Barlow’s Research Roundup: Two companies added to RBC Global Energy Best Ideas list of top picks

Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow

Energy best ideas

RBC head of global energy research Greg Pardy added two companies to his global energy best ideas list of top picks,

“In October, the RBC Global Energy Best Ideas List was up 8.1 per cent sequentially compared to the iShares S&P Global Energy Sector ETF (IXC), which was up 12.7 per cent and a hybrid benchmark (75 per cent IXC, 25 per cent JXI – iShares Global Utilities ETF) that was up 11.5 per cent on a sequential basis. This month, we are adding Technip Energies (TE-FP) and Patterson-UTI Energy (PTEN-US) to the RBC Global Energy Best Ideas List”

The list as it stands now is Suncor Energy, BP PLC, California Resources, Tamboran Resources, PrairieSky Royalty, Canadian Natural Resources, Ovintiv Inc., Woodside Energy, Enerflex Ltd., Patterson-UTl Energy Inc, Technip Energies, AltaGas Ltd., Pembina Pipeline Corp, Cheniere Energy Inc., Kodiak Gas Services Inc, Williams Companies Inc., EDP Renovåveis S.A. and Northland Power.

“Misguided rate hike”

Citi economist Veronica Clark titled her Friday report “Canada Economics Weekly: A misguided rate hike”. Economists are rarely so blunt,

“The Bank of Canada raised rates to 2.50 per cent this week, in line with market expectations but contrary to our expectation for rates to remain unchanged. Officials’ reaction function seems to have changed this year, becoming much less reactive to actual recent data, and more responsive to expectations of higher inflation that has yet to materialize. While officials noted that policy rates could still rise further, guidance that the “Governing Council agreed to proceed carefully” is somewhat dovish and makes us inclined to think officials will skip a hike in December if activity and inflation evolve as expected. We even expect headline inflation over the next few months to be somewhat softer than officials’ latest Q4 forecasts of 3.4 per cent, keeping rates on hold in January as well. But as officials have become much more reactive to higher energy prices, there remains a clear chance of another hike in either December or January if energy prices rise much further. For now – while the economy remains in excess supply – we think officials will be cautious to not raise rates too far above 2.75 per cent (into the slightly restrictive territory of the neutral range) on expectations of pass-through alone (without seeing evidence of stronger underlying inflation in the data)”.

Housing

Macquarie analyst David Doyle thinks domestic housing prices are unlikely to fall further, but also that a recovery is a long way off,

“Our broader view remains that downside risks to growth from housing have diminished considerably. While a rebound is unlikely near-term, the growth headwind from housing should diminish further ahead. This should occur even with the recent back-up in rates and likelihood of further hikes from the BoC. An important offset to this is a diminishing rate reset headwind in 2027. Mortgage rate developments. YTD fixed mortgage rates have risen alongside bond yields. Variable rates are now following. We see a further 100 bps in BoC hikes by end-27. Affordability. After improving in 2024 and 2025, progress towards restoring affordability has stalled in 2026 due to the increase in rates. House prices have remained weak. Overall, prices have fallen by around 20 per cent in nominal terms (and 30 per cent in real terms) from their Feb-22 peak. While prices appear to be stabilizing, there is little evidence of a rebound. Population growth/immigration. Upward revisions to population estimates have been released. These suggest less of a potential housing overbuild than previous data had indicated. More insight may come when the federal government releases an updated immigration plan in November … Scope for further downside in home sales is limited due to already depressed levels. New construction poses a potential headwind ahead should low population growth persist. Credit growth. This has continued to decelerate. The composition of mortgages has been shifting towards shorter-term fixed and variable rate”

Bluesky post of the day

Pretty cool map showing existing & planned data centres by live IT power load.

[image or embed]

— Toby Nangle (@tobyn.bsky.social) November 2, 2026 at 2:37 AM

Diversion

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