Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
Look for a pause in rally
Scotiabank strategist Hugo Ste-Marie warns clients of temporary overheating in U.S. equities,
“While we remain bullish Equities, the rapid increase in the S&P 500 over the past few weeks has led to the emergence of acute overheating conditions. Recall that the S&P 500 (7501) has gained more than 1150 points from its March-30 low (6344), implying an 18-per-cent bounce. After such a move, the index is now trading 591 points above its 50-day moving average. … the deviation from its 50-d MA represents a three standard deviation move relative to deviations observed over the past year. Again, we believe the uptrend in equities will endure, but the aggressive overheating conditions could point towards some consolidation in the near-term, especially if LT bond yields keep surging in coming days”
Electricity strategy
RBC Capital Markets analyst Maurice Choy sees long term benefits from the federal government’s plans for the electricity grid,
“Our view: We see long-term benefits in having an effective National Electricity Strategy, particularly to promote more efficient capital investments across our Canadian Power, Utilities and Infrastructure coverage, and meet rising power demand across the country. Admittedly, there isn’t much tangible news in this announcement for investors to act on, with more details likely to emerge after the government completes its planned consultations over the coming months. For the regulated utilities, we see the potential for Hydro One, Fortis, Emera and Canadian Utilities to get involved in building more interprovincial interties. For the Alberta IPPs, this strategy may offer a supportive future landscape for more power generation opportunities in Canada, although we remain most focused on the industrial carbon tax review and the Clean Electricity Regulations (which were temporarily suspended in Alberta as part of the Canada-Alberta MOU last year), and what these mean for data center development in Alberta. For renewables, we see the announcement as being neutral, as renewable energy is typically procured at the provincial level and tax credits are already in place to support growth. Lastly, we believe Hammond Power Solutions could benefit from government support for domestic manufacturing of electrical equipment, including transformer”
Rare earth outlook
BofA Securities’ global mining conference this week included a focus on rare earth materials as analyst Lawson Winder reported,
“Adamas Intelligence: Permanent magnets drive more than 50 per cent of volume and more than 95 per cent of value from RE consumption perspective. Over 80 different grades of NdFeB [Neodymium-Iron-Boron] magnets are available, with dysprosium and terbium required for high-temperature applications. NdFeB demand is set to increase 3x by 2040. Robotics are the new frontier, poised to surpass all other end-use categories by 2040 (based on a conservative forecast of 65m robot units per annum). As of Q1′26, global magnet capacity at 45ktpa [tonnes per annum] of. Capacity is set to increase to 117ktpa by 2030, with over 70ktpa of ex-China capacity planned.
“MP Materials (MP): MP is a vertically integrated (mine to) magnet producer. In its Midstream RE separation business, MP is currently producing at 4000tpa of NdPr oxide and expects to reach 6000tpa by YE26. Independence facility magnet commissioning and qualification process is underway (on track to generate magnet revenue from GM by YE26). Also, recently broke ground at the new magnet facility (10X). Per MP, there is 14kt of ex-China NdPr supply (MP and Lynas) with more than 50kt of ex-China magnet capacity (requiring 31kt of NdPr). By 2040, ex-China magnet capacity can increase to 160ktpa, requiring 80kt NdPr. Management highlighted that ex-China NdPr supply is already tight and largely committed, reinforcing the strategic value of integration. Technological progress has allowed MP to reduce heavy rare earth usage in magnets by roughly 60%”
Adamas executives forecast NdFeB pricing to reach $150 per kilogram in the medium term, almost triple current prices.
Bluesky post of the day
GOLDMAN DESK: “.. as illustrated by the dark blue line, it’s obvious why the top heaviness of S&P is a topic of conversation. at the same time, you have to ask if you’re willing to pick a fight with the light blue line ..” [Pasquariello]
— Carl Quintanilla (@carlquintanilla.bsky.social) May 15, 2026 at 7:23 AM
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Diversion
“NASA Reveals New Details About Artemis 3—and It’s a Bit Weird" - Gizmodo