Scott Barlow
A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the World Wide Web.
Janus Capital's Bill Gross described the current state of global bond markets as "scary as hell" in an interview Thursday. Importantly, however, he does not believe that a bear market – which would feature steadily higher interest rates over time – has begun.
"'I recognize the tremendous liquidity problems and the ups and the downs on a daily basis – or even on a minute basis – and it scares the hell out of me,' Gross said… Bloomberg also noted Mr. Gross' assessment that, for the 10 year U.S. Treasury bond, "2.30 per cent is 'fair value.'"
"Gross says bond rout scary as hell even without bear market" – Bloomberg
As another report points out, equity investors that view bond markets as sleepy and boring should start paying close attention to global rates.
"Yes, German and U.S. bond yields have soared to their highest levels this year. And, yes, more than $626-billion of value has simply evaporated from an index of global sovereign bonds since the end of March... Without a significant change in the fundamental backdrop of central-bank stimulus and relatively slow growth worldwide, big investors are showing they're not quite ready to part ways with their bonds. When they are, that's when the drama will really ensue."
"You call this a bond rout? wait until the real selling starts" – Bloomberg
"Global bond selloff threatens utilities and REIT returns" – Barlow, Inside the Market
Oil prices are sliding this morning after the Organization of Petroleum Exporting Countries meetings concluded with a decision to maintain output at current levels of 30 million barrels per day. I'd include a quote here, but that's pretty much the whole story.
"OPEC's meeting in Vienna – live" – WSJ Moneybeat
"Oil heads for big weekly loss before OPEC meet" – FastFT
"OPEC to Maintain Current Oil Output" – Bloomberg
I've written a few posts recommending U.S. health care stocks. I'd probably write a few more if the others weren't routinely met with such widespread reader apathy, despite the outperformance of the sector. Maybe this report from The Atlantic's business site Quartz will help.
"Dig deeper [into the new Forbes 500 list] and health care is looking ascendant… Pharmacy chain CVS kicked Valero Energy out the top 10. Health care IT firm McKesson rose four spots to 11. And AmerisourceBergen, a drug supplier, shot up 12 spots to 16 after it closed a major deal with Walgreens that helped lower its generic drug acquisition costs."
"This year's Fortune 500 shows the strength of the U.S. health care industry" – Quartz
Tweet of the day: "@naufalsanaullah the one U.S. chart that is really tough to ignore. will eventually bring about the #financialconditionstighter trade pic.twitter.com/cz3qoXX7kh"
Diversion: "What happens to child geniuses after they grow up?" – Vice
Scott Barlow