A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web
Jeffrey Gundlach of Doubleline Investments, who took over the mantle of "Bond King" after Bill Gross changed firms, tweeted the possibility of an obituary for the bull market in bonds that began in 1982.
It might have been tongue-in-cheek, but no investor under the age of 65 has experience navigating a market of steadily rising bond yields and interest rates and a lot of painful re-education would be required. For one, dividend stocks would underperform dramatically in rising rate market,
"@TruthGundlach The moment of truth has arrived for secular bond bull market! Need to start rallying effective immediately or obituaries need to be written." – Twitter
"@sobata416 Don't poke the bond bears... ..Speculators have amassed record net shorts in both 2s and 5s: " – (chart) Twitter
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The Bank of Canada will announce interest rate policy Wednesday afternoon. This would be the big news of the day except that the consensus view is for "no change." The wording of the accompanying statement will be parsed carefully, as usual. From BMO economic research,
" We anticipate the BoC will sound more cautious than in September for the following reasons: NAFTA negotiations have taken a negative turn … OSFI's new mortgage rules, which take effect Jan. 1, 2018, introduce more uncertainty .. The economic data have softened … The BoC has already hiked twice, and it will take time to assess the impact. "
"@SBarlow_ROB BMO expects no change in Cdn rates, more cautious stance" – (research excerpt) Twitter
"Loonie Underpriced in Big Banks' Eyes as 2017 Hike Risk Remains" – Bloomberg
"@LJKawa Boom! Heading into today's meeting, markets are now pricing in more tightening from the Fed than the BoC over the next year. #cdnecon " – (chart) Twitter
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The speculative boom in lithium appears close to an end,
"'You've got a scramble for deposits, a demand side that looks very impressive, the question is always around the supply,' said Paul Gait, an analyst at Sanford C. Bernstein Ltd. in London. In the rush to meet demand there is a risk too many mines will be developed and too much metal supplied, Gait said. 'When the tide goes out, those that do not have good geology will always be found wanting.'"
"Mad Scramble for Lithium Stretches From Congo to Cornwall" – Bloomberg
"@tbiesheuvel Great BMO chart today. They see a big lithium supply response " – (chart) Twitter
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The New York Times' Dealbreaker site lays in to Tesla Motors and hedge fund manager Bill Ackman,
"Tesla should be valued as a religion and not as a car company. You can't look at Tesla's balance sheet and discern meaning anymore than you can consult The Book of Leviticus for mortgage advice.Tesla's fundamentals are terrible, it's production plans for the Model 3 are absurd and Elon isn't being subtle in his wagging of the dog to hide Tesla's production woes by suddenly pivoting to saving Puerto Rico's power grid."
"David Einhorn Dangerously Close To Letting Tesla Become His Own Private Herbalife" – Dealbreaker (NSFW language warning)
"A warning to all Tesla investors, why GE is a stock to hang on to, and how to profit from videogamers" – Globe Investor Newsletter
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Tweet of the Day: "@SBarlow_ROB MS: return of political risk premium in oil" – (research excerpt) Twitter
Diversion: President Trump is expected to de-classify documents related to John F. Kennedy's assassination,
"JFK assassination: Questions that won't go away" – BBC
Scott Barlow