Market Call: Stan Wong's outlook on North American Large Caps & ETFs (June 11, 2026)

[00:00:00] Morello Fernandez: Thanks for joining us today on Market Call, I'm Morello Fernandez, Dan Wong on the show with us, Portfolio Manager at Scotia Wealth Management. He'll take your questions on North American large caps and ETFs. Here's how to reach us. 1-855-326-6266. If you prefer to email your questions in, you can do that as well. Market Call, bnnbloomberg.ca. Thanks for coming in. Good to see you. [00:00:33] Dan Wong: Thank you. Good to see you. [00:00:34] Morello Fernandez: I thought June was supposed to be the quieter month when trading happens. Obviously, it hasn't been very quiet. What do you think is going on? Is it mostly conflict? [00:00:44] Dan Wong: Well, I mean, we had such a big recovery from the March lows, a fantastic April and May month, and now we're running into some volatility in June. Certainly, geopolitics is coming into the formula here. There's obviously some profit-taking. We've seen a lot of great moves in the technology space. So I think a healthy and normal consolidation is in play at this point, potentially. You know, the risks are still there. I mean, we still have, you know, relatively high energy prices. We have sticky inflation. We have obviously the geopolitical situation, elevated yields, and of course, midterm elections are coming. When you look back at history and midterm elections, the S&P 500 sees a drawdown of about 17.5% since 1957. So we did see a bit of a drawdown back in March of about 9%, but multiple drawdowns and heavier drawdowns can be possible this year. [00:01:35] Morello Fernandez: So not uncommon. Okay. Earnings expectations are still quite high. And I'm wondering if people are not properly factoring in the higher energy prices, which are going to stick around for at least some time. Why are earnings expectations so high, especially in a midterm? [00:01:52] Dan Wong: You know, it's amazing. Earnings growth estimates have moved from high double digits or high teens to now 25% or so for the year. And that's really what's driven much of this market move in the past couple of months up until June, of course. It's really hard to say where energy prices will be. If you kind of look at the futures curves and so forth, there is an expectation of about 70 to 75 or at least in the 70s for later on this year. So that's kind of what the market's working with at this point. But of course, geopolitical things are very, very hard to predict. And who knows where we'll be in a few months. [00:02:28] Morello Fernandez: How are consumers holding up? [00:02:31] Dan Wong: Well, I think there is a bit of a K-shaped economy, of course. You know, when you look at inflation and the cumulative inflation over the years, it's had an impact on consumers. So we do see consumer discretionary markets or the sector being relatively weak relative to other markets like technology, which is more enterprise spending and so forth. So I think the consumer, you've got to be careful if you're investing in the consumer discretionary space. Okay. [00:03:01] Morello Fernandez: Let's take a quick break, then. We'll get to the first phone calls and emails for Stan Wong of Scotia Wealth Management, taking your questions on North American large caps and ETFs. Here's how to reach us. Back in a moment. Welcome back. Thanks for joining us. We are going to start with an email from our, we don't know, Tom, there we go. Boston Scientific. Is it time to buy it? Looks like it's low enough. We talked a little bit about the run into AI. Everything is running AI, including energy. Some of the other stocks have really been beaten up and laying low. Would you go into Boston Scientific at this time? [00:03:53] Dan Wong: You make a great point. I mean, money is flowing into more growth industries and sectors at this point. And a lot of the defensive areas, such as health care, consumer staples, have been slowing down somewhat. With this particular stock, with Boston Scientific, the share price has fallen below the 200-day moving average. And the 200-day moving average itself is falling. So from a technical structure, it looks a bit weak at this point. Certainly a very high-quality med tech company. But they have a medical device called the Watchmen, which is to reduce strokes, has done well, but just not well enough for the market. So that guidance has been cut from management, and that's hurt the stock price somewhat. So for me, I think that the business is strong, the chart looks a little bit weak, and I think there is some broken momentum here. [00:04:44] Morello Fernandez: Okay, so you would wait even longer and give it a watch before stepping in if you were to step in? [00:04:48] Dan Wong: I would certainly want to see some basing pattern in the stock price, and we're not seeing that just yet. [00:04:53] Morello Fernandez: Let's get to the first phone call then. Ray's on the line in Pickering, Ontario. Ray, go ahead. [00:04:59] Speaker 3: Yeah, hi. Happy Thursday to you both. Stan, I'm looking to purchase a S&P 500 ETF. The S&P is down a bit this month, and I want to get in before the SpaceX IPO as well on Friday. But I'm looking at VFV for a long-term hold, and I'm just not sure if I should buy the VFV or the Canadian-edged VSP. When I look at the performance charts, I see that VFV outperforms VSP over the long-term, you know, by 2-4%. So I guess, did I just answer my own question that I should be looking at VFV for a long-term hold? [00:05:51] Morello Fernandez: Okay, thank you for the question. Can you just compare those two