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Scott Barlow

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

Reports now indicate that the Chinese government's attempts to curb capital flight are finally starting to take hold, and the immediate losers appear to be real estate markets across the globe.

Canada was not mentioned specifically, but domestic realtors will be put on notice by slowing home sales in Australia and California, and also a research report from RBC suggesting foreign money curbs are imminent in Toronto,

"The change spooking [potential Chinese investors] came in a statement from the State Administration of Foreign Exchange on Dec. 31, hours before the reset of Chinese citizens' annual foreign currency quotas. Among other requirements, SAFE said all buyers of foreign exchange must now sign a pledge that they won't use their $50,000 quotas for offshore property investment. Violators will be added to a government watch list, denied access to foreign currency for three years and subjected to money-laundering investigations, SAFE said."

"China's Army of Global Homebuyers Is Suddenly Short on Cash" – Bloomberg
"Canada's biggest bank warns of possible cooling measures coming to Toronto housing market" – Financial Post
Counterpoint: "Why China's 'Creative' Way to Fight Capital Outflows Won't Be Sustainable" – Bloomberg


Along with health care, cloud computing remains my favourite five-year investing theme. Goldman Sachs forecast that cloud-related spending will increase from $32-billion (U.S.) in 2016 to $137-billion by 2020. In recent days, earnings reports from Alphabet Inc., Microsoft and Intel have supported the idea of strong revenue growth in the sector,

"Microsoft topped projections on the strength of rising customer sign-ups for its cloud offerings like Azure, which saw revenue almost double. Intel sales rose more than expected, helped by orders for processors that power data-center servers -- the machines at the heart of cloud computing. While profit at Google parent Alphabet disappointed, the numbers also signaled that heavy spending to catch cloud leaders Inc. and Microsoft is paying off."

"Microsoft, Intel, Alphabet Results Buoyed by Cloud Boom" – Bloomberg
"My top investment theme 2017-2020" – Barlow, Inside the Market (Dec. 29, 2016)


Like many other investors, I'm having trouble avoiding the distractions emanating from the Washington D.C.-based three ring circus. One of the factors buried under the absurdity is that the U.S. and global economies appear to be gaining strength as Goldman Sachs reports,

"The Advance Economic Indicators report showed an increase in wholesale inventories and a slightly narrower goods trade deficit in December, as an increase in exports outweighed a rise in imports. Initial claims rose to 259k, above consensus expectations for a more modest rebound. We revised up our Q4 GDP tracking estimate by four tenths to +2.6% (qoq ar)."

"@SBarlow_ROB Meanwhile... (GS) " – (research excerpt) Twitter
"@SBarlow_ROB ML (Jan 16): 'Significant jump in global wave'" – (research excerpt) Twitter
"@jbjakobsen Dec index of leading economic indicators points to a strong rebound in US manufacturing output" – Twitter


Tweet of the Day: Orwell's 1984 is the top selling book at Amazon, but the late academic Neil Postman, author of "Amusing Ourselves to Death", had a good argument that Huxley's Brave New World is more applicable.

"@chenthil_nathan Jan 25 Since Orwell seems to be today's flavor, here is Neil Postman comparing Orwell and Huxley. This quote never ages. (From Goodreads site)" – Twitter

Diversion: Mathematical proof that good modern art is not just random splotches on canvas, "Why Fractals Are So Soothing" – The Atlantic

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