Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
BofA Securities’ (increasingly bearish) chief investment strategist Michael Hartnett published a remarkable data point which supported his colleague Savita Subramanian’s forecast for low equity market returns in the 18 months ahead,
“Annualized inflow to global stocks in 2021 ($1tn) is greater than cumulative inflow of prior 20 years … H2 view: macro backdrop = higher inflation, hawkish central banks, weaker growth, i.e. stagflationary; investment backdrop = rising Rates, Regulation, Redistribution (3Rs ) & peak Positioning [equity allocation], Policy, Profits (3Ps); investment returns = low/negative stock/credit H2; optimal portfolio = H2 barbell of long inflation (e.g. commodities, TIPS, small cap, banks, Japan) & long quality (e.g. cash & defensive utilities, staples, healthcare, REITs).”
“@SBarlow_ROB BofA: “annualized inflow to global stocks in 2021 ($1tn) is greater than cumulative inflow of prior 20 years” – (chart) Twitter
The research department at Credit Suisse updated their list of top 11 Canadian stock picks,
“Every Canadian research analyst identifies and ranks up to 3 Outperform rated stocks based on a 6-12 month time horizon. For the #1 Top Pick, we expand our analyst’s view by including Investment Thesis, Catalysts, Debates, Pushback, and Valuation.”
The stocks are Element Fleet Management Corp., Royal Bank of Canada, Sun Life Financial Inc., Transalta Corp., Altagas Ltd., Northland Power Inc., Suncor Energy Inc., Newmont Mining Corp., Barrick Gold Corp. and Endeavor Mining Corp.
Teck Resources Ltd is on the U.S. top picks list.
“@SBarlow_ROB CS: Top 11 Canadian stock ideas” – (table) Twitter
Scotiabank analyst Mario Saric still likes apartment REITs despite political campaign promises to make home ownership more affordable,
“Canadian Housing affordability is a hot topic during the Pandemic, with the National avg. home price +23% (we est. Apartment REITs have lagged the local housing market by 14%). We estimate the avg. National home price is 9% above income levels, while avg. National CMHC Q3/20 Rent sits 1.5% below income … New supply growth and tempering foreign demand are common themes [in campaign promises], while the Liberal Party mention of “Corporate” owners is unique. We still believe CAD Apartment (MF) REITs have a positive near- and long-term fundamental outlook (assuming no big regulatory changes) driven by a large gap in the cost of owning vs. renting, international immigration, and broader economic recovery. Our top residential picks are IIP [Interrent REIT] and TCN [Tricon Capital Group], while our slight shift in preference for Value over Growth on Aug 23rd arguably implies a bit better near-term upside in discounted asset classes (Office, Retail, Diversified, Seniors)”
” @SBarlow_ROB BNS still likes apartment REITs despite campaign affordability pledges” – (research excerpt) Twitter
Diversion: “Gmail Will Soon Allow You To Place Calls” – Gizmodo
Tweet of the Day:
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.