quickly? [00:05:54] Dan Wong: Sure. One would be Canadian dollar hedge, and one would not be. Obviously, the Canadian dollar has had some weakness over the long-term. It's been weak so far this year. So it really depends on the outlook for the U.S. dollar versus Canadian dollar. I personally prefer holding things more on a neutral basis, meaning, sorry, not neutral basis. I'd rather hold the U.S. dollar version whereby there is no hedging. I think that long-term, the U.S. dollar can remain pretty firm against the Canadian dollar. With regards to the actual ETF, this is basically the S&P 500. And as I've mentioned before, I'm cautious around just owning the passive index like that, just like this, just because valuations are a bit high, because about 45% to 50% of this ETF is in tech or tech-related industry stocks and so forth. So as a portion of the portfolio, if you want something passive and you want to just have that exposure, I think it could make sense. But for me, I think holding something like this whereby valuations are a bit expanded and it's heavy, heavy into technology and technology-related stocks, I'd be very careful there. I'd probably want to buy something that's more equal weight or buy the exposure to tech and growth is a bit more muted. [00:07:14] Morello Fernandez: There's some advice for Ray as we move on to David, who is in Ottawa. David, go ahead. [00:07:19] Speaker 4: Yes, good afternoon. Thank you for taking my call. My question is on CCO Cameco. About a week ago, Cameco was trading at about the mid-150s and now it's gone down to the mid-130s. Is there a reason for this? And is there a reason for this weakness? Another question is, do you own the stock and are you positive on the stock and on uranium? Thank you very much. Have a great day. [00:07:42] Morello Fernandez: Thank you for the question. I'm just trying to see if there's anything specific to Cameco that came up. Nothing that I can recall off the top of my head. For you, anything specific weighing on the stock? [00:07:53] Dan Wong: No, I mean, I think this is, you know, going back to the fact that there's been a little bit of profit taken over the last month or so or the last little while. The stock's still up 50% over the last 12 months. When I look at the technical structure of this name, and by the way, I do own this name in the portfolio. I do believe that this long-term, renewable, clean energy makes a lot of sense, especially when you add in the fact that we need more energy in the world and electrification, especially for AI data centers. The stock's fallen down to around the 200-day moving average. So, for me, it's still pretty attractive from a technical perspective. We've seen a period of ascending highs and ascending lows. So, for me, it still makes sense. [00:08:37] Morello Fernandez: That was for David. Let's go to Elliot in Hamilton, Ontario, with a question. Elliot, go ahead. [00:08:42] Speaker 5: Good afternoon. AstraZeneca has a very good cancer franchise, and it recently reported, and the stock went up nicely. But like many health care stocks, it's come right back down again. How would you assess AZN and the technicals, please? Thank you. [00:08:56] Morello Fernandez: Thank you for the question. We don't have the chart for AstraZeneca, but we all know the name. Would you invest in the space? [00:09:04] Dan Wong: I like this name. It's not in our portfolio at this point. The stocks come right down to the 200-day moving average, which historically has provided a bit of a support level for this name, AZN. Again, I think that if you look at the rotation out of defensive areas into growth, that's been pretty intense more recently. But this name is trading at around 18 times forward earnings with about a 14-15% growth rate. So certainly the valuation does look attractive. It's a name that I would say that it's, you know, you don't want to have everything in technology and growth names. You want to have some that are a bit more defensive. And I like health care because most of the names in the health care space gives you that defensive aspect, but at the same time gives you some healthy growth as well. [00:09:50] Morello Fernandez: OK, that was AstraZeneca for Elliott. We're going to take a quick break. We'll be back with Stan Wong to answer your questions in just a moment. Stay tuned. Welcome back to Market Call. We're going to do an email from Doug. Doug says, I'd like your guest's opinion on Fairfax Financial. It was up around $2,700 a while ago, now to about $22. It's a P-E ratio under 8, which seems low. What is up with Fairfax Financial? Any concerns about Fairfax? Have you bought into Fairfax at any point? [00:10:30] Dan Wong: Not in our portfolio. I mean, I look at the technicals. Really, the trend's been a bit more sideways. The fact that 200-day moving averages started to roll over to the negative, which is not a great technical structure. This is obviously a very large property and casualty insurer. But, of course, they have a large investment portfolio as part of it. I think the market kind of thinks that the best part of the earnings cycle might be behind it because of the way insurance and investment results sort of come in. I think they've had a couple of very strong periods of years of very strong insurance numbers and very strong investment numbers. Fairfax is very well known for acquisition as an acquisition store. We don't know when the next acquisition will be and how it will help. That might be the next catalyst. But for now, and I would say for valuation purposes on a price-to-book and a price-to-earnings level, it's actually