Skip to main content
top links

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

The RBC mining and materials equity team upgraded base metals stocks to “overweight” and published their top ideas for the first quarter of 2024,

“Our view: For Q1/24, we upgrade Base Metals & Energy Transition Metals to Overweight, upgrade Diversified/Bulks commodities to Overweight, maintain our Overweight rating on Precious Metals and Uranium, and reiterate our neutral view on Fertilizers. We are making two additions to the Best Ideas Portfolio and five deletions -- we are adding Vale and Sandfire Resources and removing Pan American Silver, Ecora Resources, Norsk Hyro, Mineral Resources, and South32. The Q4/23 portfolio was up 14.9% outperforming the MSCI Benchmark up 12.0 per cent”

The companies on the list are now CF Industries, Nutrien, Capstone Copper, Hudbay Minerals, Sandfire Resources, Ivanhoe Mines, Pilbara Minerals, Adriatic Metals, Hochschild Mining, G Mining Ventures, Gold Fields, Northern Star Resources, De Grey Mining, Agnico Eagle, Royal Gold, Cameco, NexGen Energy, Vale, Champion Iron, Glencore, Teck Resources, and Anglo American.

***

BofA Securities investment strategist Michael Hartnett wonders how investors can believe Federal Reserve rate cuts are imminent,

“Only 5 times in last 90 years has Fed cut rates with core CPI (3.9 per cent) more than the [unemployment]-rate (3.7 per cent), cuts triggered by war (1942) or recession (1969, 1974, 1980, 1981), but neither in 2024…why Wall St soooo risk-on … At least until weak US$ says ‘policy mistake’ or U.S. labor market transitions to redundancies (-ve payroll) … Geopolitics inflationary … Transit volumes through Red Sea/Suez Canal down 35-45 per cent past 4 weeks … Red Sea 12 per cent of world trade, 30 per cent of container traffic) … Global freight rates up 120 per cent past 6 weeks … We like bonds (shorter-duration given policy risk), as well as bullion (the U.S., dollar will weaken); case for bonds … Equity-like returns without equity-like risk … Handy at a time when ‘soft landing’ slam-dunk consensus, and world growth so dependent on US consumer”

***

RB Advisors deputy chief investment officer Dan Suzuki continued to flesh out the firm’s belief we are at a ‘once-in-a-generation’ inflection pointy for investors,

“Market leadership tends to change in response to structural shifts in the macroeconomic fundamentals. The global economy is currently undergoing major inflections across inflation, interest rates, globalization, corporate profitability, demographics and government balance sheets. When coupled with the prevailing bifurcation of sentiment and record market concentration, the current juncture may offer investors a once-in-a-generation opportunity to rebalance portfolios. Just as in the wake of the Internet bubble, what part of the market you own could mean the difference between another lost decade of returns for crowded and expensive assets or very attractive returns or assets where capital is truly scarce. With all eyes on US large cap growth stocks and disinflation beneficiaries, we see bigger opportunities in international, small caps, value stocks and inflation beneficiaries”

“What does a once-in-a-generation investment opportunity look like?” – RB Advisors

***

Diversion: “Landmark Research Reveals the Origins of Multiple Sclerosis” – Gizmodo

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe