Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
The second wave of COVID-19 had me concerned about a slowdown in North American economic activity, but Morgan Stanley notes stronger than expected realtime data,
“In the US, 4Q20 GDP is currently tracking at 5.4%Q, higher than our mid-November forecast of 4.8%Q (note our 4Q20 GDP estimate already includes our forecast of month on month declines in personal consumption expenditures in Nov and Dec). The uplift in the tracking estimate is coming from strong consumer spending as well as the upside in durable goods orders. Global economic activity continues to expand, albeit at a more moderate pace as compared to the previous months. Global manufacturing PMI (a measure of sequential activity) moderated to 53.7 in November, after reaching a cycle high of 54.3 in October … For October, nominal personal consumption expenditure (released last week) has now recovered to over 98% of its pre-Covid levels. In November, Black Friday online sales were strong, with Kimberly Greenberger, our US consumer sector analyst, noting that “Adobe Analytics estimates Black Friday online sales, including both mobile and desktop, increased 21.6% y/y to $9.03B, a 2 point acceleration from 2019′s 19.6% y/y growth ($7.4B)”
“@SBarlow_ROB MS: Real-time U.S. eco data holding up better than I expected” – (research excerpt) Twitter
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National Bank economists noted weak conditions in the Toronto rental market,
“In the condo apartment portion, seasonally adjusted current sales are decent, but in fact this means a weakness as there will be no catch-up of sales foregone this spring due to Covid-19. For 2020 as a whole, condo apartment sales are set to be the lowest since 2014. At the opposite, the number of condo apartments listed for sale is currently at a record level. As a result, market conditions in the condo apartment segment are balanced so far in Q4 but tilted towards ‘favourable’ to buyers” territory.”
“@SBarlow_ROB NBF: “rather soft conditions” for Toronto rental market’ – (research excerpt) Twitter
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2020 has seen a giant surge in ESG investment, motivating Morgan Stanley to host an expert panel on potential legislation by president-elect Joe Biden to open the floodgates even further,
“We hosted an expert panel on energy and renewables policy with Ari Peskoe, Director of the Electricity Law Initiative at Harvard University, and Michael Wara, Director of the Climate and Energy Policy Program at Stanford University … the Biden administration could drive a regulatory agenda that addresses vehicles emissions standards, power plant emissions and permitting for large fossil infrastructure projects. Updates to vehicle emission standards and power plant emissions standards could ultimately drive higher cost of power generation from fossil fuel based plants, making renewables power generation increasingly more attractive … there is a possibility that the EPA could make it more expensive to run natural gas-fired power plants by requiring carbon capture for those plants, a technology that is challenging and likely prohibitively expensive”
“@SBarlow_ROB MS: ESG investment floodgates set to open even wider under President Biden” – (research excerpt) Twitter
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Column (online only): “Morgan Stanley picks the top growth stocks for the long term” – Barlow, Inside the Market
Diversion: “Our Favorite io9 Videos of 2020” – Gizmodo
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Scott Barlow