Barlow’s Research Roundup: ‘Global wave’ of market indicators makes downturns a buying opportunity
Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
Positive wave and boosters
Underlying market conditions remain positive worldwide, according to BofA Securities quant strategist Nigel Tupper and his global wave model of market indicators,
“The Global Wave improved this month, and the signal has now been positive for nine months. Five of the seven components of the Global Wave contributed positively led by Global Producer Prices. The Global Wave continues to move in tandem with the global earnings cycle which suggests any pullbacks in equity market performance may be sentiment driven and may present buying opportunities. The five components of the Global Wave contributing positively this month were Global Producer Prices (which improved in 60 per cent of countries), Industrial Confidence (60 per cent of countries), Consumer Confidence (60 per cent of countries), the Global Earnings Revision Ratio, and Capacity Utilisation. In contrast, Global Credit Spreads contributed most negatively as credit spreads widened by 57bp in the last three months as sentiment turned more cautious across multiple asset classes. Unemployment also contributed negatively. A rising Global Wave supports the Global Boosters Year-to-date, the cyclical Global Boosters have outperformed the defensive Bunkers by32.2 per cent, and the Boosters outperformed the Bunkers in every region. While the Global Wave continues to rise, history suggests the Boosters should outperform.
“The booster stocks are more cyclical with characteristics including lower credit rating, high beta, positively correlated with bond yields, economically sensitive earnings growth and high estimate dispersion (analysts have varied forecasts for revenue and growth). ”
Stocks currently on the boosters list likely to interest Canadian investors include McDonalds, Coca-Cola, PepsiCo, Accenture, Cadence and Fortinet.
Weak copper
Copper has been touted as a promising investment story thanks to electrification and data centre expansion but stocks have been weak of late, as RBC Capital Markets analyst Sam Crittenden describes,
“Copper prices slipped 1.2 per cent this past week to $6.54/lb amidst an AI driven selloff which dampened risk sentiment broadly as well as the end of a short-lived strike at Centinela, though Teck’s Highland Valley Copper mine went on strike on Saturday, with reduced operations. Copper equities fell 8.6 per cent week-over-week which was our worst performing tracked asset class of the week. Meanwhile, LME copper stocks rose to their highest levels since July, with LME stocks in U.S. warehouses accounting for 62 per cent of all inventory on the exchange, the highest in over 12 years (Mining.com). CME exchange inventory also rose to its highest ever level at 724kt. While US based LME stocks are still subject to a potential copper tariff, traders may be moving metal into US based LME warehouses for greater flexibility to exploit potential shifts in the CME/LME arbitrage opportunity. Demand indicators remain healthy, with Shanghai inventories falling by 20kt w/w and the Chinese copper import premium now at its highest level since 2022 ($147/t)”
RBC has “outperform” ratings on First Quantum Minerals (with a speculative designation), Capstone Mining, Hudbay Minerals, and Atalaya.
TKsubhed
Wells Fargo chief equity strategist Ohsung Kwon’s latest report included some informative nuggets,
“Our Sentiment Indicator triggered a Buy signal last week, and we believe the positioning led rotation is largely over. Interestingly, correlations vs. Semis for hyperscalers and Software have flipped positive over the past month, unlike in July. We read that as a sign that the market has treated AI/Tech indiscriminately, and see opportunities in Hyperscalers & Infra Software … Our indicator now shows a contrarian Sell signal on Pharma, Biotech & Life Science, and Software is approaching the level as well ... We remain bullish Health Care as one of the only sectors with accelerating EPS growth, but it’s now time to pick stocks based on fundamentals … Option-implied moves suggest that FOMC will be an average day for the market with a 10-per-cent chance of a hike priced in for October. Midterms are now the largest implied daily move over the next month, even more than Hyperscaler earnings this week. In our view, a split Congress would be risk-on for AI stocks. Sentiment has reset meaningfully with our contrarian sentiment indicator triggering a Buy signal last week”.
Bluesky post of the day
The CEOs of the two biggest AI chip companies have something in common: Impatience on waiting for capital to mobilize. $NVDA $AVGO (first screener from WSJ on 10/26, second from BBG on 8/14)
— Luke Kawa (@ljkawa.bsky.social) October 27, 2026 at 8:02 AM
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Diversion
“Ridley Scott Is Producing a New ‘Alien’ Movie” - Gizmodo