Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
Data centres need nat gas
Morgan Stanley analyst Robert Kad expects AI to drive huge gains in natural gas demand and two Canadian companies are among the beneficiaries [my emphasis],
“Across the U.S., our analysis counts 1,272 announced data centre projects totaling 80 GW of incremental power demand. We estimate a high end forecast of 14-15 Bcf/d of corresponding natural gas demand. … Demand growth is concentrated in PJM [a power grid entity covering Michigan, Delaware, Illinois, Ketucky, Maryland North Carolina, Ohio, Tennessee and Virginia among other states] (55 per cent of total) and Virginia (34 per cent), with EQT, TC Energy, Dominion, and Vistra most proximate in our geospatial mapping. Preferred ways to play this geospatial analysis include E&Ps (EQT), Midstream Energy Infrastructure (WMB, TRP, ENB, KMI) & Utilities (VST, TLN).”
Gold
BMO chief economist Doug Porter published a note called Trade Tally: New Gold Dream (a reference to the 80s band Simple Minds that I bet went over a lot of people heads) showing that soaring gold prices have obscured weakness elsewhere in trade,
“In a difficult year for Canadian trade, the spike in gold prices helped keep the overall balance in check. True, the deficit for the year widened to $31.3 billion from $7.2 billion in 2024, but that’s less than 1 per cent of GDP and manageable—especially with the surplus on services and investment income strengthening. Overall exports dipped 0.2 per cent last year, undercut by a 5.8-per-cent yearly drop in U.S. sales. And the overall figure was flattered by the 41.7-per-cent spike in precious metals (which keyed a 68-per-cent surge in exports to the U.K.). Unfortunately, this only countered the 3.0-per-cent drop in all other exports. The figures were also swayed by a pullback in prices for Canada’s number one export—oil. Looking through these price swings, overall exports fell 2.0 per cent in volume terms last year, while imports dipped 0.2 per cent in real terms. Most of the damage was done in Q2, and we still expect net trade to add moderately to GDP growth in Q4 (figures out next Friday). We dig into all these trade issues and the U.S. 2025 results as well in this week’s Focus Feature”
“BMO’s Porter: “Trade Tally: New Gold Dream”” – (chart) Bluesky
Small caps
The RBC Capital Markets global equity team updated their Canadian small cap conviction list,
“The Q1/26 Canadian Small Cap Conviction List has seen a total return of 9.2 per cent quarter-to-date, with the non-resource portion up 4.5 per cent quarter-to-date and the resource portion up 16.6 per cent quarter-to-date. This compares to the S&P TSX Small Cap Index total return of 15.1 per cent quarter-to-date and the S&P TSX Composite Index total return of 6.2 per cent quarter-to-date. This report features a comment from each contributing analyst on potential share price catalysts ahead”
The stocks on the list are Cargojet Inc., Cineplex Inc.,, Coveo Solutions Inc., DRI Healthcare Trust, Doman Building Materials Group Ltd., D2L Inc., Exchange Income Corporation, Jamieson Wellness, Inc., Pet Valu Holdings Ltd., Primaris REIT, StorageVault Canada Inc., Trisura Group Ltd., WELL Health Technologies Corp, Cascades Inc., Enerflex Inc., G Mining Ventures Corp., Interfor Corporation, Major Drilling Group International Inc., Osisko Development Corp, Superior Plus Corp. and Torex Gold Resources Inc.
Bluesky post of the day
B of A: “.. in 2026, for every $100 of inflows to global equity funds, US stocks have accounted for $26, their lowest share since 2020 .. “.. US exceptionalism theme ending with lower relative inflows to US assets, not outflows from US assets.”
— Carl Quintanilla (@carlquintanilla.bsky.social) February 20, 2026 at 7:14 AM
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Diversion
“Rumors Suggest Apple and Meta Are Betting Big on AI Wearables” - LifeHacker