently appears to be 3.27%.

Credit Environment

When the dials point left, the credit environment is cautious and risks are priced higher. Long bonds are in much greater demand than short bonds.
guageguage-1guage-2

Currency

The Brazilian Real (BZF), Japanese Yen (FXY), Australian Dollar (FXA), Singapore Dollar (FXSG), and Canadian Dollar (FXC) are looking strong relative to the US dollar.
The Canadian dollar has been appreciating compared to the US dollar.

Equities

US stocks have greater momentum than US bonds:
guage-3
Canadian stocks also have greater momentum than Canadian bonds:
guage-4

Global Markets

  • Mexico has changed 5.16% in price since last week’s close.

Comparing national stock markets, Brazil (EWZ), Peru (EPU), South Africa (EZA), Indonesia (EIDO), Taiwan (EWT), New Zealand (ENZL), Thailand (THD), South Korea (EWY), China (MCHI), Poland (EPOL), Hong Kong (EWH), Germany (EWG), India (INDA), Qatar (QAT), Finland (EFNL), Chile (ECH), Australia (EWA), Japan (EWJ), Mexico (EWW), Canada (EWC), Russia (ERUS), Netherlands (EWN), Philippines (EPHE), Belgium (EWK), US S&P 500 (IVV), Austria (EWO), Norway (ENOR), France (EWQ), Sweden (EWD), Uae (UAE), Switzerland (EWL), Israel (EIS), Singapore (EWS), United Kingdom (EWU), Spain (EWP), Ireland (EIRL), Denmark (EDEN) are rising, while other regions appear to be neutral or falling.

US Stocks

Yesterday’s closing price was 2,184.05. This is 0.14% higher than last week’s price (2,180.89), and 1.03% higher than last month’s price (2,161.74), and 5.68% higher than the price three months ago (2,066.66), and 17.12% higher than the price six months ago (1,864.78), and 9.74% higher than the price one year ago (1,990.20).The average P/E ratio of the S&P 100 (equal weighted) is 21.91. This implies the market is overvalued. There is likely an overly optimistic outlook and risks may be unduly discounted. This implies a forward capital return of 4.56% (before dividends).

The following stocks appear to present short-term (2-6 months) opportunities for price increase (buy high, sell higher):

  • Biogen Inc. (BIIB)
  • Qualcomm Incorporated (QCOM)
  • Texas Instruments Incorporated (TXN)
  • Amazon.com, Inc. (AMZN)
  • Apple Inc. (AAPL)
  • Merck & Company, Inc. (MRK)
  • Alphabet Inc. (GOOGL)
  • Microsoft Corporation (MSFT)
  • Alphabet Inc. (GOOG)
  • Abbott Laboratories (ABT)
  • Celgene Corporation (CELG)
  • The Priceline Group Inc. (PCLN)
  • Facebook, Inc. (FB)
  • Bank Of America Corporation (BAC)
  • Caterpillar, Inc. (CAT)
  • Amgen Inc. (AMGN)
  • Cisco Systems, Inc. (CSCO)
  • Abbvie Inc. (ABBV)
  • Lockheed Martin Corporation (LMT)

These stocks appear to be priced attractively from a long-term (3-5 years) perspective (buy low, sell high):

  • General Motors Company (GM)
  • Ford Motor Company (F)
  • Metlife, Inc. (MET)

Canadian Stocks

Yesterday’s closing price was 14,747.50. This is -0.05% lower than last week’s price (14,755.60), and 1.61% higher than last month’s price (14,514.50), and 7.27% higher than the price three months ago (13,748.60), and 22.01% higher than the price six months ago (12,087.40), and 7.15% higher than the price one year ago (13,763.80).The average P/E ratio of the TSX60 (equal weighted) is 24.44. This implies the market is overvalued. There is likely an overly optimistic outlook and risks may be unduly discounted. This implies a forward capital return of 4.09% (before dividends).

The following stocks appear to present short-term (2-6 months) opportunities for price increase (buy high, sell higher):

  • Teck Resources Limited (TCK-B.to)
  • First Quantum Minerals Ltd (FM.to)
  • Silver Wheaton Corp. (SLW.to)
  • Encana Corp. (ECA.to)
  • Blackberry Limited (BB.to)
  • Barrick Gold Corporation (ABX.to)
  • Agnico Eagle Mines Limited (AEM.to)
  • Yamana Gold Inc (YRI.to)
  • Restaurant Brands International (QSR.to)
  • Bombardier Inc., Cl. B, Sv (BBD-B.to)
  • Kinross Gold Corp. (K.to)
  • Husky Energy Inc. (HSE.to)
  • Rogers Communications Inc., Cl. (RCI-B.to)
  • Franco-nevada Corporation (FNV.to)
  • Cgi Group Inc., Cl.a, Sv (GIB-A.to)
  • Saputo Inc. (SAP.to)
  • Arc Resources Ltd. (ARX.to)
  • Crescent Point Energy Corp. (CPG.to)
  • Cdn Natural Res (CNQ.to)
  • Dollarama Inc (DOL.to)
  • Transcanada Corp. (TRP.to)
  • Snc-lavalin Sv (SNC.to)
  • Constellation Software Inc. (CSU.to)
  • Shaw Communications Inc., Cl.b, (SJR-B.to)

These stocks appear to be priced attractively from a long-term (3-5 years) perspective (buy low, sell high):

  • Power Corporation Of Canada, Sv (POW.to)

Other Assets

Crude Oil (HUC.to), Base Metals (ZMT.to), Silver Etf (HUZ.to), TSX Composite (ZCN.to), US S&P 500 (SPY), FTSE Developped Ex-US (VDU.to), Global Infrastructure (ZGI.to), MSCI EAFE (XIN.to), TSX REIT (XRE.to), Canadian Universe Bond (XBB.to), Natural Gas (HUN.to) are performing better than cash.
The gold price is falling, which may indicate bullishness toward stocks.

