Scott Barlow
A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the Web
U.S. non-farm payroll results are crossing the wire at time of writing.
The U.S. economy created 227,000 versus consensus estimates of 180,000. Wage growth disappointed, higher by 0.1 per cent month over month and 2.5 per cent year over year.
Just when I thought I couldn't be surprised, Credit Suisse started touting U.S. president Donald Trump's approval rating as a market indicator,
"US stocks have been trading closely with shifts in Trump's favorability, as have 10 year Treasury yields, the Dollar, and crude oil. Within US equities, small caps, value, Financials, cyclicals, domestic revenue producers, and high tax payers have been particularly tied to shifts in Trump's favorability, as has the performance of companies headquartered in states that voted for Trump."
I can't really process this right now except to note suspicion that the correlations won't last long.
"@SBarlow_ROB WTH? (CS) " – (research excerpt) Twitter
"@SBarlow_ROB Even in a world of new marvels 'Trump approval rating driving asset markets' was not a thing I expected ' – (charts) Twitter
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A Bloomberg report argues that the loonie has come too far, too fast and is set for a decline,
"The loonie has gained about 4 percent against the U.S. dollar since touching a 10-month low at the end of last year amid higher oil prices and a weaker greenback. But looming are possible U.S. trade talks, a weak economic recovery and a potentially dovish central bank. These fundamental factors, along with technical indicators, point to a potential reverse… "The CAD has performed remarkably well supported by higher oil prices, but all good things do eventually come to an end," Deutsche Bank AG foreign-exchange strategist Sebastian Galy said by e-mail."
"Signs Are Flashing That Loonie Surge Has Gone Too Far, Too Fast" – Bloomberg
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BMO chief strategist Brian Belski believes that pessimistic investors need an attitude adjustment,
"In our view, investors are in dire need of perspective in terms of stock market performance trends, especially considering the ever increasing short-term time horizons and emotion-led reactionary conclusions…Our work shows that when S&P 500 January performance is positive, like it was last month, the best performing stocks tend to continue their outperformance, returning 13% on average the following 11 months."
"Market Performance Realities" - Belski, BMO
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Bloomberg details a steep, 40-per-cent decline in Vancouver home sales,
"The Real Estate Board of Greater Vancouver reported transactions in Metro Vancouver plunged 40 percent in January over a year earlier as both buyers and sellers hover on the sidelines. That's the seventh straight month of declines, according to data compiled by Bloomberg. The ratio of sales to listings -- used by the industry as a harbinger of prices -- is also at a two-year low, according to the board."
"Vancouver Home Sales Plunge 40%, Extending String of Declines" – Bloomberg
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Tweet of the day: "@M_C_Klein "The fact that a lot of the gains from globalization seem to be able to avoid taxation has distributional consequences" -- @Brad_Setser " – Twitter
Diversion: "Watch How Terrifyingly Bad Car Safety Was Just 20 Years Ago" – Wired
Scott Barlow