quite close to the median over the last 10 years. So, I don't think it's actually necessarily cheap, nor is it expensive at this point. So, I think we need to see some catalysts in the stock before it becomes attractive. [00:11:32] Morello Fernandez: Let's get to the phone lines then. We have GB on the line in Ottawa with a question. GB, go ahead. [00:11:38] Speaker 6: Yeah, I was wondering if Stan can give me his opinions on this hotshot stock, Micron, whether at the moment it's buy, sell, or hold. [00:11:48] Morello Fernandez: Okay. Thank you. Thank you for the question. I'm going to guess you're saying hold for Micron. What would you do here? [00:11:54] Dan Wong: Yeah, and I think that, you know, with a stock that's kind of gone up 675% in the last 12 months. [00:12:03] Morello Fernandez: 709% in one year is the number. That's incredible. [00:12:07] Dan Wong: So, I think we want to express some caution here. If there's a substantial pullback or a correction of some sort, I think that's where it can make some sense. [00:12:16] Morello Fernandez: Would you take some money off right now if you'd made that profit? I would. [00:12:19] Dan Wong: I mean, it really kind of depends on the profit that's in the portfolio for an investor at this point. Yeah, sorry. It's 700%. I had a different stock quote up. The beta on this stock is very high. It's two times the S&P 500. So, there's a correction in the S&P 500. You can expect this stock to move a little bit quicker on the downside as well. Interesting thing is that this stock has always been kind of cheap from a valuation perspective. Right now, it's trading at 9.4 times forward earnings. But the growth rate is just phenomenal at this point. Very strong earnings growth estimates going forward over the next few years. But I just think that when a stock has made this type of move, you want to take a pause and maybe look for some sort of a pullback. We see, you know, 637% growth rate earnings for fiscal 2026. And next year, it's 82%, which is still very strong. But for me, I'd be cautious on entering it now. If there's a substantial pullback, then maybe there's an opportunity there. [00:13:21] Morello Fernandez: Okay. That was for GB. Let's go to the next caller. Jack's on the line in Toronto. Jack, go ahead. [00:13:27] Speaker 7: Hi, Mirella. Hi, Stan. Thanks for taking my call. My question is regarding Honeywell. I have a position in it, and I know they're spinning off their aerospace division at the end of the month. I was wondering if Stan follows it and whether or not I should increase my position. It has been trending downwards the last month, month and a half. Thanks very much. [00:13:51] Morello Fernandez: Okay. Thank you for the question. They are going to split the company. What's typical when you split up a company, or is there a typical when they're sort of portioning off? [00:13:59] Dan Wong: That's a good question. I'm not sure if I know the answer to that in terms of how well a stock can do. I mean, typically, when you're splitting up a company, you're trying to extract value. Some of the parts should be greater than the whole, and we'll see if that actually happens. It's not a name that we hold on our portfolio. I think in the industrial space, there's names that are a bit more attractive from a growth perspective, whether that be Caterpillar or Vertif Holdings or GE Renova or something like that. When you look at the Honeywell stock chart, the 200-day moving average has been relatively flat over the last year or so, and the stock price has been very flat as well. I would attribute this to a pretty meager growth rate compared to other names. Earnings growth rate looks to be around 7% to 8% over the next few years for Honeywell, which is okay. But there are many names out there that are somewhat tied to AI infrastructure, tied to reshoring and nearshoring and supply chain realignment that I would say are more interesting from a growth perspective. [00:15:00] Morello Fernandez: So it sounds like they're taking aerospace in one direction and then, I guess, energy and automation together in the others. Would you expect, which one would you expect to do better if you were just sort of looking at them as separate businesses? [00:15:14] Dan Wong: I would say the energy side should do better on a go-forward basis. Aerospace, as you know, can be a bit more cyclical, so it's very hard to know what the next few years will look like. I think we're mid-cycle in the economy, so aerospace should continue to do okay. But as we get nearer to the end of the game and we get closer to a downturn in the economy, that's where I'd be careful on the aerospace area. [00:15:42] Morello Fernandez: Let's get to the next caller. Alfred on the line in California in Mountain View. Alfred, go ahead. [00:15:48] Speaker 8: Yeah, good morning. Thank you for taking my call. Stan, your take on Berkshire Hathaway, I am a long-term investor. The stock has been trading sideways for quite a while. Thank you. [00:16:02] Morello Fernandez: Thank you for the question. Warren Buffett said he's retiring and people went, oh, and really the stock has not come back full force since that time, but a lot has also happened in that time. Are you still positive on Berkshire Hathaway? [00:16:16] Dan Wong: You know, Berkshire Hathaway has always been about Warren Buffett and how he chooses his portfolio and what he buys and sells. That's obviously changed. We have new management in place and new management has come in and made some substantial changes, notably adding to Alphabet. Now, I think it's third or fourth largest position