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Decade ahead will be great for investing but we’ll need to wait 12 months first, CIO says

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2 years ago

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Bill Smead looks ahead to the best stock picks in 2023 and beyond.
Bloomberg / Contributor / Getty Images

Investors will need to wait out the next year to reap the financial rewards of the next decade, according to Bill Smead, chief investment officer at Smead Capital Management.

“We know we have to sit through the next probably 12 months of probably the tide continuing to go out and going against us temporarily to get to the money we’re going to make over the next 10 years,” Smead said on CNBC’s “Squawk Box Europe” Wednesday.

Smead said capital and labor-intensive businesses were winners as the value of their income streams for the next decade “is way more viable than those stocks are representing.”

Smead Capital Management has oil and gas, land and Canadian lumber producers under its belt, which should all be bolstered thanks to the current property market in the U.S., Smead said.

“We know that we’ve got to build a lot of houses in the next 10 years,” he said.

The U.S. housing market boomed at the height of the Covid-19 pandemic as people looked to relocate and interest rates reached a record low, but it has since cooled as recession concerns weigh on the minds of prospective buyers and sellers.

History repeating itself?

Smead also drew parallels between the current economic situation in the U.S. and the 1960s and 1970s.

“Back then you had the Vietnam War, now you’ve got the pandemic war,” he told CNBC, adding that both periods involved a large amount of government borrowing relative to GDP.

Smead isn’t the first analyst to suggest a look back into history could indicate what’s ahead for the economy.

Historian Niall Ferguson suggested the world was sleepwalking into an era of political upheaval similar to the 1970s, but worse, when interviewed by CNBC at the Ambrosetti Forum in Italy in September.

“The ingredients of the 1970s are already in place,” Ferguson, Milbank Family Senior Fellow at the Hoover Institution, Stanford University, said.

Nobel Prize-winning economist Christopher Pissarides made similar comparisons in June when he described the labor market as “worse than the 1970s,” with workers across Europe opting to strike over pay and working conditions.

An increasing number of workers have decided to strike since Pissarides made the comments in the summer.

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Investment

S&P/TSX composite up more than 100 points, U.S. stock markets mixed

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October 16, 2024

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TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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Economy

S&P/TSX up more than 200 points, U.S. markets also higher

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1 week ago

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October 11, 2024

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TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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Economy

S&P/TSX composite little changed in late-morning trading, U.S. stock markets down

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1 week ago

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October 10, 2024

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TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.

The S&P/TSX composite index was up 0.05 of a point at 24,224.95.

In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.

The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.

The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.

The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.

This report by The Canadian Press was first published Oct. 10, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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