Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
Citi global strategist Chris Montagu ranks all stocks in the MSCI All Country World Index according to valuation – price-to-book and price-to-earnings – and momentum in terms of stock price and also earnings.
One of the stocks that has now moved into the top decile is Bank of Montreal.
Other new entries into the top decile are luxury goods providers LVMH and Richmont, also Airbus, Australia and New Zealand Banking Group, Woodside Energy Group, Lloyds Banking Group, Safran, Barclays and Oriental Land.
“Canadian bank enters Citi’s list of top global stocks” – (table) Twitter
RBC’s oil and gas research team led by Greg Pardy updated their list of top stock ideas as the list continues to outperform,
“In July, the RBC Global Energy Best Ideas List was up 9.4% compared to the iShares S&P Global Energy Sector ETF (IXC) up 7.0% and a hybrid benchmark (75% IXC, 25% JXI – iShares Global Utilities ETF) up 6.5%. Since its inception in February 2013, the RBC Global Energy Best Ideas List is up 123.7% compared to the S&P Global Energy Sector ETF up 17%.”
The two changes this month are the addition of Liberty Energy and the removal of Secure Energy Services.
This leaves a list of Shell, BP, Suncor Energy, ConocoPhillips, Canadian Natural Resources, Enerplus Corp., Santos Ltd., Tourmaline Oil, ARC Resources, Range Resources, California Resources Corp., Tamarack Valley Energy, Freehold Royalties, Ranger Oil Corp., Brigham Minerals Inc., Schlumberger Ltd., Liberty Energy, Cheniere Energy Inc., Altagas Ltd., Algonquin Power and Utilities, Drax Group PLC and HF Sinclair Corp.
“RBC’s global energy top ideas” – (table) Twitter
Wells Fargo U.S. equity strategist Christopher Harvey has re-started an old feature called ‘trader talk’ that covers the issues he has discussed most with institutional clients,
“As we survey the current landscape, bears appear unbowed, long-onlys seem confused/nervous, and the average hedge fund is scrambling to figure out how to salvage the year. The bounce in Growth likely provided some relief for the average hedge fund. An increasing HF question is ‘How aggressive do we short cyclicals, and will they stage a relief rally as (perhaps) rates rise with CPI?’ Another is ‘What do you think about the Software vs Semi trade?’
“Conversations suggest many PMs have been long Software and short Semis. Long-only Growth funds are just shellshocked as nothing has worked, asking about the macro (which is unusual). Long-only Value PMs and Quants are getting nervous because a great year is turning into a merely okay year, with performance degrading with breakevens since the May CPI report. The Value/Quant conversations are centered on cyclicality and how much to pull back and whether to wait for a bounce?
“Bond Market and Stagflation. What’s troubling for any sort of sustained cyclical trade is bond market pricing. In our view, the Treasury market is pricing in longer-term stagflation with 10yr reals at +25bps and 10yr breakevens of ~250bps.”
“Wells Fargo: bond market pricing in stagflation” – (research excerpt ) Twitter
Diversion: “Webb Space Telescope Turns Its Eye on the Chaotic Cartwheel Galaxy” – Gizmodo
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