Biz Wax/Investing/Economy (BIE)

Talk about anything.

Moderator: Global Moderator

User avatar
Webscout
Administrator
Administrator
Posts: 28376
Joined: Thu Dec 28, 2006 8:43 am

Today Oct 23/17

Post by Webscout » Mon Oct 23, 2017 7:13 am

Peaking global growth threatens equity rally


SCOTT BARLOW
31 MINUTES AGO
OCTOBER 23, 2017 FOR Utopia
A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web

Goldman Sachs strategist David Kostin, who's been bearish through much of 2017, notes that the recent rally in North American equities has been well grounded in fundamentals, but that the good times may be coming to an end,

"Economic growth is the most important driver of corporate earnings and equity performance. Since the Tech Bubble, S&P 500 returns have generally tracked the pace of US economic activity as captured by the ISM Manufacturing Index. After dipping in 2Q, the index has surged in recent months and in September hit 60.8, the strongest reading in 13 years (since May 2004)… Although economic data are extremely strong now, an ISM reading above 60 typically marks the peak of growth and presages economic and equity deceleration."

"@SBarlow_ROB GS: equities tracking growth, which may have peaked" – (research excerpt) Twitter

=====

Thanks to global central banks, equity returns have been very much driven by macroeconomic factors in the past decade – the effects of low interest rates on dividend stocks is only one prominent example. Citi's global strategy team recently noted their "Big Macro Calls" for the remainder of the year,

"The global Cyclical/Defensive sector trade is still 75% correlated to UST yields. Bond bears should Overweight Cyclicals (especially Financials) and Underweight defensives (especially Consumer Staples, Utilities, Telecoms)… Stock-pickers who don't want to be bond traders should neutralise their Cyclical/Defensive exposure. Or they should stick to sectors which don't slavishly follow bond yields (IT, Materials, Energy)."

"@SBarlow_ROB Citi's Big Macro Calls: "global cyclicals defensives is 75% correlated to UST yields" – (research excerpt) Twitter

=====

The government of Singapore has joined the anti-car movement by capping the number of drivers at current levels,

"The government will cut the annual growth rate for cars and motorcycles to zero from 0.25 percent starting in February, the transport regulator said on Monday. "In view of land constraints and competing needs, there is limited scope for further expansion of the road network," the Land Transport Authority said in a statement. "

"Singapore to Stop Adding Cars to City From February 2018" – Bloomberg

=====

The Atlantic's online business magazine Quartz highlights a study attempting to pick the winners and losers from electric vehicle sales,

"Globally, the share of electric vehicles (EV), not including hybrids, is under half a percent even as it edged ahead in a handful of countries… Selling a combined 45.5 million cars per year, [China and the U.S.] are set to put the most electric cars on the road in the coming year.. Tesla leads the world in devoting its entire lineup to electric vehicles, but Volkswagen, Volvo, and GM have announced they will go all-electric the coming decades. "

"Ladies and gentlemen, the winners and losers of the electric car race (so far)" – Quartz

Related: "Oil Investors Jump Back Into the Fray" – Bloomberg

"The "fundamental rule" of traffic: building new roads just makes people drive more" – Vox

=====

Tweet of the day: @chigrl Barclays: #Chinese economic slowdown to pressure commodities #energy #metalsDiversion: " – (chart) Twitter

Diversion: "Falsehood: "If this was the Stone Age, I'd be dead by now"" - Greg Laden's Blog
Image

User avatar
Webscout
Administrator
Administrator
Posts: 28376
Joined: Thu Dec 28, 2006 8:43 am

....winners and losers from electric vehicle sales,

Post by Webscout » Mon Oct 23, 2017 7:18 am

The Atlantic's online business magazine Quartz highlights a study attempting to pick the winners and losers from electric vehicle sales,

"Globally, the share of electric vehicles (EV), not including hybrids, is under half a percent even as it edged ahead in a handful of countries… Selling a combined 45.5 million cars per year, [China and the U.S.] are set to put the most electric cars on the road in the coming year.. Tesla leads the world in devoting its entire lineup to electric vehicles, but Volkswagen, Volvo, and GM have announced they will go all-electric the coming decades. "

"Ladies and gentlemen, the winners and losers of the electric car race (so far)" – Quartz
[HIDE]

Code: Select all

https://qz.com/1102552/ladies-and-gentlemen-the-winners-and-losers-of-the-electric-car-race-so-far/
[/HIDE]
Image

User avatar
Webscout
Administrator
Administrator
Posts: 28376
Joined: Thu Dec 28, 2006 8:43 am

Big money stays away from booming bitcoin

Post by Webscout » Mon Oct 23, 2017 7:20 am

Big money stays away from booming bitcoin
[HIDE]

Code: Select all

https://beta.theglobeandmail.com/globe-investor/investment-ideas/big-money-stays-away-from-booming-bitcoin/article36687238/
[/HIDE]
Image

User avatar
Webscout
Administrator
Administrator
Posts: 28376
Joined: Thu Dec 28, 2006 8:43 am

Today-Oct 24/17

Post by Webscout » Tue Oct 24, 2017 6:47 am

Weakness ahead for loonie, dividend stocks


SCOTT BARLOW
40 MINUTES AGO
OCTOBER 24, 2017 FOR Utopia
A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web

The technology stocks that have led global markets are weaker early Tuesday ahead of Alphabet and Amazon.com earnings reports. U.S. industrials, ex- general Electric, are higher after strong earnings reports from 3M and United Technologies.

