Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
Economic resilience
BMO chief economist Doug Porter outlined why Canada avoided a severe housing-related recession,
“To this day, Canadian housing prices are still drifting lower, bringing the cumulative drop since early 2022 to more than 20.5%. That is not far from the cumulative 26% five-year decline seen in the U.S. from 2007 to 2012. The latter helped trigger the devastation of the GFC and the following Great Recession. Instead, Canadian GDP growth has averaged nearly 2% since home prices started falling. How? Briefly, for housing specifically, the run-up to the peak was much more abrupt in Canada, so fewer got caught at the top. The correction has been regionally concentrated in Ontario and B.C.— the other 50% of the country has seen no such correction. And the mortgage debt was in stronger hands in Canada, in part thanks to the stress tests.”
“Canada’s great (housing) escape”” – (chart) Bluesky
AI demand strong
Scotiabank analyst Nat Schindler queries a prominent tech insider for signals on AI demand,
“We hosted our quarterly call with the CEO of a cloud partner managing ~$5.5B of annual spend in which our expert got out his crystal ball. Capacity remained the key constraint, with hyperscalers increasingly require multi-year commitments. Commitment growth outpaced consumption at AMZN, MSFT and GOOG in 3Q. MSFT’s capacity constraints began to improve in Sept. and Azure is expected to lead initial Vera Rubin deployments. On the partner’s same-customer data (excluding 60-65% of Google customers signed in the past year), GCP grew fastest, again. This firm is seeing white-hot demand for ORCL, consumption up >100% YY in 3Q, as ORCL win more production workloads. SNOW remains on a tear as data agents drive query volume. The expert was sounding great on NET demand, and a bit more nuanced on DDOG.
Scotia Investment Conclusion. This partner’s comments point to strong 3Q26 hyperscaler results as demand exceeds capacity, and likely stellar RPO growth. GOOG is gaining the most share, largely from new customers. AMZN’s commitment acceleration should show up in backlog. Comments on MSFT up-ticked QQ as its capacity position improves. We feel good about hyperscaler data center buildout continuing strongly in ‘27”.
U.S. midterms, market reaction potential
BofA Securities investment strategist Michael Hartnett outlined the odds for political outcomes in the rapidly approaching U.S. midterm elections,
“US midterms Nov 4th; current outcome odds…DEM sweep 64%, GOP Senate/DEM House 28%, GOP sweep 9%; latest Trump approval 38% (on economy 34%, on inflation 27%; probability of DEM sweep on rise (up from 49% in Sept) as war & AI saps GOP approval on #1 issue “affordability”; but tough Senate map for DEMs why political strategists still predict split government outcome…DEMs must flip 4 of 6 most vulnerable GOP seats in North Carolina (current probability of DEM flip = 97%, Alaska (74%), Texas (67%), Ohio (63%), Maine (58%), Iowa (44%), and defend vulnerable seats in Georgia (97% = current prob of DEM hold), New Hampshire (90%), Michigan (72%); “sweep” outcome hinted by surprisingly close race for Texas Governor between GOP incumbent Abbott (currently polling 48% according to Real Clear Politics) & DEM challenger Hinojosa (46%)…we think big referendum on affordability vs. AI data centers (announcement of temporary pause on data center expansion by business friendly Abbott reflects electoral unease re affordability and energy grid risks … DEM sweep = big risk-off, stocks skid >10%, US dollar, bond yields fall into year end, international stocks outperform on less trade & military wars, but Europe outperforms Asia (loses Trump AI friend); DEM sweep signals electoral shift from populist capitalism to populist socialism, says next big direction in tax & regulation up not down (EPS negative) … GOP Senate, DEM House = risk-on (stocks bid >5%) as narrative “Gridlock = Goldilocks” so play “US presidential cycle” analog (in which Year 3 strongest performer).”
Bluesky post of the day
Investors just poured $166 Billion into Money Market Funds over the last week, the largest weekly inflow since Covid 🚨
— Barchart (@barchart.com) 9 October 2026 at 06:46Diversion
“RIP Margaret Hamilton, whose code saved the Apollo 11 Moon landing” – Ars Technica