Portfolio

A theoretical portfolio, split evenly between gold (IGT in Cdn$), real estate (XRE in Cdn$), Canadian stocks (XIU in Cdn$), US stocks (XSP hedged to Cdn$), international stocks (VDU in Cdn$) and bonds (XBB in Cdn$).

As of today, the theoretical portfolio would hold:

  • One unit (20%) real estate
  • One unit (20%) Canadian stocks
  • One unit (20%) US stocks
  • One unit (20%) international stocks
  • 1 unit (20%) bonds

Market Outlook, August 8, 2016

I don’t like the look of bonds or oil prices, or even gold. The bond yield curve is quite flat, which seems to be in response to lower long-term yields. I find it surprising to see that Canadian, American and International stocks are all pretty evenly balanced in their potential. Small caps have better momentum than large caps, and the momentum style is outperforming the value style. We’re likely moving into a period that is good for stock ownership.

Interest Rates

yieldcurve

The 3 month T-bill rate is 0.50%, the 1 year T-bill rate is 0.53%, the 3 year government bond yield is 0.54%, the 10 year government bond yield is 1.05% and the long government bond yield is 1.64%. The yield curve is normal. Long government bonds appear very overvalued. There seems to be very little opportunity for profit in bonds. A safe haven, such as tangible assets (eg. precious metals, real estate, etc.), may be a better bet.

Expected (forward-looking) inflation is 1.38%. This is within the Canadian central bank’s target band of 1% to 3%.

The equity risk premium for large caps, in Canada, currently appears to be 2.89%. For small caps, it currently appears to be 3.05%.

Credit Environment

Government bonds are in greater favour than corporate bonds:
guage

Long bonds are more popular than short bonds:guage-1High yield bonds are outperforming high quality bonds:
guage-2

Currency

The Brazilian Real (BZF), Japanese Yen (FXY), and Australian dollar (FXA) are looking strong relative to the US dollar.
The Canadian dollar has been losing value compared to the US dollar.

Equities

While bonds haven’t quite gotten to the point where they’re losing money, stocks are in a much better position, both in the US and in Canada.

US bonds vs. US stocks:
guage-3
Canadian bonds vs. Canadian stocks:
guage-4

Global Markets

Comparing national stock markets, Brazil (EWZ), Peru (EPU), Taiwan (EWT), South Africa (EZA), Indonesia (EIDO), New Zealand (ENZL), South Korea (EWY), Hong Kong (EWH), Poland (EPOL), Australia (EWA), Thailand (THD), China (MCHI), Philippines (EPHE), India (INDA), Russia (ERUS), Germany (EWG), Qatar (QAT), US S&P 500 (IVV), Japan (EWJ), Austria (EWO), Chile (ECH), Canada (EWC), Finland (EFNL), UAE (UAE), Israel (EIS), Netherlands (EWN), Belgium (EWK), France (EWQ), United Kingdom (EWU), Switzerland (EWL), Singapore (EWS), Sweden (EWD), Denmark (EDEN), Mexico (EWW), and Ireland (EIRL) are rising, while other regions appear to be neutral or falling.

US Stocks

Yesterday’s closing price was 2,182.87. This is 0.55% higher than last week’s price (2,170.84), and 2.49% higher than last month’s price (2,129.90), and 6.03% higher than the price three months ago (2,058.69), and 16.11% higher than the price six months ago (1,880.05), and 11.81% higher than the price one year ago (1,952.29).The average P/E ratio of the S&P 100 (equal weighted) is 21.92. This implies the market is overvalued. There is likely an overly optimistic outlook and risks may be unduly discounted. This implies a forward capital return of 4.56% (before dividends).

The following stocks appear to present short-term (2-6 months) opportunities for price increase (buy high, sell higher):

  • Biogen Inc. (BIIB)
  • Qualcomm Incorporated (QCOM)
  • Texas Instruments Incorporated (TXN)
  • Microsoft Corporation (MSFT)
  • Alphabet Inc. (GOOGL)
  • Amazon.com, Inc. (AMZN)
  • Merck & Company, Inc. (MRK)
  • Kinder Morgan, Inc. (KMI)
  • Cisco Systems, Inc. (CSCO)
  • Apple Inc. (AAPL)
  • Alphabet Inc. (GOOG)
  • The Priceline Group Inc. (PCLN)
  • Bank Of America Corporation (BAC)
  • Celgene Corporation (CELG)
  • Abbott Laboratories (ABT)
  • E.i. Du Pont De Nemours (DD)
  • Amgen Inc. (AMGN)
  • Caterpillar, Inc. (CAT)
  • Blackrock, Inc. (BLK)
  • American International Group (AIG)
  • Morgan Stanley (MS)
  • International Business Machines (IBM)
  • Facebook, Inc. (FB)
  • Dow Chemical Company (DOW)
  • Intel Corporation (INTC)
  • Monsanto Company (MON)
  • MasterCard Incorporated (MA)
  • JP Morgan Chase & Co. (JPM)

These stocks appear to be priced attractively from a long-term (3-5 years) perspective (buy low, sell high):

  • General Motors Company (GM)
  • Ford Motor Company (F)
  • Metlife, Inc. (MET)

Canadian Stocks

Yesterday’s closing price was 14,648.80. This is 0.45% higher than last week’s price (14,582.70), and 3.64% higher than last month’s price (14,134.50), and 6.91% higher than the price three months ago (13,701.50), and 14.67% higher than the price six months ago (12,774.50), and 8.25% higher than the price one year ago (13,531.90).The average P/E ratio of the TSX60 (equal weighted) is 25.41. This implies the market is overvalued. There is likely an overly optimistic outlook and risks may be unduly discounted. This implies a forward capital return of 3.94% (before dividends).

