Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
Scotiabank analysts in the biggest domestic market sectors selected stocks most at risk of U.S. tariffs,
“All the banks would be heavily exposed to the economic fallout from a Canada-U.S. trade war, although banks with a higher share of earnings coming the United States, such as BMO and TD, would be relatively more insulated… In a trade-war scenario, we would strongly favour Canadian lifecos over banks … With Diversified Financials and Insurance being service-oriented, with no physical exports, we think tariff implications relate more indirectly to (1) GDP/unemployment and (2) foreign exchange translation. Our most sensitive name to Canadian economy and labour markets is goeasy Ltd … U.S. and Canadian oil markets are very integrated. U.S. refineries need Canadian heavy oil (the United States is not a big heavy oil producer) and Canadian producers need U.S. refining (most Canadian pipeline capacity goes right to U.S. refineries). Tariffs are intended to support local businesses, but since the United States does not produce much heavy oil, who is it benefitting? … Ultimately, we believe the tariffs are a negotiating tactic and are either unlikely to be implemented (at least on energy) … Least impacted: Companies with international exposure (PXT, AOI, VET, and IPCO) or U.S. operations (OVV and BTE) would be less affected by tariffs … We expect tariffs would have a minimal impact on the Canadian Software & Payments firms we cover, given that most revenues generated by our coverage relate to software and services, with very little contribution related to products sold into the United States … Within our Transportation & Industrials coverage, companies that would be relatively most exposed to potential U.S. tariffs include railroads and aerospace players. Canadian railroads CNR and CP have highly diverse operations and customer bases, but they do have 21% exposure to U.S.-bound shipments from Canada and Mexico … We would view the negative impact on Canadian real GDP growth as a headwind for the [REIT] sector. In this report, we highlight three names within the S&P/TSX Real Estate Index that derive majority of their revenue/income from U.S. based assets: GRT.UT-CA (Granite REIT), CIGI-US (Colliers) and FSV-US (FirstService)”
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Nomura global research’s Top eight out-of-consensus calls includes one for Canada,
“Top 8 out-of-consensus calls US: The Fed cuts rates just once in 2025, in March 2. China: Despite more fiscal stimulus, growth slows to 4.0% in 2025 3. Euro area: No consumer recovery, raising the risk of even deeper ECB rate cuts 4. Japan: Amid a virtuous wage-price spiral, the BOJ hikes to 1.00% by Q3 5.India: With sharply slowing growi, the RBI makes 100bp of rate cuts by Q3 6. Malaysia: With strong investment-led growth, BNM hikes rates by 25bp in 02 7. Australia: The RBA cuts rates early, in February, with two more cuts in May and August 8. Canada: With lackluster growth and easing inflation, the BOC cuts rates to 2.50% by April”
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Citi U.S. equity strategist Scott Chronert selected 16 stock ideas for the next 12 months,
“We have selected 16 names for the Focus List. Our criteria during the selection process include: (1) actionable stocks by excluding those with low liquidity; (2) preference for stocks that did not score poorly on Citi’s multi-factor quant model; and (3) bold stock calls that were significantly different from the Street in expected total returns, earnings forecasts, or analysis. Our analysts believe that these are our high-conviction ideas that the market is perhaps overlooking”
The stocks are MongoDB Inc., DT Midstream Inc., Evergy Inc., Quanta Services, United Parcel Service, American Airlines Group Inc., Boston Scientific Corporation, Royal Caribbean Cruises, Ionis Pharmaceuticals Inc., Intercontinental Exchange, Meta Platforms Inc., Welltower, The Coca-Cola Company, Take -Two Interactive, Ally Financial Inc. and AT&T Inc.
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Diversion: “Killed, Butchered and Cannibalized: Archaeologists Uncover Horrific Prehistoric Massacre in Britain” – Gizmodo