Rob Lauzon's Top Picks: September 12, 2022

Top picks from Rob Lauzon, chief investment officer, Middlefield Capital Corporation

FOCUS: North American equities

MARKET OUTLOOK:

It's a confusing time for investors as central banks are hiking rates into a slowing economy. The strong U.S .dollar is an earnings headwind for multinationals as well as for the economies of countries with weak currencies that import commodities. The general view from economists is that there is a 6-12 month lag between rate hikes and impacts on earnings. As the effects of higher interest rates permeate through the economy, different sectors may experience downturns at different times, resulting in a rolling recession. Third-quarter and 2023 earnings estimates for North American companies have started to come down since peaking in mid-June, except for energy. Overall, we do not anticipate a deep recession in North America and believe that North American companies are currently well positioned relative to global alternatives.