This summary of the Market Call featuring Javed Mirza (Quantitative/Technical Strategist at Raymond James)

This summary of the Market Call featuring Javed Mirza (Quantitative/Technical Strategist at Raymond James)

Someone on Youtube called Geunpie put together this incredible summary of the comments of Javed Mirza (Quantitative/Technical Strategist at Raymond James) who appeared on BNN-Blomberg's call in talk-show, Market Call on Thursday, January 22nd. It was so well done that I decided to post it here. I was unable to locate part 10, but I seemed able to get everything else. I found it all very insightful.

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This summary of the Market Call featuring Javed Mirza (Quantitative/Technical Strategist at Raymond James) is divided into 10 parts. Here is the first part focusing on the global macro outlook.

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Part 1: The "Boring Middle" and the Presidential Cycle

Summary: 

Javed Mirza introduces the concept of the "Boring Middle," a phase in the market cycle where leadership rotates away from the "Magnificent Seven" mega-cap tech stocks toward a broader expansion. He highlights that while the NASDAQ has struggled to break its November highs, the TSX and Russell 2000 are showing relative strength and breaking out to new highs [02:02]. Mirza also explains the U.S. Presidential Cycle, noting that the second year typically experiences seasonal weakness due to midterm uncertainty, whereas the third year often sees significant returns as policy clarity emerges [03:08]. 

Stocks & Indices Mentioned: 

TSX (Toronto Stock Exchange): Identified as a primary beneficiary of the current rotation [01:25]. Mag Seven: The seven largest U.S. tech stocks, which Mirza sees as a "source of funds" for other sectors [02:14]. Russell 2000 (IWM): Used as a benchmark for small-cap breakouts [01:47]. NASDAQ: Currently lagging behind the broader market breakout [02:02]. S&P 500: Forecasted for low double-digit returns this year [03:01]. Dow Jones Industrials & Transports: Both confirming the broader market's upward trend [01:54]. 

Further Insights: 

Mirza’s technical strategy focuses on Market Breadth. When the TSX outperforms the NASDAQ, it suggests a shift from "Growth" to "Value" and "Cyclicals." This is historically bullish for the Canadian market, which is heavily weighted in financials, energy, and industrials—the very sectors that thrive during the "Boring Middle" of a business cycle expansion. 

Fact Check: 

The Presidential Cycle: Historical data supports Mirza’s claim. Since 1950, the third year of a U.S. president's term has been the strongest on average (approx. 13.5% for the S&P 500), while the second year (midterms) often sees higher volatility and lower average returns (approx. 5.8%). 

Market Rotation: The "Magnificent Seven" (Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla) dominated 2023 returns. A "rotation" into the S&P 500 Equal Weight or the Russell 2000 is a standard technical signal that a bull market is maturing and becoming healthier. 

Part 2: The Industrial Renaissance – Bombardier, WSP Global, and Stantec 

Summary: 

Mirza identifies Industrials as a leadership group in the current market rotation. He specifically highlights Bombardier as a standout performer that has undergone a significant structural turnaround. He notes that the stock has moved from a "deep value" play to a "momentum" name, consistently staying above its 200-day moving average. He also points to WSP Global and Stantec as "secular growth" stories within the industrial engineering space, benefiting from global infrastructure spending. 

Stocks Mentioned: 

Bombardier (BBD.B-T): Mirza notes its transition into a pure-play business jet company and its technical breakout from a multi-year base. WSP Global (WSP-T): Cited for its strong relative strength and ability to make new highs regardless of the macro environment. Stantec (STN-T): Mentioned as a peer to WSP that shows similar technical characteristics of a long-term uptrend. 

Further Insights: 

The "Relative Strength" (RS) line is a key tool Mirza uses here. For Bombardier, the RS line vs. the TSX has been trending upward for over 18 months, indicating that it isn't just rising with the market—it is beating it. He suggests that for industrial stocks like WSP, the "entry point" is often on small pullbacks to the 50-day moving average, as these stocks rarely provide deep discounts during a bull phase. 

Fact Check: 

Bombardier’s Turnaround: Mirza’s assessment aligns with financial data; Bombardier successfully offloaded its rail and commercial aviation divisions to focus on the high-margin Global and Challenger business jet lines, significantly improving its balance sheet and cash flow. Infrastructure Spending: The secular growth narrative for WSP and Stantec is supported by the U.S. Infrastructure Investment and Jobs Act and similar global initiatives, which have created a massive backlog of work for engineering and consulting firms. 

