A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web
The Federal Reserve’s statement on monetary policy this afternoon overshadows everything else in the investment world today.
Global markets are expecting signs of an imminent rate cut – and have already bought risk assets in anticipation – so a statement deemed insufficiently dovish would likely result in a downward move in equities.
“@dbcurren BMO: “We forecast that the #Fed will eventually cut policy rates to mostly mitigate #growth headwinds coming from the #trade file, but we reckon today’s too soon, despite how bulled-up stock and bond #markets are, and how bullied-up President #Trump is” – Twitter
Goldman Sachs’ monthly “Where to invest Now?” report is great, but it’s in slide presentation form and the lack of explanatory text means some reading between the lines is required.
This month’s version features a list of U.S. stocks where strategist David Kostin sees strong expected earnings growth combined with reasonable valuations.
These top picks include Lululemon Athletica Inc., Advanced Micro Devices Inc. and some lesser-known names like Ulta Beauty Inc., Ebix Inc., and Fox Factory Holding Corp.
“GS: High growth, reasonable valuation stocks” – (full table) Twitter
“@SBarlow_ROB GS: Sector valuations well ordered by ROE” – Twitter
Citi analyst Prashant Rao provided a positive outlook for the Canadian energy sector in a report released Wednesday, and included a potential dividend play in the sector,
“With inventory levels stubbornly at YE18 highs, we believe that the Kenney administration will continue mandated curtailments into next year while simultaneously having talks with the private sector to assume its CBR contracts. Our S/D model now assumes flatter overall production into 1H20, inventory levels normalizing as 2020 begins on a similar CBR ramp as before (but off of a lower baseline 2Q rate). Importantly, this could leave room for production growth to resume in 2H20 irrespective of Line 3 expansion’s timing. … Despite a lack of specific payout ratios, HSE’s reduced capital profile, low debt repayment need, and concentrated ownership make growing dividend ratably the preferred way to return excess capital to shareholders. We expect HSE to increase its dividend at ~20% CAGR in the next 5 years.”
“@SBarlow_ROB Citi constructive on Canadian oils, sees a dividend play in HSE’ – (research excerpt) Twitter
“If countries commit to climate action ‘Canada’s oil is first to go’: Professor” – BNN Bloomberg (video)
Tweet of the Day:
Which brings me to my final observation. If the major selling point of this project is the potential to create a unified (and convenient) payments system - then it's worth asking if a company facing antitrust and political scrutiny is going to be the right one to do that.— Tracy Alloway (@tracyalloway) June 19, 2019
Diversion: “Here Are The Top 40 Places You Should Never Ever Swim” – Science