Shares are up 21,000% in less than a month. Plus, have the markets really bottomed out?

Stocks rose sharply in July after hitting their lowest level in June and the big question for investors is whether there is a bigger move higher or lower than the June low in the future. in Was this the bottom?D., US institutional portfolio manager, Ben Carlson, frames the discussion as a legal battle in the courtroom.

The case for the bulls – that June has been at least a mid-term low and it’s clearly been going up for a while – begins with the belief that peak inflation pressures have already been priced in equities. With higher interest rates taking effect and inflation waning, stocks have room to move higher.

Recession fears persist, but strong labor markets and consumption should protect the economy from any deep downturn, the bullish case argues. Corporate earnings continued to show strong, and future guidance did not move lower.

The case of the bear — that the July rally was a hoax and the market bottom of 2022 not yet damaged — means that even if peak inflation reverses in stock prices, consumer prices will remain high and threaten aggregate discretionary spending.

Possible scenario where inflation forces central banks to tighten monetary policy to the point that a recession leads to reasonable results and is likely to lead to a decline in record stock levels. The housing market is a huge determinant of GDP growth in North America, and its continued slowdown threatens the economy.

If I’m the judge here, I’m ruling in favor of the bears despite not having a strong conviction. Central Bank policy rates are still on track to rise (even if bond yields fall during July) while the lag effects of previous interest rate hikes are still being felt.

I also expect further cuts in the 2023 earnings forecast. Analysts often wait until the fourth quarter to reduce next year’s earnings estimates because they don’t want to do so in the third quarter, and then have to change it again before the end of the year.

– Scott Barlow, Globe and Mail market strategist

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stock to think

AMTD Digital Corporation (HKD-N) Dubbed the new “meme” stock so beloved by retail investors, it’s ever gone for a ride. Despite pulling back on Wednesday, it has traded nearly 21,000 percent higher since its initial public offering in July, and recently surpassed the market capitalization of Facebook owner Meta platforms. We are not kidding. Here’s what you need to know.

rundown

What a $360 million fund manager that has outperformed TSX Composite for 16 years is buying and selling

Money manager Stephen Takashi isn’t waiting for the markets to drop further to buy stocks he thinks will be good bets for the future. Chief investment officer at Lester Asset Management in Montreal, which manages assets estimated at $360 million and has topped TSX Composite’s returns over the past 16 years, a lot of damage has been done. Brenda Boo discovered what he was buying and selling.

Good spot in the bond market for investors who find GIC investment countries very full

Success in bonds this year is judged by how little you lost, not how much you gained. In this regard, corporate bonds have moderately outperformed while offering better returns. Rob Carrick takes a look at why they are a good fit for your portfolio.

See also: Some investors doubt US corporate bonds will continue to rise in the summer

Do steel stocks stand a chance in a recession?

Investors in steel stocks, such as Canada’s Stelco Holdings, should expect some tough times ahead as recession threats dampen sector sentiment and prices continue to slide. While some analysts remain optimistic about the sector given that prices are still high compared to historical levels – and demand is high in key sectors such as automobiles and housing – others expect steel prices to fall as economic growth slows. We have Brenda Boe.

What to expect from 10 year returns if we enter a recession

It pays to go back to market history as the economy is dancing on the brink of a recession to see what investors might have in store for the long term. Investors enjoyed positive real returns nearly 88 percent of the time from 1881 to June 2012. There were only a few periods—the other 12 percent of months—when they incurred losses over the next 10 years. On average, the market generated annual returns of 6.6 percent over the ten-year rolling periods. Norman Rothry has all the details of data processing.

Wall Street’s ‘fear gauge’ is in limbo as major investors continue to avoid stocks

Wall Street’s most-watched gauge of market anxiety is showing volatile trading expectations ahead despite the recent pullback in US stocks, although lower institutional investor exposure to stocks may help curb volatility. Saqib Iqbal Ahmed report.

Other (for subscribers)

The Cruncher Number: Why These 10 US Stocks Are Ranked by Total Shareholder Return

Analyst promotions and downgrades on Wednesday

Analysts upgrades and downgrades on Tuesday

Crypto market collapsed. Still buying bitcoin

After a sharp decline, American small companies tempt investors with cheap estimates

globe advisor

Is it time to reconsider your investment approach? Here are some strategies for a market pullback

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Ask Globe Investor

A question: My son will be starting college this fall, and we plan to make his first withdrawal from his Registered Education Savings Plan. However, we are at a loss as to how to withdraw funds. Should we get our contributions out first? Government grants and profits? Or a mixture?

Answer: Your confusion about RESPs is understandable. As much as they are a great way to save for your child’s education – and collect some free government grant money in the process – RESPs are also among the most complex investing tools ever. This becomes especially clear when it comes time to take advantage of the accumulated funds. I ran into the same dilemma when my son started college two years ago, and my conclusion was: Priority must be given to obtaining RESP grants and earnings as early as and in the most tax-efficient manner, making sure not to leave excess plan amounts after the child has finished school, when the Impose severe financial penalties. Read John Heinzl’s full response here.

What’s new in the coming days

Investment professor Dr. George Athanasakos tells us why stocks of companies that have paused hiring are overvalued.

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