Looking for investing ideas? Here’s your weekly digest of the Globe’s latest insights and analysis from the pros, stock tips, portfolio strategies plus what investors need to know for the week ahead.
Cannabis-stock euphoria has returned – and short sellers are salivating like never before
Investors have been pushing marijuana shares back near their highs, with a number of stocks recovering most of what they lost during a recent correction, as the Senate this week approved a bill to legalize cannabis, setting the stage for sales to begin on Oct. 17. The enthusiasm comes despite serious questions about just how profitable these companies can become under legalization, David Milstead writes, a potential that has led to extremely high valuations in the sector. That’s led to intense interest in the stocks from short-sellers, who profit when stocks decline, not rise.
Related: Still want to ride the cannabis boom? Six bets to play the green gold rush
Read more: The secret to Aurora Cannabis’s takeover strategy – and why MedReleaf sold
New leveraged marijuana ETFs on the way
Investors looking to leverage the marijuana industry can soon do so, with three new exchange-traded funds (ETFs) set to launch later this summer, Clare O’Hara writes. Horizons ETF Management Canada Inc. filed preliminary documents with regulators recently to launch three new ETFs on the TSX that will focus on leveraging the cannabis sector. Leveraged ETFs – also known as “double ETFs” – typically aim to deliver two or three times the return on their stated index, and carry a higher risk rating than typical ETFs.
Related: A marijuana ETF that pays a distribution? Is it safe?
Read more: Horizons president Steve Hawkins on banks, marijuana and the future of the ETF market
Canada can’t win a trade war, but here’s how investors can profit
Let’s get one thing clear from the outset: We cannot win a trade war with the United States, Gordon Pape writes. If U.S. President Donald Trump follows through with his threat to slap tariffs on cars, it would really get ugly. A reader asks what companies might be relatively immune from tariffs if things go from bad to worse. Here are three Canadian firms that might qualify. If the trade war escalates to the point of recession, however, all companies will suffer. But these may be less impacted than others.
Related: Three TSX stocks on the move because of the escalating trade war - and why
Read more: What investors should do as the trade war escalates
TSX makes remarkably broad-based rebound to record highs. Strategists believe the rally is far from over
After a long period of sluggish performance, Canada’s benchmark index has shaken off concerns about tariffs, crude oil prices, mortgage regulations and interest rates − and emerged to a new record high, David Berman writes. The S&P/TSX composite index has rallied past its previous high in early January. If market strategists are to be believed, the rebound should continue as Canadian companies benefit from strong commodity prices and exposure to a humming U.S. economy.
Read more: Canadian stocks reach record but no one’s wearing party hats yet
‘Truly massive disappointment’: Regulatory overhaul of mutual fund fees falls short of expectations
After a half-decade of study and consultations, Canada’s securities regulators have released their final recommendations for changing mutual fund fees – but the proposals fall short of what many industry players expected, Tim Kiladze writes. Under the proposed new rules, regulators will prohibit deferred sales charges, or DSCs, and will also curtail trailing commissions collected by discount brokerages or DIY investing services. But they stopped short of banning such trailer fees altogether. Trailer fees, which are embedded commissions paid by mutual-fund companies to compensate financial advisers and firms that sell their funds, were widely viewed as the main target of the regulators’ review.
Read more: It just became clear we’ll never see an investment industry where clients must come first
The surprisingly reliable timing strategy for buying TSX bank stocks
When financial firms hold investor days, investors become believers, David Berman writes. That’s one takeaway from an analysis by National Bank Financial, which looked at the performance of bank and insurance stocks after executives walked investors through their strategies and financial targets. These stocks often outperformed their peers following these special events, offering a compelling trading strategy for short-term investors. But does the strategy of buying into investor days show promise beyond the financial sector?
Read more: RBC loses its lustre as investors make TD Canada’s premium bank
What investors need to know for the week ahead
On the calendar: Bank of Canada Governor Stephen Poloz speaks in B.C. on Wednesday, ahead of the central bank’s next rate decision on July 11. His comments will be closely followed as U.S. President Donald Trump’s trade tirade and weaker-than-expected economic data call into question the BoC’s rate hike ambitions. Further clues as to what the bank will do next may be found in its quarterly look at business optimism and plans, due out on Friday. Also that day is a look at Canada’s economy with the release of GDP figures for April. European Union leaders meet for a summit in Brussels Thursday and Friday. Companies posting earning during the week include Canopy Growth, AGF Management, Corus Entertainment, Shaw Communications, Nike and Constellation Brands.
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