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

BofA Securities sees the possibility that copper, currently trading near US$4.50 per pound after a strong rally, could reach US$9 by 2024,

“Given the fundamental backdrop, and low inventories, we see a risk that the red metals may spike to $5.89 per pound … we expect a rebalancing of the copper market in 2023 and 2024, before renewed shortfalls and another draw on inventories kick in from 2025 … In our view, scrap supply is critical and our analysis suggests that scrap usage at smelters/refiners could increase from around 4200 tonnes in 2016 to 6700 tonnes by 2025. If our expectation of increased supply in secondary material … did not materialise, inventories could deplete within the next three years, giving rise to even more violent price swings that could take the red metal above $20,000 per tonne ($9.07/lb)”

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“@humenm Anyone for $20,000 a tonne copper? ' – (research excerpt) Twitter

***

Stocks representing companies with high ESG rankings have been outperforming, but, as Credit Suisse U.S. equity strategist Jonathan Golub noted, the positive performance is not coming from environmental-related stocks, it’s the ‘S’.

Mr. Golub published a chart Monday showing that stocks qualifying for the environmental segment of ESG have outperformed the S&P 500 by only 0.2 per cent while those conforming to social requirements – diversity and inclusion primarily – have beat the benchmark by 4.8 per cent.

“@SBarlow_ROB CS’s Golub: It’s the ‘S’ in ESG creating the outperformance,” – (chart) Twitter

***

BMO economist Shelley Kaushik relayed StatsCan data showing the economic effects of the pandemic by province,

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“The pandemic and its accompanying restrictions were certainly the biggest story of [2020]: the best-performing economies were in the relatively less-affected Maritime Provinces, led by Prince Edward Island’s 3.0% contraction. And, who can forget the historic oil price drop of last spring? That drop, plus a heavy caseload, dragged Alberta’s economy down by 8.2%, marking the deepest recession in the country. A strong concentration of cases in other economic heavyweights, including Quebec (-5.3%) and Ontario (-5.0%) brought national economic output down 5.3% on an industry basis for the year … "

“@SBarlow_ROB BMO: pandemic-related economic damage by province” – (research excerpt) Twitter

***

Scotiabank strategists see a major commodity index at an important level,

“While the ride in copper prices to $4.50 has grabbed a lot of attention, most commodity prices have enjoyed a strong ride in the past year. As shown below, iron ore, steel, lumber, corn, soybeans, wheat, coffee, cotton, and lean hogs have also performed well, with some standing at/near record highs. ... The CRB index is now back to a five-year ceiling. While the 200/210 level could offer some resistance, if that zone is exceeded, it would mark a major breakout for the commodity basket, with the uptrend potentially extending toward the 280 level.”

“@SBarlow_ROB BNS: Important level ahead for CRB index’ – (research excerpt, charts) Twitter

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***

Newsletter: “Investors should start preparing for an inflation ‘earthquake’” – Globe Investor

Diversion: “20 percent of full workdays will be supplied from home after the pandemic ends, compared with just 5 percent before” – Marginal Revolution

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