Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
Sentiment in REIT sector stuck in neutral
RBC Capital Markets analyst Pammi Bir previewed earrings season for the REIT sector and reiterated top picks in the form of “higher conviction calls”,
“Markets giveth and taketh away. For a minute there, we felt quite smart. To Feb-27, the TSX REIT Index posted a +6% year-to-date total return, tracking well toward our base case high-single to low-double-digit return call for the year. Yet as we’re often reminded, as quickly as the gains come, the pullback can be even swifter. As the Iran conflict took hold in March, this time was no different. To Mar-27, the TSX REIT Index delivered a flat YTD return, relatively in line with the TSX Composite (+1%) but ahead of the S&P 500 (-7%). Versus global peers, CDN REITs outperformed Europe (-6%) & Asia (-1%) but lagged the US (+3%).
“Sentiment seems stuck in neutral…Equity markets, along with Canadian REITs, have made up some lost ground in recent days. Still, soaring energy prices, inflation concerns, higher bond yields, and downside risks to economic growth have weighed on investor appetite. Against this backdrop, investors seem to be leaning a bit more defensively, with seniors housing and retail outperforming more cyclically exposed property types YTD, including industrial and office … Sector remains well-positioned for cloudier skies. Though new risks have surfaced, we believe the key ingredients are intact for the sector to deliver high-single to low-double digit total returns in 2026. That includes healthy fundamentals across most property types, decent N12M [next 12-month] earnings and NAV growth (low to high-single digits), strong corporate liquidity, and reasonable leverage … While a parting of macro clouds would likely help, our optimism is underpinned by decent earnings and NAV growth and reasonable valuations. Our basket of higher conviction calls includes BEI, CIGI, CSH, FCR, GRT, and SVI, reflecting a mix of strong fundamentals, compelling earnings growth, and value. Other top picks: APR, CAR, DIR, EXE, GO, HR, KMP, MHC, PMZ, REI, and SRU”.
Oil market not out of the woods
BofA Securities analyst Kalei Akamine discussed the global energy markets after announcement of a ceasefire in the Middle East,
“At the eleventh hour, escalation threats gave way to a two-week ceasefire that triggered an immediate relief rally. Oil prices plunged $17/bbl, leaving WTI trading under $100/bbl for the first time in a week. Traders, desperate for any signs of de-escalation, seized the moment to lean into risk, lifting S&P futures up 3%. Boats will move but oil fields stay shut. Oil still tightening This ceasefire is explicitly short-lived. While Iran agrees to allow safe passage through the Strait of Hormuz, potentially normalizing tanker traffic, 11 million b/d of production remains shut-in. Fully reactivating these fields will take weeks, maybe months, and simply won’t happen in a temporary truce – therefore while tanker traffic provides a lifeline to embattled buyers, inventories are still draining, and the market is still tightening. Fundamentals today are simply different – the 400mn bbl build that occurred in 2H25, that threatened to double in 1H26 and push oil into the low $50’s, has been now wiped out 5 weeks into the war. Balances are now much tighter, mid-cycle oil is now higher, geopolitical risk has been validated, and global SPR refill will likely firm future demand. But make no mistake that oil stocks will still reverse, just not all the way …
“Our best ideas have been more than just a call on oil. OVV – our top pick for 2026 – is a rerating story anchored on portfolio clean up. With NuVista, OVV can now claim 15 years of oil runway in two of the best assets in E&P – the Northern Midland Basin, and the condensate-rich Montney – versus a peer avg. of +/- 10 years. The pending Anadarko sale ($3.0bn), expected imminently (early 2Q), not only fully funds NuVista ($2.7bn, ~$1.2bn cash), but leaves a clean balance sheet (0.6x) that underwrites a new 50-100% payout ratio”
Promising connectivity
Connectivity - optical and copper cables for network and industrial uses - continues to look promising as a picks and shovels method of benefiting from the data centre buildout, electrification, and an improving global economy according to Citi analyst Asiya Merchant,
“We remain constructive on Corning shares (+ST [short-term] view), reflecting its structurally advantaged, vertically integrated position within the optical supply chain. Ramping solar production facilities should also enable improved margins and FCF generation ahead. Shares have outperformed (65% YTD), we would be buyers on any macro related dips ahead of their May 6th Investor Updates where we expect updates to their 2028 Springboard. Copper interconnect players (APH/TEL) have experienced multiple compression as shift towards optical interconnect gains momentum. We believe the recent underperformance at APH creates an attractive setup (+ST view), given constructive intra quarter data center commentary (AI+CPU Infrastructure, 35%+ of revenues) and the recent CCS acquisition which better positions them vs peers in the copper/optical debate. On TEL, constructive data center demand, energy and improving industrials provide partial offsets to mixed auto datapoints in the near term”.
Bluesky post of the day
1 Bloomberg’s John Authers: Going further back, the market is pricing this as a truly historic development. These are the 10 biggest daily declines in the Brent crude contract since 1990.
— Don Curren 🇨🇦🇺🇦 (@dbcurren.bsky.social) April 8, 2026 at 6:57 AM
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Diversion
“Fascinating: 70 years of data says that music is getting worse” - A Journal of Musical Things