A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web
Citi research listed Canada among the world’s least attractive global markets in a Tuesday report.
Strategist Chris Montagu compiles an “attractive score” based on “a mix of style, fundamental and macroeconomic indicators as inputs.”
This isn’t overly helpful so I requested a full breakdown of the methodology from Citi but haven’t received it yet. I would be very surprised if household debt and the national current account deficit weren’t among the main reasons pushing us down the list.
Mr. Montagu ranks Italy, the United States, Singapore, Australia and the U.K. (!) as the most attractive markets. Canada is fourth from the bottom, above Malaysia, Mexico and Brazil.
“ @SBarlow_ROB C: Canada among world's least attractive markets” – (chart) Twitter
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Morgan Stanley analyst Keith Weiss argued that Microsoft Corp. is the best positioned technology company for the future,
“A hybrid cloud leader ... With a solution portfolio spanning from core Infrastructure Services (compute, storage), to compelling Platform-as-a-Service capabilities (data, identity, analytics, machine learning), and up the stack to the application layer (productivity apps, front office apps, core financials), Microsoft benefits from a differentiated Public Cloud offering… Durable growth in the commercial businesses (60%+ of revenues), plus improving gross and operating margin trends, bolsters our confidence in above-consensus forecasts of a 3-yr revenue [compound annual growth rate] of 12%”
“ @SBarlow_ROB MS: Microsoft best positioned technology company” – (research excerpt) Twitter
“@SBarlow_ROB MS: "Big picture, public Cloud adoption is at 22% of workloads… and expected to reach 50% by the end of 2022" – (research excerpt) Twitter
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BMO economist Robert Kavcic provided details on Vancouver’s rapidly slowing housing market,
“Vancouver home sales were down 31.4% y/y [year-over-year] in March, little changed from the prior month and pointing to another seasonally-adjusted decline on a month-over-month basis. New listings were up 11.2% y/y… As such, the benchmark price was down 7.7% from a year ago, the deepest decline since 2009. While the detached market still faces much weaker conditions overall (prices are down 10.5% y/y), condo prices are falling too (-5.9% y/y)”
“@SBarlow_ROB BMO: Vancouver housing market still under pressure” – (research excerpt, chart) Twitter
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Citi quantitative strategists provided some numbers behind the underperformance of value investing,
“ Value has been the worst performing factor based on MSCI World in March…The valuation spread in high and low Value companies is at a nearly 20 year wide. However, investors’ defensive positioning and the recent inversion of the US yield curve do not bode well for Value… We advise to stay diversified across styles, but caution that the market is pricing along two dimensions – Value vs. Everything. Given the macro influence and the narrow breath in equity markets, understanding the macro risk underlying portfolios is particularly important.”
“@SBarlow_ROB C: market continues to use value investors as punching bags” – (research excerpt) Twitter
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Tweet of the day:
Diversion: “Bell customer’s 5-month fight is 1 of almost 10,000 recent complaints to telco mediator” – CBC
Newsletter: Global markets in bullet points – Globe Investor
Scott Barlow