Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
Citi analyst Alex Miller published the firm’s list of top performing investing sectors Thursday. The criteria include valuation, profit growth, price momentum, risk and earnings momentum.
In order, the top sectors are video gaming, services offshoring, IT services, patents/intellectual property, artificial intelligence, virtual reality and cloud computing.
Mr. Miller listed ten stocks with exposure to the most top-performing themes. These are Taiwan Semiconductor manufacturing, Samsung Electronics, SK Hynix, Apple Inc., Qualcomm Inc., Tata Consultancy Services, Resmed CDI, Cerner Corp., Digital Telecom IFCF and Netlink.
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RBC economists posted an update on domestic consumer spending,
“After staging a swift recovery in late May, spending on apparel, gifts, and jewelry ended August down about 8% relative to last year. Weaker back-to-school shopping likely contributed, as electronics spending also weakened. Total card spending was up about 5% relative to the same time last year. Spending on household goods and services, at department stores, and on specialty goods fell slightly towards the end of the month… Canadians continued to show interest in patios, with restaurant spending near year-ago levels.”
"@SBarlow_ROB RBC: “COVID Consumer Spending Tracker” (Canada)" – (research excerpt) Twitter
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Credit Suisse U.S. equity strategist Jonathan Golub published a list of the top performing U.S. stocks year to date,
“The biggest winners are more than just speculative darlings; they have faster sales and earnings growth, stronger margins, less debt, and reinvest more in their businesses. While their YTD returns might be stretched, these winners are fundamentally superior.”
The biggest winner list is led by Zoom Video Communications' 523 per cent jump and biotech firm Livongo Health’s 465 per cent surge. Tesla Inc., software provider Fastly Inc., solar power equipment maker Sunrun Inc., Docusign, cloud security software maker Zscaler Inc. , Wayfair Inc., Moderna Inc., and Peleton Interactive have all climbed more than 200 per cent.
Peleton, Docusign, Wayfair and Moderna are no surprise as beneficiaries from the pandemic, but clearly I haven’t been following the success of Zscaler , Fastly and Sunrun closely enough.
“@SBarlow_ROB CS: Top performing U.S. stocks year to date (to September 2)” – (research excerpt, table) Twitter
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Also from Credit Suisse, global equity strategist Andrew Garthwaite recommends a ‘structural overwieght’ in stocks, thanks to monetary conditions (my emphasis),
“Our aggregate policy indicator (monetary, fiscal, corporate lending and US dollar) is twice as loose as levels seen at the peak of the GFC. We believe policy remains very loose, allowing more of a V-shaped recovery (hence, pre-pandemic levels of GDP are restored by mid-2022). The key supports are: i) the extension of fiscal easing/furlough schemes in Europe; ii) the very limited tightening of lending/credit conditions; iii) the Fed being very dovish; iv) the recent fall in US bankruptcies; and v) little apparent likelihood of a widespread second lockdown (with the number of deaths falling sharply relative to infections in both Europe and the US). Policy should lead to inflation expectations rising to 3%, which should allow the [U.S. 10 year inflation-adjusted bond yield] to fall to 2.5% and the debt to be inflated away.”
"@SBarlow_ROB CS' Garthwaite: “Our aggregate policy indicator (monetary, fiscal, corporate lending and US dollar) is twice as loose as levels seen at the peak of the GFC"” – (research excerpt) Twitter
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Column: Why loonie watchers should be following the copper price – Barlow, Inside the Market
Newsletter: “Five tech sectors that will transform the economy and reward investors” – Globe Investor
Diversion: I am among the nerdy people counting the days until Canadian film director Denis Villeneuve releases Dune,
“Breaking Down the Spice, Worms, and Pain Boxes in Dune’s First Trailer” – Gizmodo
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Scott Barlow