2012

Global slowdown to hit Canadian economy, stock markets in 2013, economists say
Globe and Mail, December 31, 2012

“Much depends on what happens with the U.S. “fiscal cliff,” the catch-all term for tax increases and spending cuts that would automatically go into effect if a budget deal is not reached by today. While a compromise appeared to be shaping up Monday, it’s still unclear what the agreement would include.  A comprehensive deal could send markets upward in a “relief rally,” according to the researchers at Pavilion Global Markets.”


Investing 2013:  How to play the U.S.
Financial Post, December 28, 2012

“Pierre Lapointe, meanwhile, is far less optimistic about U.S. equities in 2013. The head of global research and strategy at Pavilion Global Markets Ltd. in Montreal said the lacklustre growth that has existed south of the border since the end of the recession will continue and he doesn’t believe corporate profitability will be nearly as strong as it was this past year.  “Profit margins have already started to roll over,” he said. “Gone are the days that companies could squeeze as much as possible out of their existing workers.”


China’s economic revival makes yuan a solid bet
Financial Post, December 11, 2012

“Our strongest currency views at the moment are in Asia,” Pierre Lapointe, the head of global strategy and research at Pavilion Global Markets Ltd. in Montreal, said in a note to clients. “We believe this is purely a domestically-led Chinese upswing that will continue through the first half of next year and will have positive effects on small, open, emerging Asian economies.”


Raise or hold on real assets proves tough call
Pensions & Investments,  December 10, 2012

“Cori E. Trautvetter, Chicago-based senior consultant at Pavilion Advisory Group, said: “Over the last three or four years there has been a definite heightened interest in real assets.” But generally, investors aren’t ready to raise or make first-time allocations to real assets, she added.   “I would say probably the two areas we see the most interest in real assets are commodities” and real estate, Ms. Trautvetter said.”


Gold: It’s the end of the world as we know it
CNN Money, December 10, 2012

“Gold is also expected to benefit from record low interest rates in the first half of next year.  The Federal Reserve has maintained a zero interest rate policy for years and is expected to announce additional asset purchases to keep rates low when it meets this week.”


Lower Real Wages Darken U.S. Economic Outlook: Chart of the Day
Bloomberg, November 27, 2012

“Households are in a poor position to sustain U.S. economic growth because their wages are failing to keep pace with inflation, according to Pavilion Global Markets Ltd. strategists.


Assante’s architect aims to build new empire in pension consulting
Globe and Mail, September 20, 2012

“We believe that Pavilion has nailed the sweet spot” in being able to combine smaller firms into one that can compete against bigger players, and yet offer more personal service, said the chief executive officer of Pavilion Financial. “The industry is very split. You have a handful of very large firms … and then you have well over 100 small mom-and-pop shops.”


Little room left for gains in high-yield bonds, analysts say
Financial Post, September 19, 2012

“Since the start of the recession, high yield bonds have outperformed equities by a wide margin,” Pierre Lapointe, a macro strategist at Pavilion Global Markets Ltd. (formerly Brockhouse Cooper) in Montreal said in a note. “Going forward, however, it will be more difficult for high-yield bonds to do well.”


Bernanke needs some friends in the private sector
Globe and Mail, September 12, 2012

“Non-financial corporations currently hold $930-billion (U.S.) in bank deposits, a 50 per cent increase from before the recession, according to Brockhouse Cooper, an investment brokerage in Montreal. “This sure would be a nice stimulus to the economy if companies suddenly decided to put that cash to good use,” the firm’s economists said Thursday in a research note.”


An investor’s guide to the U.S. fiscal cliff
Financial Post, September 7, 2012

“Our view was, and still is, that fears of the repercussions of the fiscal cliff are overblown and we doubt either political party will allow the full expiration of the tax hikes, choosing instead to kick the expiration can, though for what length of time, no one can know,” said Pierre Lapointe, a macro strategist at Brockhouse Cooper in Montreal.”


Skeptics show flaws in the Fed model
Globe and Mail, August 20, 2012

“The Fed model breaks down when interest rates are low,” said Pierre Lapointe, global macro strategist at Brockhouse Cooper in Montreal. Mr. Lapointe has found that at historically low bond rates – less than 5.5 per cent on the U.S. 10-year government bond – stock values are typically also depressed. It’s only at higher rate levels that the two consistently move the way the Fed model says they should – stock values rising when bond yields dip, stocks falling when bond yields rise.”


