Harris Picks Top Stocks Amid Bond Market Pressure

Paul Harris, portfolio manager at Harris Douglas Asset Management, Inc., shared his market outlook and top stock picks for September 28, 2026. Harris noted that bonds are causing stress in the market, with the U.S. 10-year yield reaching its highest level since July 2007. The Canadian 10-year yield is also near a three-year high due to energy-driven inflation concerns.

Despite rising yields, stocks have held up well, and Harris' top picks are Meta (META:NASDAQ), Microsoft (MSFT:NASDAQ), and EssilorLuxottica (EL:EPA). He highlighted that Meta's stock fell 17% over the past year despite growing earnings per share by 22%. The company's profitability is elite, with a gross margin of approximately 82% and operating margin of approximately 41%. Harris believes the stock is undervalued at a forward P/E of around 17.3 to 17.6 times.

Microsoft's earnings have been compounding, with Q3 FY26 EPS reaching $4.28 and revenue growing by 18%. The company's margins are very high, with gross margin at approximately 68%, operating margin at approximately 47%, and net margin at approximately 39%. Harris noted that the shares pulled back due to management's guidance of increased capex, but analysts view this as AI investment that will pay off via Azure.

EssilorLuxottica's stock fell 46% over six months, dropping from a high of €376 to a low of €191. However, fundamentals are modest, with a gross margin of approximately 58% and an adjusted operating margin targeted at 19-20% for 2026. The company trades richly on trailing earnings but has depressed prices against largely unchanged targets.

Harris noted that the Canadian angle is policy divergence, with the Fed tightening while the Bank of Canada holds, which weighs on the Loonie and keeps pressure on Canadian yields. This makes the October 28 meeting a real coin-flip.