A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web
BMO analyst Ben Pham provided top picks in the income-heavy energy infrastructure sector,
“Q1/25 earnings season kicks off on April 30 with CPX (BMO is restricted). We have made estimate changes to over half of our coverage, expect more in-line/misses than beats, and have lowered target prices for GEI (to $26 vs. $28) and TA (to $20 vs. $22), both still rated Outperform. Following our analysis of public data sources, proprietary models, and detailed discussions with our coverage, we point to notable potential Q1/25 beats from H, EMA, and ALA and potential quarterly misses from NPI, TA, and GEI. We recommend positioning accordingly into Q1/25 results with further details herein.”
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Scotiabank strategist Hugo Ste-Marie is expecting the outlook to darken for TSX stocks,
“The TSX Q1/25 reporting season will start in earnest on Monday. As in the U.S., Q1 results are largely irrelevant rear-view data given the tariff wars. Still, for what it’s worth, we believe there is solid beat potential relative to the sell-side’s expected C$367 in EPS for the TSX Composite (-7.4% q/q, +13% y/y). Materials, Industrials, and Discretionary could carry the tally higher, although we would be wary of Banks if they decide to front-load PCL charges. Energy should be mostly in line.
2025 outlook — negative revisions are only starting. We expect a mostly negative revision tone for FY 2025 from sell-side analysts as companies discuss tariff impacts on their profit margins and growth trajectory. Further downward revisions could occur if macro data starts coming in below consensus. Three levers that would send FY 2025 consensus lower — commodity, profit margins, and PCL.”
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BofA Securities completed their monthly fund manager survey (FMS) and, unsurprisingly, things took a turn for the bearish,
“Bottom line: 5th most bearish FMS in past 25 years, 4th highest recession expectations of past 20 years, record no. of global investors intending to cut US stocks (Chart 1); FMS max bearish on macro, not quite max bearish on market (“peak fear” norm is ≈6% cash level vs 4.8% today); but our FMS says a. April asset price lows to hold near-term, b. big upside needs big tariff easing, big Fed rate cuts, and/or economic data resilience. On Macro & Policy: net 82% of respondents say global economy to weaken (30-year high), 42% say recession likely, inflation expectations highest since Jun’21, probability of “hard” landing surges to 49% (vs 37% “soft,” 3% “no” landing); 41% of investors predict 3 or more Fed cuts on sharp deterioration of “liquidity conditions.”On Tail Risks & Crowds: #1 crowded trade: “long gold” (49%), not “long Mag 7″ for 1st time since Mar’23; #1 tail risk: “trade war = recession”; 73% say “US exceptionalism” has peaked, as FMS outlook for both US$ & US profits rated worst since 2006/0″
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Diversion: “Ankylosaur footprints from Canada are first of their kind in the world” – CBC
