Barlow’s Research Roundup: Biggest issues for regulated utilities investors

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

Utilities underperform as bond yields climb

RBC Capital Markets analyst Maurice Choy summarized the big issues in domestic regulated utilities,

“Canada (sector total return 0.5 per cent vs. S&P/TSX Composite 3.8 per cent in April 2026). The Canadian regulated utility sector underperformed the S&P/TSX Composite index in April 2026, as the 10-year Government of Canada bond yield rose roughly 10 basis points during the month to 3.54 per cent. Of note, on a month-over-month basis, Hydro One (up 1.6 per cent) was higher, Emera, Fortis and Algonquin were largely flat, and Canadian Utilities (down 0.8 per cent) was lower.

“Topic-wise, discussions mainly centred around: (1) our expectations heading to the Q1/26 results release; (2) the OEB disallowing H’s recovery of 2025 ice storm costs, as well as the Red Lake transmission line being declared a priority project; (3) AQN potentially re-domiciling to the U.S. to optimize its tax structure; (4) remaining catalysts for EMA, notably the closing of the sale of NMGC; and (5) ROE matters relating to FTS (notably at ITC;) and CU (given Alberta’s annual formulaic reset for ROE)”.

More record highs ahead

More record highs are ahead for U.S. equities says Goldman Sachs head of equity execution [trading] on the Cross Asset Sales desk Brian Garrett,

“After a massive rebound in the past six weeks—which saw the S&P 500 recoup all of its March losses and then some—a key question is whether U.S. stocks are likely to cool off.

“Garrett says these concerns are reasonable. He points out that investor sentiment has gone from ‘quite negative to extremely positive’ in a short length of time — which could suggest that there is now a lack of potential buyers.

“Indeed, after the S&P 500 makes new all-time highs, returns over the next month do tend to be below average. Still, he believes that the recent rally is built on a solid foundation. ‘The geopolitical environment has cooled, the economy is healthy, and earnings have surprised to the upside,’ Garrett says. And a deeper look at the historical record reveals an interesting pattern. While returns after all-time highs tend to be weaker over the next month, they’re actually stronger over the next year. ‘Longer-term-oriented investors should still expect positive things from U.S. equities,’ Garrett says”

World Cup and technology

BofA Securities thematic research analyst Haim Israel discussed the mammoth scale of the upcoming World Cup and the technological development involved in the coverage,

“With 48 teams and 104 matches across 16 host cities, the tournament is projected to engage more than 6 billion people-around three-quarters of the world’s population. Attendance is expected to reach 6.5 million fans, almost double the previous record … A FIFA-WTO study estimates that the 2026 World Cup alone could add around $41-billion to global GDP and support over 800,000 jobs, with the U.S. accounting for 185,000 jobs. Accumulated air miles of all the people travelling to watch the games could reach 3 times the distance between Earth and the edge of our solar system, profiting airlines. Other sectors best positioned to benefit from World Cup include beverages, sportswear, restaurants, broadcasting, social media, and online betting … AI, exascale computing, digital twins, data centres, robots and autonomous vehicles are just a few of the technologies converging together at this event. The final match could consume up to 7 per cent of global internet traffic, as viewing shifts decisively from linear TV to streaming, mobile and social platforms … Our 2026 World Cup survey across BofA Global Research suggests that France will lift the trophy in a final. Mbappé is expected to be top scorer and Lamine Yamal player of the tournament. AI concurs, but adds Spain with equal probability to win the World Cup”

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