Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
Nat gas turnaround
RBC Capital Markets natural gas and gold strategist Christopher Louney’s Wednesday update was titled, Natural Gas Strategy Quick Take: On The Ski Jump,
“A week ago , we were looking at a market on its back foo t, retreating towards and then through our middle/base scenario forecast , finishing the week as low as $3.10/MMBtu [metric million British thermal units]. Yet now, with production 4 Bcf/d [billion cubic feet per day] lower, LNG feedgas volumes stable above 19 Bcf/d, and, more importantly, a dominant cold front sweeping across the U.S. (near-term high double-digits forecasts shifted from just 8 per cent above normal last week to 35 per cent currently) with freezing temperatures from the South Central to the Northeast, natural gas has spiked higher (up 24 per cent, around $4.85/MMBtu midday, our full year high scenario). Based on positioning, it seems the market was caught off guard, sentiment was tipped, and now we are left with the question: Where to go from here (and when)? Our View vs. Consensus: Natural gas prices will continue to at least hold these gains for the duration of this cold front , which now stretches into February (more on that below) , and thus outperform our baseline view. This , however, is yet to change our view fundamentally for the remainder of the year. Given the seasonal nature of gas, we are reminded that price gains are rarely linear, and that gas will likely move lower once this cold front subsides, ahead of the shoulder season. However, we expect these prices may find fundamental justification again later in the year. We’ve said that natural gas will spend most of its time this year in the $3.49 -4.85/MMBtu range, the bounds of which are both lower than consensus”
Top picks in energy infrastructure
Scotiabank strategist Robert Hope previewed profit reports from the energy infrastructure sector and noted a preference for natural gas-weighted companies,
“Looking to Q4/25 reporting, on balance, our estimates are below consensus for the majority of companies. While marketing margins, power generation volumes and Alberta power pricing are expected to be headwinds, overall we see year-over-year growth for the group given the incremental contribution from new assets and strong utilization of assets. We expect H1/26 will be busy in terms of project announcements and management updates, which we highlight below. We prefer the gas-levered pipeline/midstream names, followed by the power names and then the utility group. Our overall favourite names are ALA-T, AQN-N, BIP-N, CPX-T, KEY-T, and TRP-T”
Fund managers still bullish
Also from Scotiabank, strategist Hugo Ste-Marie summarized the results of his recent survey of fund managers,
“Investors remain bullish equities, but they have continued to diversify portfolios into (1) EM, (2) Canada, and (3) EAFE at the expense of U.S. stocks. Turning to AI, most investors believe disappointing revenues/slow adoption pace is the most likely reason to pop high valuation multiples in the space. Sector preference. Resource-oriented sectors make their way to the top of investors’ lists. Technology falls to its lowest spot since Q4/24. Investors seem to be toying with two contrarian trades: Industrials stand in second place while Real Estate rises to its highest since late 2023.”
“Our divergence with investors: We’re unsure how investors expect sustained Energy outperformance given subdued demand/high supply and would remain underweight. Where we would take a second look: Canadian Industrials may enjoy some mean-reversion if economic growth surprised to the upside as we believe and the USMCA is renewed. Real Estate are also spiking our interest after more than 5 years of underperformance on cheap valuations and rising M&A activity. We may eventually revisit our UW in both spaces”
Bluesky post of the day
“The Party told you to reject the evidence of your eyes and ears. It was their final, most essential command.” -1984
— Jacob T. Levy (@jacobtlevy.bsky.social) January 21, 2026 at 12:49 PMDiversion
“Your smart TV is tracking more than you realize” – MakeUseOf