The following stocks appear to present short-term (2-6 months) opportunities for price increase (buy high, sell higher):

  • Teck Resources Limited (TCK-B.to)
  • First Quantum Minerals Ltd (FM.to)
  • Silver Wheaton Corp. (SLW.to)
  • Yamana Gold Inc (YRI.to)
  • Encana Corp. (ECA.to)
  • Agnico Eagle Mines Limited (AEM.to)
  • Barrick Gold Corporation (ABX.to)
  • Kinross Gold Corp. (K.to)
  • Bombardier Inc., Cl. B, Sv (BBD-B.to)
  • Restaurant Brands International (QSR.to)
  • Blackberry Limited (BB.to)
  • Cgi Group Inc., Cl.a, Sv (GIB-A.to)
  • Rogers Communications Inc., Cl. (RCI-B.to)
  • Snc-lavalin Sv (SNC.to)
  • Dollarama Inc (DOL.to)
  • Franco-nevada Corporation (FNV.to)
  • Constellation Software Inc. (CSU.to)
  • Magna International Inc (MG.to)
  • Arc Resources Ltd. (ARX.to)
  • Cdn Natural Res (CNQ.to)
  • Transcanada Corp. (TRP.to)
  • Shaw Communications Inc., Cl.b, (SJR-B.to)
  • Husky Energy Inc. (HSE.to)
  • Canadian Pacific Railway Limite (CP.to)
  • Saputo Inc. (SAP.to)

These stocks appear to be priced attractively from a long-term (3-5 years) perspective (buy low, sell high):

  • Power Corporation Of Canada, Sv (POW.to)
  • Canadian Imperial Bank Of Comme (CM.to)

Other Assets

Crude Oil (HUC.to), Base Metals (ZMT.to), Silver (HUZ.to), US S&P 500 (SPY), TSX Capped Composite (ZCN.to), FTSE Developped All Cap Ex US (VDU.to), Global Infrastructure (ZGI.to), MSCI EAFE (XIN.to), TSX REIT (XRE.to), Natural Gas (HUN.to), Canadian Universe Bond (XBB.to) are performing better than cash.
The gold price is neutral.
The oil price is rising, which increases manufacturing input costs and energy costs and may slow economic expansion.

Portfolio

A theoretical portfolio, split evenly between gold (IGT in Cdn$), real estate (XRE in Cdn$), Canadian stocks (XIU in Cdn$), US stocks (XSP hedged to Cdn$), international stocks (VDU in Cdn$) and bonds (XBB in Cdn$).

As of today, the theoretical portfolio would hold:

  • One unit (20%) real estate
  • One unit (20%) Canadian stocks
  • One unit (20%) US stocks
  • One unit (20%) international stocks
  • 1 unit (20%) cash

Stock return forecast for August

Oops, I’m a couple days late. I’m happy with my stock “forecast” for July. I predicted a 62% of the market finishing the month higher than it began. It rose from 14,064.54 to 14,566.65, for a gain of 3.68%. I realize that my method is an almanac-style forecast, with results are satisfactory if not entirely helpful. I can’t imagine it’s much use to realize that there’s a good chance of losing money (or a relatively small chance of making money) one month and buying or selling your investments based on that. Such a strategy would be expensive and prone to error.

Having said that, the forecast for August is positive. I’ll predict about a 64% likelihood that the TSX will end the month higher than 14,566.65. And I don’t like the look of September.

 

Nintendo

The other day, a friend was teasing me for not knowing that the Nintendo stock would take off. Pokemon Go was released in a number of countries worldwide and has proven to be hugely popular. I’ll freely admit that I’ve been playing a lot of Pokemon Go (with and without my kids). It’s a really fun game, well thought out and easy to learn, but broad enough to hold sustained interest. And, unlike the prototype (Ingress), it is monetized. Chances are that Nintendo will do very well from this game.

Their share price (quote) doubled, rising 100% between July 7 and July 22. Wow. The question that I raise is: what is this stock price based on? It’s not based on reported earnings, or anything measurable, it’s based on expectations and a future outlook that seems very rosy. If the stock price doubles, that implies that the earnings will double, based only on a single game. Is that realistic?

Nintendo seemingly didn’t think so. They made a statement, saying that the financial impact from the game will be limited. The market reacted with a 17% drop in Nintendo’s share price on July 25. Some investors still made a huge gain, but I would expect the share price, at this point, to correct back to something more moderate and in-line with real-world earnings.

The stock isn’t easy for investors in North America to buy. It trades on the Tokyo exchange, with ADRs available over-the-counter and on certain European exchanges. On top of that, it’s purely speculative at the moment (and all the gains have probably already been made), I think it’s a very risky stock that isn’t worth my while.

Market Outlook, July 25, 2016

Interest Rates

yieldcurve

The 3 month T-bill rate is 0.48%, the 1 year T-bill rate is 0.53%, the 3 year government bond yield is 0.57%, the 10 year government bond yield is 1.09% and the long government bond yield is 1.73%. The yield curve is normal. Long government bonds appear very overvalued. There seems to be very little opportunity for profit in bonds. A safe haven, such as tangible assets (eg. precious metals, real estate, etc.), may be a better bet.

Expected (forward-looking) inflation is 1.38%. This is within the Canadian central bank’s target band of 1% to 3%.

