Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
I follow BofA Securities quantitative strategist Savita Subramanian as closely as any other global strategist.
Ms. Subramanian released her top 10 U.S. stock picks for growth and value in a Tuesday report.
The top ten growth picks are Advanced Auto Parts Inc., Amazon.com Inc., Facebook Inc., Alphabet Inc., Marathon Petroleum Corp., Microsoft Corp., Netflix Inc., NRG Energy Inc. T-Mobil U.S. Inc., and Vertex Pharmaceuticals Inc.
For value, the top 10 are Exelon Corp., Globe Life Inc., HCA Healthcare Inc., Marathon Petroleum Inc., Parker-Hannifin Corp., Philip Morris International Inc., TE Connectivity Ltd., T-Mobil U.S. Inc., Exxon Mobil Corp. and Zimmer Biomet Holdings inc.
It’s interesting to me that Marathon Petroleum and T-Mobil are on both lists, but it would take more work to uncover how relevant that is.
“ @SBarlow_ROB B of A: Top ten U.S. stock picks for growth and value” – (table) Twitter
“ @SBarlow_ROB B of A: Top 10 stock pick methodology” – Twitter
For Canadian investors, the copper price is an important indicator on two fronts. The loonie has been closely tracking the commodity price for one, and copper also provides an indicator for global manufacturing activity and the state of the post pandemic economic resurgence,
“Copper prices pushed up to 3-month highs on Tuesday, after bottoming on March 23 … It has taken two big elevator rides down, with the first one in January as China was dealing with COVID, and then again in March, when Europe and North America shut down. But the recovery in the red metal has largely tracked equities since, as has the loonie. The key message from copper: The recovery is indeed at hand, but it will be gradual, and we are still a long way from pre-virus levels.”
“@SBarlow_ROB BMO: "The key message from copper: The recovery is indeed at hand, but it will be gradual, and we are still a long way from pre-virus levels" – (research excerpt, chart) Twitter
Also from BofA, economist Carlos Capistran now sees a slower economic recovery for Canada,
“The sharp drop in March brought down 1Q GDP growth to -8.2% qoq saar, the worst since 2009. The drop was mostly due to the declines in consumer expenditure (-7.5%) and nonfarm business inventories (-CA$3.6bn) from supply chain disruptions (Chart 2). Meanwhile, private investment was little changed (-0.3%), and net exports went down modestly by 1.2bn as trade flow weakened two ways (exports -11.3%, imports -10.7%). We expect further GDP deterioration in 2Q with a 35% contraction as the country remained in lockdown in April and most of May … We now expect a 7.5% contraction in 2020 from 8.0% before, but with a weaker recovery of 6.5% from 9.0% [ in 2021] before”
“@SBarlow_ROB BoA now expects a slower economic recovery for Canada” – (research excerpt) Twitter
“Canadian economists aren't expecting a V-shaped recovery” – BNN Bloomberg
CIBC’s interest rate strategist Ian Pollick warned investors about long term bonds,
“Bottom Line: Long-bonds are scary right now, and the peak total-return profile for 2020 is likely behind us. Canada once had the flattest 10s30s curve in the G7 and, those days are also likely behind us too. Elevated financial requirements from the government means a near permanent supply concession, particularly as outstanding sizes grow to historical levels”
“ @SBarlow_ROB CM's Pollick: "Bottom line: Long-bonds are scary right now"’ – (research excerpt) Twitter
“US yield curve steepens as 30-year Treasury falls from favour” – Financial Times (paywall)
Diversion: “Facing temptation: The neural correlates of gambling availability during sports picture exposure” – Springer Link
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