"Tech Stocks Are Sinking Ahead of Google and Amazon Earnings" – Bloomberg

Me, on video game stocks: "This market sector's return is three times the index" – Barlow, Inside the Market

"United Tech beats Street, lifts forecasts again" – Reuters

=====

Former Treasury Department economist Mark Dow wrote an important chart-heavy piece predicting imminent volatility in currency markets that will see the U.S. dollar rally against the loonie,

"the patterns suggest the dollar is on the verge of busting a move higher… The Canadian dollar is not exactly a funding currency, but the one-year chart of USDCAD looks very bid .. [precious metals prices] appear to be breaking down .. The bottom line here is that bonds and bond proxies are overbought and investors are structurally short dollars."

"Tax cuts, fed chair, the dollar and bonds. en garde." – Dow, Behavioral Macro

=====

The futures curve for West Texas Intermediate crude is almost in backwardation – longer term prices below the spot price – and this is very bullish for the commodity price. An inverted futures curve means producers will sell physical oil, reducing inventories, rather than sell at higher, forward prices for future delivery.

"@JKempEnergy BACKWARDATION beckons for WTI: the contango from month 1 to month 7 is now down to just 21 cents (narrowest since 2014)" – (chart) Twitter

"Oil Just Isn't That Important to Petrocurrencies Right Now" – Bloomberg (includes loonie)

=====

Tweet of the Day: "@JavierBlas2 With an important message from IMF boss @Lagarde: "In 50 years time, #oil will be a secondary commodity" -- #OOTT #FII2017 " – Twitter

Diversion: "George Clooney and Matt Damon speak out about what they knew about Harvey Weinstein: 'He was a womanizer'" – Business Insider
Image

User avatar
Webscout
Administrator
Administrator
Posts: 28376
Joined: Thu Dec 28, 2006 8:43 am

Today-Wed...Oct 25/17

Post by Webscout » Wed Oct 25, 2017 11:16 am

‘Bond King’ posits obituary for 35-year-old bull market in bonds. Investors aren’t ready


SCOTT BARLOW
5 HOURS AGO
OCTOBER 25, 2017 FOR Utopia
A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web

Jeffrey Gundlach of Doubleline Investments, who took over the mantle of "Bond King" after Bill Gross changed firms, tweeted the possibility of an obituary for the bull market in bonds that began in 1982.

It might have been tongue-in-cheek, but no investor under the age of 65 has experience navigating a market of steadily rising bond yields and interest rates and a lot of painful re-education would be required. For one, dividend stocks would underperform dramatically in rising rate market,

"@TruthGundlach The moment of truth has arrived for secular bond bull market! Need to start rallying effective immediately or obituaries need to be written." – Twitter

"@sobata416 Don't poke the bond bears... ..Speculators have amassed record net shorts in both 2s and 5s: " – (chart) Twitter

=====

The Bank of Canada will announce interest rate policy Wednesday afternoon. This would be the big news of the day except that the consensus view is for "no change." The wording of the accompanying statement will be parsed carefully, as usual. From BMO economic research,

" We anticipate the BoC will sound more cautious than in September for the following reasons: NAFTA negotiations have taken a negative turn … OSFI's new mortgage rules, which take effect Jan. 1, 2018, introduce more uncertainty .. The economic data have softened … The BoC has already hiked twice, and it will take time to assess the impact. "

"@SBarlow_ROB BMO expects no change in Cdn rates, more cautious stance" – (research excerpt) Twitter

"Loonie Underpriced in Big Banks' Eyes as 2017 Hike Risk Remains" – Bloomberg

"@LJKawa Boom! Heading into today's meeting, markets are now pricing in more tightening from the Fed than the BoC over the next year. #cdnecon " – (chart) Twitter

=====

The speculative boom in lithium appears close to an end,

"'You've got a scramble for deposits, a demand side that looks very impressive, the question is always around the supply,' said Paul Gait, an analyst at Sanford C. Bernstein Ltd. in London. In the rush to meet demand there is a risk too many mines will be developed and too much metal supplied, Gait said. 'When the tide goes out, those that do not have good geology will always be found wanting.'"

"Mad Scramble for Lithium Stretches From Congo to Cornwall" – Bloomberg

"@tbiesheuvel Great BMO chart today. They see a big lithium supply response " – (chart) Twitter

=====

The New York Times' Dealbreaker site lays in to Tesla Motors and hedge fund manager Bill Ackman,

"Tesla should be valued as a religion and not as a car company. You can't look at Tesla's balance sheet and discern meaning anymore than you can consult The Book of Leviticus for mortgage advice.Tesla's fundamentals are terrible, it's production plans for the Model 3 are absurd and Elon isn't being subtle in his wagging of the dog to hide Tesla's production woes by suddenly pivoting to saving Puerto Rico's power grid."

