A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web
I missed this report when it first came out on Jan. 2, but Goldman Sach’s prominent U.S. equity strategist David Kostin published a top picks list of stocks representing the highest profit and revenue growth outlooks in his universe.
The list of “The 100 largest stocks in the S&P 500 ranked by 2020E Sales growth” is led by Bristol Myers Squibb Co. (disclosure – I’ve owned this stock since February of 2009) , Global Payments Inc., Boeing Co., Fidelity National Info Services Inc. and Vertex Pharmaceuticals Inc.
The earnings growth table is topped by Charter Communications Inc., Netflix Inc., Exxon Mobil Corp. and Facebook Inc.
“@SBarlow_ROB : (Jan 2) Where to find sales growth in U.S. equities for 2020” – (full table) Twitter
“@SBarlow_ROB GS: Where to find U.S. EPS growth in 2020” – (full table) Twitter
Mr Kostin also published a list of stocks with the highest potential returns based on Goldman analyst target prices. That table is here.
BMO economist Sal Guatieri notes that the Bank of Canada is once again showing concern about rising housing prices.
Recent weak economic data means there’s no chance Governor Stephen Poloz raises rates to cool real estate prices, but he might be less likely to cut rates,
“In a cautiously upbeat take on the economy … BoC Governor Poloz said that: “Should this housing rebound continue, we will be watching for signs of extrapolative expectations returning to certain major housing markets—in other words, froth.” While home prices in some major Canadian cities aren’t bubbling away at the 30%-to-40% clip of early 2017, they are clearly gaining steam.”
“@SBarlow_ROB BMO: Poloz watching for froth in housing markets” – (research excerpt) Twitter
B of A Securities (formerly Merrill Lynch) chief investment strategist Michael Hartnett published some interesting observations on market conditions in “Sell 20x in 2020”,
“'Maximum liquidity, minimal growth’ explain bullish price action, ongoing leadership from high yield credit and US growth stocks (SPX/SPW, US/EM, growth/value, large/small all back at 2019 highs) … We remain Q1 bullish but note following: this week sees record inflows to bubbly bonds; credit spreads (IG AA, HY BB) cyclical lows; equity leadership stretched (AAPL >40% above 200dma), volatility not at lows, investors have priced in PMI recovery >55 but no inflation … As in 2018, underperformance of high yield bonds (HYG), semiconductors (SOX), homebuilders (XHB), banks (BKX) should be viewed as a prelude to a “top”.”
That last sentence – identifying the most reliable signs of a market top – is the most relevant section in my opinion.
“@SBarlow_ROB Hartnett on market conditions ; "“Maximum liquidity, minimal growth”' – (research excerpt) Twitter
Diversion: “Alex Trebek is prepared to say goodbye to Jeopardy. But hopefully not for a while” – Vox
Tweet of the Day
Like it or not, the US has a very different place in the world when it is ~20% of global output from when it was ~40% of it. Can't ride in like John Wayne & impose your will anymore. Need to build coalitions & international institutions. Bluff, bluster & bully won't get us there https://t.co/nnhRtKngej— Dow (@mark_dow) January 9, 2020