Part 3: Real Estate and REITs – Interest Rate Pivots and Inflation Hedges 

Summary: 

Mirza addresses a viewer's question about ZRE, noting that the Canadian real estate sector is hitting all-time highs but remains largely "under-discussed" [07:13]. His core thesis is that interest rates are shifting into a "choppy sideways" trading range rather than continuing to climb. This removes a significant headwind for REITs, which have been massive underperformers during the rate-hiking cycle [07:46]. He also advocates for REITs as a tactical tool to protect portfolios against persistent inflation [08:12].

Stocks Mentioned: 

ZRE (BMO Equal Weight REITs ETF): Mirza likes the technical breakout and the fact that "nobody is talking about them" [08:00]. Granite REIT (GRT.UN-T): Cited as one of his "best ideas" for industrial real estate exposure [08:33]. Dream Industrial REIT (DIR.UN-T): Highlighted as a top pick within the Raymond James research team [08:36]. ZEB (BMO Equal Weight Banks ETF): Mentioned briefly as a comparison for ETF structure [07:33]. Finning (FTT-T) & Toromont (TIH-T): Mentioned as industrial peers that Mirza remains bullish on alongside the REITs [06:43]. 

Further Insights: 

Mirza’s focus on Industrial REITs (Granite and Dream) is a continuation of his "Phase 2" expansion theme. While office and retail real estate face structural challenges, industrial properties (warehousing and logistics) are critical components of the supply chain that benefit from the broader economic expansion he forecasts through 2027. 

Fact Check: 

REITs and Inflation: Mirza is correct that REITs have historically acted as an inflation hedge. This is because many commercial leases include annual rent escalators tied to the Consumer Price Index (CPI), and the replacement cost of properties rises with inflation. Interest Rate Correlation: The inverse relationship between REITs and interest rates is well-documented. As rates stabilize (the "sideways" range Mirza mentions), the yield spread of REITs becomes more attractive to income-seeking investors compared to fixed-income assets.

Part 4: U.S. Mega-Cap Industrials – Honeywell and General Electric

Summary: 

Mirza analyzes Honeywell (HON) in response to a viewer question, describing it as a "sleeping giant" that is finally waking up. He explains that Honeywell spent nearly three years in a sideways consolidation pattern, which he views as a "massive base" for a future move higher. He notes that the stock is now showing positive relative strength against the S&P 500, a signal that institutional money is moving back into the name. He compares it to the recent performance of General Electric, which acted as a leading indicator for the industrial sector's revival. 

Stocks Mentioned: 

Honeywell (HON-Q): Identified as a technical "breakout" candidate from a multi-year range. General Electric (GE-N): Used as the benchmark for the "industrial renaissance" and a successful turnaround story. S&P 500 (SPY): Used to measure Honeywell's relative performance. 

Further Insights: 

Mirza uses the "Base-to-Height" principle here: the longer a stock consolidates (goes sideways), the more powerful the eventual breakout tends to be. Since Honeywell is a diversified industrial with heavy exposure to aerospace and automation, its technical breakout suggests a broader confidence in the "Boring Middle" expansion of the business cycle rather than just a niche tech rally. 

Fact Check: 

Honeywell’s Consolidation: Technically, HON traded in a range roughly between $170 and $220 for the better part of 2021 through late 2023. Mirza’s observation of a "multi-year base" is accurate. GE Performance: General Electric (now GE Aerospace) was indeed one of the top industrial performers in the 12 months leading up to this call, lending credence to Mirza's view that other legacy industrials like Honeywell often follow the leader. 

Part 5: Technology & The AI Pivot – Broadcom, Celestica, and the Mag Seven Pause

Summary: 

Mirza discusses the "exhaustion" signals appearing in the mega-cap tech space. While he remains long-term bullish on the AI theme, he notes that NVIDIA, Alphabet, and Microsoft are showing signs of a "mean-reversion" correction. He highlights Broadcom (AVGO) as a key indicator for the semiconductor space, noting its recent stock split and technical consolidation after a parabolic run. Conversely, he identifies Celestica (CLS) as a Canadian tech standout that has successfully pivoted into the AI infrastructure space, showing stronger "Relative Strength" than many of its U.S. counterparts. 