"David Einhorn Dangerously Close To Letting Tesla Become His Own Private Herbalife" – Dealbreaker (NSFW language warning)

"A warning to all Tesla investors, why GE is a stock to hang on to, and how to profit from videogamers" – Globe Investor Newsletter

=====

Tweet of the Day: "@SBarlow_ROB MS: return of political risk premium in oil" – (research excerpt) Twitter

Diversion: President Trump is expected to de-classify documents related to John F. Kennedy's assassination,

"JFK assassination: Questions that won't go away" – BBC
Image

User avatar
Webscout
Administrator
Administrator
Posts: 28376
Joined: Thu Dec 28, 2006 8:43 am

Here's where you should not be putting your investment dollars right now

Post by Webscout » Thu Oct 26, 2017 4:12 pm

David Rosenberg: Here's where you should not be putting your investment dollars right now
https://beta.theglobeandmail.com/globe- ... e36737243/
Image

User avatar
Webscout
Administrator
Administrator
Posts: 28376
Joined: Thu Dec 28, 2006 8:43 am

Biz Wax/Investing/Economy (BIE)

Post by Webscout » Fri Oct 27, 2017 9:01 am

Trump ‘setting the stage’ to tear up NAFTA


SCOTT BARLOW
2 HOURS AGO
OCTOBER 27, 2017 FOR UTOPIA
A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web

Merrill Lynch's weekly update on investor flows highlighted a considerable inflow into U.S. equities as the expense of emerging market assets. The high correlation between the S&P/TSX Composite and the MSCI Emerging Markets index makes the trend relevant for domestic investors,

"[investors] poured $6.1 billion into funds tracking U.S. stocks in the week to Oct. 25 … U.S. stock portfolios have posted $13.4 billion of inflows in the past four weeks… Investors pulled $700 million from emerging-market equity funds, the first outflow in 10 weeks. Local-currency emerging-market debt funds also experienced redemptions. The flows are the first sign higher U.S. Treasury yields are causing the "lust for yield" to pause, according to the report."

"'Lust for Yield' Pauses as U.S. Stock Inflows Hog the Spotlight" – Bloomberg

=====

I hold the iShares Nasdaq Biotechnology ETF so yesterday's sell-off in the sector, caused by weak results from Celgene Corp., was highly unwelcome,

"The second-half biotechnology stock rally that lifted the Nasdaq Biotech Index to the highest level in almost two years was stopped in its tracks this week as giants Biogen Inc. and Celgene Corp. whiffed on earnings. The third-quarter earnings season had been viewed by many analysts as the next key catalyst to validate the group's recent climb and is likely to leave investors wondering what's next."

"Celgene's Earnings Whiff Drags Down the Rest of Biotech" – Bloomberg

=====

Amazon.com Inc. posted a huge earnings beat Thursday and Alphabet's results were also strong. As a result, U.S. equity futures are higher ahead of the market open,

"Futures jump after strong tech earnings" – Reuters

"The Rumor That Amazon Will Sell Prescription Drugs Just Got Serious" – Gizmodo

=====

Vox believes the U.S. president is 'setting the stage' to withdraw from the NAFTA agreement, and wonders whether he can be stopped,

"The [U.S.] proposals — which included unprecedented ideas like requiring the countries to vote on staying in the agreement every five years, ensuring the pact would be perpetually precarious — seemed designed to get Mexico and Canada to reject the ideas and allow Trump to blame them for the deal's collapse … Trump can unilaterally withdraw from the agreement by giving Mexico and Canada six months' notice. But Congress also has a say, since it ratified and implemented the agreement through legislation. Congress can fight to keep that legislation — the rules governing the way that the US trades with Mexico and Canada under NAFTA — intact. It can also pass new laws designed to boost its own authority over trade agreements"

"We asked 6 experts if Congress could stop Trump from eliminating NAFTA" – Vox

=====

Meanwhile in the energy sector, Brent crude prices continue to sneak up on the $60 per barrel mark as global supply tightens,

"'Oil raced higher overnight with Brent finishing in sight of the magical $60 a barrel mark, spurred on by Saudi remarks supporting the oil production cut through to the end of 2018,' said Jeffrey Halley, senior analyst at futures brokerage OANDA."

"Brent crude oil approaches $60 as markets tighten" – Reuters

"How will peak oil demand affect the upstream industry?" – Wood Mackenzie

=====

Chicago criminals are apparently familiar with the business section of their paper,

"Palladium Is a Hot Commodity for Chicago Car Thieves" – Bloomberg

=====

Tweet of the Day: "@NBCNews JFK files show Hoover wanted the public convinced Oswald acted alone nbcnews.trib.al/VBdSFVM " – Twitter

Diversion: "Paul Newman's Daytona Rolex Sells for a Record $17.8 Million" – Bloomberg
Image

User avatar
Webscout
Administrator
Administrator
Posts: 28376
Joined: Thu Dec 28, 2006 8:43 am

Here's where to invest your money right now

Post by Webscout » Fri Oct 27, 2017 1:18 pm

David Rosenberg: Here's where to invest your money right now


DAVID ROSENBERG
SPECIAL TO Utopia
5 HOURS AGO
OCTOBER 26, 2017
Let's talk about what I like right now in the investing landscape.

