Desjardins REIT analyst changes his top picks as economic outlook deteriorates

A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web

Desjardins analyst Kyle Stanley is changing his REIT recommendations as the outlook for domestic economic growth deteriorates,

“The new U.S. administration’s approach to trade has dramatically increased geopolitical tensions and resulted in significant equity market and yield curve volatility in the year to date. The corresponding deterioration of the Canadian economic outlook since we published our 2025 outlook in December has prompted us to revisit historical REIT performance under various scenarios that most closely resemble today’s economic environment. Based on this analysis, we have reconfigured our preferred asset class pecking order to (1) seniors housing; (2) multifamily; (3) retail; (4) industrial; (5) self[1]storage; and (6) office”

Mr. Stanley has “buy” ratings on Nexus Industrial REIT, Boardwalk REIT, European Residential REIT, Flagship Communities REIT, BSR REIT, Minto Apartment REIT, Granite REIT, Interrent REIT, Dream Residential REIT, Dream industrial REIT, Canadian Apartment Properties REIT and Killam Apartment REIT.

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RBC Capital Markets head of global energy research Greg Pardy provides top picks in the energy sector in a report called Canada-An Energy Powerhouse ,

“The 590,000 Trans Mountain Pipeline Expansion (TMX) has transformed Canada’s oil egress equation, affording energy producers with global market diversification at a critical time and a revenue tailwind via narrower/less volatile WCS-WTI spreads. From 2 million bbl/d back in 2000, Canada is poised to support about 800,000 bbl/d of crude oil supply growth from 2024-30—reaching 5.9 million bbl/d by end of decade. Our updated crude oil supply-demand analysis also suggests that Canada should remain long oil export pipeline capacity until late 2027 amid circa 75,000 bbl/d of optimization/integrity gains across various lines. Indeed, the energy pieces are falling into place for Canada, with carbon competitiveness —a private-public venture—still to go … Canada’s total oil supply growth of 800,000 bbl/d from 2024-30 to 5.9 million bbl/d (2-per-cent CAGR, 133,000 bbl/d per year) remains largely intact … Our emphasis on energy stock selectivity reflects intensified market volatility amid no clear path for US tariff policy at this juncture. Our high conviction picks—all of which are on our Global Energy Best Ideas List—include Shell in Europe, ConocoPhillips and Chord Energy in the United States, and Suncor Energy, Canadian Natural Resources, ARC Resources and PrairieSky Royalty in Canada”

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Citi foreign exchange strategist Daniel Tobon is suggesting clients should buy the U.S. dollar against the loonie in case of an election surprise,

“We see several vulnerabilities for CAD. Markets likely view a Carney victory as one associated with greater fiscal and a more measured approach to trade negotiations. Thus CAD is subject to a knee-jerk selloff if Poilievre were to surprise, in that it could imply less expansionary fiscal and/or more volatility on the negotiations front. But regardless, we think markets are underpricing the possibility of US-Canada trade tensions resurfacing after the election. We’re reminded Carney’s ascension was catalyzed by deteriorating relations over tariffs. Indeed, our measure of cross-asset tariff risk has generally tracked Liberal Party polling (Figure 2). With President Trump and Carney having shelved trade negotiations until after Canada’s election, there is now risk the Trump administration approaches the initial (re)negotiations hawkishly once the election is in the rearview mirror (and there’s a lower bar for a negative surprise after recent concessions on reciprocal tariffs)”

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Bluesky post of the day:

Diversion: “A Massive Underwater Volcano Literally Shook the Edge of Space” – Gizmodo