Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
Citi’s Montreal-born U.S. equity strategist Tobias Levkovich warned investors that a V-shaped economic recovery is unlikely,
“While stimulus programs offset near-term disruption given generous unemployment benefits, lower interest rates, and falling gasoline prices, the joblessness is stunning, and it could take years to recover…“we suspect that getting so many people back to work quickly is not very likely, as bankruptcies, small business closures, and depressed consumer spending all restrain the recovery, which creates its own new set of complications. Policy makers and government officials globally will need to be responsive as local citizenry demand a better tomorrow. “
“@SBarlow_ROB Levkovich: "the joblessness is stunning, and it could take years to recover"’ – (research excerpt) Twitter
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BofA Securities’ quantitative strategist Savita Subramanian updated her list of top ten stock picks for growth and value investors. The screening criteria for both lists includes analyst ratings, high potential for upwards earnings surprises. The growth list focuses on five-year projected earnings growth while value stocks are ranked by forward price to earnings ratios.
The growth list (alphabetically) is Advanced Auto Parts Inc., Amazon.com Inc. , Facebook Inc., Alphabet Inc., Marathon Petroleum Corp., Microsoft Corp., Netflix Inc., NRG Energy Inc., T-Mobile U.S. Inc. and Vertex Pharmaceuticals Inc.
For value, Chubb Ltd., Globe Life Inc., HCA Healthcare Inc., Metlife Inc., Marathon Petroleum Inc., Parker-Hannifin Inc., Phillip Morris International Inc., TE Connectivity Ltd., T-Mobile U.S. Inc., Zimmer Biomet Holdings Inc.
“@SBarlow_ROB BoA: Top ten stock picks for growth and value” – (tables) Twitter
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Citi bank analyst Maria Semikhatova raised her rating on RBC and CIBC to buy,
“Overall we model [provisions for credit losses] for the Canadian banks to average 67bps this year and 47bps in 2021E. Given low exposure to the high risk sectors and non-mortgage retail loans RBC and CIBC appear best positioned … Despite downward earnings revision we see RBC and CIBC attractively valued based on the average [return on tangible equity] in 2020-2022E and upgrade the stocks to Buy. We continue to rate BNS, TD and BMO Neutral.”
“@SBarlow_ROB Citi upgrades RBC and CIBC to buy” – Twitter
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Richard Bernstein, former chief quantitative strategist at Merrill Lynch and founder of RB Advisors, appeared on CNBC and argued that the current market rally is not the beginning of a new bull market,
“momentum [investing] is taking over and technicals are taking over and that’s not how bull markets start… 19 or 20 states have accelerating numbers of [COVID-19] cases and some of these states are opening up”
“Momentum trading is making an ill-timed comeback, investor Rich Bernstein warns” – CNBC (video)
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Diversion: “Something We Can All Agree On? Corporate Buzzwords Are the Worst” – The Atlantic
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Scott Barlow