I like Japanese stocks. The major averages have broken a 25-year downward trend-line. Small-caps have been outperforming, so this transcends the weak yen stimulus. Female participation rates are on a secular uptrend and prior taboos, such as importation of foreign labour, have been broken.

Next comes the nationalistic phase of Shinzo Abe's legacy that is rewriting the constitution and embarking on a more rigorous military policy. Political stability is intact, a rarity around the world. And the Nikkei 225 and Topix also are rare benchmarks trading at multiples at or below their historical norms. So far in this bull market, 80 per cent of the total return has come from pure earnings per share (EPS) growth and the remainder via dividend yield – now matching the United States – and higher payouts. There has been no P/E expansion at all – that comes next. In the United States (on a comparable positive EPS-only basis), 20 per cent of the total return has come via earnings, 60 per cent from P/E multiple expansion and 20 per cent from dividends. You choose. And the Japanese market is underowned globally and among the locals – there is more retail money sitting in zero-per-cent bank deposits than in Japanese equities.

I like global defence stocks. Not just because of the changes in Japan, but because of what Japan is responding to … the escalating threat from North Korea as well as the move by China's Communist Party to inscribe President Xi Jinping's new "guide to action," which most certainly will involve attempts at greater dominance in Southeast Asia.

And insofar as a primary goal involves China moving "closer to centre stage" in the world, this means greater efforts to ensure that the One Belt One Road strategy (building infrastructure links between the East and West) will be a success. This, in turn, should be beneficial for basic material prices and global shippers.

I'm bullish on various measures of volatility that will confront a lot of change in coming months and quarters. A shift in global monetary policies for one – quantitative tightening (QT) in the United States; rate hikes in both the United States and Britain (for the latter, 90 per cent priced in now for year-end given inflation well above target at 3 per cent); tapering by the ECB; a new ECB president to be chosen, not to mention someone new at the helm at the Fed as well. In addition, we have rising populism in Europe, with implications for the Italian election; continuing tensions in Spain; the virtual breakdown of the Brexit talks; the likely abrogation of the North American free-trade agreement, which could tip the U.S. economy into a recession with or without tax reform; heightened odds that the Democrats take the U.S. House a year from now. Did I miss anything?

I like high-quality government bonds. Pundits think QT in the United States and the taper in the euro area are negatives. But in fact, because these central bank reversals are more likely to dampen the "animal spirits" that were whetted during this age of monetary largesse, we may well find that "buy the dips" was a reference to U.S. Treasuries, not equities. Be that as it may, we could well see the 10-year T-note gravitate back to the high end of the 2.3-per-cent to 2.6-per-cent range, given the "reflation" psychology in the market and, as we had mentioned in recent weeks, the massive net long position in the futures and options pits on the Chicago Board of Trade that has yet to be fully unwound.

But this will come back to bite because 42 of those epic 54 records the Dow has turned in this year came when the 10-year yield was south of 2.4 per cent. I also see core inflation coming down further, based on base effects, the rebound in the U.S. dollar and a sustained weakening in rents – as the supply aftershocks linger following this cycle's construction boom. Apartments are growing so affordable that a Freddie Mac survey found that 76 per cent of renters now believe renting is more affordable than owning, up from 65 per cent a year ago.

I also like the energy market. We are getting some really effective guidance from OPEC on the output cut extensions. U.S. storage data are in decline and the API just showed a 5.8-million-barrel weekly slide in gasoline stocks and a 4.9-million-barrel decline in distillate inventories. The technical condition in the crude market has improved markedly and a geopolitical risk premium is starting to get embedded from two sources – uncertainty over Iranian exports and the escalating tension building in Iraq following this recent Kurdish vote on independence.

The Canadian oil-producer stocks have quite a bit of catching up to do if/when West Texas intermediate settles into a mid-$50 (U.S.) to high-$50-dollar-a-barrel range. And this is not just about improving supply-demand fundamentals in the crude oil market but in natural gas as well. And the weather is going to play a key role on the demand side, which will deplete underground gas inventories in that key November-April period. Note that these stockpiles, as per the U.S. Energy Information Administration, stand at 3.646 trillion cubic feet or 4.7 per cent below year-ago levels.

Well, in the name of being consistent, if Mr. Xi can continue to ensure stable growth in China (despite the massive debts at the state-owned enterprises, which have been the bedrock for China's economy) – that also means stemming capital outflows – and if the oil price hangs in, then the outlook for emerging markets will also be rather constructive. India, as an aside, just took some major steps in its budget to spend $32-billion in recapitalizing its debt-laden state-controlled banks (strained by a rising tide of corporate loan defaults).

