Evan Buhler/The Canadian Press
Hi again, Jon Erlichman here, with our weekly Trade Secrets update. We hope you’re enjoying The Globe’s free online stock-picking competition, Trade Off, so far. More on that below, along with an update on what’s been happening in the markets and tools to help your investing game.
The leaderboard
It’s been exciting to see so many of you embracing Trade Off, especially the perspective you’re sharing with your picks.
Shout out to TeresaMitchell44 for standing out on the leaderboard by leaning heavily into mining, with stocks such as Endeavour Silver and First Majestic Silver.
It’s also great to see some familiar faces participating, such as Rob Carrick, who has helped identify standout dividend-paying stocks in different TSX sectors through his selections.
This week in markets
Stocks have been regaining momentum after some wobbly trading through much of November. The new spark comes amid growing expectations for interest rate cuts in the United States. Not only are traders increasingly betting that the U.S. Federal Reserve will lower rates in December, there is also a growing view the Fed could cut them another three times by the end of 2026.
Now, on the one hand, lower rates signal signs of economic weakness, such as a cooling U.S. jobs market. On the other hand, Michael Kantrowitz, chief investment strategist at Piper Sandler, told clients in a research note he thinks lower rates could support housing numbers and manufacturing data – and ultimately corporate profits, which could help lift equity prices.
Speaking of rate cuts, it’s one of the reasons why gold has been rallying, which in turn is helping the Canadian stock market continue to reach new highs. Gold is typically seen as more attractive when rates are declining.
The S&P/TSX Composite Index rose above 31,000 for the first time last week. Overall gains in Canada this year have been stronger than the S&P 500 thanks to the incredible run-up in gold stocks.
Strategists at Goldman Sachs, meanwhile, are predicting bullion could reach US$4,900 by the end of next year, as central banks continue to buy gold and ETF buying remains robust.
As for December trading overall, it has historically been friendly to investors. According to the research team at investment firm CFRA, the S&P 500 gains an average of 1.5 per cent in the final month of the year, based on performance dating back to 1945.
The trade secret
The simple fact that you’re participating in Trade Off will help you get in the habit of monitoring a portfolio and become a more informed investor. But beyond the contest, The Globe also has great tools, such as a free watchlist for tracking stocks.
Meanwhile, this is a time of year when you often hear pros talk about selling their losers for tax purposes. It’s commonly known as tax-loss selling. But what exactly does it entail? John Heinzl recently wrote about what you should consider, using BCE shares as an example.
And Scott Barlow rounded up a list of stocks that strategists think could be worthy of a tax-loss sale. That includes views from experts at firms such as Scotiabank, National Bank and CIBC.
Thanks again for being part of Trade Off. Wishing you a great week ahead in the contest!
Let’s get smarter together,
Jon
Jon Erlichman is the founder of Ticker Take on YouTube and a contributor to BNN Bloomberg.