Daily roundup of research and analysis from The Globe and Mail\u2019s market strategist Scott Barlow<\/p>\n
Downgrades for IMO, NVA and TOU<\/p>\n
TD energy analyst Aaron Bilkoski made some major downgrades,<\/p>\n
\u201cOil price assumptions relatively intact (including US$65\/bbl WTI long-term), crack spreads higher, but natural-gas lower: In addition, we have narrowed our 2026E WCS Hardisty heavy differential assumption to US$13\/bbl (from US$14\/bbl) to capture market resilience, and our long-term assumption (2027E+) to US$14\/bbl (from US$15\/bbl). We have also increased our 2026E USMC 321 crack spread assumption to US$19\/bbl (from US$17\/bbl) and 2027E to US$17\/ bbl (from US$16\/bbl), while LT remains unchanged at US$16\/bbl. Looking to natural gas, we have reduced our 2026E HHUB \/ AECO pricing by 6 per cent and 7 per cent, respectively, to reflect higher inventories, particularly in Canada, which are approaching basin limits. The storage overhang in Canada has been exacerbated by pipeline maintenance and a slower-than-expected LNG Canada ramp-up than we had originally modelled. We have raised our 2027E HHUB pricing to US$4.00\/mmBtu (from US$3.75\/mmBtu) and lowered our AECO pricing to $3.25\/mcf (from $3.40\/mcf) \u2026 With this update, we are also introducing our 2027 estimates and highlight three key downgrades, largely due to the sector multiple expansion referenced above: 1) IMO to SELL, 2) NVA to HOLD, and 3) TOU to HOLD\u201d <\/p>\n
Government shutdowns usually not a big deal for markets<\/p>\n
Morgan Stanley head of U.S. policy Monica Guerra discusses the potential impact of a government shutdown on equity markets,<\/p>\n
\u201cSince 1976, there have been 20 federal government shutdowns, lasting an average of eight days. While Democrats seek to extend the Affordable Care Act (ACA) subsidies to rally their base, Republicans aim to pass a short-term \u201cclean\u201d funding bill. They could, however, use the shutdown to cut programs inconsistent with the Trump agenda, which could have deeper economic impacts. On average, real quarterly GDP growth has increased 2.2 per cent during periods of government shutdowns and risen over the past six government shutdowns, indicating a limited economic spillover. However, economic effects could be magnified this time since a full shutdown is more likely than a partial one, and federal job cuts could be higher than usual. Economic data releases could be delayed, such as Friday\u2019s nonfarm payrolls report, though mandatory government spending\u2014such as Social Security, Medicare and Medicaid\u2014will continue. Bond price volatility has increased during government shutdowns; nonetheless, investors may still turn to US Treasuries for safety, as coupon and debt service payments are not at risk\u201d<\/p>\n
Hard disk drive bull market<\/p>\n
Also from Morgan Stanley, analyst Erik Woodring is very bullish on hard disk drive providers into 2028,<\/p>\n
\u201cOur U.S. Tech team has high conviction that this HDD cycle will be \u201cStronger for Longer\u201d as they believe strengthening demand for data-enabling technologies is extending the cycle peak into CY28. They believe HDD suppliers Western Digital and Seagate will show continued strong margin expansion, well above consensus forecasts of moderating improvement, resulting in EPS estimates for 12-24 months out that are 19-35 per cent above consensus. On top of the greater earnings power, their regression analysis suggests significant multiple expansion is also warranted\u201d<\/p>\n
Nuclear power stock soars, gets downgraded<\/p>\n
BofA Securities is downgrading modular nuclear reactor provider Oklo (OKLO-N<\/a>) after the stock jumped from US$70 on Sept. 4 to US$145 by the Sept. 23 before settling back to the US$110 range, <\/p>\n \u201cWe downgrade Oklo (Neutral from Buy) and NuScale (Underperform from Neutral) as valuations now embed deployment ramps and discount rates we view as unrealistic at this stage of SMR adoption. Our reverse DCFs using our 14% discount rate imply 15.5GW for Oklo and 34.7GW for NuScale by 2040, 44%\/92% above each company\u2019s base case forecast \u2026 Oklo bulls highlight its political backing and vertically integrated build-own-operate model, which could capture more value \u2026 bears stress this approach is capital-intensive\u201d<\/p>\n Bluesky post of the day<\/p>\n New MMI piece: The Coming Wave of 20,000 Job Losses in Vancouver\u2019s Housing Sector<\/p>\n Pre-construction apartment and ground-oriented home sales are each down 80% since 2021, costing the GVA 20,000 jobs in the first 6 months of the year alone.<\/p>\n Read here: www.missingmiddleini…<\/p>\n [image or embed]<\/a><\/p>\n \u2014 Dr. Mike P. Moffatt (@mikepmoffatt.bsky.social<\/a>) September 29, 2025 at 9:25 AM<\/a>Diversion<\/p>\n