To be clear, while I am less bullish on Europe than I was before (and correspondingly more positive on Japan), I am still constructive over all. I am impressed with French President Emmanuel Macron, who is forging ahead in parliament to scrap the wealth levy and, in the process, cutting tax rates on capital gains, dividends and interest by 70 per cent to a flat 30-per-cent rate. This is a big departure from the recent past, when François Hollande chose to boost taxes on the highest income earners. Mr. Macron is definitely pro-business and pro-deregulation and is getting things done far faster than is the case in the United States right now.
Image

User avatar
Webscout
Administrator
Administrator
Posts: 28376
Joined: Thu Dec 28, 2006 8:43 am

Today-- Oct 30/17

Post by Webscout » Mon Oct 30, 2017 7:03 am

This week ‘could change everything’ for bonds, dividends and the loonie


SCOTT BARLOW
1 HOUR AGO
OCTOBER 30, 2017 FOR UTOPIA
A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web

U.S. bond managers are in a bit of a panic with Bloomberg touting "a week that could change everything."

A new Fed chair is set for appointment, a Fed meeting on interest rates will happen Wednesday, the release of a new tax bill is expected and there's also monthly report on job creation,

"It all comes at a pivotal time, with 10-year yields breaking above the crucial 2.4 percent level and touching a seven-month high of 2.48 percent. With yields entering a new, elevated range, traders are bracing for turbulence as they ponder the direction of the world's biggest bond market for the remainder of 2017…It's a frightening week to take a big bet one way or the other."

A continued rise in U.S. rates and yields will have one of two effects on Canadian markets. Either domestic bond yields climb in sympathy – threatening dividend stock returns – or the loonie falls significantly if yields stay the same.

"Bond Traders Confront Fears in Week That May Change Everything" – Bloomberg

"'This loonie's going down': CIBC's Tal" – BNN

=====

Morgan Stanley, like Goldman Sachs last week, published a list of their favourite secular growth stocks. It used to be that "secular" meant "stable" and these stocks would be in sectors like telecom, pharma and consumer staples. No longer, Morgan Stanley's picks include high flying NVIDIA Corp., Salesforce, Amazon.com and Netflix,

"MORGAN STANLEY: These 16 stocks are set for huge growth no matter what" – Business Insider

Video game stocks continue to rocket higher as Nintendo raised profit forecasts,

"Nintendo Boosts Profit, Sales Outlook on Robust Switch Demand" – Bloomberg

"How investors can profit from all those jobless young males playing video games" – Barlow, Inside the Market, Oct. 23, 2017

"Nintendo boosts profit forecasts on Switch strength" – FastFT

=====

The world's major economies are showing the best levels of synchronized economic growth in many years and as a result, "everyone's a metals bull,"

"For the first time in years, optimism is widespread among traders, smelters, miners and brokers gathering in London, buoyed by a combination of strong growth across the world's key demand centers, supply curbs in China and a return of investor interest. "The global economy looks much better than it has done probably since the crisis, maybe before that," said Saad Rahim, chief economist at Trafigura Group Pte, the second-largest metals trader. "I'm pretty bullish.""

"Everyone's a Metals Bull as Global Economic Engine Fires Up" – Bloomberg

=====

Tweet of the Day: "@ustewart US tech stocks rose by over $190bn last week. Greater than gdp of New Zealand " – Twitter

Diversion: We're coming up on the 500 year anniversary of the Protestant Reformation,

"9.5 myths about the Reformation" – Oxford University Press blog
Image

User avatar
Webscout
Administrator
Administrator
Posts: 28376
Joined: Thu Dec 28, 2006 8:43 am

Today Tuesday-Oct 31/17

Post by Webscout » Tue Oct 31, 2017 7:45 am

SCOTT BARLOW
1 HOUR AGO
OCTOBER 31, 2017 FOR Utopia
A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web

In the spirit of the season, Bloomberg and others have released a series of market-oriented charts designed to terrify investors. The CBOE Volatility Index, and derivative products designed to lever up the movements in the index, feature prominently.

"The scary thing about levered VIX products is that they can become forced buyers of volatility. This could become a vicious cycle, where anticipation of the volatility buying from VIX products pushes volatility higher (which in turn requires them to buy even more)."

Other charts include U.S. consumer debt levels which have disconnected from income, suggesting the U.S. consumer is almost tapped out.

The Bond Vigilantes blog added five scary charts with "investors have crowded in to risky assets" and "remember when investors used to worry about debt?" figuring prominently.

"You Wanna See Something Really Scary? Try These Market Charts" – Bloomberg

"Here are some of the scariest charts in finance to celebrate Halloween" – Bond Vigilantes

"IMF warns volatility products loom as next big market shock" – Financial Times

**

Researchers at Exxon Mobil might just be talking their book here, but the company sees very little risk to oil demand from electric vehicles before 2040.

"The electric-vehicle, or EV, fleet won't grow fast enough to displace much in the way of fuel demand, according to Exxon Vice President Jeff Woodbury … 'By 2040, the fleet is about 6 per cent EV,' Woodbury said, referring to a company forecast on the growth of electric cars. Even if you boosted that number by 50 per cent, it would only remove about a half-million barrels a day in demand, he said, 'not substantial when you think about overall oil demand of over 100 million barrels per day, at that point.' "

"Exxon Is Not Threatened by Tesla" – Bloomberg

"One Metal Will Be Transformed by the Electric Car Boom" – Bloomberg

**

The Council on Foreign Relations continues its quest to understand where Apple Inc. books profits and how distorted import and export data can become for tax reasons.

