A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web
Maclean's might have sugarcoated this a bit, but, unfortunately, the details seem correct,
"If you were unlucky enough to buy into the stock market at the peak in 2008, just before the financial crisis hit full force, your gains (excluding dividends) wouldn't buy you much more than two loaves of price-fixed bread at Loblaws and a bag of President's Choice sour grapes … With that kind of dim performance, Canada's market is not only bad; it's the absolute worst performing market in the world."
"Canada's stock market is the worst in the world" – Maclean's
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While we're at it, Bloomberg has more pessimistic news on the domestic market,
"With pipeline, regulatory and political frustrations reaching new heights, the nation's energy stocks slumped to their lowest level in almost two years this month. The iShares S&P/TSX Capped Energy Index ETF, which tracks Canadian energy companies, has seen about $56 million in outflows this year versus $32 million in inflows for an ETF focused on U.S. stocks."
"Investors Are Bailing on Landlocked Canadian Oil" – Bloomberg
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Merrill Lynch energy strategist Francisco Blanch has been a very useful source of analysis. Mr. Blanch was the only expert who predicted, correctly in my opinion, that OPEC's production cuts were designed more to invert the futures curve and drain global oil inventories, not to increase prices which would, and did, stimulate U.S. shale production.
Mr. Blanch has raised his commodity price forecast,
" [we] see Brent crude oil prices averaging $50 to $70/bbl through 2023. But in contrast to last year, we think risks are skewed to the upside as petroleum markets are now in backwardation, a trend that may last for 2-3 more years. Global oil consumption expanded by 1.6 b/d on average in the past three years, the best three-year run rate since 2012 when demand recovered from the Great Recession."
"@SBarlow_ROB ML's Blanch has been good on oil lately" – (full research excerpt) Twitter
"Oil eases as dollar rises, U.S. inventories expected to rise" – Reuters
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British Columbia enacted new restrictions on foreign investors buying real estate,
"Starting Wednesday, foreigners will pay the province a 20 percent tax on top of the listing value, up from 15 percent now, and a levy on property speculators will be introduced later this year, according to budget documents released Tuesday."
"Vancouver's Hot Housing Market Gets Tougher for Wealthy Chinese" – Bloomberg
"B.C.'s NDP budget takes aim at real estate market" – Report on Business
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JP Morgan emphasized the historic market relationship between inflation pressure and commodity price outperformance,
"Commodities rallied to the highest in more than two years in January, and heading into 2018 banks including Goldman Sachs Group Inc. remain positive. JPMorgan said raw materials tend to do well in the late stage of the economic cycle, echoing remarks from billionaire bond manager Jeffrey Gundlach. Glencore Plc also touched on the outlook for "emerging inflation" as a positive for commodities as the trader reported record earnings on Wednesday."
"Inflation's Back and Commodities Will Benefit, JPMorgan Says" – Bloomberg
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Tweet of the Day: "@FD "This is code for loosening up on payday lenders and others who prey on the well-known inability of many people to understand the implications of compound interest." @M_C_Klein in fine form ftalphaville.ft.com/2018/02/21/219… " – Twitter
Diversion: An academic paper on how to contact alien life,
"The Evolutionary Psychology of Extraterrestrial Intelligence: Are There Universal Adaptations in Search, Aversion, and Signaling?" – SquareSpace
Scott Barlow