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Inside the Market Cash machines: These companies are best at turning investment into higher profits

A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web

Goldman Sachs is predicting a surge in corporate investment in 2018 that will boost U.S. economic growth.

In preparation for the trend, the analysts presented a table of companies that have been the most efficient at turning spending into profits. Prominent names on the list include tech giants NVIDIA Corp., Alphabet Inc. and Facebook, but also lesser-knowns like Diamondback Energy Inc., and Kennametal Inc.

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"@SBarlow_ROB GS: Companies deploying capital most efficiently" – (full table) Twitter

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Oil markets are tamer Thursday as the positive effects of a projected extension of OPEC production cuts is offset by higher U.S. production.

"Oil steady as expected output curbs balance U.S. supply" – Report on Business

"@chigrl RBC: OECD Stocks – Surplus to Five Year Avg #oil #oott #gasoline" – (charts) Twitter

"China's Energy Gorilla Will Eat Less and Do More" – Businessweek

"Leaked Report: Corn Ethanol Hurts The Environment" – Mint Press

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The Federal Reserve Bank of San Francisco published a technical but important research report arguing that the Shiller PE Ratio which is scaring off investors is actually not a great valuation metric in the current market,

"Before labeling the latest run-up in the CAPE ratio as another speculative bubble, it's worth considering whether the current elevated value can be explained by 'favorable macroeconomic factors.' … A simple regression model that employs a parsimonious set of macroeconomic explanatory variables can account for most of the run-up in the CAPE ratio since 2009, offering some justification for its current elevated level. The same model predicts a 13% decline in the CAPE ratio over the next 10 years"

"Stock Market Valuation and the Macroeconomy" – Federal Reserve Bank of San Francisco

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I haven't written much about the potential takeover of the economy by robots because the growth rate for companies like Rockwell Automation and Japan's Fanuc, while decent, has not been strong enough to indicate an economic revolution. It appears that Emerson Electric is more optimistic as it has raise its takeover bid for Rockwell,

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""We remain convinced there is compelling strategic, operational, and financial merit to bringing together our two companies," Emerson Chief Executive David Farr said in a statement. "The industrial logic for this combination is clear. A combination of Emerson and Rockwell would create a leader in the $200 billion global automation market."

"Emerson sweetens bid for Rockwell Automation to $29 billion" – Reuters

"Metal 3-D Printing Is, Finally, Overcoming Its Limitations" - M.I.T. Technology Review

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Tweet of the Day: "@MylesUdland DB's Sløk: "I'm getting client questions whether the current sell-off in US high yield will cause a US recession and the answer is no." – Twitter

Diversion: Leonardo da Vinci painting sells for almost half a billion U.S. dollars – Reuters

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