While the TSX Composite lost 2.3% this past week, this would not give a complete picture of the widespread selling pressure placed on large cap Canadian stocks. Look at some of these figures on this past week’s stock performances: Financials: Bank of Montreal (BMO) – 4.08%, Industrial Alliance Insurance (IAG)-3.93%, Manulife (MFC) -9.27%, National Bank (NA) -4.81%, Power Corp (POW) -4.74%, & Sunlife (SLF) -6.50%. Resources: Canadian Natural Resources (CNQ) -8.42%, Encana (ECA) -6.93%, Nexen (NXY) -6.51%, Talisman (TLM) -5.67%, & Teck Resources (TCK.B) -5.73%. Transport: Canadian National (CNR) -4.26% & Canadian Pacific (CP) -3.87%. Manulife, Nexen & Sunlife all hit new 52 week lows this past week.
Hot Sector: Both Agrium (AGU) +2.65% & Potash (POT) -0.49% have held up well through the carnage. Both are up over 13% through the past 4 weeks.
Safety Plays: Preferred Shares: Bombardier (C & D) pay around 7%, Brookfield Properties (L & N) 6.1-6.4%, Canadian Western Bank (A) 6.4%. Insurance companies along with the two smaller banks (CIBC & National) pay in excess of 6% with limited volatility. Corporate bonds 7-9 years out are paying 4.5%.
Precious Metals: Consider Claymore Gold Bullion ETF (CGL) hedged versus US dollar. Agnico Eagle (AEM), Eldorado (ELD), Iamgold (IMG), & Silver Wheaton (SLW) look promising in uncertain times.
Strategy: Watch closely but stay defensive and light on equities. Sell into strength and wait it out. Some of the stocks mentioned above have suffered severe losses and could be poised for rapid increases but it might takes weeks before the rebound. Remain cautious and good luck, Warren
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