Brockhouse Cooper

Archives: 2011 — Sep–Oct

At the bell:  Three charts to start your week
Globe & Mail, October 31, 2011

"Stock market volatility has shaken the confidence of retail investors, but it didn’t perturb the “smart money” crowd of institutional investors, according to Pierre Lapointe and Alex Bellefleur of Brockhouse Cooper. In the first half-hour of a typical trading day, impulsive stock-market players react to overnight news and economic releases. Smart-money managers, on the other hand, take their time to sift through the news and are not averse to investing later in the day, the economists write in a recent report.

Inflation may stop rate cuts from lifting P/E's:  Chart of the Day
Bloomberg news, October 28, 2011

Do stocks have more jet fuel after rocketing in October
Financial Post, October 28, 2011

 "Pierre Lapointe, a global macro strategist at Brockhouse Cooper, is also bullish on equities and despite the massive rally, thinks stocks have more room to grow.

He said the recent soft patch in the global economy was typical of a mid-cycle slowdown – a view supported for now by the latest U.S. growth figures that said the world’s biggest economy grew 2.5% in the third quarter."

High-quality stocks -- and good buys to boot
Globe and Mail, October 27, 2011

"Contrary to the rest of the world, Canadian investors do not pay a premium for quality stocks,” Mr. Lapointe and Mr. Bellefleur wrote in a research paper. “For this reason, we would conclude that Canadian quality stocks are not expensive.”

Are the Fed's latest stimulus plans just talk?
Globe and Mail, October 26, 2011

"...Pierre Lapointe, global macro strategist at Brockhouse Cooper, believes Fed officials might simply be jawboning the possibility of quantitative easing here – that is, talking up the possibility of more monetary policy stimulus to convince people that it still has the ability to give the economy a boost. Taking action is another matter, though."

October dark no more
National Post, October 25, 2011

"Pierre Lapointe, a strategist at Brockhouse Cooper, said so-called "smart money," a concept that refers to the performance of an index when you remove the emotional transactions that take place at the start of the trading session, indicates long-term institutional investors have been buying the dip in markets this summer."

Global bank stocks trade at 40-year low
Globe and Mail, October 24, 2011

“While we agree that European and American banks are not out of the woods yet, we argue that the financial sector is oversold in countries with sound banking systems,” Pierre Lapointe and Alex Bellefleur of Montreal-based Brockhouse Cooper said in a strategy note. “We believe that the financials decline in countries with sound banking systems is overdone.”

Europe has a plan -- Sort of
Bloomberg Businessweek, October 20, 2011

"A system “where France effectively insures Italy’s and Spain’s debt will probably be the catalyst for France to lose its top rating,” analysts Pierre Lapointe and Alex Bellefleur at Brockhouse & Cooper..."

Brazil cuts rates.  Is China Next?
-CNN Money, October 20, 2011

"Economists at Brockhouse Cooper, a brokerage firm in Montreal, pointed out in a note Thursday that there has been a direct correlation between China rate hikes and commodity prices going down this year."

US stocks decline amid Europe Crisis
-Bloomberg News, October 19, 2011

"Speculators are staying away from U.S. stocks even though the economy is rebounding and risk is easing, according to Pierre Lapointe, Brockhouse & Cooper Inc.'s global strategist. He reached that conclusion by tracking the gap between the number of E-mini S&P 500 futures that smaller investors own and the number sold short, a bet on lower stock prices."

Time to ditch commodities?
-Wall Street Journal, Weekend Investor, October 15, 2011

"While most commodities look increasingly speculative, commodity producers may be worth owning. They often trade at a discount to the underlying price of the commodity itself: At $82 a barrel, for example, oil is priced for moderate global growth, says Pierre Lapointe, a Montreal-based strategist at brokerage firm Brockhouse Cooper, while oil stocks are priced for a recession. Whether or not a recession is in the cards, he believes that makes stocks a better bet."

China likes energy stocks.  Others should, too
-Globe & Mail, October 12, 2011

"Alex Bellefleur, financial economist at Brockhouse Cooper, argued in a note to clients that energy stocks are priced for a recession, but crude oil is not – making energy stocks attractive for reasons beyond prospective deal-making."

U.S. earnings:  A reality test for the fear-mongers
-Globe & Mail, October 11, 2011

"Pierre Lapointe, global macro strategist at Brockhouse Cooper in Montreal, believes that if we’re in for any surprise this earnings season, it’s likely to be on the upside. He said that over the past three months – roughly coinciding with the period in which the stock market’s outlook took a sharp turn for the worse – 351 publicly listed companies in the U.S. lowered their earnings guidance, one of the lowest totals in the past decade."