The equity risk premium for large caps, in Canada, currently appears to be 2.94%. For small caps, it currently appears to be 3.05%.

Credit Environment

There is almost no preference between government bonds and corporate bonds (top dial). Long bonds are in favour whereas short bonds are not (middle dial). High yield bonds have a small advantage over high quality bonds (bottom dial). Taken altogether, this implies some appetite for risk on the part of investors.
guageguage-1guage-2

Currency

The Brazilian Real (BZF) and Japanese Yen (FXY) are looking strong relative to the US dollar.
The Canadian dollar has been losing value compared to the US dollar.

Equities

Where does there appear to be more opportunity right now?
US stocks have the advantage over US bonds:
guage-3
And the same relationship exists in Canada:
guage-4

Global Markets

  • Turkey Investable has changed -15.38% in price since last week’s close. Hardly surprising, given the tumultuous news.

Comparing national stock markets, Brazil (EWZ), Peru (EPU), South Africa (EZA), Indonesia (EIDO), Taiwan (EWT), Chile (ECH), Thailand (THD), Philippines (EPHE), New Zealand (ENZL), Russia (ERUS), Hong Kong (EWH), South Korea (EWY), India (INDA), China (MCHI), Finland (EFNL), UAE (UAE), US S&P 500 (IVV), Australia (EWA), Qatar (QAT), Singapore (EWS), Mexico (EWW), Israel (EIS), Canada (EWC), Norway (ENOR), Spain (EWP), Denmark (EDEN), Netherlands (EWN), Austria (EWO), Switzerland (EWL), Japan (EWJ), United Kingdom (EWU), Poland (EPOL), Belgium (EWK), France (EWQ), Germany (EWG), Sweden (EWD) are rising, while other regions appear to be neutral or falling.

US Stocks

Yesterday’s closing price was 2,175.03. This is 0.38% higher than last week’s price (2,166.89), and 2.92% higher than last month’s price (2,113.32), and 4.18% higher than the price three months ago (2,087.79), and 14.06% higher than the price six months ago (1,906.90), and 12.09% higher than the price one year ago (1,940.51).The average P/E ratio of the S&P 100 (equal weighted) is 22.71. This implies the market is overvalued. There is likely an overly optimistic outlook and risks may be unduly discounted. This implies a forward capital return of 4.40% (before dividends).

The following stocks appear to present short-term (2-6 months) opportunities for price increase (buy high, sell higher):

  • Qualcomm Incorporated (QCOM)
  • Kinder Morgan, Inc. Common Stoc (KMI)
  • Biogen Inc. (BIIB)
  • Amazon.com, Inc. (AMZN)
  • Microsoft Corporation (MSFT)
  • Texas Instruments Incorporated (TXN)
  • Cisco Systems, Inc. (CSCO)
  • Morgan Stanley Common Stock (MS)
  • International Business Machines (IBM)
  • Exelon Corporation Common Stock (EXC)
  • Johnson & Johnson Common Stock (JNJ)
  • Simon Property Group, Inc. Comm (SPG)
  • Facebook, Inc. (FB)
  • Lockheed Martin Corporation Com (LMT)
  • Intel Corporation (INTC)
  • Comcast Corporation (CMCSA)
  • Emerson Electric Company Common (EMR)
  • 3M Company Common Stock (MMM)
  • General Motors Company Common S (GM)
  • Union Pacific Corporation Commo (UNP)
  • Pfizer, Inc. Common Stock (PFE)
  • Southern Company (the) Common S (SO)
  • Costco Wholesale Corporation (COST)
  • Caterpillar, Inc. Common Stock (CAT)
  • Amgen Inc. (AMGN)
  • AT&T Inc. (T)
  • Bristol-myers Squibb Company Co (BMY)
  • Duke Energy Corporation (holdin (DUK)
  • Alphabet Inc. (GOOGL)
  • Abbott Laboratories Common Stoc (ABT)
  • Blackrock, Inc. Common Stock (BLK)
  • General Electric Company Common (GE)
  • Alphabet Inc. (GOOG)
  • Exxon Mobil Corporation Common (XOM)
  • Ford Motor Company Common Stock (F)
  • Pepsico, Inc. Common Stock (PEP)
  • Unitedhealth Group Incorporated (UNH)
  • Altria Group, Inc. (MO)
  • Time Warner Inc. New Common Sto (TWX)

These stocks appear to be priced attractively from a long-term (3-5 years) perspective (buy low, sell high):

  • General Motors Company Common S (GM)
  • Ford Motor Company Common Stock (F)
  • Metlife, Inc. Common Stock (MET)

Canadian Stocks

Yesterday’s closing price was 14,600.70. This is 0.47% higher than last week’s price (14,532.40), and 3.32% higher than last month’s price (14,131.40), and 5.83% higher than the price three months ago (13,796.00), and 17.85% higher than the price six months ago (12,389.60), and 9.11% higher than the price one year ago (13,381.60).The average P/E ratio of the TSX60 (equal weighted) is 24.84. This implies the market is overvalued. There is likely an overly optimistic outlook and risks may be unduly discounted. This implies a forward capital return of 4.03% (before dividends).

