BNN-Bloomberg, Market Outlook, Robert McWhirter, Sep 3, 2021
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MARKET OUTLOOK:
The fundamental outlook appears cloudy as COVID-19 is causing supply chain disruptions resulting in shortages and price increases of labour, semiconductors, and shipping containers.
While equity market seasonality usually calls for caution at this time of year, technical analyst Leon Tuey had positive comments on August 26th “…the Mid-Caps and Small-Caps (which) have been of great concern to many, have bottomed and their bull market has returned. Record highs are assured ..The fun now really begins.”
J.P. Morgan’s Global Equity Research team supported this positive view for small/mid-cap (SMid) stocks, noting this morning “we continue to believe the underlying “tide” is still very positive for small/mid-caps and should continue to serve as a tailwind for Small/Mid investors through at least the first half of next year.
…. nominal GDP growth is expected to remain strong, which should help corporate margins recover, pushing earnings growth into double digits for the first time in four years… a scenario that should eat into valuation multiples, giving Small/Mid-Caps an undemanding (attractive) valuation against that of most other asset classes.”
We believe equities will rise over the next 12 months.
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Robert McWhirter, president, Selective Asset Management
FOCUS: Canadian dividend and small-cap stocks
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