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A daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow

BofA Securities’ global quantitative strategist Nigel Tupper maintains a growth model he calls “Global Wave” to measure the strength of economic growth. The components are industrial confidence, consumer confidence, capacity utilization, unemployment, producer prices, credit spreads and corporate earnings revisions.

The model now clearly points to slowing growth,

“The Global Wave fell again this month and has now fallen for five months. Weakening earnings expectations and moderating confidence are weighing on the Global Wave. The US Fed appears focused on hiking short-term rates to address inflation which has the potential to weigh on the global economy. A downturn in the Global Wave suggests investors position defensively. Unusually in a downturn, supply-side issues are driving higher energy and commodity prices which are supporting earnings expectations of some cyclical sectors, so Energy and Materials may be an exception in this downturn … The components contributing most negatively to the Global Wave this month were the Global Earnings Revision Ratio which continues to fall as downgrades accelerate, and Global Consumer Confidence and Global Industrial Confidence which fell in more than 70% of countries.

“BofA: “The Global Wave fell again this month and has now fallen for five months””- (research excerpt) Twitter


BMO chief economist Doug Porter adamantly denies Canada’s housing affordability issue has been caused by lack of supply,

“How many times have we all been told in the past year that Canada’s raging housing market is largely due to the fact that we have “the lowest supply of housing in the G7″? ... First, Canada’s supply is not particularly out of line with the OECD average, and certainly not much different than any of the UK, U.S., or Australia. (And we have made the point many times that given a younger population than Europe or Japan, we would naturally have a lower ratio—kids don’t own homes.) Second, a technical point, Canada is in fact NOT lower than the U.S., so it isn’t even the lowest in the G7. Yet, somehow, our average home prices are (roughly) 60% higher on average than in the U.S., with essentially the same level of supply per capita. Yes, we should do all we can to encourage supply; but clearly there is more at work here than that. "

“BMO chief economist does NOT agree that Canada’s housing bubble was caused by lack of supply” – (research excerpt) Twitter


Citi commodity analyst Ephrem Ravi believes the strong commodity rally is close to its end,

“Many investors take the view that the Russia/Ukraine crisis is reinforcing an emergent commodity supercycle. Citi’s view is to tread lightly on this thesis. Commodity outperformance starting in 2020 was the normal result of an economic change from recession to growth, where commodities generally outperform. It was followed by the energy intensive first crisis of the Energy Transition, reinforced by feared supply disruptions from Russia/Ukraine which actually inflated commodity prices. Neither a new surge in demand nor a new supply shortage from lack of investment appears universally on the horizon for commodities. … headwinds from China’s persistent lockdowns, the likely reduction of European economic growth, the rise of US interest rates and the challenges to EM growth given fx depreciations and capital flight play a role.

“Citi: ‘world is likely to see the end of a strong commodity cycle”” – (research excerpt) Twitter


Diversion: “Taiwan Releases Military Invasion Survival Guide for Its Citizens” – Gizmodo

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