The following stocks appear to present short-term (2-6 months) opportunities for price increase (buy high, sell higher):

  • Teck Resources Limited (TCK-B.to)
  • Yamana Gold Inc (YRI.to)
  • Silver Wheaton Corp. (SLW.to)
  • First Quantum Minerals Ltd (FM.to)
  • Kinross Gold Corp. (K.to)
  • Barrick Gold Corporation (ABX.to)
  • Agnico Eagle Mines Limited (AEM.to)
  • Encana Corp. (ECA.to)
  • Canadian Pacific Railway Limite (CP.to)
  • Franco-nevada Corporation (FNV.to)
  • Arc Resources Ltd. (ARX.to)
  • Rogers Communications Inc., Cl. (RCI-B.to)
  • Bombardier Inc., Cl. B, Sv (BBD-B.to)
  • Cdn Natural Res (CNQ.to)
  • SNC-Lavalin Sv (SNC.to)
  • Eldorado Gold (ELD.to)
  • Goldcorp Inc (G.to)
  • Restaurant Brands International (QSR.to)
  • Gildan Activewear Inc. (GIL.to)
  • Dollarama Inc (DOL.to)
  • Metro Inc (MRU.to)
  • Transcanada Corp. (TRP.to)
  • Alimentation Couche-tard Inc Cl (ATD-B.to)
  • Thomson Reuters Corporation (TRI.to)
  • Canadian National Railway Co. (CNR.to)
  • Telus Corporation (T.to)
  • Brookfield Asset Management Inc (BAM-A.to)

These stocks appear to be priced attractively from a long-term (3-5 years) perspective (buy low, sell high):

  • Power Corporation Of Canada, Sv (POW.to)

Other Assets

Crude Oil (HUC.to), Silver (HUZ.to), Base Metals (ZMT.to), Global Infrastructure (ZGI.to), Real Estate (XRE.to), US S&P 500 (SPY), TSX Composite (ZCN.to), MSCI EAFE (XIN.to), FTSE Developed (VDU.to), Gold (IGT.to), Canadian Universe Bond (XBB.to), Natural Gas (HUN.to), Premium Money Market (CMR.to) are performing better than cash.
The gold price is rising, which often indicates nervousness in equity markets.
The oil price is rising, which increases manufacturing input costs and energy costs and may slow economic expansion.

Portfolio

A theoretical portfolio, split evenly between gold (IGT in Cdn$), real estate (XRE in Cdn$), Canadian stocks (XIU in Cdn$), US stocks (XSP hedged to Cdn$), international stocks (VDU in Cdn$) and bonds (XBB in Cdn$).

As of today, the theoretical portfolio would hold:

  • One unit (20%) of gold
  • One unit (20%) real estate
  • One unit (20%) Canadian stocks
  • One unit (20%) US stocks
  • One unit (20%) international stocks

Market Outlook, July 18, 2016

Whereas June ended on a sour note for stocks, July has seen slow and steady growth. Stocks are more attractive than bonds as an investment at the present, and small caps in Canada look especially strong. The gold price has stopped advancing, and the oil price, which has been falling over the past three weeks, may be stabilizing.

Interest Rates

yieldcurve

The 3 month T-bill rate is 0.45%, the 1 year T-bill rate is 0.51%, the 3 year government bond yield is 0.52%, the 10 year government bond yield is 1.05% and the long government bond yield is 1.67%. The yield curve is normal. Long government bonds appear very overvalued. There seems to be very little opportunity for profit in bonds. A safe haven, such as tangible assets (eg. precious metals, real estate, etc.), may be a better bet.

Expected (forward-looking) inflation is 1.38%. This is within the Canadian central bank’s target band of 1% to 3%.

The equity risk premium for large caps, in Canada, currently appears to be 2.99%. For small caps, it currently appears to be 3.10%.

Credit Environment

Government bonds and corporate bonds are equally in favour.
guageLong bonds are far preferred to short bonds.

guage-1

High yield bonds have a bit better momentum than high quality bonds.guage-2

Currency

The Brazilian Real (BZF), Australian Dollar (FXA), Japanese Yen (FXY), and Canadian Dollar (FXC) are looking strong relative to the US dollar.
The Canadian dollar has been appreciating compared to the US dollar.

Equities

Where does there appear to be more opportunity right now?
In the US, stocks have the advantage over bonds:
guage-3
And the situation in Canada is similar:
guage-4

Global Markets

  • Austria has changed 6.93% in price since last week’s close.
  • Brazil has changed 5.40% in price since last week’s close.
  • Qatar has changed 5.01% in price since last week’s close.
  • Saudi Arabia has changed 6.23% in price since last week’s close.
  • South Africa has changed 5.40% in price since last week’s close.

Comparing national stock markets, Brazil (EWZ), Peru (EPU), Russia (ERUS), Taiwan (EWT), Indonesia (EIDO), Philippines (EPHE), South Africa (EZA), Thailand (THD), South Korea (EWY), New Zealand (ENZL), Chile (ECH), Australia (EWA), Canada (EWC), Singapore (EWS), China (MCHI), US S&P 500 (IVV), India (INDA), Turkey (TUR), Hong Kong (EWH), UAE (UAE), Israel (EIS), Japan (EWJ), Norway (ENOR), Mexico (EWW), Malaysia (EWM), Finland (EFNL), Qatar (QAT), and Denmark (EDEN) are rising, while other regions appear to be neutral or falling.

US Stocks

Yesterday’s closing price was 2,161.74. This is 1.15% higher than last week’s price (2,137.16), and 4.03% higher than last month’s price (2,077.99), and 3.22% higher than the price three months ago (2,094.34), and 12.48% higher than the price six months ago (1,921.84), and 3.95% higher than the price one year ago (2,079.61).The average P/E ratio of the S&P 100 (equal weighted) is 22.94. This implies the market is overvalued. There is likely an overly optimistic outlook and risks may be unduly discounted. This implies a forward capital return of 4.36% (before dividends).