in the portfolio. Yes, the stock price has been pretty flat over the last year. In fact, it's negative at this point slightly. And the 200-day moving average has been very sideways to slightly trending down and rolling over at this point. So, I look at Berkshire as we look at the management that's changed. So, there's a bit of uncertainty around that. We'll see if this sort of new style of management, I assume it's new, is going to help the share price and help the net asset value of the shares. But for now, we're not in this name. I prefer to choose the individual companies myself, of course. [00:17:12] Morello Fernandez: Instead of the big basket. [00:17:13] Dan Wong: Yeah. And, you know, certainly when Warren Buffett was running it, you couldn't deny the performance long term. But now it's a wait-and-see approach. [00:17:22] Morello Fernandez: Let's take a quick break. We're going to look at Stan's past picks from last June when we return. Stay tuned. Let's get through some past picks from Stan Wong from June 12th of 2025. So, a year ago, we're going to start with the iShare Silver Bullion ETF SVR on the TSX. It's at $17.39 a year ago to $29.36 today. So, 69% upside for return and total return. Why did you decide to do silver through an ETF? Do you remember? [00:18:01] Dan Wong: Well, we wanted to own actual silver, the hard asset, which is what this is. It holds actual silver bullion. And I like silver more than gold. And gold obviously has had quite the run, although gold's come down in the last little while. In fact, I think it's in a new bear market, down 20%. We still hold silver, but I took about half off the table a couple of months ago, or a few months ago. So, we still have it, and we're watching it now. It's right now right at the 200-day moving average. I think silver makes more sense for me compared to gold, if you're comparing the two, because of the industrial benefits of silver. You've got solar, electrification aspects, power grids, AI infrastructure demand that can help silver. If real rates continue, or if real rates fall, which they haven't been, and geopolitical risk remains elevated, silver can benefit. So, you've got one thing that's not happening, the other thing that's happening positively. So, that's what's happening there. I think that silver, I think of it more than just a precious metal. It's really an electrification and industrial metal, or infrastructure metal as well. But we'll see where the technicals go from here, whether or not we continue to hold this position and take the rest of the profits off. [00:19:13] Morello Fernandez: What does supply look like for silver? We talk about shortages of some of the other metals for the build-out. Where does silver fall in that? [00:19:19] Dan Wong: This is now the sixth consecutive annual market deficit of supply. So, that's another case to own silver. But as you can see, the chart's starting to soften a bit on silver. [00:19:31] Morello Fernandez: Okay. Let's get to your next fast pick. McKesson, MCK, in New York. And at the time, it was $730.80, which was last June. U.S., now to $794.53. So, 9% upside total return is the same. McKesson is the delivery of the pharma? [00:19:48] Dan Wong: Yeah, so they're one of three major distributors of pharmaceutical products. And they're in the logistics space as well. Alongside of Cardinal and Sincor, there are three companies that control 90% of the North American market in this space. I like these particular names. So, we own McKesson. We own Cardinal as well. Because they are very recurring revenue. They have very recurring revenues. Resilient demand because it's just the delivery of pharmaceutical drugs from, you know, Pfizer to Walgreens and whatnot or Walmart and so forth. So, that's never going to stop. It's very, very reliable type of earnings. But, as we talked about earlier, healthcare has kind of come off a little bit because money is rotating out of healthcare and other defensive areas into more growthier areas. But, it's very important to have part of your portfolio in defensive areas and be diversified. [00:20:47] Morello Fernandez: And so, you said you own Cardinal and McKesson and McKesson. [00:20:51] Dan Wong: And McKesson. [00:20:51] Morello Fernandez: You like them both. Okay. Let's get to your third pass pick from June of last year, which is NVIDIA on the NASDAQ NBDA at $145,000 U.S. Now to $20,271, 40% upside. Total return is the same. NVIDIA, volatile. It got up to something like, I want to say $236,000, $237,000, dropped back down. But, every day is very different for the company. Have you held your position? [00:21:15] Dan Wong: We still hold it. We continue to buy it for new clients. Obviously, it's one of the AI infrastructure leaders. They've got a dominant platform for AI, GPUs, networking. It's not just about their hardware. It's about their software. Their platform makes it very sticky for enterprise users. And I think if you look at the CapEx tailwind for AI, we're looking at, I think it's $700 billion being spent by the hyperscalers this year. NVIDIA and other semiconductor companies are beneficiaries of that. So, to me, NVIDIA remains the toll road of the AI build-out. [00:21:56] Morello Fernandez: So, when you buy for new clients, you wait for a bit of a pullback since it is so volatile? [00:22:00] Dan Wong: Certainly. Like, we want to see some value from a technical perspective. When the stock takes off, we want to be careful and not buy things when they're overbought. We use Relative Strength Index to really assess that. So, if there's a pullback coming in the next month or