Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
Domestic apartment rents are not growing and Scotiabank REIT analyst Mario Saric assessed the repercussions for the sector,
“Rentals.ca July data showed flat 2-bedroom asking rents, similar to June and a bit better than the negative 0.3 per cent 3-month average; avg. 1BR fell 0.5 per cent, in line with June. Overall National Apartment Rent was flat vs. June, similar to last month and 3-month avg. Geographically, results were mixed depending on 1BR and 2BR data. On 2BR data, the GTA West, Vancouver and Montreal all posted modest gains, while Calgary was down 1 per cent. On 1BR data, no markets posted gains, while Vancouver fell 1 per cent. Winnipeg and St John’s were in-line with avg., while regional markets in AB/BC were slightly better than major markets. Based on the market data and our est. 1BR/2BR REIT splits, all the Apartment REITs were similar at flat market asking rents … The flattish April to July asking rents compares to 0.9-per-cent avg. last year. That said, Apartment REITs have now given up outperformance on the IIP privatization news , suggesting valuation has already adjusted. Our SO-rated names = CAR, KMP and NRR”
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BMO senior economist Robert Kavcic detailed the dominance of AI stocks during the most recent U.S. earnings season,
“A strong 80 per cent of S&P 500 companies have topped expectations so far, according to LSEG’s tally. That leaves growth tracking at 11 per cent year-over-year for Q2, and roughly 10 per cent year-over-year for calendar 2025—both of those estimates have been revised up notably since July 1. AI is making a mark on earnings, with most of the upward estimate revisions since the start of summer coming in technology and communication services. Those two sectors are now expected to post Q2 earnings growth of 24 per cent year-over-year and 19 per cent year-over-year, respectively, and nearly 20 per cent each for calendar 2025. However, eight of the remaining nine major sectors are looking at earnings growth of 3 per cent or less (financials are also firm at 13 per cent year-over-year) … That said, the market strength runs broader than the concentrated earnings strength, with double-digit (in many cases, greater than 20 per cent) one-year gains now spread across 7 of 10 major S&P 500 sectors, and even into the TSX as well”
“Focus: Can Canadian Households Hold Down the Fort?” – BMO Economics
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BofA Securities head of global research Candace Browning highlighted a big winner from rare earth scarcity related to trade sanctions on China,
“In his earnings preview last week, Lawson Winder significantly raised his earnings estimates and price objective for MP Materials (MP), driven by the company’s public-private partnership with the US Department of Defense (DoD). The deal prompted a 33% boost in Lawson’s domestic Neodymium Praseodymium (NdPr) price forecast to $110/kg (from $82.60), lowered estimates for oxide sales to China, and raised contributions from magnet production. MP subsequently posted better-than-expected 2Q EBITDA and alluded to significant potential upside to the base-case $650m of annual EBITDA from the DoD and Apple agreements with higher NdPr prices than the $110/kg minimum guarantee. With rare earth (RE) essential to fast-growing markets like EVs, wind turbines, drones, and humanoid robotics, Lawson highlights MP’s unique positioning. It operates the only rare earth mine, separation facility, and magnet manufacturing site in the Western hemisphere. With most global supply still concentrated in China, MP stands out as an unmatched vehicle for investors seeking exposure to the rising demand for strategically important RE magnets”.
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Citi U.S. equity strategist Scott Chronert raised his target on the S&P 500,
“Our year-end S&P 500 base case target is lifted to 6600 from a previous 6300. We now project $272 and $308 in index earnings for ’25 and ’26, respectively (from $261 and $295 previously). There is no material change in our valuation assumptions. The expected fundamental drag from tariffs has been mostly modeled at this point, with OBBBA-related tax benefits providing an offset that should accrete to forward earnings. Q2 beats are met with stable 2H projections meaning they flow more directly through to full year consensus. Similar to the set up last year at this time, the fundamental outlook is for sector broadening into the outyear”
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Bluesky post of the day:
“Study STEM,” they said. “It’s the wave of the future,” they said. “You’ll always have a high-paying job,” they said. 😂
— TED (@epicureandealmaker.bsky.social) August 10, 2025 at 9:41 AM
Diversion: “Inside the automated warehouse where robots are packing your groceries” – The Verge