September’s just not a very fun month to be in the markets. The TSX rose 1.4% over the past week. That’s better than nothing, but it’s still 10.6% lower than a year ago. Short-term interest rates have fallen (the overnight and 30-day T-bill rates), so that now the yield curve is normal. All other things being equal, lower interest rates should help to stimulate spending and business investment. The Canadian dollar, on the other hand, continues to struggle against the US dollar.

No asset class looks like it has the potential for a good short-term return. Even gold has turned slightly negative. Oil is starting to flatten out. But nothing is looking up.

In Canada, Valeant (VRX) looks attractive again. The other companies that I mentioned last week, Alimentation Couche-tard (ATD.B), Constellation software (CSU) and Dollarama (DOL) still look good. In the US, Amazon (AMZN) looks attractive, with Facebook (FB) and Nike (NKE) also showing potential for short-term gains.

Market Outlook September 21, 2015

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