Elsewhere in the market, the gold stocks continue to disappoint.  While the price of gold itself has been trading in a narrower range between US$1640-1700 per ounce, the stocks have fallen as almost all the gold miners have reduced guidance ranges for production this year and increased dramatically the operating costs of existing mines and the capital costs for new mines.  While the continued depreciation of all the major currencies should support gold prices, the stocks will need to demonstrate better profitability to move higher.  Financials have rallied in the past months and are now back at the top end of the trading range so we are not expecting this group to beat the market over the next few months. Technology stocks have gone through a soft period but are now looking to grow again as the economy expands.  Profit margins remain high and cash generation is substantial.  Our favourite areas continue to be cloud services, smart-phones and semi-conductors.  Qualcomm, Broadcomm and Microsoft remain our top U.S. picks but we have also added back to our position in Apple on the price weakness and added Cisco as well for its valuation and improved growth prospects.  In Canada we continue to like Open Text and CGI Group.

One key area of strength in a recovering global economy is the industrials sector.  This includes the manufacturing sector in the U.S. as well as the auto-makers.  In Canada, this would include Finning, Bombardier, Aecon and the auto parts companies such as Magna and Martinrea.  Our overall view continue to be bullish on stocks but we are also treading a bit more carefully in the past week or so given the strength thus far this year and the potential for a correction in the short-term.  Our equity weight in Balanced accounts is running around 60% right now, above the median 50% weight but below the highs of around 68% that we were at last September.

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