so, then we would add for new clients. [00:22:18] Morello Fernandez: Okay. Let's take a quick break, then. We're going to be back with your phone calls and your emails for Stan Wong of Scotia Wealth Management on North American large caps and ETFs. We'll be back in a moment. [00:22:27] Speaker ?: We'll be back in a moment. [00:22:57] Morello Fernandez: Welcome back. Elaine has written in. She says, could I have your thoughts or Stan's thoughts on Netflix going forward? Netflix is one of those ones I feel like there's a little bit of a lack of clarity in the sense that other streamers are doing better now, kind of closing the gap that used to exist with Netflix. Do you own any of these sort of entertainment streaming companies? Do you like any of them? [00:23:30] Dan Wong: Well, we own Netflix. You do? Okay. We've done well over the years with Netflix, but more recently it's been a bit disappointing. After that fight over Warner Brothers ended, the stock price, as you can see, kind of popped a little bit, but now it's fallen again. The stock price is now below the 200-day moving average, and the 200-day moving average has started to roll over. So that's been very disappointing from a technical perspective. With that being said, I still think they're the leader, and they're going back to its roots of creating content and getting into live sports and so forth, which is important. They're trading at 24.5 times forward earnings with about a 23% growth rate. So from an evaluation perspective, I think it makes a lot of sense still, but the technical structure is looking a bit soft, so we're evaluating that at this point, and we'll see what we do with the shares. [00:24:20] Morello Fernandez: How long have you held it? [00:24:22] Dan Wong: Years. Years. We've done well with it. Years. Four or five years, at least. [00:24:28] Morello Fernandez: What did you think of the bid for Warner Brothers? [00:24:31] Dan Wong: I thought it was expensive. I thought that Netflix, their strength is just building original content and getting to sports, which is a new thing for them, and I think that's what they're going back to, obviously, rather than having this massive spend. Paramount's going to do well with that, so now I think there's a bit more heavier competition on the other side of the table. Maybe that's what's hurting the stock at this point, but look, Netflix is still growing, and international and local content is still growing for Netflix. Netflix, its ad price tiers is helping them as well, you know, can't share passwords anymore, that's helping them, so there's a lot of uncertainty from investors over where Netflix goes next. I think that earnings and numbers and subscribers is what's going to push the stock back up. [00:25:19] Morello Fernandez: Let's go to the phone line. Sidney's on the line in London, Ontario. Sidney, go ahead. [00:25:23] Speaker 9: Hi, thanks for taking my call. I currently don't own anything in the telecom sector, but looking at TELUS, the price, it's shown a lot of weakness, and I'm wondering what your thoughts are on TELUS as a long-term hold, and what are your thoughts on Victor Dodig's ability to kind of turn the financial performance of the company around? Thank you. [00:25:46] Morello Fernandez: Okay, thank you for the question. Yes, change at the top for TELUS, concerns investors have about the dividend perhaps being cut, if it's sort of their monthly income or quarterly income. What do you think about TELUS? [00:26:02] Dan Wong: You know, firstly, when you look at the telecom space, it's been tough. An interest rate environment, which is not falling, is tough for names like TELUS and so forth. Not a lot of media content, which is, you know, not a diversifier for TELUS like it would be for something like Rogers and Bell. Stock price, obviously, is falling. It's below the 200-day moving average. The 200-day moving average is lower as well. They're trending lower. You're seeing a 10.2% dividend yield, which is probably not sustainable. When I look at my Bloomberg terminal, we see a projected decline in dividends going forward over the next three years. So, from a technical perspective, not an aim that I probably want to enter at this point, probably some sort of a dividend cut in the next little while. Stock's down 18% in the last 12 months. [00:26:52] Morello Fernandez: With Dodiga going to take the helm here, and if there is a dividend cut, would you look at it again perhaps after that? [00:26:59] Dan Wong: Possibly, but when you look at the telecom space, it's not really a growth area. TELUS is indicating 1.5% growth on my terminal here over the next few years. So, for me, as more of a growth or growth at a reasonable price manager, probably not a name that shows up on my screens. Okay. [00:27:21] Morello Fernandez: Let's move to the next caller. Rob is in Calgary. Rob, go ahead. [00:27:26] Speaker 10: Hi. Thanks for taking my call. I've held Pfizer for a number of years, and although I like the dividend, I didn't trim during the COVID spike, and I've ridden it down to its current levels. I'm thinking of switching out to Eli Lilly, and I'd like Stan's opinion, if he thinks that's a good move, or does he prefer another player in the pharma space? Thanks again, and have a good afternoon. [00:27:48] Morello Fernandez: Okay. Eli Lilly's had a real run-up. Would you chase it right now? [00:27:51] Dan Wong: We own the shares, and we've done very well with it over time. I think that they're a clear leader in the diabetes and weight loss management space. They're beating out Novo Nordis more recently. Certainly, there