One wealth manager says analyst responses to upcoming first quarter earnings reports may provide some clarity for investors amid volatile equity markets, saying he sees opportunities in Canadian energy and gold.
Stock markets experienced abrupt up-and-down movements during Monday morning trading as investors looked to determine the potential impact from U.S. President Donald Trump’s trade war.
Lyle Stein, president at Forvest Global Wealth Management Inc., said in an interview with BNN Bloomberg Monday that there is “no question about the uncertainty out there in the market,” leaving investors unable to place bets on the future given tariff uncertainty.
“Now that’s creeping into all kinds of other things… how do you actually even look at a company in this highly uncertain world?” he said.
The sharp swings in stock markets Monday came alongside false rumors about Trump’s trade war.
Market swings came as a White House account on X said a rumor that Trump was contemplating a 90-day pause on tariffs was “fake news,” according to the Associated Press.
“One might say it’s oversold, but without any sense of where the world is going, it’s hard to make a strong case,” Stein said.
However, he added analyst reactions to first quarter earnings figures may provide some level of clarity. Stein said that while earnings for companies listed on the S&P 500 are down, “they’re not down in our view nearly enough given the economic uncertainty, given the significant slowdown in the U.S. economy and then given the fact that margins are at all-time highs.”
“So, until we start to see analysts dropping their numbers, and that’ll start happening really in the next couple of weeks with the Q1 (first quarter) earnings reports, it’s hard to make a positive sense on how to properly value this market.”
Stein added that his company is looking at upgrading its portfolio by reinvesting cash, saying there are “lots of places to look for income when everything goes on sale.”
Given the current circumstances, he said he likes Canada’s energy sector.
“We like the pipeline area. We like the fact that we’re getting well north of five per cent yields and we like the fact that it is a North American situation more so than a made in Canada situation,” he said.
Stein added he is “intrigued” by Canadian energy stocks.
“They’ve gotten absolutely slammed and the price of oil is hitting US$60. But these companies are really in good shape and the beauty is at $60 oil, ultimately the price is self-correcting,” he said.
Stein also said his weighting currently is about 20 per cent in gold stocks.
“We have had a very positive view on gold as an asset class that we call ‘protection against calamity,‘” he said.
“Calamity from an investor perspective comes in two ways. It comes in the way of inflation, which is the long run death of investing, and it comes in the way of geopolitical uncertainties, that we’ve had for a long time, really since Trump’s talk about tariffs. Uncertainty has reigned and that’s very positive for the gold market.”
