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January 4th, 2019

What to Watch in 2019

By PRATTE

2019 EN

First, Happy New Year to all our readers! We are happy to be back and to accompany you for a new year. For our first blog of 2019, we thought we would offer you publications that offer an analysis of what you need to keep an eye on in 2019. The last year has certainly been a year of roller coasters and volatility as the peaks achieved in 2018 are now a thing of the past. In this blog, you will find stocks to watch, the Canadian economic forecast and the risks to watch in 2019. Here are the best articles to read to prepare yourself for 2019.

Stock market: the good moves of 2018, stocks to watch in 2019

Who better than our president and portfolio manager, Philippe Pratte, to offer you a list of stock to watch in 2019. He recently participated in an article where he noted stocks who performed well in 2018 and those to watch in 2019. He also gave his opinion on several topics, including the cannabis sector and the cryptocurrency sector. Among the stocks selected by Philippe Pratte, we can find Hexo, Walt Disney and Shopify. An article to read to find out which stocks were selected by our portfolio manager as well as those selected by other experts in the industry.

Canadian Economy

In an interview with CTV, the governor of the Bank of Canada, Stephen Poloz, announced no recession for the Canadian economy in 2019. However, he does believe that trade tensions remain the biggest risk for the Canadian economy in 2019. “Trade and investment are already slowing internationally as a result of the trade war that’s already started and the prospects that there may be more,” he said. “That would be a slowing in all economies and higher prices because tariffs raise prices. So there’s a risk there that we have rising inflation at the same time as slowing economies. There are no macroeconomic tools to fix that combination.”

The Toronto Stock Exchange, after reaching its highest-level last July, continues to decline, with losses of more than 10% since the beginning of 2018. In fact, more than half of the stocks in the index have 20% losses since their last summit.

We cannot ignore the recent woes of the black gold, which, as we know, greatly affect the Canadian economy. According to Statistics Canada, pump prices dropped 5.4% compared to the same period a year ago. Many investors remain cautious about their inability to predict what lies ahead in 2019. Still, the Bank of Canada is planning a good year for the Canadian economy. A perspective to read to better understand where our economy is heading.

The Stock Markets in 2019

Investors around the world are looking forward to the end of 2018, which was undoubtedly disastrous for the financial markets. The shares of the FAANG group (Facebook, Amazon, Apple, Netflix and Google) have all lost a large amount of their market value, while the three major US indexes have suffered greatly in the last months.

MoneySense presents a compilation of articles that offer a market outlook for 2019. The Goldman Sachs is expecting that markets should record “modest gains” in 2019. They believe the S&P will gain around 5% and the bank recommends that people hold more money than in the past and remain in a defensive position. They fear, however, the impact of the 25% tariffs on Chinese products that could, in their opinion, affect the performance of markets.

On Morgan Stanley’s side, they estimate no market growth in 2019. They also believe that companies’ quarterly revenues will be lower than what we have been used too. Like Goldman Sachs, Morgan Stanley recommends the defensive strategy. An interesting article to read to prepare for next year that could be difficult in terms of market performance.

2019 in Graph

Macleans magazine is back for a fifth year in a row with 70 graphics to watch for 2019, giving readers a better sense of what’s ahead in the upcoming year. On the menu, the oil crisis in Alberta, trade tensions and rising interest rates. A must read in order to understand what happened in 2018 while preparing for what awaits us in 2019.

Companies to Watch in 2019

Outstanding list compiled by Bloomberg Intelligence analysts who analyzed more than 1900 companies in various sectors to establish their top 50 companies to watch. They have identified companies that will face unusual challenges in the upcoming year or that are expected to sell new products or services. To compile their charts, analysts considered revenue growth, margins, market share, debt and other factors such as economic conditions. Here is the list of 50 companies to watch in 2019.

 

Pratte Portfolio Management is registered with the Autorité des marchés financiers (AMF) and the Ontario Securities Commission (OSC).

This newsletter is solely the work of the author for the private information of clients. The views (including any recommendations) expressed in this newsletter are those of the author alone, and are not necessarily those of Pratte Portfolio Management.

The information contained in this newsletter is drawn from sources believed to be reliable, but the accuracy and completeness of the information is not guaranteed, nor in providing it do the author or Pratte Portfolio Management assume any liability. This information is given as of the date appearing on this newsletter, and neither the author nor Pratte Portfolio Management assume any obligation to update the information or advise on further developments relating to information provided herein. This newsletter is intended for distribution in those jurisdictions where both the author and Pratte Portfolio Management are registered to do business in securities. Any distribution or dissemination of this newsletter in any other jurisdictions is prohibited. The holdings of the author, Pratte Portfolio Management., its affiliated companies and holdings of their respective directors, officers and employees and companies with which they are associated may, from time to time, include the securities mentioned in this newsletter.

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