The following stocks appear to present short-term (2-6 months) opportunities for price increase (buy high, sell higher):

  • Kinder Morgan, Inc. (KMI)
  • Intel Corporation (INTC)
  • Lockheed Martin Corporation (LMT)
  • Amazon.com, Inc. (AMZN)
  • Halliburton Company (HAL)
  • Union Pacific Corporation (UNP)
  • Texas Instruments Incorporated (TXN)
  • Johnson & Johnson (JNJ)
  • 3m Company (MMM)
  • Altria Group, Inc. (MO)
  • Bristol-myers Squibb Company (BMY)
  • Simon Property Group, Inc. (SPG)
  • Pfizer, Inc. (PFE)
  • AT&T Inc. (T)
  • Chevron Corporation (CVX)
  • Comcast Corporation (CMCSA)
  • Medtronic Plc. (MDT)
  • Exelon Corporation (EXC)
  • General Electric Company (GE)
  • Exxon Mobil Corporation (XOM)
  • Emerson Electric Company (EMR)
  • Caterpillar, Inc. (CAT)
  • Unitedhealth Group Incorporated (UNH)
  • Verizon Communications Inc. (VZ)
  • United Parcel Service, Inc. (UPS)
  • Costco Wholesale Corporation (COST)
  • Morgan Stanley (MS)

These stocks appear to be priced attractively from a long-term (3-5 years) perspective (buy low, sell high):

  • General Motors Company (GM)
  • Ford Motor Company (F)
  • Metlife, Inc. (MET)
  • Conocophillips (COP)

Canadian Stocks

Yesterday’s closing price was 14,482.40. This is 0.84% higher than last week’s price (14,361.90), and 4.32% higher than last month’s price (13,882.40), and 5.56% higher than the price three months ago (13,719.80), and 19.95% higher than the price six months ago (12,073.50), and 3.18% higher than the price one year ago (14,036.60).The average P/E ratio of the TSX60 (equal weighted) is 24.74. This implies the market is overvalued. There is likely an overly optimistic outlook and risks may be unduly discounted. This implies a forward capital return of 4.04% (before dividends).

The following stocks appear to present short-term (2-6 months) opportunities for price increase (buy high, sell higher):

These stocks appear to be priced attractively from a long-term (3-5 years) perspective (buy low, sell high):

  • Power Corporation Of Canada, Sv (POW.to)
  • Canadian Imperial Bank Of Comme (CM.to)

Other Assets

Crude Oil (HUC.to), Silver (HUZ.to), Base Metals (ZMT.to), Global Infrastructure (ZGI.to), Real Estate (XRE.to), TSX Composite (ZCN.to), S&P 500 (SPY), Natural Gas (HUN.to), International Stocks (XIN.to) and (VDU.to), Canadian Universe Bond (XBB.to), Premium Money Market C (CMR.to) are performing better than cash.
The gold price is falling, which may indicate bullishness toward stocks.
The oil price is rising, which increases manufacturing input costs and energy costs and may slow economic expansion.

Portfolio

A theoretical portfolio, split evenly between gold (IGT in Cdn$), real estate (XRE in Cdn$), Canadian stocks (XIU in Cdn$), US stocks (XSP hedged to Cdn$), international stocks (VDU in Cdn$) and bonds (XBB in Cdn$).

As of today, the theoretical portfolio would hold:

  • One unit (20%) real estate
  • One unit (20%) Canadian stocks
  • One unit (20%) US stocks
  • One unit (20%) international stocks
  • 1 unit (20%) bonds

Market Outlook, July 11, 2016

Short bonds seem to be going nowhere as investors prefer long bonds. The oil price is dropping, but gold continues to rise. That, along with silver and base metals, is probably what’s supporting Canadian small caps, which are outperforming large caps. Canadian and US stocks are doing okay, but international stocks are not.

Interest Rates

yieldcurve

The 3 month T-bill rate is 0.47%, the 1 year T-bill rate is 0.50%, the 3 year government bond yield is 0.46%, the 10 year government bond yield is 0.96% and the long government bond yield is 1.55%. The yield curve is inverted in the short end. The Bank of Canada prime rate may rise to slow inflation and economic activity. Long government bonds appear very overvalued. There seems to be very little opportunity for profit in bonds. A safe haven, such as tangible assets (eg. precious metals, real estate, etc.), may be a better bet.

Expected (forward-looking) inflation is 1.37%. This is within the Canadian central bank’s target band of 1% to 3%.

The equity risk premium for large caps, in Canada, currently appears to be 3.00%. For small caps, it currently appears to be 2.99%.

Credit Environment

When the dials point left, the credit environment is cautious and risks are priced higher.

Investors presently prefer government bonds over corporate, long bonds over short and high quality bonds over high yield.
guageguage-1guage-2

Currency

The Brazilian Real (BZF), Japanese Yen (FXY), Australian dollar (FXA), and Singapore dollar (FXSG) are looking strong relative to the US dollar.
The Canadian dollar has been losing value compared to the US dollar.

Equities

Where does there appear to be more opportunity right now?
US stocks are outperforming bonds:
guage-3
Canadian stocks are also outperforming bonds:
guage-4

Global Markets

Comparing national stock markets, Peru (EPU), Brazil (EWZ), New Zealand (ENZL), Indonesia (EIDO), Philippines (EPHE), Thailand (THD), Russia (ERUS), Taiwan (EWT), Chile (ECH), India (INDA), Singapore (EWS), Australia (EWA), USA S&P 500 (IVV), South Korea (EWY), South Africa (EZA), Canada (EWC), China (MCHI), Turkey Investable (TUR) are rising, while other regions appear to be neutral or falling.

