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Stan Wong is vice-president and portfolio manager at Macquarie Private Wealth. His focus is North American large caps and ETFs.

Top picks:

Walt Disney Co.
Disney is one of the world's most dominant media and entertainment conglomerates and has diversified operations in theme parks, filmed entertainment, television broadcasting (ABC & ESPN) and consumer products. The acquisitions of Marvel Entertainment and, more recently, Lucasfilm will boost Disney's revenue and earnings for years to come. Also, the company's first theme park in mainland China (Shanghai) is expected to open in 2016. Disney's shares are attractive with an expected long-term annual earnings growth rate of 10-15 per cent.

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Qualcomm Inc.
Qualcomm is one of the world's leading manufacturers of digital wireless communications equipment. It is expected to see solid chip set sales in the coming years as the economy improves and the rapid growth of the smartphone and tablet computer market persists. As well, Qualcomm's Snapdragon chip set will boost earnings as media-centric wireless devices continue to gain popularity. The shares are compelling as they trade at a significant valuation discount to their 10-year history. Qualcomm yields a 2-per-cent dividend and has an expected long-term annual earnings growth rate of 12-15 per cent.

iShares US Home Construction ETF
The iShares US Home Construction ETF provides diversified exposure to home construction, building materials and home improvement companies including PulteGroup Inc., Toll Brothers Inc. and Home Depot Inc. The U.S. housing market continues to recover – housing starts and building permits are up significantly, new and existing home sales are up, prices are climbing, and inventory is declining. Indeed, the U.S. housing recovery should translate into significantly stronger earnings for home builders, building materials and home improvement companies.

Past picks: June 7, 2012

Apple Inc.
Then: $571.72
Now: $434.58
Total return: –22.35 per cent

Yum Brands Inc.
Then: $66.77
Now: $69.64
Total return: +6.55 per cent

iShares High Dividend Equity ETF
Then: $57.53
Now: $69.08
Total return: +24.28 per cent

Total return average: +2.83 per cent

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Market outlook:

U.S. equities appear overbought in the near term and the risk of a minor consolidation has grown. Beyond the short term however, it is likely that the trend for U.S. stocks continues to be up for the balance of the year. Improvement in U.S. employment and housing market data along with continued Federal Reserve Bank stimulus has provided a solid landscape for U.S. equities to push higher.

Turning to Canada, struggling commodity prices along with an uncertain domestic housing market will continue to act as impediments to Canadian equities. Indeed, we maintain our considerable overweight of U.S. stocks over Canadian stocks in the expectation that the S&P 500 will continue to significantly outpace the S&P/TSX. U.S. large-cap growth companies look especially attractive and we expect an eventual and sustained rotation of leadership from defensive sectors to more cyclical sectors as the economy improves.

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