AM 1150 Kelowna - Radio Rallies & Reversals

So much for the scourge of September, historically the worst month for equities. Strength is pretty much across the board helping most indexes turn in a strong third quarter. Technology has been the star this month, jumping up 13%. While consumers are continuing to delever and rebuild their savings (they have no equity to borrow against), and governments are looking to do the same, corporations are taking advantage of the low interest rate environment to lever up.

Now the news today was the contraction in Canadian GDP for the month of July. While the number matched expectations of minus 0.1%, it lends support that growth is slowing. Monetary policy will remain very stimulative for the forseeable future and perhaps so too will fiscal policy. Look for the Bank of Canada to pause at the next meeting.

So where are there potential opportunities? With ten year Canada's and Treasuries yielding 2.75% and 2.53%, respectively, dividend paying stocks are about as attractive as they have ever been, and there is value to be found. Also, emerging market bonds may not be as risky as you think.

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