As economy sputters, Brazil unveils $66-billion stimulus plan
Globe and Mail, August 15, 2012

“Brazil is one of our least favourite countries in the current environment,” analysts at Brockhouse & Cooper, a Montreal-based investment consultancy, wrote in a report in May.”


Europe is not fixed.  Not by a long shot.
CNN Money, August 14, 2012

“Economists for brokerage firm Brockhouse Cooper in Montreal noted in a report Tuesday morning that “it is no secret that Germany is heavily trade-dependent.” The economists expressed concerns that Germany won’t be able to boost domestic demand enough to “buffer against the storm circles in the rest of Europe” and warned that Germany “should prepare for a rocky road ahead as the country’s trade partners remain in rough shape.”


Central bankers to the rescue?  Don’t count on it.
Globe and Mail, July 30, 2012

“…Brockhouse Cooper believes that any hope that the Fed will launch another round of quantitative easing – or QE, a stimulative policy involving printing money to buy bonds – might be baked into share prices already.  “As a result there is a risk that a QE announcement would be seen as a ‘sell the news’ event,” Brockhouse Cooper said in a note, referring to those days when stocks fall on what looks like good news.”


Imbalance in S&P 500 Seeding Pessimism: Chart of the day
Bloomberg, July 24, 2012

“Smaller U.S. companies are trailing larger ones badly enough to help explain why stock investors are increasingly pessimistic, according to Pierre Lapointe, a global macro strategist at Brockhouse & Cooper Inc.  The CHART OF THE DAY displays a ratio of the Standard & Poor’s 500 Equal-Weighted Index, which doesn’t take into account each company’s market value, to the S&P 500, which does.


Short selling ban won’t stop bears
CNNMoney July 24, 2012

“According to the Brockhouse Cooper research, markets in Australia, Greece, South Korea, Spain and Japan all tumbled between 20% and 50% in the final three and a half months of 2008 — despite short selling bans on all stocks. Austria, Belgium, France, Canada and Germany also joined the U.S. in banning short selling of financial stocks. Their markets all tanked too.


High divident yields are no reason to ditch bonds
Globe and Mail, July 12, 2012

“The dividend yields on stocks are near a record high relative to the yield on bonds right now, providing one great reason to load-up on the former and ditch the latter. But is that what you should be doing?  The U.S. Federal Reserve would like it that way. In keeping its key interest rate so low and holding down longer-term bond yields, it hopes to drive investors into stocks.However, strategists at Brockhouse Cooper have different thoughts on the matter. They looked at how various equity markets performed after their respective dividend-yield-to-bond yield ratio peaked, and found that stock returns were nothing special.”


Chinese government reports rare decine in foreign investment
Globe and Mail, July 12, 2012

“The possibility that Chinese corporations are currently holding a massive U.S. dollar short position is a new aspect of the story. Strategist Pierre LaPointe of Brockhouse Cooper explains how the short position came about in a report released Wednesday.”


Wall Street advances as Euro leaders act to protect Spanish banks
Bloomberg News, July 10, 2012

“Only 19 companies made profit projections last month that beat analysts’ average estimate, according to data compiled by Bloomberg and summarized by Brockhouse in a July 5 report. The total was the lowest for any June since the figures were first compiled in 2000 and the second-lowest for any month after the 14 last September. “Investors did not get many indications from companies on the strength of earnings,” Lapointe, who is based in Montreal, wrote with colleagues Alex Bellefleur and Frances Donald. “The risk is that we will get more earnings misses than usual.”


Bank of Canada Rate Cut? Don’t Count it Out.
Wall Street Journal, July 9, 2012

“Might Canada’s central bank be headed for a rate cut, after all? Investment house Brockhouse Cooper isn’t ruling it out. Forget the depiction of Canada as a “boring-but-good” investment proposition, the firm’s Montreal-based analysts wrote Monday in a report. “On the contrary, we believe that Canada is very interesting, but in a somewhat ‘bad’ way.”


