BMO chief strategist expects TSX to keep pace with U.S. stocks

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

RBC Capital Markets analyst Sam Crittenden detailed strength in the copper mining sector,

“Copper equities gained 8.2 per cent last week, outpacing the 1.0-per-cent rise in copper prices to $4.37, supported by a confluence of bullish factors. A weakening U.S. dollar (down 0.5 per cent week-over-week, down 7.5 per cent year-to-date), the worst-performing YTD asset class we track, made copper more affordable in global markets. Supply disruptions at Codelco’s El Teniente mine (400ktpa; 1.5-per-cent global supply), which partially resumed operations following a fatal collapse, provided incremental price support. At the same time, Chinese data surprised to the upside, with July copper imports up 3.4 per cent and concentrate imports jumping 9 per cent amid record smelting activity. Further optimism stemmed from easing U.S.-China trade tensions, reinforcing a constructive demand outlook. Inventories continued to reverse flow away from the U.S., with LME and Shanghai inventories rising 10 per cent and 13 per cent, respectively, while CME inventories grew only 2 per cent, now accounting for 50% of combined exchange inventories. We believe the continuation of these macro tailwinds, alongside improving sentiment toward global growth, underscores a supportive backdrop for copper equities in the near term”

Mr. Crittenden has “outperform” ratings on First Quantum Minerals Ltd. (I own that one) and Champion Iron Ltd.

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BMO chief strategist Brian Belski remains bullish on Canadian equities,

“Despite persistent trade rhetoric, we remain steadfast that Canada is well-positioned fundamentally and that investors should remain focused on the broader fundamental normalization process that is well under way in our view. In fact, the Canadian earnings recovery that we have been highlighting since the middle of 2024 continues to trend toward a more normalized growth profile. Furthermore, after a very short-lived trade-induced negative revision cycle at the beginning of the year, revisions have now clearly shifted positive with S&P/TSX FY1 and FY2 bottom-up EPS estimates up almost 2 per cent since bottoming at the end of June. More importantly, profitability metrics have stabilized over the last few quarters and growth expectations have now accelerated back toward more normalized high-single digits and is likely to reach the double-digit range by the end of the year. Yes, from our perspective the normalization process remains firmly on track and Canadian equities remain well-positioned to keep pace with the U.S. … Breadth of revisions on a clear upswing, driven by Financials and more cyclical sectors”

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BofA Securities energy analyst Clifton White threw some cold water on the natural gas bull case,

“While summer LNG demand averaged 3.3 Bcf/d higher YoY, it has been dwarfed by production and power looseness that exceeded 6 Bcf/d year-over-year. The storage surplus has swelled to 195 Bcf, from 117 Bcf at end of May, because of the persistently loose balances. With the western regions of the US and Canada rapidly re-filling stocks, natural gas could get pushed back to the Midwest and Eastern US this fall, and tropical activity could make it difficult to clear daily injection needs in the coming months … A combination of efficiencies, higher gas prices, and optimism around LNG demand growth has spurred record natural gas production. Further, it only took 2026 gas prices trading $4-4.5/mmbtu year-to-date to increase the natural gas rig count by more than 20 per cent since 1Q25. These newly added rigs should provide incremental production just as Golden Pass enters service later this year. Higher production drives our outlook for inventories to end summer around 3.93 Tcf, and in turn we reduce our September-December 2025 price forecast to $3.0/mmbtu … Natural gas seems to be back to its familiar position of waiting for a cold winter. We still believe in the LNG demand growth story with more than 6 Bcf/d export capacity expected in service in the next 2 years across North America. However, the upcoming LNG projects diversify feedgas demand away from Henry Hub as nearly all this upcoming export capacity is located outside Louisiana. There is also a positive power demand story led by the technology sector”

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Bluesky post of the day:

Diversion: “Research Psychiatrist Warns He’s Seeing a Wave of AI Psychosis” – Futurism