Canadian investors entered 2018 hoping to see a strong bull market continue to run. They came out with their tails between their legs. The S & P / TSX Composite Index, which started the year above 16,300, peaked at its worst year since the 2008 financial crisis, down more than 13 percent to 14,000 at the end of December. So what will be the 2019 store? The Financial Post asked six banks and investment companies for their TSX 2019 targets, and rated them low to high.
The Llorente Bank of Canada – 18,500 points
Both markets in the US and in the Canadian markets should be attractive to investors, said Sebastian Lavoie, chief economist at Lorentian Bank in Canada, after all the barriers that slowed down the S & P / TSX index. By mid-year, the US and China will end their trade, at least in terms of commodity; The USMCA trade agreement will be approved and the energy industry will recover. Reducing production from OPEC as well as the district cuts in Alberta and the expected growth in railway capacity should lead to the industry revival of 2019, he said. However, Lavi warns that "there is no chance" of TSX hitting his target without these catalysts.
Capital Markets – 18,000 points
Investors invested so much in 2088 on what they did not have – that is, a faster recovery in oil prices and the return of health to emerging markets – that they missed the good: improving profits and expanding dividends, BMO Capital Markets' chief investment strategist Belsky wrote. Investors are still negative sentiment towards investments in Canada, but Belsky is being a contrarian because the market's fundamentals remain strong. If the S & P / TSX index hits 18,000 points, as expected, it will be an all-time high. And even then, Belsky admits that the projection may be too low "if / when the trigger everyone is waiting for is indeed attractive."
National Bank of Canada – 16,600 points
National Bank of Canada chief economist Stefane Marion strategist is betting on the revival of global markets in 2019 and this should help improve the S & P / TSX index as well. Improvements in global markets, Merrion said, usually lead to depreciation of the US dollar, which should lead to a rise in commodity prices. However, Marion admits that this is unlikely to happen without a solution to the US-China trade war, which was baked to a target of 16,600 points. "There is no way we can achieve such a goal without having a trade strike to be extended," he said.
Russell Investments – 16,000 points
The performance of the S & P / TSX Index in 2019 is linked to oil exclusions, Russell Investments' investment manager, which Isles Kashtria wrote, and moderation at the discount could ease "the current negative sentiment in Canadian stocks." The price gap between Western Canada and Midwest Texas was reduced to $ 15, but historical losses of up to $ 50 hit the market and weighed heavily on analysts' earnings estimates, Kshatriya said. As oil prices plummeted, Canadian stocks were hit hard and oversold. As sentiment on stocks begins to change, investors can again see some TSX's "trapped value" being locked. There is only one condition, writes Kshatriya: oil prices must cooperate.
CIBC is going on a thin line of defensiveness
Head of investment strategy Ian de Vertville
CIBC – 15,600 points
CIBC's chief investment officer, Ian de Vertville, admits there is a cloud of market uncertainty due to the US-China trade war. "It's someone who guesses what the conclusion will be," he wrote, so that the bank "goes on the prestigious line of defense" For 2019, which includes the upgrade of two sectors traditionally performing better in the defense and communications markets, regardless of a more cautious approach, DeVerte sees the S & P / TSX index gaining more than 1,300 points. After individual companies were "taken to the woods" in 2018, as well as an improved gold market, he wrote.
Sunlife Global Investments – 15,000 points
Sadik Adatia, investment manager at Sunliff Global Investment, has bad news for weary investors who are volatile, causing a one-time fluctuation of 800 points: there's still more to be done. Adatia predicts that the TSX will remain in place and stand at 2019 at 15,000 points, with massive fluctuations in volatility that could leave investors even more picky on the market. The TSX index is expected to be affected by a decision on Brexit, which is expected to come in early 2019, as well as continuing rate hikes by the Fed and the Bank of Canada. A commercial deal with China could make the tide, but Adatia is so pessimistic that one of them will not let it go.