Lack of positive guidance has analysts worried about Q2 earnings reports
Financial Post, July 6, 2012

“As Alcoa Inc. kicks off a slew of U.S. corporate second-quarter earnings announcements on Monday, there is a distinct sense of foreboding among analysts about what will happen on the markets, which have thus far this year been volatile to say the least. The worries stem in part from a distressing lack of new guidance, especially positive forecasts, coming from U.S. companies, Pierre Lapointe, global macro strategist with Brockhouse Cooper, said in a report Thursday.”


Looming foreclosures = House Price Obstacle
The Big Picture, June 28, 2012

“David Wilson of Bloomberg takes a crack at the Housing turnaround story: Persistently high foreclosure rates show the U.S. housing industry is “bouncing along the bottom” even though sale prices are recovering. The chart above, via strategist Pierre Lapointe of Brockhouse & Cooper, shows the percentage of foreclosed home loans little changed from the 4.3% average for 2009. (Data source: Mortgage Bankers Association).”


Giddy about U.S. housing? Slap yourself
Globe and Mail, June 27, 2012

“We pointed out yesterday that rising homebuilding stocks are stoked about recent improvements in the U.S. housing sector. But not everyone is on board with this bullish theme. Brockhouse Cooper argued in a note on Wednesday that the housing market – rather than show any meaningful improvement – will merely bounce along the bottom for some time.”


Bad news spurs global market plunge
Globe and Mail, June 21, 2012

“The U.S. is really supposed to be the last refuge, where we go to hide,” said Frances Donald, financial economist at Brockhouse Cooper, pointing to the country’s economic momentum. “So when you get hit with these bad numbers, it shocks the system. You wonder where else you’re supposed to go.”


Buy emerging markets — but not yet
Globe and Mail, June 20, 2012

“…the four big driving forces of the group – Brazil, Russia, India and China, the so-called BRIC economies – each are struggling with their own problems, said Brockhouse Cooper global macro strategist Pierre Lapointe in a recent report. China has a slumping housing market, India an inflation problem, while Russia faces slumping prices for its big oil exports, and Brazil looks headed for a consumer credit crunch.”


Earnings, GDP: Get ready to be disappointed
Globe and Mail, June 17, 2012

“Economic data have been coming in far weaker than expected almost across the board, but that hasn’t led analysts to trim their estimates for GDP growth. That could be a problem for the stock market, according to Pierre Lapointe, global macro strategist at Brockhouse Cooper. He says the consensus estimate for U.S. GDP growth this year is running at 2.2 per cent. But the slew of recent, dismal economic figures have led him to conclude that growth could end up being far weaker, at only 1.5 per cent.”


Stick with defensive stocks and beat market consistently
National Post,
June 15, 2012
“Pierre Lapointe, a macro strategist at Brockhouse Cooper, has a different take on the opportunities that result from highly volatile markets. He takes a shorterterm macro approach that requires more of a trader’s mentality. During “risk on” periods, he said investors should focus on assets with “strong bull betas,” that is, investments that do better than the overall markets.”


Bonds’ caution could be bad news for stocks
Globe and Mail, June 12, 2012

“It is important to keep in mind that since the end of the recession, the high yield credit market has usually been a leading indicator of equities,” Brockhouse Cooper said. “Despite the recent equity pullback, there is a big divergence of opinion between corporate bondholders and equity investors. When bond and stocks investors disagree, our experience tells us that the bondholders are usually right.”


The factory ‘reshoring’ opportunity
Globe and Mail,June4,2012

“There were 14 million people employed at U.S. factories before the recession, compared with about 12 million now. The industry’s inflation-adjusted investment in structures, an indicator of growth, remains below the average of the past 40 years, according to Brockhouse Cooper, an economics advisory firm in Montreal. Manufacturing wages still are at their average of the past couple of decades, once adjusted for inflation, suggesting many of the new jobs come with lower salaries.”


Looking for growth’s green shoots amid economic uncertainty
National Post, May 14, 2012

“Profit margins have peaked and the historical earnings growth is only 7.6%,” said Pierre Lapointe, a strategist at Brockhouse Cooper in Montreal. “In a situation where the global economy is slowing down, we simply do not see how earnings growth could come out 50% above the historical average.”