are other players coming into the fray, but I think that Eli Lilly is ahead of the curve. We're seeing very strong earnings growth over the next few years, 50% for this year, 22% fiscal 27, and 17% for 28. It's one of these names whereby you're not only getting the reliable aspects of a healthcare pharmaceutical name, but you're also getting very strong earnings growth. So, we like it. We continue to own it. Probably a little bit overbought at this point. With a 70 RSI, I'd wait for a little bit of a pullback before buying new shares. [00:28:42] Morello Fernandez: Okay. Let's go to the next. Oh, no. We've got to take a quick break. We're going to be back with more of your emails and your phone calls for Stan Wong of Scotiable Wealth Management. Back a moment. Welcome back. Sylvie has written in. May I please have Stan's thoughts on Vertiv, whether it's a good entry and why? Also, does he hold the stop? Vertiv Holdings, is that something you own or have owned in the past? [00:29:11] Dan Wong: Yeah. This is the name that we hold in our portfolio, and it's a name that I've actually highlighted as a top pick in past segments. Stock is up 162% in the last 12 months. Technical structure looks very, very strong with higher highs and higher lows. It has. There has been a little bit of profit taking in the last three, four weeks or so, so it might present an opportunity. It's a 100-day moving average at this point, so it might present a bit of an opportunity, maybe layer into it. But this is basically the company that mainly is in this AI infrastructure data center space. You know, when you talk about data centers, they consume a lot more energy than anything else. They run 24-7, so Vertiv, one of their main services and product is, you know, thermal cooling and heat rejection and power transfer switches. So, when you look at the future of the build-up of AI data centers, Vertiv is very much in it. [00:30:10] Morello Fernandez: So, because it's had the run-up, and I know you said there's been some profit taking, so it's a little bit off. Would you step in where it is today? [00:30:17] Dan Wong: I mean, it's sold off. I think the RSI or the, you know, it's getting close to oversold at this point. So, I think it's one of the strongest names out there, but it's a high beta stock. You're looking at about 1.8 to 1.9 times the beta of the S&P 500. We're looking at 33% to 35% earnings growth going forward, and it's not that expensive relative to the earnings growth. We're looking at about, I think, 40 times PE on a forward basis. So, I would layer into it. We already own it, and for new clients or new money that's coming in, we are starting to buy. Shares of this for those new people. Okay. [00:30:55] Morello Fernandez: Let's go to Jacob on the line in Toronto with a question. Jacob, go ahead. [00:30:59] Speaker 11: Hello, good afternoon. I would like to ask about Shopify, please. If he's got it in his portfolio, and second, if it's worth to buy it now after all the dip. It went down so much. I appreciate it very much. Thank you, and have a nice afternoon. [00:31:16] Morello Fernandez: Thanks for the question. Shopify always volatile. One got hit by software concerns as well. It's down to just under $150. Have you owned it before? [00:31:26] Dan Wong: I've never owned Shopify. You know, certainly it's a well-talked-about name. I see from a technical structure, the 200-day has just started to roll over, which is not a positive thing. And the price of the shares are now below that 200-day moving average. It's always been a bit of a pricier name from a price-to-earnings and price-to-sales perspective. The shares are actually down 4.3% in the last 12 months compared to a lot of other tech and just the general market. That's been rough for this particular name. The fact that it more caters to the mid-market and the mid-sellers or mid-businesses or small businesses. Smaller businesses, yes. I think that makes it a little bit more risky in terms of how the economy is moving going forward. So, not a name that we've been looking at. It doesn't really show up on our radar or screen extremely well. Certainly, growth can be strong, but I think that you look at price-to-sales, it's trading at nine times toward price-to-sales, which is quite pricey. [00:32:30] Morello Fernandez: Okay. So, Shopify is not one you would put money in. I think a lot of people are wondering whether they should cut losses for the company and take the money out, having ridden that sort of downward slide. [00:32:40] Dan Wong: Yeah, I would watch for recent lows and see if it breaks below that because that might be a bit of a support level. But I would say also from a relative perspective, there are so many strong technology names out there with much better valuations, especially on a PE to growth level that you can look at that may not be Shopify. [00:32:59] Morello Fernandez: Let's go to an email then from Rob. I would like the guest's thoughts on TRI. I've owned it for a long time and took some profits last summer. Still above water, should I hold, should I get out, pulling up the line chart? I think we do have for Thomson Reuters also has that software concern element to it and it's at 1.12.49 today. [00:33:24] Dan Wong: So, you know, Thomson Reuters, we think of as a financial data type of company, but it's also a legal tax compliance and professional workflow software company. And really, when we think about AI disruption, this is one of the companies that it's impacted or at least perceived to have impacted going forward. And as a result, the share price has fallen below the 