"Apple's Exports Aren't Missing: They Are in Ireland" – Council on Foreign Relations

**

Energy consulting group Wood Mackenzie posted an extremely optimistic perspective on renewable energy.

"Operating solar capacity in the U.S., for instance, has grown by a factor of 37(!). And now renewables often rank as the cheapest source of new generation capacity … Yesterday's prevailing wisdom – that clean energy is too expensive for widespread adoption – is now rarely expressed among energy market leaders … First Solar demonstrated that a solar project can provide an essential reliability service better than any source of conventional generation."

"Next-Generation Energy Technologies Are Constrained by Outdated Markets. Here's How to Fix Them" – Wood Mackenzie , Greentech Media

**

Tweet of the day: "@SBarlow_ROB "Watching This Neural Network Render Truly Photorealistic Faces Is Creepy and Mesmerizing" #general #feedly sploid.gizmodo.com/watching-this-" – Twitter

Diversion: "Time for Another Top Earning Dead Celebrities List from Forbes" – Alan Cross
Image

User avatar
Webscout
Administrator
Administrator
Posts: 28376
Joined: Thu Dec 28, 2006 8:43 am

...little risk to oil demand from electric vehicles before 2040.

Post by Webscout » Tue Oct 31, 2017 7:54 am

Researchers at Exxon Mobil might just be talking their book here, but the company sees very little risk to oil demand from electric vehicles before 2040.

"The electric-vehicle, or EV, fleet won't grow fast enough to displace much in the way of fuel demand, according to Exxon Vice President Jeff Woodbury … 'By 2040, the fleet is about 6 per cent EV,' Woodbury said, referring to a company forecast on the growth of electric cars. Even if you boosted that number by 50 per cent, it would only remove about a half-million barrels a day in demand, he said, 'not substantial when you think about overall oil demand of over 100 million barrels per day, at that point.' "

"Exxon Is Not Threatened by Tesla" – Bloomberg
https://www.bloomberg.com/news/articles ... rry-demand

"One Metal Will Be Transformed by the Electric Car Boom" – Bloomberg
https://www.bloomberg.com/news/articles ... ns-bullish
Image

User avatar
Webscout
Administrator
Administrator
Posts: 28376
Joined: Thu Dec 28, 2006 8:43 am

Investors should prepare portfolios for an imminent economic slowdown

Post by Webscout » Wed Nov 01, 2017 8:42 am

Investors should prepare portfolios for an imminent economic slowdown


SCOTT BARLOW
3 HOURS AGO
NOVEMBER 1, 2017 FOR Utopia
Market strategist Scott Barlow is reading today on the Web

The Parliamentary Budget Office report offered little in the way of good news for Canadian economic growth in the coming years. The PBO believes the best growth is behind us and a multi-year slowdown period is ahead,

"We project real GDP growth to slow from 3.1 per cent in 2017 to 1.9 per cent in 2018 and then to 1.8 per cent in 2019 before averaging 1.7 per cent annually over 2020 to 2022."

This is not entirely bad news for investors, as the upward pressure on interest rates and bond yields should abate.

"Budget office predicts higher deficit this year, but sees slow decline coming" – CTV News

"Canada's Mini Boom Ends With a Surprise GDP Contraction" – Bloomberg

=====

The outlook remains bright for industrial metals prices and, in particular, for alumina, which is already sharply higher year to date,

"Alumina, the raw material used to make aluminum, has jumped 56 percent since August after China shut down some production, triggering a wave of buying by traders and aluminum smelters. The rally is putting a strain on metal producers in China, where alumina accounts for 40 percent of the cost of making aluminum. Cost pressures could worsen in the months to come as Chinese environmental reforms weigh most heavily on bauxite and alumina producers. That may give extra fuel for aluminum's 28 percent rally this year, the biggest since 2009."

"Why Biggest Metals Rally of the Year May Have Further to Run" – Bloomberg

"Goldman Turns to Hiring Spree for Commodities Trading Fix" – Bloomberg

=====

Oil prices continue their steady move higher although Citi is concerned that some OPEC nations are likely to ignore production quotas in the months ahead,

"With both the Kingdom of Saudi Arabia and Russia intent right now to keep their production cuts in place through end-2018, the free rider problem among other OPEC countries also gets reinforced with any other country capable of producing more oil even more likely to produce it knowing that the two big producers have announced long in advance of 2018 what their end- 2018 intentions are…But before these price-induced supply additions hit the market, any prolonged price uplift could erode the commitment of either Russia or Saudi to maintain their production cuts."

