A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web
In most cases, I’m not a big fan of “Top investment theme” reports because they’re usually full of flavour of the month stock ideas that don’t pan out for investors.
Citi is an exception as their investment theme analysts have built a strong performance track record.
In a recent report, Citi’s quantitative research team filtered through the thematic analysts top sector picks to uncover the most promising market areas and individual stocks. The top themes were, in order, services offshoring, artificial intelligence, IT services, global stock buybacks, timber and virtual reality.
Using a wide range of criteria including valuations, profit growth prospects, risk, and balance sheet health, the favoured stocks within the most promising themes include, BASF AG, ASML Holdings, SAP and Siemens Group.
“@SBarlow_ROB Top thematic market sectors” – (research excerpt) Twitter
“@SBarlow_ROB C’s top investment themes and stock picks” – (table of stocks) Twitter
The legal decision Thursday to delay the TransMountain pipeline construction was an unwelcome surprise for domestic oil patch investors.
Portfolio manager Eric Nuttal’s email to clients had a distinct undercurrent of frustration and annoyance,
“Is Canada the land of "no"? … Today the Federal Court of Appeals ruled that the Federal Government failed in their duty to adequately consult aboriginal people in the Transmountain Pipeline process and ordered that it must go back for review to the National Energy Board. Six years of work apparently wasn’t enough. This was NOT the expected outcome. Today’s event likely delays the ultimate approval of the pipeline barring “special legislation” from the Feds. “
I have my own feelings on the matter, but they’re worth no more than anyone else’s. The environment, the economy and jobs creation, and the rights of indigenous people are all legitimate concerns under the law and there’s no meta-framework that can prioritize them for all Canadians. It’s a straight fight for political influence.
“@SBarlow_ROB Canadian oil patch is annoyed” – (email excerpt) Twitter
“Ottawa stuck with Trans Mountain pipeline other investors wisely rejected” – Willis, Report on Business
“Trans Mountain court ruling a 'blow' to Trudeau's credibility, experts say” – CBC
Global asset management behemoth BlackRock warned Canadian investors about a domestic yield curve set to invert,
“Inversions of the curve between 3 months and 10 years successfully predicted GDP contractions beginning in 1981, 1990 and 2008, while failing to predict the 2015 slowdown, based on OECD and Statistics Canada data. False inversions, ones which weren’t followed by periods of GDP decline, were notable in 1962 and 1998.
Others say the current bout of flattening is different from previous episodes. Echoing Poloz, RBC Capital Markets head of fixed-income research Mark Chandler points to the “dearth” of long-dated Canadian debt distorting the curve. Additionally, the magnitude of change financial markets have gone through in recent years make it difficult to draw the same conclusions from yield-curve flattening today.’
“BlackRock sounds alarm as Canada curve inversion approaches” – Bloomberg
“@SBarlow_ROB BMO rel sanguine about inverted Canadian yield curve” – (research excerpt) Twitter
Tweet of the Day:
The link between your job and your ideology. https://t.co/1QOnn7IFl9 Would LOVE to see this done for the UK some time. Would BES or any other dataset allow it? @ProfJaneGreen @p_surridge pic.twitter.com/PAcFPSnuh5— Tim Bale (@ProfTimBale) August 31, 2018
Diversion: “Why Your Brain Can’t Let Go of a Grudge” – Gizmodo