A morning roundup of research and analysis from the The Globe and Mail’s market strategist Scott Barlow
A remarkably succinct table from Citi Research highlights a significant group of global stocks set to benefit from the next wave of technological innovation.
The major themes are carbon capture (ArcelorMittal and AMG NV set to benefit), agricultural-based data analysis (BASF, Bayer), fibre recycling (Coats Group PLC), gene therapy (Gilead Sciences Inc., Novartis International AG), hydrogen power (Siemens AG, Vestas Wind Systems A/S), Quantum computing (ASMP), personalized nutrition (Danone SA, Yakult Honsha Co. Ltd.) and internet healthcare (Ping An Good Doctor) .
The report includes companies that will be most negatively affected by each trade.
“C: stock picks for the next wave of innovation” – (full table) Twitter
See also: “@tracyalloway As I looked over the 26-page Morgan Stanley research note describing the billions of dollars being poured into ESG, I couldn't help but wonder: is there a risk that the rush into sustainable investing might not be that sustainable?” – (charts) Twitter
RBC analyst Josh Nye reported that more Canadians are struggling with high debt loads,
“Consumer insolvencies rose an eye-catching 9.5% in 2019, the largest annual increase since the 2008-09 recession. That translated into 44.6 insolvencies per 10,000 working age Ca-nadians, up from 41.4 in 2018 but still well short of the 55.8 rate seen in 2009. Last year’s increase reflected a rise in the number of ‘proposals’ — offers to pay creditors a percentage of what is owed and/or extend the repayment schedule … Actual bankruptcies declined for a tenth straight year after legislative changes in 2009 made consumer bankruptcy more punitive.. Rather than changing labour market conditions, we think an increase in debt servicing costs was a key factor in rising insolvencies”
“ @SBarlow_ROB RBC: "More Canadians struggled with debt in 2019"” – (research excerpt, chart) Twitter
An alarming negative surprise regarding the spread of the coronavirus has Wall Street strategists scrambling to update their forecasts. There are widely disparate views on how investors should navigate the illness-related economic slowdown. B of A Securities remains optimistic,
“Despite recent concerns about the effects of coronavirus on global growth, we find evidence of a cyclical recovery ahead, particularly in the US. Macro data for consumers, credit, China, commerce & central banks imply 11% US EPS growth by the end of Q2… Our scenario analysis shows that in a broad rebound, outperformance is likely from cyclical sector, US & EM ex-China & HY bonds, many of which investors have shunned in 2020. Sell deflation winners like crowded tech & rate-sensitive utilities.”
“@SBarlow_ROB BoA still bullish’ – (research excerpt) Twitter
Citi is more cautious,
“There is uncertainty, not just about the epidemiological progress of the virus, but on how long and how much routines will be affected and spill over to the global economy … The economic impact of the virus requires evaluation through multiple lenses 1) manufacturing supply chains; 2) tourism, transportation, and services relationships; and 3) commodity demand and prices … After an initial selloff, markets, even in China, rebounded. Is this because the markets believe there will be a rebound in China that will lift other economies, that the tourism shock is limited, and that lower oil prices on balance are positive for the global economy? Or, are the markets assuming that monetary policy will react to cushion the global economy, as has been the case in recent years? Overview of February projections: We lowered our global growth forecasts by 0.2pp to 2.5% for 2020 and raised for 2021 by 0.1pp to 2.8%”
“@SBarlow_ROB C: more of a wait and see outlook” – (research outlook) Twitter
Newsletter: This strategist thinks ETF investing is a Ponzi scheme that will end badly – Globe Investor
Diversion: “ Why are people getting worse at The Price is Right?” – Marginal Revolution
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