Looking beyond the profit warnings: insiders are selling
Globe and Mail, May 11, 2012

“Insider selling has been high throughout the market’s post-recession recovery, but it surged even higher – to record levels – over the past few months, Brockhouse Cooper global macro strategist Pierre Lapointe recently noted.”


Factory Shift Fails to Lift U.S. Worker Wages
Bloomberg, May 11, 2012

“Factory workers are getting no richer as General Electric Co. (GE) and other U.S. companies move production back home, according to Pierre Lapointe, Brockhouse & Cooper Inc.’s global macro strategist.”


Looking for the kings of capital spending
Globe and Mail, May 9, 2012

“Pierre Lapointe, global macro strategist at Brockhouse Cooper in Montreal, recently did a stock screen to identify the companies on the S&P Global 1200 – a global composite of the biggest stocks throughout the world’s major equity markets – that have shown the best growth in both capital spending (capex, for short) and operating margins over the past year.”


Three charts: Bank of Canada overly optimistic on GDP
Globe and Mail, May 7, 2012

“The latest jobs report…indicates that the recovery is not getting the necessary traction. And the concerns aren’t just domestic. Watch for a negative impact on the U.S. from the economic slowdown in Europe, says Brockhouse Cooper economist Pierre Lapointe.”


Decoupling, no. Depression, yes.
Globe and Mail,May 3, 2012

“…Tuesday’s strong report on U.S. manufacturing in April has inspired some observers into taking a more confident tone on the U.S. economy, which of course implies that there is some kind of decoupling going on between Europe and North America. Brockhouse Cooper shoots down that notion, though…our view is premised on the idea that the U.S. and euro economies are desynchronized, not decoupled.”


Insiders are selling. Should you?
CNN Money, April 18, 2012

“Corporate managers are not buying the current rally. If the people who know their companies best are selling, maybe you should reconsider whether to buy,” said Pierre Lapointe, global macro strategist with Brockhouse Cooper. He added that the current level of insider selling could signal as much as a 10% decline in stocks over the next few months.


Bank Credit Worst to Companies Since Crisis Peak
Bloomberg News, April 18, 2012

“The problem with emergency liquidity injections is that they become addictive,” said Alex Bellefleur, an analyst at Brockhouse & Cooper Inc. in Montreal. “That is especially the case when injections are trying to fight underlying flows that are accelerating. This is the dynamic we are currently in.”


“Explosion in Student Debt” Drags Down Housing
Bloomberg News, April 17, 2012

“As the cost of attending U.S. colleges and universities surges, student-loan debt is turning into “a significant drag on the housing market,” according to Pierre Lapointe, a Brockhouse & Cooper Inc. strategist.”


A confusing week for stocks
Globe and Mail, April 13, 2012

“The folks at Brockhouse Cooper aren’t buying the bullish arguments. They said on Friday that economic surprises are turning negative — and just as a string of positive surprises helped drive stocks higher in recent months, this downward turn weigh on stocks.’


Slowdown? Maybe. Dividend cuts?No way.
Globe and Mail, April 2, 2012

“Brockhouse Cooper remains skeptical about the economic backdrop (a global slowdown is coming) and the earnings season (10 per cent earnings growth over the next year? No way). But despite their cautious approach, they believe that dividends are safe.”


As earnings outlook darkens, recession talk begins 
Globe and Mail, April 2, 2012

“The fact that company managers are not guiding the market higher tells us that their outlook is not as rosy as the market thinks,” said Pierre Lapointe, Alex Bellefleur and Frances Donald, in a note.”


Iceland’s recovery offers case for reviving drachma
Globe and Mail, March 9, 2012

“Brockhouse Cooper global macro strategist Pierre Lapointe said the “first ingredient” in Iceland’s speedy turnaround was its independent currency. Far from the rapid devaluation being a curse on the country’s economy, he said, it allowed Iceland to become more competitive in the global market and make the adjustments necessary to bring its wildly tilted finances back into a semblance of balance.”


Global worries spark stock selloff
Globe and Mail, March 6, 2012

“In a recent note to clients, Pierre Lapointe, global macro strategist at the brokerage firm Brockhouse Cooper in Montreal, says investors yanked a net $23.5-billion (U.S.) out of U.S. equity funds over the past six months, indicating that many Main Street buyers remain skeptical of stocks’ potential for further advances.”


