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Scott Barlow

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

The U.S. Department of Energy provided good news for investors in the energy sector Wednesday with its weekly report on crude inventories. The data indicated the lowest storage levels in 19 months. That length of time is the key for me, because it indicates declining year-over-year inventory levels and provides a sign that the glut in North American oil supply is, at long last, burning off despite rising shale production. Importantly, gasoline inventories were also reported at lower levels than expected.

"@StuartLWallace U.S. Crude Stockpiles Drop to Lowest Level in 19 Months more on @TheTerminal via @NicoAGrant #OOTT " – (chart) Twitter

"Oil Steady as U.S. Crude Stockpiles Drop While Output Rises" – Bloomberg

See also: "Wood Mackenzie: Big Transformation in Power Sector" – (video) Bloomberg

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The doomsayers on the domestic financial system will have to wait. CIBC reported stronger-than-expected profit results thanks to a strengthening economy and raised their dividend.

"Canadian Imperial Bank of Commerce topped expectations with higher third-quarter profit and hiked its dividend by more than 2 per cent. Adjusting to exclude certain items, including a one-time gain of $383-million on the sale of a minority stake in American Century Investments last year, CIBC earned $2.77 a share. Analysts surveyed by Bloomberg expected earnings per share of $2.65."

"CIBC beats profit estimates, boosts dividend" – Report on Business

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Citi economist Willem Buiter advises investors to not fear the taper.

"The global economy is more robust currently than it has been for years, which implies that it should be able to withstand modest monetary tightening… We continue to expect global real GDP growth at 3.1 per cent year-over-year in 2017 and 3.3 per cent in 2018 … up from 2.5 per cent growth in 2016.1 Our [advanced economy] and EM forecasts are also almost unchanged this month (we expect 2.1 and 2.2 per cent AE growth in 2017 and 2018, respectively, after 1.6 per cent in 2016; in EMs, we expect 4.5 per cent growth in 2017 (+0.1pp) and 4.7 per cent in 2018, after 3.9 per cent in 2016)."

Again, this is good news for global commodity and economically-sensitive equity sectors.

"@SBarlow_ROB Buiter: Global growth can withstand taper" – (research excerpt) Twitter

"Central Bank Balance Sheets Are Headed for a Great Divergence" – Bloomberg

See also: "@SBarlow_ROB Citi: China to drive metals prices higher" – (research excerpt) Twitter

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At this point, I don't know whether this matters for investors or not, but Morgan Stanley is predicting another revolution in technology as quantum computing power becomes widely available.

"While the classical computer is very good at calculus, the quantum computer is even better at sorting, finding prime numbers, simulating molecules, and optimisation, and thus could open the door to a new computing era…. we believe quantum computing could trigger the beginning of a fourth industrial revolution, with farreaching consequences for many sectors where computing power is becoming a limitation for R&D, such as Financials, Pharma (drug discovery), Oil & Gas (well data analysis), Utilities (nuclear fusion), Chemicals (polymer design), Aerospace & Defense (plane design), Capital Goods (digital manufacturing and predictive maintenance), Artificial Intelligence, and Big Data search in general.…

"@SBarlow_ROB MS: Inflection point for quantum computing revolution" – (research excerpt) Twitter

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Tweet of the Day: "@bill_easterly Actually, money does buy happiness" – (chart) Twitter

Diversion: "Fifty Inventions that Shaped the Modern Economy" – Marginal Revolution

Rob Carrick has a warning about average yearly prince inflation for Canadians.

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