Darren Sissons, partner & portfolio manager at Campbell, Lee & Ross Investment Management, shares his outlook on Global & Technology Stocks.
Darren Sissons, Partner & Portfolio Manager, Campbell, Lee & Ross Investment Management
Focus: Global & Technology Stocks
Top picks: Danaher, LVMH Moët Hennessy, Shell Plc
MARKET OUTLOOK:
Despite high macroeconomic and geopolitical tensions under the current U.S. administration, the sizable U.S. deficit is the key market driver.
That excessive fiscal spend is positively impacting risk assets driving U.S. indexes to ever higher levels. Equally so, the ‘Made in America’ derivative of the ‘Make America Great Again’ narrative is driving inbound investment of size into the U.S., which is also a tailwind.
Tariffs are depressing consumption, which is the largest component of the U.S. economy. Collectively, these influences are positively skewing the current account portion of the U.S. balance of payments.
While cracks in labour markets, credit metrics, and commercial real estate are expanding, the phrase ‘Hold Your Nose’ and ‘Buy’ has been the most accretive investment recommendation in 2025.
Markets initially expected a weak 2025 given the above noted tensions but global indexes surprised to the upside.
Broader healthcare was especially weak given White House hostility to the sector i.e., the Most Favoured Nations (MFN) drug pricing policy and tariffs on non-American drug companies.
However, use of U.S. production facilities to circumvent tariffs and containment of MFN policy largely to MedicAid, drove a strong sector rewarding those who targeted a ‘Dogs of the Dow’ recovery trade on the broader sector.
Interest rate cuts in Canada and the U.S., are a positive. Typically, rate cuts are multiple events so expect further cuts in both countries.
While lower rates penalize fixed income investors, they will probably trigger some rotation from fixed income into equities, which will be positive for equity indexes.
TOP PICKS:
Michael Simpson’s Top Picks: Danaher, LVMH Moët Hennessy & Shell Plc Darren Sissons, partner & portfolio manager at Campbell, Lee & Ross Investment Management, shares his top stock picks to watch in the market.
Danaher (DHR NYSE)
A dividend grower currently yielding 0.60 per cent.
A strong balance sheet with US$15 billion of acquisition firepower backed by an effective acquisition and integration strategy.
Its bioprocessing business should benefit from U.S. tariffs as non-U.S. companies will circumvent that policy via U.S. production.
It is seldom on sale, but the negative stance of Health Secretary Robert F Kennedy Jr and the White House pushed it and wider healthcare to attractive entry levels.
LVMH Moët Hennessy (LVMH CAC)
A progressive dividend currently yielding 2.40 per cent.
In 2024, it was the largest company in Europe by market capitalization. However, tariff fears and concerns over a recession in the U.S. saw hot money and generalist funds exit Europe and the luxury sector. This mass exodus discounted the stock to attractive entry levels.
The luxury market is typically resilient to economic slowdowns as it targets the wealthier tiers of the population who benefit rather than suffer from recessions.
Expect another acquisition in the not-too-distant future.
Shell Plc (SHEL NYSE)
An attractive dividend currently yielding 4 per cent.
The buyback program is continuous and of size.
Energy is currently persona non grata to most investors, so valuations are attractive.
The demand for energy continues rising. ESG thematics failed to deliver meaningful change so until fusion technology is commercially feasible and/or broader nuclear energy generation across global electricity grids is a reality, carbon-based energy will remain in demand.
PAST PICKS: OCTOBER 7, 2024
Hermes International SCA (RMS EPA)
Then: € 2162.00
Now: € 2112.00
Return: -2%
Total Return: -2%
Nestle SA (NESN SWX)
Then: CHF 83.62
Now: CHF 74.31
Return: -11%
Total Return: -7%
Visa (V NYSE)
Then: US$273.79
Now: US$352.38
Return: 29%
Total Return: 30%
Total Return Average: 7%