Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
RBC analyst Bish Koziol helpfully provided a table listing the firm’s top Canadian stock picks for each major investment strategy. I’ll list the top five picks in each category.
* Value: Enerflex Ltd., Canadian Western Bank, Canadian Imperial Bank of Commerce, Bank of Montreal, Canadian Tire Corp.
* Growth: Northland Power Inc., CI Financial Corp., Gibson Energy Inc., Innergex Renewable Energy Inc., Canadian Tire Corp.
* Momentum: Eldorado Gold Corp., Kinross Gold Corp., Pan American Silver Corp, Thomson Reuters Corp., Metro Inc.
* Predictability: Winpak Ltd., Metro Inc., Shaw Communications Inc., Rogers Communications Inc., Algonquin Power & Utilities Corp.
“@SBarlow_ROB RBC: Top 15 Cdn stocks by investment style” – (full table) Twitter
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CIBC economist Benjamin Tal estimates that Canadian rent collection was better than expected for April, good news for real estate assets,
“According to preliminary estimates obtained from the Canadian Federation of Apartment Associations, residential rent collection for the month of May averaged between 75% and 90%, roughly in line with the collection rate seen in April. This figure is better than expected, with the consensus being that May collection would be weaker. Note that despite the fact that most of the recent decline in employment is concentrated in low-wage occupations, the April collection rate was higher among low-income renters. We suspect that the trend in May was similar. That can be explained by the availability of CERB money (which probably played a more important role in rent payments for May), and the fact that many of those renters are protected by rent control regulations and are reluctant to leave units with average rent well below the market rate”
“@SBarlow_ROB CM: Canadian rent collection better than expected for April” – (research excerpt) Twitter
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Citi remains skeptical that financial markets can continue to rally as the global economy deteriorates,
“The macroeconomic outlook therefore remains dire: we are expecting the deepest recession in living memory, and most economies will not return to their pre-COVID-19 GDP levels before at least 2021.Yet financial markets paint a different picture. A stark dichotomy has emerged between the economic outlook and financial markets. Continued stock market rally remains puzzling, yield curves have steepened and oil prices recovered. Extensive policy response, led by ample liquidity provided by central banks, likely contributed to the move in the markets. However, since it is not clear that markets can be propped up indefinitely, caution is warranted. Risk assets could be fragile once the cold, hard economic reality hits again.”
“@SBarlow_ROB C: "Risk assets could be fragile once the cold, hard economic reality hits again” – (research excerpt) Twitter
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Column: “A proven strategy for buying domestic bank stocks” – Barlow, Inside the Market
Diversion: “The pros and cons for Canadian cities interested in being hubs for fan-free NHL games” – CBC
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