Four Big Changes to RBC’s Top 30 Global Equity Ideas

Daily digest of research and analysis by Globe and Mail market strategist Scott Barlow

RBC’s research team has updated its top 30 global stock ideas,

“This list remains one of the long-term, high-conviction ideas, with quarterly updates allowing for dynamic changes in names that we believe offer higher conviction upside potential. Since the publication of our Q2 update April 4, 2022, the Top 30 list generated a total return of -17.4% (in USD) versus our benchmark, the MSCI World Index, at -15.6% Year-to-date, the list has generated a total return of -14.0%, above the benchmark at -20.1%, and since the inception of our quarterly list at the end of the year 2019, the Top 30 generated a total return of +20.8%, above the benchmark at +13.2%”

There are four changes to the roster this quarter. Amazon.com Inc., Intuitive Surgical Inc., Louisiana-Pacific Corp. and Twilio Inc. have been phased out in favor of AES Corp., American Tower Corp., Lonza Group AG and Veeva Systems Inc.

The remaining stocks on the list are Adidas AG, Alexandria Real Estate Equities Inc., Alimentation Couche-Tard, AltaGas Ltd., American international Group Inc., Anheuser-Busch Inbev SA, Brookfield Asset Management, Canadian Natural Resources Ltd., Canadian Pacific Railway Ltd., ConocoPhillips, CrowdStrike Holdings Inc., DuPont de Nemours Inc., Intact Financial Corp., M&T Bank Corp., Mastercard Inc., Mosaic Co., Palo Alto Networks Inc., R1 RCM Holdco Inc., S&P Global Inc. . ., Shell PLC., Siemens AG, Stericycle Inc., Telus Corp., Transdigm Group Inc., UnitedHealth Group Inc. and Wesco International Inc.

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Citi economist Nathan Sheets details significant easing of global supply chain pressures,

“Our Citi Global Supply Chain Pressure Index showed a welcome easing in June, its first significant decline since January. The good news is that the index’s pullback last month suggests pressures in global sectors goods, which have been a central driver of inflation, may finally ease. The bad news is that this appears to be happening on the back of a slowdown in global demand for consumer goods, especially discretionary goods , and therefore could also signal growing recession risks… The index’s pullback in June reflected a marked softening in data for PMI and global inventories – Measures of supplier delivery times and producer order books tightened significantly improved.While overall transport costs appear to have fallen less steeply, even there the data showed s container shipping from China to the US West Coast. Even as we highlight the easing of pressures on the supply chain in June and its significant implications, we also emphasize that this is not a “quite clear” signal for supply chains. “.

Citi: “Our Citi Global Supply Chain Strain Index showed appreciable easing in June, its first significant decline since January” – (research excerpt) Twitter

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BMO Chief Economist Doug Porter describes the sharp decline in crude prices, an event that could prove a watershed moment when primary market fears shift from inflation to recession,

“In a potentially huge move for the outlook for global inflation, energy prices succumbed significantly to growing recession concerns on Tuesday. sliding over $10 a barrel and WTI falling from nearly $9 to under $100 Importantly, wholesale gasoline prices fell by a similar percentage For much of the spring, l gasoline proved even fiercer than crude costs, with reduced refining capacity. In turn, this amplified the pain for consumers (which was even more intense for those outside the United States, being given the greenback’s strength this year.) While a deep drop in gasoline prices will do nothing for the upcoming June CPI release (to be released next Wednesday), it points to major relief the following month. Of course, this is not just a start. Oil prices should remain low and other costs should fall to provide lasting relief to the inflation outlook. But it’s a big step in the right direction. »

“BMO: ‘Energy Prices Succumbed Significantly to Growing Recession Concerns on Tuesday'” – (research excerpt) Twitter

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Derivation: “The Best TV Shows of 2022 (So Far)” – The Ringer

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James T. Quintero