Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
Scotiabank’s strategists rank domestic stocks by value, growth, momentum and quality to make their top 30 stock list.
This month’s updates involved important changes,
“CM is the first major bank to enter the Top 30 list since 2022 this month (although we held CWB until NA announced their takeover). LUG and TXG are the other add, replacing PAAS, SU, and PEY. Miners are the largest sector, with Energy in second. Financials rise to third, equaling Staples, while Industrials is in fourth place … The pecking order for Resources is Gold, Base Metals, then Energy. If Gold miners hit some of their highest rankings since 2020, Base Metal miners rankings have not followed spot prices higher, while Energy is being dragged down by WTI. Meanwhile, Defensives are broadly rising in rankings, mostly centered on interest rate sensitives rebounding. Cyclicals’ rankings also broadly rose, capturing some of Energy’s ranking weakness. Overall, our Cyclicals-over-Defensive bias is narrow, but seems to be stabilizing. Sector-wise, Financials, Gold miners, and Staples are the highest-ranked sectors”
The list as it stands now is Secure Energy Services, CES Energy Solutions, Athabasca Oil, Imperial Oil, ARC Resources, Dundee Precious Metals, IAMGOLD, Torex Gold Resources, Lundin Gold, Centerra Gold, Kinross Gold, SilverCrest Metals, Fortuna Mining, Hudbay Minerals, New Gold, Stella-Jones, AtkinsRealis Group, Bombardier, Brookfield Business Partners, Dollarama, Linamar, North West Co, Loblaw Cos, George Weston, Primo Water, CIBC, goeasy, Fairfax Financial Holdings, Manulife Financial and Altagas.
***
RBC Capital Markets attempted to get ahead of the game by asking analysts about the market effects of a potential Canadian federal election,
“We dig into hot topics in the equity market. In this edition, we spotlight the Canadian federal election. As part of our quarterly RBC analyst survey, we recently polled RBC’s Canadian analysts on their views on the implications of the Canadian federal election for their industry. The three big things you need to know: First, nearly half of our Canadian equity analysts see the election as relevant or highly relevant to their industry, with Utilities and Energy most in focus. Second, views were most bullish for Energy and least bullish for Utilities on the Conservative Majority scenario and the opposite was true for the Liberal Minority / NDP Opposition outcome. Third, taxes generally and the carbon tax in particular, along with immigration, were the issues most in focus”
***
BMO senior economist Sal Guatieri highlighted a welcome decline in financial stress in the domestic economy,
“Canadian households and businesses received some good news on the insolvency front. Consumer insolvencies look to have steadied in recent months to August, close to pre-pandemic levels. And, bankruptcies remain historically low, suggesting lenders are working with borrowers to ease the original terms of the agreement. Even more welcome is that business bankruptcies, which soared in January when the government started requiring repayment of pandemic loans, have fallen steadily to within shouting distance of 2019 levels. This means that surviving companies are relatively healthy and could remain so if borrowing costs decline further and the economy firms up”
***
Diversion: “The Elite College Students Who Can’t Read Books” – The Atlantic