HSBC: Crude rally is for real this time

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

I sense a theme in the market coverage this morning,

"U.S. junk bonds are a time bomb with a long fuse" – Reuters Breaking Views

"Wall Street's Rising Euphoria May Spell Trouble for Stock Market" – Bloomberg

"CNN Greed/Fear Index is a little high" – Twitter

"Are we seeing a peak in bullish equity sentiment at last?" – Financial Times

"Man Group Says Emerging-Market Bond Values Don't Make Sense" – Bloomberg

"'I haven't seen hedging activity this light since the end of the financial crisis'" – Wall Street Journal

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Competition is good in a capitalist economy, but we've reached a point where financial media is so desperate to either maintain or build their audience (I'm not entirely innocent here either) that reflexively contrarian clickbait has become the norm rather than the exception.

HSBC believes that the current rally in crude prices, unlike previous upsurges after mid-2014, is sustainable,

"OPEC's cuts are aimed at bringing global inventories back down to five-year average levels. A large part of the job was done in 2017 – the US inventory surplus was ~4% at y/e vs >20% at the peak, while the latest (Oct) data shows OECD inventories 5% above. Demand seasonality points to a possible small surplus in 1Q18e, but a tighter market in 2Q and especially 3Q, which should eradicate the remaining inventory surplus by around 3Q."

"@SBarlow_ROB HSBC: Crude rally for real this time" – (research excerpt) Twitter

"Oil hits highest since May 2015 above $68 on tighter market" – Reuters

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Matthew Klein from FT Alphaville has written a post defending U.S. university endowment funds from proposed taxation. This resulted in an ongoing riot on social media,

"The tax on university endowments is anti-intellectualism and cultural resentment masquerading as fiscal policy" – Klein, FT Alphaville (free with registration)

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Tweet of the day: "@SteveSaretsky Canadian labor force growing dependence on Real Estate. Via @BenRabidoux " – (chart) Twitter

Diversion: "Gadgets and Gear at the 2018 Consumer Electronics Show" – Bloomberg