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bnn market call

Peter Brieger.

Peter Brieger is CEO and managing director of GlobeInvest Capital Management. His focus is on North American large caps.

Top picks:

Inter Pipeline Fund (IPL.UN TSX)

Toronto-Dominion Bank (TD TSX)

Tetra Tech Inc. (TTEK TSX)

Past picks: May 23, 2012


Central Fund "A" (CEF.A TSX)
Then: $19.44
Now: $16.27
Total return: –16.03 per cent

Inter Pipeline Fund (IPL.UN TSX)
Then: $19.65
Now: $23.74
Total return: +26.78 per cent

Total return average: +5.38 per cent

Market outlook:

April's pre-May swoon was quickly reversed this month: So far the TSX is up +1.9 per cent, and the S&P 500 is up +3.3 per cent in U.S. dollars and +6.0 per cent in Canadian dollars. However, the TSX is still off 7.4 per cent from its recent high and the S&P 500 is off 2.2 per cent.

Going forward, the outlook for the S&P 500 very much depends on its 2013 and 2014 earnings per share. Using a range of earnings per share for 2014 of $118 to $122 and applying the current PER of 14.9 times 2013 EPS, one could see potential increases of about 7.3 per cent and 10.9 per cent respectively. How this ultimately plays out depends on the outlook for the economy and corporate profits as we go through the second half of 2013 and into 2014. The TSX is still bedevilled by weak commodity prices and, until we see a reversal, those will put pressure on it.