200-day moving average and the long-term trends has weakened. The 200-day moving average has certainly fallen as well. So, that AI pressure could continue to pressure its competitive advantages. And that's why, you know, the share prices now fall into where it is and the technical structure looks tough. But I think AI disruption is really clouding the outlook. So, for me, we don't own it. Probably wouldn't be adding to it until we see some sort of stability in the name. [00:34:15] Morello Fernandez: Are you looking at software stocks at all, some of them so beaten down, but their business will interest you? [00:34:22] Dan Wong: Yeah, I mean, the thing is, we've got to find the names in which look attractive. But software stocks generally were very expensive and still, in many cases, remain expensive today. So, from a growth perspective and a growth at a reasonable price, using a peg ratio analysis and so forth, a lot of them are still expensive. So, we don't really, you know, I'd rather be in the names that are the benefactors of this hyperscale spend, such as semiconductor, such as, you know, AI data center construction and so forth. And I think software is getting disrupted by the potential for artificial intelligence changes. [00:35:02] Morello Fernandez: Let's get to the next email from Peter. He says, what is your view on Oracle for the next several years? You know, shares have been down as people look at the amount in costs for AI and their build-out. And a lot of that is on debt. So, a company expects to spend about $70 billion on net capital expenditures in the current fiscal year and wants to raise another $40 billion in equity and debt. So, a lot going on for Oracle. Have you looked at Oracle? [00:35:29] Dan Wong: Yeah, so not on our radar. Shares are now below the 200-day moving average. The 200-day moving average is also rolling over. So, we talk about software names being a bit tough at this point and challenged at this point. So, a lot of uncertainty going forward. And they are one of the hyperscalers that is spending the amount of capex we're talking about. They're not a benefactor because they're the spender. So, it's not a name that shows up on my radar. Certainly, the earnings growth numbers still look solid. But there's a lot of cloud hanging around what AI can affect or how it can impact these types of names. Okay. [00:36:04] Morello Fernandez: Let's go to another email. This one from Gene. Hi, Stan. Can I get your outlook on Microsoft, please? Microsoft also has the same software concern, although they have other parts to the business now. Would you put some money in Microsoft? [00:36:17] Dan Wong: Yeah. So, this is actually a name that we exited probably around six months to nine months ago on those very concerns. From a valuation perspective, it has now come down. Actually, valuation was quite high. Now, valuation has come down to about, you know, one times peg or so, which is not bad. Trading at 21 times forward earnings with about an 18% growth rate. But, you know, compared to a lot of other technology names, this also, very similar chart to Oracle, whereby the 200-day moving average has started to roll over earlier this year. And now, the price is now trending below that 200-day moving average. So, for our quant platform, this would not be something that we would add to at this point. So, it took profits a while ago. Maybe it's a name that we get into. Obviously, it's a high-quality name, but there's a lot of concerns about the impact of software stocks. [00:37:08] Morello Fernandez: All right. Let's take a quick break. We're going to get some new picks from Stan Wong when we come back. Stay tuned. Join us tomorrow for Market Call. Richard Orrell will be on the show, portfolio manager at RN Croft Financial Group. He'll take your questions on exchange-traded funds. That's tomorrow. And if you missed Market Call, you can check out our daily podcast. Find it on iHeartRadio and other platforms. You can also watch full episodes on our YouTube channel. Let's get to some new top picks from Stan Wong, starting with Alphabet, so G-O-O-G-L, on the NASDAQ. We talked a little bit about Microsoft, and you owned it, and then you sold it. What do you like about Alphabet, and how long have you held it? [00:37:57] Dan Wong: We've held it for a number of years. And I think when you go back a year or two, we thought about or worried about whether or not Alphabet was getting into the artificial intelligence space. And today, it's a reality. AI monetization is happening. We're seeing that in stronger cloud growth, deeper engagement, and broader monetization across this platform, including Gemini and so forth. When you look at the acceleration in the cloud business for Alphabet, Google cloud revenue year-over-year rose 63% in the last quarter, which is tremendous. And search and advertising, of course, remains its strong core strength and so forth. A lot of cash flow involved in there. And you look at the ecosystem depth. We think of Apple as having a great ecosystem, but so does Alphabet. You look at Gemini, AI Chips, YouTube, Android. They've got 350 million paid subscribers today. So this is a strong name with very good growth aspects, but still a relatively decent valuation. So I really do like this name. I think it's, you know, obviously a leader. You're getting AI upside, cloud momentum, platform dominance, and valuation that looks decent. [00:39:13] Morello Fernandez: Do you think that the fact that they put AI into the search function has helped them? Everybody thought search was going to go circling down the drain