A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the Web
Michael Batnick, Director of Research at Ritholtz Wealth Management, is not overly concerned about Wednesday's market sell-off. I generally feel the same way,
"Stocks are expensive and people are waiting, nay, begging for them to come down. This, coupled with the fact they haven't pulled back in so long has created a weird feedback loop where the lack of movement is making some investors paranoid. It "feels" like there is a rug-pull moment coming any day now. A few interesting statistics on how calm the market has been; There has been just one -1% day in the S&P 500 in 2017 (Today could be the second). Up until this point in 2016, the S&P 500 fell 1% 17 times. I was surprised to find that the S&P 500 hasn't had a 5% pullback since July 2016."
"What's Going On?" – Batnick, The Irrelevant Investor
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Goldman Sachs has identified 15 "nightmare stocks" using futures markets. There are few household names among them but these companies might be worth following as the proverbial canaries in the coal mine to assess where the market is headed next. After such a long period of low market volatility, an increase in market gyrations is more likely,
"In order to qualify for Goldman's 'most-feared' list, a stock had to have been in the 40th percentile or above for [implied volatility and 12-month skew] over the past year. The firm then ranked those 15 companies in order of 12-month normalized skew percentile."
The three most nightmarish stocks listed are Spark Therapeutics Inc., Dynegy Inc., and Dun and Bradstreet Corp.
"GOLDMAN SACHS: Traders fear these 15 nightmare stocks" – Business Insider
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The Financial Times previews the upcoming OPEC meeting by inferring the cartel is a bit demoralized,
"Energy ministers from Opec and its allies will roll into Vienna next week with one overriding goal: preventing another collapse in the oil price. It is indicative of their reduced ambition that few members are prepared to talk of a significant recovery in the market .. Six months ago, when it first agreed to reduce output, the cartel's own analysts were forecasting that US oil production would contract in 2017 by 150,000 barrels a day … Now, following an almost unprecedented rebound from battle-hardened shale drillers which have shown they can compete in a world of $50 a barrel oil, those same Opec analysts are forecasting that US output will grow by 820,000 b/d this year. "
"Opec meets with shrunken ambitions" – Financial Times
"OPEC Prepares for Long Battle to See Off Shale: QuickTake Q&A" – Bloomberg
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Tweet of the Day: Portfolio manager and retail stock expert Jeff Macke (his father was the driving force behind department chain Target's rise) provides a brilliant chart showing just how predictable and steady the growth of online retailing has been. There are no surprises hear, no matter what pundits say.
"@JeffMacke Retail is hard. My point is only calling BS on the "sudden secular shift" excuse. Nothing sudden here: census.gov/retail/mrts/ww… " – (chart) Twitter
Diversion: "Dutch king reveals he has been a KLM pilot for 21 years" – CNBC
Scott Barlow