US Stocks

Yesterday’s closing price was 2,129.90. This is 1.28% higher than last week’s price (2,102.95), and 0.68% higher than last month’s price (2,115.48), and 4.31% higher than the price three months ago (2,041.99), and 9.61% higher than the price six months ago (1,943.09), and 2.10% higher than the price one year ago (2,086.05).The average P/E ratio of the S&P 100 (equal weighted) is 22.61. This implies the market is overvalued. There is likely an overly optimistic outlook and risks may be unduly discounted. This implies a forward capital return of 4.42% (before dividends).

The following stocks appear to present short-term (2-6 months) opportunities for price increase (buy high, sell higher):

  • Amazon.com, Inc. (AMZN)
  • Simon Property Group, Inc. (SPG)
  • Halliburton Company (HAL)
  • At&t Inc. (T)
  • Johnson & Johnson (JNJ)
  • Altria Group, Inc. (MO)
  • Verizon Communications Inc. (VZ)
  • Comcast Corporation (CMCSA)
  • Lockheed Martin Corporation (LMT)
  • Exxon Mobil Corporation (XOM)
  • Duke Energy Corporation (DUK)
  • Lowe’s Companies, Inc. (LOW)
  • Southern Company (the) (SO)
  • Medtronic Plc. (MDT)
  • 3m Company (MMM)
  • Costco Wholesale Corporation (COST)
  • General Electric Company (GE)
  • Bristol-myers Squibb Company (BMY)

These stocks appear to be priced attractively from a long-term (3-5 years) perspective (buy low, sell high):

  • General Motors Company (GM)
  • Metlife, Inc. (MET)
  • Ford Motor Company (F)
  • Conocophillips (COP)

Canadian Stocks

Yesterday’s closing price was 14,259.80. This is 0.01% higher than last week’s price (14,258.90), and 0.14% higher than last month’s price (14,240.00), and 6.24% higher than the price three months ago (13,422.80), and 14.58% higher than the price six months ago (12,445.50), and -0.56% lower than the price one year ago (14,339.50).The average P/E ratio of the TSX60 (equal weighted) is 25.23. This implies the market is overvalued. There is likely an overly optimistic outlook and risks may be unduly discounted. This implies a forward capital return of 3.96% (before dividends).

The following stocks appear to present short-term (2-6 months) opportunities for price increase (buy high, sell higher):

These stocks appear to be priced attractively from a long-term (3-5 years) perspective (buy low, sell high):

  • Power Corporation Of Canada, Sv (POW.to)
  • Canadian Imperial Bank Of Comme (CM.to)

Other Assets

Crude Oil (HUC.to), Silver (HUZ.to), Base Metals (ZMT.to), Global Infrastructure Etf (ZGI.to), TSX REIT (XRE.to), Natural Gas (HUN.to), TSX Composite (ZCN.to), S&P 500 (SPY), Canadian Universe Bond (XBB.to), Gold (IGT.to) are performing better than cash.
The gold price is rising, which often indicates nervousness in equity markets.
The oil price is falling.

Portfolio

A theoretical portfolio, split evenly between gold (IGT in Cdn$), real estate (XRE in Cdn$), Canadian stocks (XIU in Cdn$), US stocks (XSP hedged to Cdn$), international stocks (VDU in Cdn$) and bonds (XBB in Cdn$).

As of today, the theoretical portfolio would hold:

  • One unit (20%) of gold
  • One unit (20%) real estate
  • One unit (20%) Canadian stocks
  • One unit (20%) US stocks
  • One unit (20%) bonds

Forecasting refinement – P/E ratio

The P/E ratio is the ratio of the price of a stock to the earnings of the company. For example, if a share of a company’s stock costs $10 and over the past year the company earnings $1 per share, then the P/E ratio is $10 / $1 = 10. This is then averaged for all companies across a market or index to find the average P/E of the market. If the P/E ratio is high, then people are willing to pay more per dollar of earnings.

In value investing, there is a belief that the P/E ratio is predictive of future stock market performance. When the P/E ratio is high, stock prices are too high and will be expected to decline. When the P/E ratio is low, stock prices will be expected to rise. This assumes that the earning power of corporations drives stock valuations (which seems to be a valid assumption).

However, when looking at the relationship between P/E ratio and stock market performance (the price of the index), there is no correlation from one month to the next. In fact, there is a relatively high correlation in the same month (P is related to P/E, go figure), which isn’t very helpful. It implies that as earnings are announced, almost all investors update their price in less than a month. This result isn’t really surprising. Looking at year-to-year changes didn’t produce a better result.

It could be different for a single company, but for the index average, the earnings only result in simultaneous change, and so have no predictive power.

Market Outlook July 4, 2016

The mood in the market seems pretty somber. We are witnessing a flight to safety, with a clear preference for bonds over stocks, government over corpoI am traveling today, so I’m not able to insert the usual charts and graphics.

Interest Rates

The 3 month T-bill rate is 0.48%, the 1 year T-bill rate is 0.52%, the 3 year government bond yield is 0.55%, the 10 year government bond yield is 1.12% and the long government bond yield is 1.76%. The yield curve is normal. Long government bonds appear very overvalued. There seems to be very little opportunity for profit in bonds. A safe haven, such as tangible assets (eg. precious metals, real estate, etc.), may be a better bet.

Expected (forward-looking) inflation is 1.40%. This is within the Canadian central bank’s target band of 1% to 3%.

The equity risk premium for large caps, in Canada, currently appears to be 2.90%. For small caps, it currently appears to be 3.01%.

