Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
Top picks in REITS
RBC Capital Markets analyst Pammi Bir reviews first quarter earnings in the REIT sector and provides top picks,
“Our view: Post better-than-forecast earnings growth, we can’t help but feel more constructive on our preferred subsectors, particularly seniors housing, industrial, and retail. Notably, upward revisions to earnings and NAV estimates were once again the strongest in seniors housing, while firmer tailwinds are also forming in industrial. Retail remains operationally resilient, with some extra juice to NAVs from cap rate compression on the back of recent transactions. Among our top picks, we see a particularly compelling entry point on CSH, with its PEG ratio among the lowest in our coverage. We also flag GRT (above average growth profile), REI (accelerating core earnings growth), the visible high-single digit growth of APR, MHC, and SVI, and encouraging (surprising) positive momentum in KMP’s operating performance. Other Outperform ratings include: BEI, CAR, CIGI, DIR, EXE, GO, HR, PMZ, and SRU”
The re-narrowing
Scotiabank strategist Hugo Ste-Marie described the re-narrowing of global market leadership and the difficulties this causes for active managers,
“While the S&P 500 started the year with a broader rally across sectors and stocks, market leadership has since narrowed significantly. Year-to-date, only 36 per cent of stocks are outperforming the index. This shift largely reflects Technology’s initial underperformance early in the year, followed by a sharp rebound that has returned the sector to the top of performance rankings. As a result, this marks the fourth consecutive year in which market gains have been highly concentrated in a small number of stocks … For context, Tech now accounts for 37 per cent of the S&P 500 and nearly half of the index when combined with Communications (48 per cent in total). In Canada, the rally appears broader at first glance, with 69 per cent of stocks posting positive returns and 51 per cent outperforming the TSX. However, the picture changes materially once Energy stocks are excluded. Ex‑Energy, only 36 per cent”
How rallies end
Michael Hartnett’s weekly Flow Show report at BofA Securities is as punchy as usual,
“Zeitgeist: “Everyone is now convinced that equities are the best inflation hedge.” The Biggest Picture: strong price action, retail mania, slumping vol...so bubbly; add mega IPOs to AI big boys and market concentration easily surpasses (48 per cent) bubbles of roaring ‘20s, Nifty 50 ‘70s, Japan ‘80s, TMT ‘90s (but not railroads in 1880s); surge in bond yields how booms/bubbles end...why bond vigilantes on maneuvers; yield tells. … BofA Bull & Bear Indicator hits 8.0...sell-signal for risk assets triggered; consensus max bullish on Positioning & Profits, plus yields breaking up suggests some profit taking here; but no one cutting longs in stocks before historic IPOs and big top Policy tightening will come after CPI hits 4-5 per cent in coming months”
Bluesky post of the day
"Just 16 percent of U.S. adults rate the economy 'excellent' or 'good'" "Americans are increasingly listing gas prices as the nation’s top problem" "Americans still identify the government most often as the nation’s top problem," www.washingtonpost.com/politics/202...
— Scott Lincicome (@scottlincicome.bsky.social) May 22, 2026 at 7:22 AM
[image or embed]
Diversion
“The economics of unions” - Marginal Revolution