Research Roundup: Shockingly bullish strategist recommends these ‘stocks for stability’

Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow

Perfection amidst chaos

Evercore ISI strategist Julian Emanuel is surprisingly bullish, seeing the potential for “perfection” conditions for investors,

“Navigation – Perfection Amid Chaos – On 1Q26 Earnings Season: 2026 to date has been highly Imperfect and Chaotic for Investors – AI Disruption concerns, Credit Stress, surge and crashin Precious Metals, Government shutdowns, Geopolitical tension and outright conflict, the latest in the Middle East spiking Oil and raising fears over Affordability and Inflation. Yet there are reasons for optimism, even Perfection. The 4/7 U.S./Iran Ceasefire sparked a huge rally catalyzed by Oil plunging and early unwinding of extreme Bearish hedging positioning in Stocks, Credit, and Bonds. March/April has a history of significant market turns, up and down. … Importantly, 1Q26 Earnings Season will be strong, 3M Revisions robust – underscored by SPX consensus 2026 EPS rising from 312 to $320 (up 17.2 per cent; EVR ISI up 11.1 per cent) despite the Oil Shock, and strength in not just Energy (26 per cent) but also Info Tech (40 per cent) and Materials (28 per cent). 10-per-cent-plus EPS growth years have seen 13-per-cent SPX upside on average, up 10/11 times since 1996. Earnings Drive Stocks, and will help lift SPX to 7,750 by year-end 2026. Companies, amid the Oil volatility and Chaos, are likely to guide conservatively, and some may pull altogether. But Investors, learning from 2025, won’t be fooled”.

Mr. Emanuel recommends the Evercore ISI Stocks for Stability - a list of internal analyst top picks. These include:

• Constellation Brands Inc. (STZ-N)
• Haliburton Co. (HAL-N)
• Toast Inc. (TOST-N)
• Boston Scientific Corp. (BSX-N)
• Caterpillar Inc. (CAT-N)
• Siemens Energy EG (SMEGF)
• Apple Inc. (AAPL-Q)
• Amazon.com Inc. (AMZN-Q)
• Microsoft Corp. (MSFT-Q)
• Palo Alto Networks Inc. (PANW-Q)

Fund Managers not panicking

Scotiabank’s quarterly survey of portfolio managers found less bearishness than I would have expected,

“No major shift; Equities remains top choice. While at the margin investors have added some defense in Q1, with Cash exposure rising a tad, we have not seen an exodus from Equities … Barbell positioning to mitigate the war impact. Materials and Energy are now viewed as the most likely outperformers over the next 12-month. We have to go back to 2022 to see such a combo. We remain Overweight both sectors as we suspect the commodity cycle could extend for quite some time. Tech is rounding out the top three, forming a nice barbell positioning, in our opinion, to protect against the war. We indicated yesterday that Tech risk-reward profile was getting more appealing after its relative valuation has deflated, while the sector retains its superior forward earnings momentum. Financials and Industrials sectors are ranked number 4 and 5, respectively. At the other end of the spectrum, we have consumer sectors, with both Staples, and Discretionary ranking at the very low-end of the pecking order … Despite the solid valuation re-rating of the past two years, Canadian and LatAm equities are still viewed as cheap, while U.S. equity valuation remains too high, according to investors polled … While we have 40 per cent of respondents indicating that U.S. earnings forecasts are too high, that percentage drops sharply in Canada to the tune of 10 per cent. We note two points: 1) resilient economic growth and 3-per-cent-ish inflation (pricing power) provide a fertile ground for companies to grow top-line growth at an above-average clip; 2) despite the uncertainty associated with the war in Iran, earnings expectations could endure heavy negative revisions without even flirting with no/negative growth - stocks have a good buffer there”

Private Equity concerns

TD U.S. rates strategist Molly Brooks is not yet too concerned about private credit issues cascading into the economy,

“Regulatory scrutiny is intensifying, with the Fed and Treasury demanding more disclosure as concerns about hidden exposures grow. While redemptions increased notably in the past few months, net inflows into the sector persisted in Q1 2026. Redemption limits and a more steady-handed investor base have helped curb significant outflows from the sector thus far. Pensions, insurance funds, and high net worth investors tend to be the largest holders of private credit. Banks have also been significant lenders to private credit funds, suggesting that a sharp decline in valuations could strain larger banks, which tend to be more exposed to the sector. While tremors in the sector have not yet made their way into broader markets, indicators such as payment-in-kind as a percent of total income and non-accrual rates are worth monitoring. There is significant differentiation in the sector, with many Business Development Companies still on a strong footing but others entering more stressed ranges.

“Further private credit worries could create pressure on markets, but are worth comparing to fears over falling CRE office valuations. Valuations remain about 50 per cent lower than pre-COVID levels and despite ongoing concerns, they have not yet significantly stressed the financial system. If the private credit sector sours and net inflows turn to outflows, we may see a tightening in financial conditions in parts of the economy, leading to some lending stresses. This would likely bull steepen the curve”

Bluesky post of the day

Diversion

“The economic value of eliminating cancer” - Marginal Revolution