Credit Environment
When the dials point left, the credit environment is cautious and risks are priced higher.
Currency
The Brazilian Real (BZF), Japanese Yen (FXY), and Canadian Dollar (FXC) are looking strong relative to the US dollar.
The Canadian dollar has been appreciating compared to the US dollar.
Equities
Where does there appear to be more opportunity right now?
US bonds are in favour more than US stocks

Canadian bonds have greater momentum than Canadian stocks. Canadian small-cap stocks, however, continue to perform really well. I think that’s because of the large number of precious metal producers.

Global Markets
Brazil has changed 9.82% in price since last week’s close.
Chile has changed 5.99% in price since last week’s close.
China has changed 5.75% in price since last week’s close.
Denmark has changed 5.50% in price since last week’s close.
Finland has changed 8.14% in price since last week’s close.
India has changed 5.72% in price since last week’s close.
Indonesia has changed 9.15% in price since last week’s close.
Mexico has changed 6.72% in price since last week’s close.
Norway has changed 6.29% in price since last week’s close.
Russia has changed 5.03% in price since last week’s close.
Singapore has changed 6.33% in price since last week’s close.
South Africa has changed 7.80% in price since last week’s close.
South Korea has changed 5.70% in price since last week’s close.
Spain has changed 8.04% in price since last week’s close.
Sweden has changed 6.02% in price since last week’s close.
Switzerland has changed 5.30% in price since last week’s close.
Taiwan has changed 5.97% in price since last week’s close.
Thailand has changed 5.59% in price since last week’s close.
Turkey has changed 5.49% in price since last week’s close.
United Kingdom has changed 5.49% in price since last week’s close.
Comparing national stock markets, Brazil (EWZ), Peru (EPU), Indonesia (EIDO), Philippines (EPHE), Russia (ERUS), New Zealand (ENZL), Chile (ECH), Taiwan (EWT), Thailand (THD), Singapore (EWS), South Korea (EWY), Canada (EWC) are rising, while other regions appear to be neutral or falling.
US Stocks
Yesterday’s closing price was 2,098.86. This is 3.02% higher than last week’s price (2,037.30), and -0.30% lower than last month’s price (2,105.26), and 1.58% higher than the price three months ago (2,066.13), and 1.72% higher than the price six months ago (2,063.36), and -0.05% lower than the price one year ago (2,099.84).
The average P/E ratio of the S&P 100 (equal weighted) is 22.18. This implies the market is overvalued. There is likely an overly optimistic outlook and risks may be unduly discounted. This implies a forward capital return of 4.51% (before dividends).

The following stocks appear to present short-term (2-6 months) opportunities for price increase (buy high, sell higher):

Halliburton Company (HAL)
AT&T Inc. (T)
Verizon Communications Inc. (VZ)
Exxon Mobil Corporation (XOM)
Altria Group, Inc. (MO)
Johnson & Johnson (JNJ)
Duke Energy Corporation (DUK)
Simon Property Group, Inc. (SPG)
Medtronic Plc. (MDT)
Southern Company (SO)
Lockheed Martin Corporation (LMT)
These stocks appear to be priced attractively from a long-term (3-5 years) perspective (buy low, sell high):

General Motors Company (GM)
Ford Motor Company (F)
Metlife, Inc. (MET)
Conocophillips (COP)
Canadian Stocks
Yesterday’s closing price was 14,064.50. This is 1.24% higher than last week’s price (13,891.90), and -0.51% lower than last month’s price (14,137.00), and 5.46% higher than the price three months ago (13,336.20), and 8.11% higher than the price six months ago (13,010.00), and -3.02% lower than the price one year ago (14,503.00).
The average P/E ratio of the TSX60 (equal weighted) is 24.85. This implies the market is overvalued. There is likely an overly optimistic outlook and risks may be unduly discounted. This implies a forward capital return of 4.02% (before dividends).

The following stocks appear to present short-term (2-6 months) opportunities for price increase (buy high, sell higher):

Teck Resources Limited (TCK-B.to)
Barrick Gold Corporation (ABX.to)
Yamana Gold Inc (YRI.to)
Kinross Gold Corp. (K.to)
Silver Wheaton Corp. (SLW.to)
Agnico Eagle Mines Limited (AEM.to)
Franco-nevada Corporation (FNV.to)
Goldcorp Inc (G.to)
First Quantum Minerals Ltd (FM.to)
Eldorado Gold (ELD.to)
Bombardier Inc., Cl. B, Sv (BBD-B.to)
Cdn Natural Res (CNQ.to)
Transcanada Corp. (TRP.to)
Arc Resources Ltd. (ARX.to)
Snc-lavalin Sv (SNC.to)
Fortis Inc (FTS.to)
These stocks appear to be priced attractively from a long-term (3-5 years) perspective (buy low, sell high):

Power Corporation Of Canada, Sv (POW.to)
Canadian Imperial Bank Of Comme (CM.to)
Other Assets
Crude Oil (HUC.to), Silver (HUZ.to), Natural Gas (HUN.to), Global Infrastructure Index (ZGI.to), TSX REIT (XRE.to), Base Metals (ZMT.to), Gold (IGT.to), Canadian Universe Bond (XBB.to), TSX Composite (ZCN.to), S&P 500 (SPY) are performing better than cash.
The gold price is rising, which often indicates nervousness in equity markets.
The oil price is rising, which increases manufacturing input costs and energy costs and may slow economic expansion.
Portfolio
A theoretical portfolio, split evenly between gold (IGT in Cdn$), real estate (XRE in Cdn$), Canadian stocks (XIU in Cdn$), US stocks (XSP hedged to Cdn$), international stocks (VDU in Cdn$) and bonds (XBB in Cdn$).

As of today, the theoretical portfolio would hold:

One unit (20%) of gold
One unit (20%) real estate
3 units (60%) bonds