Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
Scotiabank strategist Jean-Michel Gauthier helpfully detailed the changes to major Canadian equity indices,
“S&P Dow Jones Indices announced its final changes across all indices on March 8, effective on Friday, March 15 after the close. TSX Composite: Adds: MDA Deletes: LAAC [Lithium Americas Argentina Corp.], LAC [Lithium Americas Corp.] Updates: BN [ Brookfield Corp.] upweight canceled, GFL [GFL Environmental Inc.] upweight implemented. Major Flows: watch for TD, OSK [Osisko Mining Inc.], and CPX [Capital Power Corp.] … FTSE All World Canada: Adds: CCO [Cameco Corp]. Deletes: CTC/A [Canadian Tire Corp.], IGM [IGM Financial Inc.] … FTSE World Canada Small Cap: Adds: NXE [Nexgen Energy Ltd.] , CTC/A, IGM. Deletes: DND [Dye & Durham Ltd.], GOOS [Canada Goose Holdings Inc.], CCO.”
Also see, from David Milstead: One stock added to S&P/TSX Composite Index, two to be deleted
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BMO Capital Markets reiterates that ‘copper is still king’,
“Copper still king. Colin Hamilton wrote in the commodity team’s recap of the BMO Global Metals, Mining, and Critical Minerals conference that copper once more was the commodity of choice for companies in attendance. He speculates this was helped by the recent tightening of the raw material market, and we note that the structural bullishness on energy transition is likely to also a contributing factor. Copper was the only market where companies consistently presented positive longer-term demand fundamentals and growth expectations. Colin did sense some signs of investor fatigue in waiting for 2024 copper price upside, though he noted that supply-side issues have changed underlying market expectations for this year. Combined with few new growth projects on the near-term horizon, the outlook for copper continues to be relatively positive through the medium and longer terms … [More broadly] Our “Best of BMO” top picks continue to be Agnico Eagle and Hudbay Minerals for precious and base metals, respectively.″
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JP Morgan global strategist Mislav Matejka provided a pro-Magnificent Seven investment strategy with an interesting rationale,
“The magnificent 7 are again this year driving the disproportionate share of returns, with a clear concern over how sustainable this is, but we note that this group of stocks is not trading increasingly more expensive, at least not in relative terms. In fact, Mag-7 stocks appear cheaper at present vs the rest of the market than they were trading on average in the past 5 years … Growth style is also supported by the continued better earnings delivery vs Value … Ex Magnificent 7, S&P500 earnings have been negative in the past few quarters, and we believe there are risks to the consensus view that argues for the re-acceleration in earnings this year.”
The strategist is overweight healthcare, telecoms, food beverage and tobacco, real estate and utilities. Underweights are capital goods, food and drug retail, autos and banks.
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Diversion: “The Winners and Losers of the 2024 Oscars” – The Ringer