"@SBarlow_ROB Citi: Heisenberg effect in global oil markets" – (research excerpt) Twitter

"Crude breaks above US$55 for first time since January" – BNN

"Canada oil, gas drilling to pick up in 2018: industry body" – Reuters

"Oil Majors Find Their Way Back to Normality as Earnings Surge" – Bloomberg

"The Fracking Boom's Midlife Crisis" – Businessweek

=====

Tweet of the Day: "@johnauthers Why are the markets so strong? This might have something to do with it: (H/T Torsten Slok, @DeutscheBank) " – Twitter

Diversion: "This Pilot Had the Most Spectacular View Flying Into New Zealand" – Sploid
Image

User avatar
Webscout
Administrator
Administrator
Posts: 28376
Joined: Thu Dec 28, 2006 8:43 am

Nervous about frothy stocks? Here are four alternatives

Post by Webscout » Wed Nov 01, 2017 8:45 am

Nervous about frothy stocks? Here are four alternatives

ROB CARRICK-Globe & Mail
39 MINUTES AGO
NOVEMBER 1, 2017 FOR Utopia
Persistently strong stock prices are as much a threat to smart investing as falling markets.

You can see this in the rising number of questions I'm getting from investors who are nervous about buying into the stock market right now and are looking at alternatives. One reader wonders about market-linked guaranteed investment certificates, another asks if there is such a thing as an exchange-traded fund that provide exposure to stocks while guaranteeing your initial investment.

Categorically, any investment product that offers stock market exposure with no risk of losing money should be avoided. These investments seem ideal for jittery investors, but the reality is that they're designed to be profitable for the issuing financial institution and not for the investor. Anyone who truly understands how they work would never buy one.

So what to do if you have money to invest and are nervous of stocks. Here are four ideas:

- A balanced fund: Balanced funds are by far the most popular category of mutual fund, and there are a few ETF options as well. Most offer instant diversification through big holdings in both stocks and bonds, which should hold up well if the stock market falls. You can lose money in a balanced fund, but less than if you just held stocks or equity funds.

- A GIC ladder: For conservative investors who don't need access to their money. Invest equal amounts in GICs maturing one through three years. When a GIC comes due, invest in in a new three-year term. Returns from a GIC ladder are dependable – you might in theory do better with a market-linked GIC, but you could also do worse.

- Dollar-cost averaging: Pick an equity fund or ETF or stocks and buy gradually instead of all at once. For example, use 20 per cent of your money now and invest the rest every few months over the next year or so. Doing this avoids the pain of putting all your money into a market read to drop; if the market does fall in the months ahead, you'll have a chance to buy in at reduced prices.

- A high interest account: Pretty much all investment dealers offer investment savings account products, which are bought and sold like a mutual fund. Current rates on these products are in the 0.95 to 1 per cent range, which is tiny. On the plus side, investment savings accounts are issued by banks and protected by Canada Deposit Insurance Corp. Don't use an investment savings account permanently – it's just a parking spot for use until the markets decline and you're ready to start buying.
Image

User avatar
Webscout
Administrator
Administrator
Posts: 28376
Joined: Thu Dec 28, 2006 8:43 am

Credit market ‘euphoria’ provides unwelcome reminders of the financial crisis

Post by Webscout » Thu Nov 02, 2017 7:42 am

Credit market ‘euphoria’ provides unwelcome reminders of the financial crisis


SCOTT BARLOW
2 HOURS AGO
NOVEMBER 2, 2017 FOR Utopia
A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web

Credit market activity is reaching excessive levels in an unwelcome reminder of the lead up to the financial crisis. Credit Suisse strategist James Sweeney writes,

"Our credit risk appetite index has moved into euphoria, and a further surge in global IP growth would, based on history, make a full-fledged global risk appetite euphoria much more likely."

Mr. Sweeney's report is otherwise bullish on the global economy and markets – he believes asset market risks "are to the upside" – but there are other signs of overheating in credit. Bloomberg's Tracy Alloway noted that,

"While investors suffered billions of dollars in losses on similar bets a decade ago, the leverage offered by synthetic [Collateralized Debt Obligations] is luring back buyers in an era of low yields and dwindling volatility. "It would seem as if the low spread-low vol environment, similar to back in 2006-2007 (when investors couldn't get enough of levered synthetic tranches) has revived some interest in portfolio credit risk," Citigroup analysts led by Aritra Banerjee wrote. "Investors may not have necessarily wanted to add leverage, but, simply put, they have had to, given the lack of alternatives."

Domestically, junk bond sales are on pace to set records,

"New high-yield issuance in the Canadian dollar accelerated in recent weeks, taking the year-to-date total to C$3 billion ($2.3 billion), a record for this time of year, according to data compiled by Bloomberg."

