Scott Barlow
A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the Web
As the excellent piece of punitry in today's headline indicates – it was a joke overheard at the ongoing EU trade meetings – European markets and politics are enjoying a calm after the storm and humour is far more prevalent.
Italian banks are higher on rumours that state financial support is imminent. This is good news domestic investors holding bank stocks because, as I noted yesterday, Canadian bank stocks movements have been tied to their Italian counterparts in the past few days.
One point I should have clarified in my column is that it's not just Italian banks that affect our banks stocks – it's Europe as a whole. I emphasized Italy because that's where the most European investor concern was focused. There is news today that George Soros has a large short position on Deutsche Bank and if that balance sheet comes under stress, it is also an issue for Canada's big six banks.
"Italian bank stocks rebound amid rescue hopes" – Financial Times
"Italy eyes €40bn bank rescue as first Brexit domino falls" – The Telegraph
" Soros bet on fall in Deutsche Bank shares after Brexit vote" – Financial Times
"Italy's productivity conundrum: The role of resource misallocation" – VoxEu
Related: " BoE injects £3.1bn of liquidity into banks after Brexit" – FastFT
"Why Canadian banks are getting hit hard by Brexit" – Barlow, Inside the Market
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A pseudonymous financial professional who writes under the name Polemic Paine provides useful and calming perspective on European markets (in my opinion of course) with "Don't Panic, it's just like EU 2012",
"Social media does Rational to Panic in 6.8 seconds. No wonder everyone is panicking … Here are my list of things that don't matter [to investors] : One day falls in £ or FTSE, Ratings downgrades from AAA to AA, Developed market credit default swaps on countries issuing debt in their local currency, Nigel Farage and UKIP, The FT (apart from FTAlphaville who really matter)."
"Don't Panic, it's just like EU 2012." – Polemic Paine
Related: "U.S. Economy Looks Likely to Weather 'Brexit' Storm" – Wall Street Journal
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Gold has dropped more than a percentage point in early trading as the post-Brexit panic bid evaporates. Report on Business writer Tim Kiladze noted the opportunistic Canadian investment bankers who jumped in to get secondary gold miner offerings out the door in the past two trading days,
"On Monday, six gold companies rushed to tap investors for fresh funds: Guyana Goldfields Inc., Orezone Gold Corp., Osisko Mining Inc., TMAC Resources Inc., Lundin Gold Inc. and Sandstorm Gold Ltd. Within hours of launching, the size of two of the deals increased on the back of heavy investor demand."
These shares should open lower than issue price today, as is customary.
"Gold miners rush to cash in on post-Brexit price pop" – Kiladze, Streetwise
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There are two interesting stories from the global energy sector this morning. One, Reuters reports that oil storage facilities in Asia are almost full, which may cause short term weakness in the crude price,
"Unsold crude cargoes for loading in August have piled up as Asian refiners head for maintenance. Spot differentials for August-loading cargoes have dropped after monthly prices from Middle East crude sellers rose. About 1 million barrels a day of processing capacity in Asia will be shut for maintenance in October."
The second story indicates that Canadian oil producers are clearly banking on robust global crude demand growth,
"Canada's oilsands production will grow by 42 per cent to 3.4 million barrels per day by 2025, most of which will come from the expansion of existing facilities rather than new projects, analysts at IHS Energy said on Monday. "
"Traders to fill Asia oil storage in Q3 as maintenance crimps demand" – Reuters
"Canada oilsands output to grow 42 per cent by 2025," – Financial Post
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Tweet of the day: "@groditi 12.5% of the russell 1000 is flat or up... this ain't the systemic event people want to pretend it is ' – Twitter
Diversion: 'Everyone Is Lying About Not Watching TV' – Gizmodo
Scott Barlow