because AI would take over. But they've really taken AI and put it into the search function, which now you get the benefit of both. [00:39:27] Dan Wong: Yeah, that AI mode has been a game changer for them. When you search something on Google, you've got the AI mode much quicker. You don't have to click on a link to sort of research your own stuff. So I think that's made a tremendous difference. And that adoption of Gemini has been very strong as well. Their subscription levels are moving higher because they're tying it in with their Google cloud service for their consumers. I am a person that has Google Photos and Google Drive and so forth. And I've got Gemini as part of that package. [00:39:59] Morello Fernandez: Okay, let's get to your next pick then, which is GE Vernova, a GEV in New York. This is a power company, essentially. What do you like about GE? [00:40:09] Dan Wong: You know, I've always said that artificial intelligence is not just about coding or chips and so forth. It really is about electricity and GE Vernova is in that space with its gas turbines and grid equipment and electrification systems needed to meet this sort of rising power demand. We've got about $163 billion in backlog in terms of revenue for GE Vernova. So if you call them today and you need a gas turbine, they're delivering that in about four years. So you've got that great revenue visibility. If you look at the stats around U.S. data centers, by 2030, half of the electricity demand growth in the U.S. will come from data centers. And GE Vernova is heavily, obviously, involved in that space. Order momentum is climbing very quickly. They booked $2.4 billion U.S. dollars of data center-related orders in just one quarter. That's in the last quarter. That's more than all of 2025. So you certainly see that momentum. I kind of think of it as, if you think of NVIDIA as the brain of AI, GE Vernova helps supply the power and the energy. [00:41:22] Morello Fernandez: Who would be their competition? [00:41:24] Dan Wong: There's not many out there. And that's another reason why I like this name. Because one of the things that we really want to find in the names that we hold is companies with very, very little competition or not very meaningful competition. [00:41:36] Morello Fernandez: Okay. GE's one of them. Let's get to your last pick today, which is the iShares Core MSCI Emerging Markets ETF. So it's IEMG out of New York. What are you liking about emerging markets these days? Haven't really gone there in discussions recently. [00:41:52] Dan Wong: And that's a great point. Because I think that Canadian investors are too light in international markets. It's too much in Canada. When we take on new clients, it's usually a lot of Canadian companies. And they've got some U.S. And now we're seeing a little bit more U.S., but not a lot of international markets. So I like international markets, including emerging markets. This particular ETF gives you broad emerging markets exposure across all market caps, small, mid, and large, for a very low MER of nine basis points. It's pretty diversified. You've got over 2,800 holdings, but you want to be diversified because emerging markets will be pretty volatile and give you a lot more beta. When you look at GDP growth, we expect emerging markets to grow about 3.9% in 2026, developed markets 1.8%. So, you know, that story about emerging markets being a faster grower makes a lot of sense, but of course, is a bit more choppier. So in this particular ETF, you have exposure to regions such as Taiwan, South Korea, China, India, and Brazil. These are the fastest growing economies in the world. And you've got names like Taiwan Semiconductor, which we own in our portfolio, Samsung, SK Hynix, Tencent, and Alibaba. So you're getting exposure to technology companies and also financials and consumer discretionary growth companies that are outside of North American borders. And if you look at the emerging markets index, it's actually been outperforming the S&P 500 since early 2025. So we see that rotation. And from a valuation perspective, whether it be PE or whatnot, it's trading about 35 to 40% lower than that of the S&P 500. And that's the widest valuation gap in decades, I think. You look at the structural tailwinds of emerging markets or developing countries, demographics is positive, urbanization is happening, and then you've got rising wealth and rising domestic consumption. So I think this just gives you a diversified way to play another faster growing market or economy in the world. [00:44:04] Morello Fernandez: OK, we do have to leave it there. We're out of time. Good to see you. Thanks for coming in. [00:44:08] Dan Wong: Thank you. [00:44:08] Morello Fernandez: And thank you very much for joining us today on Market Call. We'll see you back here again tomorrow. We'll see you back here again tomorrow. [00:44:12] Speaker ?: We'll see you back here again tomorrow. We'll see you back here again tomorrow. We'll see you back here tomorrow. We'll see you back here tomorrow. We'll see you back here tomorrow. We'll see you back here tomorrow. We'll see you back here tomorrow. We'll see you back here tomorrow. We'll see you back here tomorrow. We'll see you back here tomorrow. We'll see you back here tomorrow. We'll see you back here tomorrow. We'll see you back here tomorrow. We'll see you back here tomorrow. We'll see you back here tomorrow. We'll see you back here tomorrow. We'll see you back here tomorrow. We'll see you back here tomorrow. We'll see you back here tomorrow. We'll see you back here tomorrow. We'll see you back here tomorrow.