Skip to main content
Canada’s most-awarded newsroom for a reason
Enjoy unlimited digital access
$1.99
per week
for 24 weeks
Canada’s most-awarded newsroom for a reason
$1.99
per week
for 24 weeks
// //

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

Citi chief U.S. equity strategist has doubled down on the bearish sentiment he published over the weekend in Market Strength Does Not Mean It Isn’t Vulnerable,

“Too many inexperienced investors are plowing into technology ideas that seem overvalued at 20x revenues, complaining that the often older investment community does not understand the disruption taking place and are too handicapped by traditional metrics. Such “new paradigm” arguments remind us of the 1999-2000 era which was the last time Panic/Euphoria was this ebullient for months before cracks emerged and indices fell … fund managers fully concede that the rate of profit expansion will slide but most fear more upside and relative performance issues than a double-digit decline at the moment, yet they prefer a higher quality tilt to portfolios. Unfortunately, this has become very consensus. Indeed, the paucity of immediate catalysts for a pullback is cited regularly, although we worry about higher taxes, cost pressures eating into profitability, tapering and more persistent inflation all coalescing in September”

Story continues below advertisement

“@SBarlow_ROB Citi: “Market Strength Does Not Mean It Isn’t Vulnerable”” – (research excerpt) Twitter

***

RBC’s head of global energy research Greg Pardy released his list of top stock ideas in the global energy sector. The report includes specific bullish comments on each company selected but there doesn’t appear to be an overriding quantitative selection process.

As for Canadian companies, Cenovus Energy Inc. is listed among the integrateds, the exploration and production subsector includes Canadian Natural Resources Ltd., Tourmaline Oil Corp., ARC Resources Ltd., and Tamarack Valley Energy Ltd.. Secure Energy Services Inc. is the domestic pick in oilfield services, AltaGas Ltd in midstream.

“@SBarlow_ROB RBC: “Global Energy Best Ideas” – (table) Twitter

***

Nomura strategist Naka Matsuzawa sees an increasing chance that the Federal Reserve will make a policy mistake,

Story continues below advertisement

“The deviations between the Fed and the market’s economic sentiment and monetary policy outlook have become quite conspicuous, and we think that the two are likely to collide head-on in the near future … In the US bond market, yields have declined since the CPI shock in mid-May, driven by super-long yields, which are the hardest for the Fed to control, but at present medium-term yields, which are in the Fed’s range of defense, are gradually coming under downward pressure as well. This is because near-term, as well as medium-term, Fed rate hike expectations are falling. The market has priced in 48bp in rate hikes over the next two years, and has not fully priced in the two rate hikes in 2023 predicted at the June FOMC. We think the market, regardless of the Fed’s intentions, is aware of the risks that: 1) governments could take hardline measures such as lockdowns in response to the renewed spread of coronavirus variants; and 2) risk-off flows stemming from China could grow more serious. The market’s iron rule is to avoid fighting the Fed, but the Fed itself will not blindly push through its course of action … (3) above in particular is reminiscent of the Fed’s policy error when it began raising rates at end-2015, even though the global economy and markets were in turmoil due to China’s decision to devalue RMB. "

“@SBarlow_ROB Nomura: “The deviations between the Fed and the market’s economic sentiment and monetary policy outlook have become quite conspicuous, and we think that the two are likely to collide head-on in the near future” – (research excerpt) Twitter

***

Diversion: “Why Even the Fastest Human Can’t Outrun Your House Cat” – Wired

Tweet of the Day:

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies