A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web
Citi global strategist Chris Montagu screened the global equity universe for stocks combining value – attractive multiples – and price momentum. The TSX’s Enbridge Inc. made the cut of top ten stock ideas along with Carlsberg (B), SAP and drugmaker Novo Nordisk. The lowest ranked stocks on these criteria featured Twitter Inc,, Grubhub Inc. and Molson Coors.
“@SBarlow_ROB Enbridge among C's top global picks for value and momentum” – (full table) Twitter
The Merrill Lynch economics team published their forecasts for Canadian growth for 2020,
“We maintain our GDP growth forecast of 1.5% for 2019 but increase it to 1.5% from 1.1% for 2020. … exports are losing momentum, [but] we no longer expect a deceleration of GDP growth in 2020. Our upward revision is driven by two factors. First, the outlook on US growth is improving amid de-escalation of the US-China trade war and a better than expected labor market…. Second, the Canadian labor market is more resilient than we expected which, along with lower mortgage rates and supportive federal spending, should support expenditure and the housing sector”
“ @SBarlow_ROB ML's eco outlook for Canada in 2020: "1.5% this year and next, with resilient services but weak industry" – (research excerpt) Twitter
Merrill’s equity strategists have also been busy providing their forecasts. Quantitative strategist Savita Subramanian sees 2020 as a year of rotations in the U.S. equity market,
“Our S&P 500 2020 year-end target = 3300, implying 6% upside … From bonds to stocks: The allocation decision is a no-brainer: the S&P dividend yield beats the 10-yr. This happens rarely, but 94% of the time that it has, stocks have beaten bonds (by ~20ppt. avg) over the next 12 months … EM and Europe could offer more upside in 2020: positive EPS revisions for the rest of world eclipse the US … the #1 driver for Value is profits, and we forecast a pickup to 8%, where our 2020E S&P 500 EPS stands at $177. In addition, (2) professional money managers are grossly overweight Momentum; (3) Value has never been this cheap; (4) factor correlations are at post-crisis lows; (5) our U.S. Regime Indicator’s “Early Cycle” phase may be near; (6) record P/E dispersion = opportunity; (7) BofAML Analyst tone is more bullish than ever on value versus momentum stocks”
“@SBarlow_ROB ML U.S. 2020 outlook: Rotations from Bonds to stocks, Growth/Momo to value, U.S. to RoW” – (research excerpt) Twitter
In the wee hours of the morning, Hu Xijin – the Editor in Chief of the English version of the Global Times - suggested that a U.S. official would shortly pop up to say that despite negative press, trade negotiations between the U.S. and China were close to reaching a deal.
He added, “They’ve been doing this a lot”.
Sure enough, less than two hours later … ,
“Yesterday’s vote in the House of Representatives to impose sanctions on Chinese officials over human rights abuses against Muslim minorities and President Donald Trump’s comments that he was happy to wait until after the election to reach an accord all increased the risks of a breakdown in talks. Despite all the noise, both sides are moving closer to agreement, according to people familiar with the situation, and U.S. negotiators expect a phase one deal to be agreed before the Dec. 15 tariff deadline”
“Five Things You Need to Know to Start Your Day” – Bloomberg
“ China warns U.S. over Uighur bill, raising doubts over early trade deal” – Reuters
Diversion: “Reuters pictures of the decade’ – Reuters
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