Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
BoC
Wednesday’s Bank of Canada rate cut pushed inflation-adjusted borrowing costs through an important and bullish level,
“The last time real Bank of Canada policy rates were effectively at zero was in early-2023, as the BoC was tightening aggressively and inflation was falling. That said, we’re nowhere near the deeply-negative real rates that spurred the excesses in areas like real estate and household spending during the 2021-22 period. But, zero-real is probably enough to start providing support, and another 50 bps of easing (assuming inflation is stuck around 2.5 per cent), would take rates back into negative territory. Note that real policy rates averaged roughly -0.6 per cent in the 10 years following the Great Recession, but that was a bygone era that featured lower neutral rates. ‘Neutral’ is a bit of a moving and ambiguous target, but we’re right about there. And further easing will start to add stimulus”
Zero real rates make bonds unattractive and stocks in demand.
Meta
Meta Platforms (META-Q) demonstrated new eyeglasses that have a heads-up display and I’m curious.
Citi analyst Ronald Josey reports,
“With three new AI smart glasses launched at Connect, we emerge incrementally positive on Meta’s AI glasses and broader AI device strategy and believe adoption of the glasses could reach a tipping point in ’26, particularly given the form factors and price points. We were impressed with the heads-up display and Neural Band integration of its new Meta Ray-Ban Display glasses during our hands-on testing at Connect and can envision multiple use cases as the technology evolves. To be clear, it remains early days across AI devices and glasses, but with AI’s always-on nature, we view the glasses as a natural extension of AI and a must-buy as superintelligence evolves the broader internet user experience. Bigger picture, we believe Meta’s Short-, Medium-, & Long-term product roadmap can deliver continued engagement, monetization gains, and margin expansion as its AI investments remain highly strategic; we reiterate our Buy & $915 TP [currently $776]”
I ride a motorcycle and was interested in the recording function on the previous Meta glasses so there’s evidence in case an oblivious driver murders me on the highway. Now I’m even more interested. Will the display be intrusive? I need more details on the visuals.
Defence stocks
The RBC Capital Markets global industrials conference has uncovered a bullish outlook for defence stocks,
“Commentary on the outlook for defense spending was a highlight. We believe the strong demand outlook supports the potential for incremental upside to defense growth expectations, especially for AeroVironment (AVAV) and Karman (KRMN). Commentary on the aerospace aftermarket was also positive, with AAR Corp. (AIR) calling out continued strong demand from airlines for spare parts, MRO services, and digital solutions.”
Bluesky post of the day
APOLLO: “.. The upward consensus revision to 2026 earnings for the S&P 500 since Liberation Day comes entirely from the Magnificent 7 .. Earnings expectations for the S&P 493 have remained suppressed ..
“.. The bottom line is .. equity investors are dramatically overexposed to AI.”
— Carl Quintanilla (@carlquintanilla.bsky.social) September 17, 2025 at 7:30 AMDiversion
“I’m a sucker for a great pilot episode and these shows have the best ones” – MakeUseof