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

CIBC World Markets is the latest research team to release their 2024 outlook,

“Particularly impressive this past year was the ability of businesses and equities to manage through the difficult inflation and interest rate environment. S&P 500 earnings in 2023 were essentially flat with 2022. Canadian earnings were less resilient, falling 8% per cent with banks and energy companies shouldering the blame… we believe a more defensive equity stance is appropriate, with a focus on companies with either low-risk earnings streams or higher leverage to the U.S. Our recommended Canadian sectors are Communications, Utilities, and Industrials, with the latter likely to lead more meaningfully as the U.S. economy regains steam later in 2024… Canada with its over-leveraged consumers will see the gradual impact of higher mortgage repricing and struggle to keep pace with U.S. equity price returns… "

CIBC is unique in providing top ETF picks for the year. These are: iShares S&P/TSX Capped Utilities Index ETF (XUT-T), BMO Equal Weight Utilities Index ETF (ZUT-T), BMO Covered Call Utilities ETF (ZWU-T), Invesco S&P 500 Equal Weighted Index ETF (RSP-A), Covered Call Fixed Income ETFs: Harvest (HPYT-T), Hamilton (HBND-T), Horizons (LPAY-T & MPAY-T), and Evolve (BOND-T).

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BMO chief economist Doug Porter provides the latest details on the country’s biggest political and economic headache,

“The Bank of Canada’s housing “affordability” index took another big step to the wrong side in Q3. It rose to the highest level since the second quarter of 1982 (where a ‘rise’ means a deterioration in affordability). The steep backup in long-term interest rates through the summer and early fall, as well as a bounce in seasonally adjusted home prices, dealt a double-whammy. The BoC’s index looks at a typical mortgage payment plus utilities costs as a portion of income. To reiterate a message from last week, this metric was very close to long-run norms of about 35 per cent — not bad at all — in the pre-pandemic period. Since then, we have seen first a frenzy of speculative buying as rates were slashed to record lows, a surge in population, and then a spike in borrowing costs. Looking ahead, note that the three prior spikes in unaffordability (early 1980s, early 1990s, and 2007/08) were followed in short order by Canadian recessions. We expect the economy to struggle to grow in 2024″

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Scotiabank mining analyst Orest Wowkodaw forecasts sector developments for next year,

“Overall, we anticipate 2024 to be a stronger year for most miners under our coverage driven by higher production volumes (combination of growth and acquisitions), slightly improved unit costs (modest deflation in some input costs such as diesel, net of higher labour costs; benefits of higher volumes), and lower planned capex investment … We anticipate the Cu miners (excluding FM-T due to the recent forced closure of Cobre Panama) to post strong average y/y production growth of 24 per cent, driven by the ramp-up of new capacity from ANTO-L (Los Pelambres expansion), CS-T (Mantoverde sulphides), ERO-T (Tacuma), IVN-T (Kamoa-Kakula Phase II/III), TECK.B-T (QB2), and VALE-N (Salobo III), with LUN-T benefiting from a full year of a recent acquisition (Caserones). HBM-T (research restricted) recently acquired Copper Mountain and will have mined higher-grade Pampacancha ore for a full year… We also expect several other companies to post meaningful 2024 y/y production growth, including CCO-T (+23% U308), CIA-T (+19% Fe), NEXA-N (+4% Zn), and VALE-N (+2% Fe), respectively”

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Diversion: “The Best Space Images of 2023″ – Gizmodo

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 11/04/24 11:59pm EDT.

SymbolName% changeLast
XUT-T
Ishares S&P TSX Capped Utilities ETF
-0.34%23.77
ZUT-T
BMO Equal Weight Utilities Index ETF
-0.76%18.19
ZWU-T
BMO Covered Call Utilities ETF
-0.3%9.82
RSP-A
S&P 500 EW Invesco ETF
+0.13%162.19
HPYT-T
Harvest Premium Yield Treasury ETF
-1.89%10.91
HBND-T
Hamilton U.S. Bond Yield Maximizer ETF
-1.47%14.76
LPAY-T
Horizons Long-Term U.S. Treasury Premium Yield E
-1.64%27.02
MPAY-T
Horizons Mid-Term U.S. Treasury Premium Yield Et
-0.11%27.12
BOND-T
Evolve Enhanced Yield Bond Fund ETF
-1.77%20

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