Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
RBC Capital Markets analyst Greg Pardy made an important (for Canadians) change to the firm’s global energy best ideas list, removing HF Sinclair Corp and adding Suncor Energy Inc.,
“Our view: In February, the RBC Global Energy Best Ideas List was down 2.6% compared to the iShares S&P Global Energy Sector ETF (IXC) down 4.9% and a hybrid benchmark (75% IXC, 25% JXI – iShares Global Utilities ETF) down 4.9%. Since its inception in February 2013, the RBC Global Energy Best Ideas List is up 133.5% compared to the S&P Global Energy Sector ETF up 24.6%”
The stocks on the list are Repsol, Shell, Suncor, Tamarack Valley Energy, Topaz Energy, California Resources Corp., Diamondback Energy, Permian Resources Corp., Range Resources, ARC Resources, Tourmaline Oil, Canadian Natural Resources, Enerplus Corp., Santos Ltd., Liberty Energy, SLB, Hunting PLC., Pembina Pipeline, Targa Resources Corp., Cheniere Energy Inc., Energy Transfer LP, Superior Plus, Marathon Petroleum, PG&E Corp. and Drax Group PLC.
“RBC Global energy top ideas” – (table) Twitter
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BofA Securities published a gazillion-page report (it’s actually 97 pages) on artificial intelligence that starts with the interest contention that “‘If data is the new oil, then AI is the new electricity’” ,
“More data is created per hour today than in an entire year just two decades ago, and global data is expected to double every 2 years. We are entering the age of the Yottabyte, but still, only 1% of global data is being captured, stored and used. This is about to change. We are at a defining moment – like the internet in the ‘90s – where Artificial Intelligence (AI) is moving towards mass adoption, with large language models like ChatGPT finally enabling us to fully capitalize on the data revolution… Until now AI could only read and write but could not understand content. Generative AI models like ChatGPT has changed this, enabling machines to understand natural language, and produce human-like dialogue and content. 4 reasons why this could be the ‘iPhone moment’ for AI: (1) democratization of data; (2) unprecedented mass adoption; (3) warp-speed technological development; and (4) abundance of commercial use cases.”
Strategists provided a list of related stock picks in a separate report that I listed in yesterday’s Daily Links report.
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Scotiabank strategists, led by Hugo Ste-Marie, warned investors not to trust the early-year rally,
“Goldilocks scenario: Priced for perfection. Positive developments out of Europe/China as well as the recent decline in U.S. inflation and sticky jobless claims have investors rethink the macro outlook. Those developments deserve some respect, but the rosy outlook where nothing goes wrong in one of the most intense Fed-tightening cycles in decades, coupled with strong risk-appetite, and elevated U.S. equity valuations, clashes with all traditional U.S. recession indicators, which are flashing red. While strong momentum could extend a bit more, scoring a double-digit gain from here would require very strong conviction that earnings will be resilient this year and rise by double-digits next year, with the S&P 500 forward P/E returning to a very elevated level. Admittedly, defensive positioning could come at a cost if momentum remains strong, but we continue to think better opportunities on the long side will arise in 1H/23″ "
“Scotia: ‘the rosy outlook where nothing goes wrong in one of the most intense Fed-tightening cycles in decades ... clashes with all traditional U.S. recession indicators, which are flashing red”” – (research excerpt) Twitter
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Diversion: “Fifty years ago today, Pink Floyd unleashed ‘Dark Side of the Moon.’ But what’s the legacy of the blockbuster album? What’s legacy, anyway” – The Ringer
Tweet of the Day:
Scott Barlow