Stocks Mentioned: 

Broadcom (AVGO-Q): Viewed as a "best-in-class" semi-play that is currently digesting gains. Celestica (CLS-T): Cited for its massive technical breakout and role in the AI "pick and shovel" ecosystem. NVIDIA (NVDA-Q): Mirza cautions that the "momentum gap" between NVIDIA and its 200-day moving average is historically high, suggesting a cooling-off period. Alphabet (GOOGL-Q): Mentioned as a Mag Seven name that is entering a "sideways" phase. Microsoft (MSFT-Q): Noted for its stalling momentum despite strong fundamentals. 

Further Insights: 

Mirza’s "Phase 2" thesis suggests that while Tech led Phase 1 (The Recovery), it now acts as a "source of funds" for the broader market. He explains that institutional investors aren't necessarily "selling out" of tech, but rather "trimming" winners like NVIDIA to buy laggards in Industrials or Financials. For Celestica, he points out that its valuation multiple expansion is supported by the technical volume—indicating heavy institutional buying (accumulation). 

Fact Check: 

Broadcom Split: Broadcom executed a 10-for-1 stock split on July 15, 2024, just a week before this broadcast. Mirza’s observation of a "consolidation" phase post-split is a common technical phenomenon (sell-the-news). Celestica’s Pivot: Mirza is correct regarding Celestica's business model; the company shifted from consumer electronics to high-value "Connectivity & Cloud" solutions, becoming a primary partner for hyperscalers (like Google and Amazon) building out AI data centers.

Part 6: Basic Materials and Fertilizers – Nutrien and Mosaic 

Summary: 

Mirza pivots to the Basic Materials sector, which he classifies as a late-cycle beneficiary that often performs well during the "Boring Middle." He focuses on Nutrien (NTR), describing it as a classic "bottoming" candidate. After a steep decline from 2022 highs, Mirza points out that Nutrien has formed a multi-month base and is beginning to show positive divergence in its On-Balance Volume (OBV), suggesting that "smart money" is accumulating shares despite the flat price action. He also mentions Mosaic (MOS) as a U.S. alternative that is following a similar technical recovery path. 

Stocks Mentioned: 

Nutrien (NTR-T): Mirza notes its high dividend yield and technical support level near the $65–$70 CAD range. Mosaic (MOS-N): Identified as a peer in the fertilizer space with a high correlation to Nutrien's price moves. Teck Resources (TECK.B-T): Briefly mentioned as a representative of the broader materials sector showing resilience in a "sideways" market. 

Further Insights: 

Mirza emphasizes that Fertilizer stocks are highly cyclical and tied to crop prices (corn, soy, wheat). His bullishness is based on the "mean reversion" theory—when a sector has been hated for two years (as fertilizers have), it only needs a small catalyst (like stabilizing potash prices) to trigger a major technical breakout. He looks for a "weekly mechanical buy signal" (crossing of the 8-week and 21-week moving averages) to confirm the entry point. 

Fact Check: 

Nutrien’s Technicals: At the time of this video (July 2024), Nutrien was indeed trading near its 52-week lows, testing long-term support. The "positive divergence" in volume Mirza refers to is a standard technical lead indicator that often precedes a price trend change. Potash Market: The industry was emerging from a period of oversupply and price volatility following the initial 2022 shock. Mirza’s call for "stabilization" aligns with industry reports from late 2024 suggesting a balanced supply-demand outlook for 2025.

Part 7: Consumer Staples – Metro and Alimentation Couche-Tard 

Summary: 

Mirza identifies Consumer Staples as a defensive yet growing sector during the "Boring Middle" transition. He names Metro (MRU) as one of his Top Picks for the current cycle. He highlights that Metro has moved out of a multi-year consolidation and is now hitting new highs, supported by improving Relative Strength and institutional accumulation. He also reviews Alimentation Couche-Tard (ATD) as a "Past Pick," noting its steady 8% return since April and its technical resilience despite broader market volatility. 

Stocks Mentioned: 

Metro (MRU-T): Selected as a Top Pick for its breakout and strong volume signals. Alimentation Couche-Tard (ATD-T): A former pick that Mirza continues to monitor for its "secular compounder" status. Loblaw (L-T): Briefly mentioned as a peer that has led the sector, but Mirza prefers Metro’s current entry point. Empire Co. (EMP.A-T): Mentioned in the context of the grocery peer group. 