Deteriorating U.S. guidance to weigh on stocks
Financial Post, March 6, 2012

“A mixed U.S. earnings season didn’t prevent equity markets from rallying over the past two months, but the deteriorating corporate guidance for profits south of the border threatens to become a major headwind for stocks in the months ahead, analysts say. “At this stage of the cycle, investors should expect positive signs from company managers,” said Pierre Lapointe, a macro strategist at Brockhouse Cooper in Montreal. “We aren’t seeing any.”


Spending and debt: Let’s not go Dutch
Globe and Mail, March 4, 2012

“Soaring stock markets leave no doubt that someone is pouring cash into the stock market. But who?
Pierre Lapointe of Brockhouse Cooper, the Montreal brokerage, examined the suspects in a recent report. He notes that surveys of individual investors demonstrate growing optimism about stocks. However, there’s no evidence that Mr. and Mrs. Average are stampeding into the market. Just the opposite. Over the past six months, retail investors pulled $23.5-billion (U.S.) out of U.S. equity funds.”


Stocks retreat amid global growth concerns
Bloomberg Businessweek, March 2, 2012

“Price swings in the S&P 500 have become more muted this year, making investors complacent about the outlook for stocks, according to Canadian brokerage firm Brockhouse & Cooper Inc.”


A quest for quality stocks, Canadian edition
Globe and Mail, February 15, 2012

Wednesday’s column, looking at Brockhouse Cooper’s screen for “quality” stocks on the S&P 500, generated plenty of reader interest. “Nice stuff,” they said, “but what about Canadian stocks?” A fair question. So today, we’ve replicated (as best we could) Brockhouse Cooper’s U.S. screen to identify the highest-quality stocks on Toronto’s benchmark S&P/TSX composite index.”


A quest for quality (read big, stable profits)
Globe and Mail, February 14, 2012

“Forget the fuss over whether you should pursue a growth strategy or a value strategy in your investment portfolio. In the aftermath of the Great Recession, says Brockhouse Cooper global macro strategist Pierre Lapointe, both strategies are being trumped by “quality” – stocks that deliver high return on equity, low volatility and clean balance sheets.”


Stocks look better but proceed with caution
Montreal Gazette, January 24, 2012

“Pierre Lapointe and Alex Bellefleur at Brockhouse Cooper, a Montreal investment dealer, point out that the aggregate profit margins of U.S. firms have risen to the highest level since 1950, suggesting that they’ll move down or, at best, fail to grow.”


Like surprises? Don’t hope too hard
Globeand Mail, January 23, 2012

One way to measure whether or not a peak in equity markets is being reached is to look at economic surprises. Better-than-expected economic data, especially in jobless claims, helped fuel a year-end rally in the United States. But there are signs that the rate of such good tidings is slowing down, and that could well herald lower equity returns, according to Brockhouse Cooper’s global macro strategist Pierre Lapointe.


The market’s throwing a party but few are going
Globe and Mail, January 20, 2012

“Traditionally, market watchers want to see volumes rise along with prices, a sign that growing demand is an underlying driver. Brockhouse Cooper global macro strategist Pierre Lapointe and financial economist Alex Bellefleur noted that the current rising-prices, falling-volumes trend is contrary to the past two economic cycles.”


U.S. Stock Futures Fall as Google Drops 
Bloomberg, January 20, 2012

“U.S. stocks are caught in “a vicious circle” of slower trading and bigger swings in prices, according to Pierre Lapointe, Brockhouse & Cooper Inc.’s global macro strategist. Trading for the 50 days ended yesterday was the slowest since at least 2008, when Bloomberg started compiling the data, at 6.67 billion shares a day.”


The collateral squeeze is on, and it’s going to hurt lending
Globe Investor Streetwise, January 18, 2012

“As strategists at Brockhouse Cooper point out, lenders are more careful these days, favouring secured loans, and they are demanding top-notch collateral, which usually means the highest-rated government bonds. The problem is, there aren’t enough of those bonds to go around. That’s not good news for borrowers, but it is good news for holders of highly rated bonds, because they will be increasingly sought after.”