With the Japanese stock market (the Nikkei 225) suffering one of its worst days in decades on Monday’s trading sessions (the TSX Index was closed for the bloodbath of a day for global stocks), Canadians may be looking to the worldwide plunge as a potential opportunity to snag a few shares on the cheap.
Indeed, if you find yourself looking for opportunities after such a horrific start to the month of August, you’re on the right track. Still, investors shouldn’t attempt to time a bottom here. Rather, slowly and steadily riding out the rough waters may be the best course of action.
After all, September tends to be a nasty month for stocks. And with a rather awful selling activity that could head into the month, perhaps it’s best to ease a toe into the waters right now. At the end of the day, stock market corrections and selloffs can extend well after we’ve bought a considerable amount of shares on the dip.
Bank of Japan sparks worsening of market selloff
As fears mount over the Bank of Japan’s latest tilt, questions linger as to what the U.S. Federal Reserve and Bank of Canada will do next. Indeed, the latest Japan stock market meltdown has taken global market volatility up a few notches. And with rising recession risks and some pundits hoping for some sort of emergency rate cut, perhaps we could be a heck of a lot closer to the next rate cut (here in Canada and in the U.S.) than many of us think.
Such a rate cut would probably be rebound fuel for markets. However, whether inflation makes a comeback in response to such cuts remains a big question. Either way, I wouldn’t make too much over the Bank of Japan’s latest pivot, even if there are still a few more big down days to go in response to the move.
TD Bank
TD Bank (TSX:TD) stock has been on the ascent over the past month after tumbling to new 52-week lows as concerns surrounding the implications of the money-laundering crisis. Indeed, the stock was oversold at the time over news that was likely already partially priced in during the prior few quarters. Either way, the added uncertainty made for a rather unpleasant ride for TD shareholders.
With the stock turning south again, investors who missed the July run may have another shot to punch their ticket to one of Canada’s finest financial firms. With a 5.2% dividend yield and a mere 13.2 times trailing price-to-earnings (P/E) multiple, I’d not shy away from the name as shares fall below $77 per share again.
Suncor Energy
Suncor Energy (TSX:SU) stands out as one of the best deep-value options in the Canadian oil patch. Undoubtedly, the oil scene could rise should Donald Trump end up winning the 2024 U.S. presidential election.
As you know, he’s a bigger fan of fossil fuels compared to President Biden or Vice President Kamala Harris, who’s likely to debate Trump come September. In any case, SU stock looks severely undervalued at just 8.4 times trailing P/E. With a nice 4.3% dividend yield and potential multi-year sector tailwinds, perhaps it’s time to back up the truck on the way down.