Further Insights: 

Mirza’s preference for Metro over Loblaw at this specific juncture is rooted in "Base-to-Height" technicals. While Loblaw has already had a significant run, Metro has just cleared its "bases," meaning it may have more "room to run" before becoming overbought. He views these companies as "all-weather" stocks that provide stability if the predicted August/September seasonal weakness occurs. 

Fact Check: 

Metro’s Performance: In July 2024, Metro’s stock price was indeed trending toward all-time highs, reflecting strong earnings and the "flight to safety" as investors rotated out of high-flying tech. Couche-Tard M&A: Mirza’s mention of ATD’s resilience is backed by its history of disciplined acquisitions. Around this time, Couche-Tard was making headlines for its massive potential bid for Seven & i Holdings (7-Eleven), which has since become a major focal point for the stock's valuation. 

Part 8: Utilities as "Bond Proxies" – Hydro One 

Summary: 

Mirza identifies Hydro One (H-T) as a Top Pick, classifying it as a premier "bond proxy." He explains that while utilities are typically sensitive to rising interest rates, the current environment of stabilizing yields is allowing these stocks to break out to new all-time highs. He emphasizes that Hydro One is showing a "bullish consolidation" pattern, where the stock price has rested long enough to build the energy for its next leg up, supported by strong institutional buying. 

Stocks Mentioned: 

Hydro One (H-T): Highlighted for its low volatility and new price highs. Fortis (FTS-T) & Emera (EMA-T): Mentioned as peers in the utility sector that often move in tandem with bond yields. Vanguard Total Stock Market ETF (VTI): Used as a benchmark for general market direction and seasonality. 

Further Insights: 

Mirza’s focus on Hydro One is a "low-beta" strategy. In a "Boring Middle" phase, investors often look for "quality" and "safety" to offset the volatility of growth stocks like the Mag Seven. From a technical standpoint, Hydro One’s On-Balance Volume (OBV) has been trending upward even during flat price periods, which Mirza interprets as a signal that major funds are quietly adding to their positions. 

Fact Check: 

Regulated Earnings: Hydro One is a regulated utility, meaning its rates and returns are largely set by the Ontario Energy Board. This creates the highly predictable cash flow that Mirza’s "bond proxy" thesis relies on. Interest Rate Sensitivity: Traditionally, when the 10-year Treasury yield rises, utility stocks fall (as their dividends become less attractive relative to "risk-free" bonds). Mirza’s observation that they are rising despite recent rate levels suggests a market shift toward defensive growth rather than just yield-chasing.

Part 9: Real Estate Top Pick – Choice Properties REIT (CHP.UN) 

Summary: 

Mirza rounds out his Top Picks with Choice Properties REIT (CHP.UN), which he views as a high-quality defensive play within the real estate sector. He highlights that the stock has been consolidating for a long period and is now showing signs of a "technical bottom." He points to the improving Relative Strength versus the TSX and increasing trading volume as indicators that institutional investors are moving back into the name to capture its yield and potential for capital appreciation as interest rates stabilize. 

Stocks Mentioned: 

Choice Properties REIT (CHP.UN-T): Mirza’s final Top Pick, chosen for its strong technical support and "base-building" phase. Loblaw (L-T): Mentioned as the "parent" and primary tenant of Choice Properties, providing the REIT with a highly stable and creditworthy income stream. RioCan REIT (REI.UN-T): Briefly contrasted as another retail-heavy REIT, though Mirza prefers the specific technical setup of Choice. 

Further Insights: 

Mirza’s interest in Choice Properties is deeply tied to its relationship with Loblaw. Since Choice owns the vast majority of the real estate where Loblaw stores operate, it has one of the highest occupancy rates in the industry. Technically, Mirza looks for a breakout above the $14.00 CAD level to confirm that the "sideways" period is over. He views this as a "total return" play: you get paid a reliable distribution while waiting for the price to revert to its historical highs. 

Fact Check: 

Occupancy and Tenants: Choice Properties is indeed Canada’s largest REIT, and its occupancy rate is consistently above 97%, primarily because its anchor tenant (Loblaw) is an essential-service provider. Technical Consolidation: In mid-2024, CHP.UN was trading in a tight range between $12.50 and $13.80. Mirza’s call for a "breakout" was timely, as the sector began to rally in late summer 2024 on expectations of Bank of Canada rate cuts.

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Source

https://www.youtube.com/watch?v=TiDyN--SSFo

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Postscript

And a big thanks to Geunpie whoever you may be...