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bnn market call

David Cockfield is chief portfolio manager and founder, CastleMoore Inc.

Top picks:

Apache (APA-N)

Last purchased on April 18 at $50.87

Apache is a lean and mean energy company. They recently pared back their portfolio, bringing more surety to its production profile while reducing dependence on Egypt. There have been more than $11-billion in asset sales. While becoming leaner in production, reserves and cash flow will decline in the short term, but the company will be left with more capital to pursue opportunities. The stock is in a seasonally strong period with an upside target of $79 (U.S.).

Health Care Select Sector SPDR ETF (XLV-N)

Last purchased on April 7 at $69.437

The healthcare and biotech sectors became a political football last summer near the end of their traditionally strong seasonal period. This is a normal event within the political election cycle. As one of the few sectors raising estimates and in a secular bull market, the space was bound to resume a bull trend. Recently breaching its 200-day moving average from below brings in a target of $84 or 18.86 per cent.

iShares S&P/TSX Global Gold Index ETF (XGD-T)

Last purchased on March 8 at $11.27

Gold producers offer excellent risk-to-reward (as does bullion) in this first of two seasonally strong periods (April-May and August-October) based on two factors. One is on a producer basis with Q1/16 EBITDA on track with levels last seen in 2014, with an outlook for subsequent quarters potentially higher as well. Declining cash costs could translated in into free cash flow (FCF) and growing cash balances. The other is bullion itself. With central banks confusing markets, the bid under bullion is real, though producers lead the commodity as a general rule. Target $23.50.

Past Picks: April 30, 2015

iShares Trust Barclays 20+ year Treasury Bond ETF (TLT.US)

Then: $125.95 Now: $131.31 +4.26% Total return: +6.91%

Canadian Natural Resources (CNQ-T)

Then: $40.08 Now: $37.57 -6.26% Total return: -3.52%

Exelon (EXC.N)

Then: $34.02 Now: $34.43 +1.21% Total return: +5.27%

Total Return Average: +2.89%

Market outlook:

Over the next three months, we should see a rationalization of the front-running U.S. Federal Reserve with other central banks and the capital markets. At present, the Fed wants to lean into the wind and raise rates, proclaiming particular positive data such as employment and nascent inflation. However, both data sets are considered lagging indicators and not ones predictive of green shoots. Global data is soft or softening. Expectations are that the ECB and China will continue to stimulate, while many Fed bankers have been talking up a continuance of a rate hike. Yellen's recent comments suggest, however, that she, and she alone, is in charge and more dovish than those on the talking circuit. The volatility from central bank messages is in part, I believe, to keep investors confused.

Or is it that the unchartered territory the Fed find itself in is simply catching up with it?

A convex portfolio is still preferred, though "risk assets" (energy, materials, financials) are currently rolling over from previous peaks initiated in early March. Persistent weakness in data against an upside risk move also necessitates that we look at defensive weakness as an opportunity to add to current or new positions, in addition to any seasonal plays .