Scott Barlow
A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the Web
Ritholtz Wealth Management's Josh Brown outlines "10 insane Things We Believe on Wall Street' to emphasize the myopia of the finance world and it's distance from real life for most of the populace.
The ten things include "Layoffs are great news, the more the better,""It's reasonable for the value of a business to fluctuate by 5 to 10 per cent within every eight hour period" and "company selling 10 million cars a year is worth $50 billion, but another company selling 40,000 cars a year is worth $30 billion because its growing faster."
"Ten Insane Things We Believe On Wall Street" – Reformed Broker
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TD bank economists are warning Canadians that an 'abysmal second quarter' will be evident in economic data in the coming weeks,
"Canada's economy likely contracted by 1.5% in the second quarter, in part due to the disruptions caused by the devastating wildfires in Alberta. But, the quarter was already looking quite soft before the fires caused mass evacuations in the Fort McMurray region in May. Most of the components of growth are expected to disappoint: consumer spending is looking anemic, business investment likely had another contraction, and exports should subtract from growth. Residential investment is forecast to be one positive… We caught a glimpse of the weak second quarter this past week in the corporate profits data. Profits fell again in the second quarter, marking the sixth decline in seven quarters. "
"@SBarlow_ROB Data will show 'abysmal' Q2 for Canadian economy - TD pic.twitter.com/U9VP7pYo3b " – (research excerpt) Twitter
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Deutsche Bank research I not exactly predicting a $1700 (U.S.) per ounce bullion price, but they are saying it's justified in light of global central bank stimulus,
"We are not saying that gold will trade up to USD1,700/oz in the near term, but when viewed against the aggregated balance sheet of the 'big four' global central banks (the Fed, ECB, BoJ and PBoC) the argument can be made if we view gold as a currency, the metal is worth closer to USD1,700/oz, versus the spot price of USD1,326/oz."
"@SBarlow_ROB DB: Gold 'fair value' is $1700 pic.twitter.com/FpBOe4t10A" – (research excerpt) Twitter
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This is just my opinion, but I believe there are two sectors representing secular growth stories that will be largely (but not entirely) immune from economic volatility: health care and cloud computing. In the latter case, I'm convinced that the cost savings from cloud computing make it an easy, logical choice for Chief Financial Officers. Previously, security concerns have limited the evolution towards cloud, but evidence that local networks are no less secure – and a lot more expensive – continues to pile up.
The Economist posted a report on the cloud sector over the weekend,
"The 'cloud-computing wars,' as some call them, are not yet over. The prize is too great. Gartner estimates that about $205 billion, or 6 per cent of the world's IT budget of $3.4 trillion, will be spent on cloud computing in 2016—a number it expects to grow to $240 billion next year. The latest battleground is data. Cloud providers are hoovering up digital information left and right so they can mine it and use the insights to offer new services or improve existing ones. Earlier this year, for example, IBM bought Truven Health Analytics, which has data on 215m patients."
"Cloud chronicles" – The Economist
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Bloomberg reports that speculators in the energy sector are 'turning the car around' on the oil price, moving from bearish to bullish. This happens every couple of weeks. Futures positioning in oil has been like a ship full of loose marbles in a storm, lurching from side to side.
"Oil Pessimists Exit as OPEC Cap Talk Spurs Bets Glut Easing" – Bloomberg
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Tweet of the Day: "@VoxMaps The Map of Literature combines centuries of books and poems in one gorgeous illustration bit.ly/2bUMGJA pic.twitter.com/0KrBbBz9Hk" – Twitter
Diversion: "Year-Long Simulation of Humans Living on Mars Comes To an End" – Gizmodo
Scott Barlow