 Pummelled emerging markets offer growing temptation
-Globe & Mail, October 6, 2011

"On a price-to-earnings basis, emerging market equities are now better value than those in developed markets, according to Pierre Lapointe, global market strategist, and Alex Bellefleur, financial economist, at Brockhouse Cooper.

Provincial bonds offer opportunity
-National Post, October 1, 2011 

"There is an implicit understanding that the federal government will rescue any Canadian province that runs into trouble in the bond market," Pierre Lapointe, global macro strategist with Brockhouse Cooper, said in a recent research report."

Can Q4 get any worse?
-Financial Post, September 30, 2011 

"Pierre Lapointe, a macro strategist at Brockhouse Cooper, also believes that stocks could move higher during earnings season, noting the low level of profit warnings issued by corporate managers in the U.S. over the past three months heralds positive earnings surprises."

Hunt is on for quality stocks with stable profitability
-Globe & Mail, September 29, 2011 

"In highly volatile and risky markets, investors are increasingly focusing on quality. Which stocks offer consistently superior returns? Which are less exposed to the unpredictable credit markets? Which are least susceptible to volatile swings in profits? Toward that end, we look at global high quality stocks with stable profits – courtesy of the Montreal-based research team at Brockhouse Cooper."

For defensive players, dividends are in the pipelines
-Globe & Mail, September 26, 2011 

"Pierre Lapointe, a global macro strategist at Brockhouse Cooper, said the attraction of defensive stocks is understandable given the darkening outlook for the global economy. “We expect Europe will fall into a recession,” while the U.S. economy is stalling, he said."

Corporate bonds look set to beat stocks
-Financial Post, September 22, 2011 

"At this point, Pierre Lapointe, a macro strategist at Brockhouse Cooper in Montreal said credit spreads are at mildly recessionary levels. In terms of lower-rated credit, he said U.S. high yield spreads are currently at levels seen during the 2001 recession or the early 1990s recession. Meanwhile, investment grade spreads are also at levels observed in the early 2000s recession.  “Credit risk premiums are not at levels seen during the doldrums of 2008, but they nevertheless signal clearly that credit markets are not enamoured with the state of the U.S. economy,” he said in a note this week."

The fed needs a little help from its friends
-CNN Money, September 21, 2011 

"...analysts at Brockhouse Cooper, a brokerage firm in Montreal, pointed out in a report Wednesday that Australia, like many other nations, is starting to feel the pinch from a decline in commodity prices and weakening industrial production. "We wonder how long Australia can keep raising interest rates while the rest of the developed world is lowering them," wrote the Brockhouse Cooper analysts."

Sub-Saharan Africa's big move up
-Vancouver Sun, September 19, 2011 

"...Pierre Lapointe, a macro global strategist at Brockhouse Cooper in Montreal, contends, the increased optimism and focus on Africa are more than justified. "Conventional wisdom says that Africa is not reducing poverty fast enough and that African economic growth is purely extractive, benefiting only foreigners and the corrupt elites at the top," he says "But this view is wrong. Our belief is that Africa might be the world's next explosive growth."

Canada's own Spain and Portugal
-Globe & Mail, September 19, 2011 

"If Ontario and Quebec were independent countries, their debt burdens would consist of their own current debts as well as their shares of the federal debt. According to Brockhouse Cooper economists Pierre Lapointe and Alex Bellefleur, both provinces would be more indebted than Spain and just slightly less indebted than Portugal, two of the problem children in the European Union."

Euro bond proposal threatens alliance
-Business News Network, September 15, 2011 

"The joint-and-several guarantee, coupled with robust fiscal rules, would make euro bonds more or less similar to the bonds issued by the most creditworthy entities within Europe," Brockhouse Cooper, a boutique brokerage and consulting firm in Montreal, said in a note on Tuesday."

Is default the next Greek tragedy
-CNN Money, September 12, 2011 

"There is no way you can have a sovereign nation default and have it not impact confidence in the financial system," said Bellefleur. "A country going broke is obviously a pretty serious thing."

 Do juicy dividends have room to grow?  Follow the cash
-Globe & Mail, September 2, 2011 

"High dividend yields are indeed looking attractive at the moment, especially when considering the current low interest rate environment,” said Brockhouse Cooper global macro strategist Pierre Lapointe and financial economist Alex Bellefleur in a report this week. “But how sustainable are they?” they asked. “High dividend yields are not meaningful if they are not going to be sustained."