"@SBarlow_ROB CS: "Our credit risk appetite index has moved into euphoria" – (research excerpt) Twitter

"As Credit Booms, Citi Says Synthetic CDOs May Reach $100 Billion" – Bloomberg

"Bond-Buying Mania Ignores Corporate Warning Flags" – Businessweek

"Canadian Junk Bond Sales Are Headed for a Record" – Bloomberg

"@tracyalloway October was a record month for junk-rated bond sales from emerging markets, with $17.5 billion sold. Via @creditsights ' – (chart) Twitter

=====

More positively, the ongoing acceleration in global economic growth continues to drive commodity prices higher,

"Metals are also on a tear, giving traders and industry experts gathered for LME Week in London plenty to cheer about. From aluminum to zinc, just about everything is up. Codelco, the biggest copper producer, suggested a run toward the all-time high of $10,190 a ton may be possible. Expectations of surging battery demand are buffering nickel prices. But the real star of 2017? That's palladium. The metal is heading for its highest close since 2001"

"From Oil to Ruthenium, Here's How Commodities Are Bouncing Back" – Bloomberg

Pedal to Metal – Reuters

"OPEC likely to keep oil supply curbs for whole of 2018: sources" – Reuters

"Oil's $1 Trillion Question" – Bloomberg

=====

Tweet of the Day: "@zerohedge Goldman: "the macro drivers of corporate profit margins all appear headed in the wrong direction" – Twitter

Diversion: "Social Media and Democracy" – Fukuyama, The American Interest
Image

User avatar
Webscout
Administrator
Administrator
Posts: 28376
Joined: Thu Dec 28, 2006 8:43 am

Today-Monday Nov 6/17

Post by Webscout » Mon Nov 06, 2017 7:16 am

Citi’s top stock picks for value and price momentum


SCOTT BARLOW
1 HOUR AGO
NOVEMBER 6, 2017 FOR Utopia
A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web

There's a lot of news this morning, but much of it is the province of other sections of the newspaper.

Market-wise, an anti-corruption campaign in Saudi Arabia with echoes of Turkish leader Tayyip Erdogan has oil prices sharply higher. Billionaire investor Al-Waleed bin Talal is among those detained by the government, albeit at the Ritz Carlton, and the crash of a helicopter killing Prince Mansour Bin Muqrin has generated considerable suspicion,

"Oil Trades Near 2-Year High After Saudi Prince Purges Officials" – Bloomberg

"Arrests put Saudi Prince investments, including Canadian hotels, in spotlight" – Globe and Mail

"Alwaleed, Caught in Saudi Purge, Has Assets Across the World" – Bloomberg

"Oil price hits 2-year high as Saudi Arabia targets elite" – Financial Times

"Mexico declares 1.5 billion barrel oil discovery" – PressTV

=====

The most vicious Venn diagram I've ever seen highlights investor anxiety regarding Tesla Inc.'s prospects as an investment,

"Thursday wasn't a good day for Tesla Inc. The stock fell almost 7 percent and closed below $300 for the first time since May. These days, though, there's another price marker for Tesla out there: the yield on its $1.8 billion high-yield bond, launched in August. This has spiked in the past week to 6.12 percent."

"Tesla's Shareholders Had a Bad Week. They Weren't Alone." – Gadfly

=====

Citi quantitative strategists published a report outlining their top global stock picks for price momentum and value. The choices are topped by JP Morgan Chase, IBM, Amgen, Goldman Sachs and American Express. The stock selection methodology is described here .

"Top global stock picks by value and momentum 'world radar methodology' ' – (table) Twitter

=====

Market news from China is unwelcome according to our website traffic statistics, but I still believe that, at some point, domestic investors will have to catch up on China quickly. The country remains the dominant source of demand for virtually every commodity and at the same time, a central bank official is warning repeatedly and stridently about major risks in the country's debt-swamped credit system,

"China's financial system is becoming significantly more vulnerable due to high leverage, according to central bank governor Zhou Xiaochuan. Latent risks are accumulating, including some that are "hidden, complex, sudden, contagious and hazardous," even as the overall health of the financial system remains good, Zhou wrote in a lengthy article published on the People's Bank of China's website late Saturday."

"China's Central Bank Chief Warns of 'Sudden, Contagious and Hazardous' Financial Risks" – Bloomberg

=====

Deutsche Bank economists threw some raw meat to gold bugs by positing the end of fiat currency in a thought-provoking research report called "Start of the End of Fiat Money",

"The basic premise is that a fiat currency system - the likes of which we've had since 1971 - is inherently unstable and prone to high inflation all other things being equal. However, for the current system to have survived this long perhaps we've needed a huge offsetting disinflationary shock. .. In "The Next Financial Crisis" we suggested how China's fairly sudden integration into the global economy at the end of the 1970s and a very favourable once-in-alifetime shift in demographics from around 1980 onwards could have contributed to the modern boom/bust culture … The argument is based around a view that a positive labour supply shock from China and developed countries' demographics between 1980-2015 has allowed inflation to be controlled externally as the surge in the global labour supply at a time of rapid globalisation has suppressed wages … It could be argued that this external disinflation shock has perhaps 'saved' fiat currencies after the runaway inflation of the 1970s."

"@SBarlow_ROB DB heads into strange territory: Start of the End of Fiat Money" – (research excerpt) Twitter

=====

Tweet of the Day: "@business BREAKING: Broadcom proposes to buy Qualcomm in a deal valued at $130 billion bloom.bg/2j6afWJ " – Twitter

Diversion: "The myth of Medieval Small Beer" – IanVisits
Image

Post Reply