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Bruce Campbell.

Bruce Campbell is president and portfolio manager, Campbell, Lee & Ross. His focus is on Canadian large caps.

Top Picks:

Alimentation Couche-Tard (ATD.B-TSX)

Couche-Tard is nicely exposed to the U.S. consumer and to Europe with recent acquisitions. The stock has pulled back almost 10 per cent from recent highs, until today. Recent purchases were last week just under $47. Continued synergies and targets such as Imperial Oil's Canadian assets will help the growth continue over the next several years.

Nike Inc. (NKE-NYSE)

Nike is growing nicely overseas and in China. The emerging consumer wants their products. Nike is an excellent way to get exposure to the U.S. consumer and to Europe and Asia. The strong U.S. dollar is a bit of a drag on growth so that they may run under 15 per cent but it will still be strong. Recent purchases in the $93 (U.S.) range on a dip.

Merck & Co. (MRK-NYSE)

Merck has been a laggard in the health care space and this entry point is attractive. Their growth should re-accelerate over the next year or two and the 3.2 per cent dividend is well above-average. Recent purchases were around $56. Valuation is not expensive and as the sector is hot, we could see flow of funds push this up in the near term.

Past Picks: March 12, 2014

Whirlpool (WHR.N)

Then: $144.05; Now: $198.69 +37.93%; Total return: +40.40%

Cenovus Energy (CVE-TSX)

Then: $29.29; Now: $21.32 -27.21%; Total return: -24.17%

Manulife Financial (MFC-TSX)

Then: $21.48; Now: $21.85 +1.72%; Total return: +4.58%

Total return average: +6.94%

Market outlook:

Thankfully, global stock markets have been substantially warmer as all of the U.S. markets (Dow Jones, S&P 500, Nasdaq) and all of the important international markets (U.K., France, Germany, Japan, China) were positive in February. In Canada, the TSX was up 3.8 per cent in the month but has given back half of that in March so far. Three major headlines recently have been Grexit, U.S. Homeland Security funding and interest rates. As expected, a four month Greek bailout extension was approved while the U.S. Republicans finally approved a one year funding bill for Homeland Security – both Greece and the Republicans blinked first. That leaves interest rates.

We have historically low interest rates and the situation is getting more interesting by the day. As we've discussed previously, Janet Yellen and the U.S. Federal Reserve are poised to raise rates especially now that the unemployment rate is now below the 2008 crash levels. The debate is whether she rises in June, July or September. She only has one shot to get it right and a big concern is the fact that it will further strengthen the U.S. dollar as most countries are going in the other direction. In Canada, Stephen Poloz appears to have softened his stance with respect to an additional cut after his surprise January cut. This is reflected in the 5-year Canadian bond rate that started the year at 1.31 per cent, dropped to a low of 59bp and has now rallied to 0.82 per cent.

Meanwhile, China became the 21st central bank to lower rates this year and Denmark has cut rates four times already in 2015. One can argue that global monetary policy has become increasingly unconventional in the last six years, with central banks implementing zero-interest-rate policies, quantitative easing and credit easing. But now we have come to the most unconventional policy tool of them all: negative nominal interest rates. Switzerland, Denmark, Sweden and a number of Euro-zone countries now have negative nominal interest rates. We are not only talking about short-term rates as the 10-year Swiss government bonds have negative interest rates. In any of these countries, an investor must pay to deposit cash in their 'savings' account. The 'shoebox under the bed' savings strategy is probably making a comeback.