Mackenzie Investments says it's time to buy bonds after tech-fuelled rally | Canada News Media
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Mackenzie Investments says it’s time to buy bonds after tech-fuelled rally

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Mackenzie Investments, one of Canada’s largest fund managers, is turning less optimistic about stocks and sees better value in bonds after the 13 per cent rally for global equities in the first half.

A big six months for tech and Japan

Central bankers’ campaigns to raise borrowing costs are starting to have an impact on the economy and will eventually force investors into a more defensive mode, Lesley Marks, Mackenzie’s chief investment officer of equities, said in an interview. There’s a 60 per cent chance of a U.S. recession in the next 12 months, according to economists in a recent Bloomberg survey.

“We think that as the data continues to unfold throughout the rest of the year, people will see that the economy is in fact slowing,” crimping corporate earnings, she said. “The relative value exists right now in fixed income.”

The firm’s strategists recommend adding investment grade debt and going underweight stocks.

Mackenzie’s view echoes growing wariness among global managers that the rally in equity benchmarks is out of sync with the economic reality. While a boom in artificial intelligence has powered gains in global tech stocks, masking weakness in other sectors, hawkish central-bank rhetoric is denting optimism about an economic soft landing.

Pacific Investment Management Co. is among those firms warning about the possibility of a recession in some developed markets due to high policy rates, making high-quality government and corporate bonds attractive.Mackenzie, a unit of IGM Financial Inc., has $190 billion under management, including balanced portfolios. The Mackenzie Ivy Global Balanced Fund nudged its fixed income allocation to above 24 per cent as of the end of May, from 21 per cent at the end of last year, while trimming stocks. The vast majority of its bond holdings are investment grade.

Marks said any recession is likely to be mild, but “the slowdown in the economy is going to play a stronger role in the outlook for equities” in the second half of 2023.

Within equities, investors should favour less cyclical sectors that will perform better in a tougher economy, such as health-care and consumer staples stocks, Marks said. She also likes Japanese equities, whose benchmarks are trading near the highest levels in more than three decades.“It’s been an ignored market for a very long time outside of this year,” she said. The Bank of Japan may yet be forced to adjust its policy of yield curve control, which would strengthen the yen, to the benefit of foreign owners of Japanese stocks, Marks added. Mackenzie’s Tokyo-listed holdings include medical equipment maker Terumo Corp. and retailer Seven & I Holdings Co., according to fund disclosures dated May 31.

 

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

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

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

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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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