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

I'm a bit annoyed with my industry this morning.

Any group of people that believes, as a matter of faith, that democracy itself would collapse without it shouldn't be gleefully squirting lighter fluid on the burgeoning fire of real estate anxiety by inferring a U.S. style financial crisis is in the offing. For one, anyone who says or writes this on television outs themselves as someone who didn't bother studying how and why the 2007-2008 crisis happened, despite almost a decade to do so.

This is not to say that the Home Capital Group situation doesn't present risk.

The domestic housing industry has been driven to a significant extent by alternative lenders, and a chill in this sector makes a correction more likely by the day. But the U.S. financial crisis was cause by dominant institutions trying to play hot potato with mortgage default liability, when in Canada, it's clear who would take the hit. A correction would hurt, a lot, but it won't be 2007.

In the news, global speculators are increasingly pessimistic about the loonie,

"The latest report from the U.S Commodity Futures Trading Commission shows a net short position against the loonie rising to $3.1-billion … "Not since February, 2016, have the sharks been sniffing so much blood – hard to imagine that just two months ago, when the loonie had rallied to [almost 77 cents], that the net speculative position was long 31,637 contracts," said David Rosenberg, chief economist at Gluskin Sheff + Associates. 'This is epic.'"

"Shorting the loonie: The sharks are 'sniffing so much blood'" – Report on Business
"An important new indicator for the loonie's next move" – Barlow, Inside the Market


Crude prices are recovering from one month lows ahead of the U.S. Department of Energy's weekly report on inventory levels,

"Oil has fallen the past two weeks on concerns increasing U.S. crude production will offset efforts by the Organization of Petroleum Exporting Countries and its allies to eliminate a global supply glut. While Fereidun Fesharaki, the head of industry consultant FGE, says OPEC is certain to extend output cuts when its ministers meet later in May, industry data showed American rigs targeting crude climbed to the highest level in two years. 'Everyone is waiting for the oil-inventory drawdowns materializing as a result of the OPEC and non-OPEC cuts,' said Giovanni Staunovo, an analyst at UBS Group AG in Zurich."

"Oil Rises From One-Month Low Before U.S. Crude Inventory Data" – Bloomberg
"IMF: Oil prices expected to remain low, highly uncertain" – Trend News
"@StuartLWallace West Texas Intermediate Closes Below Key Technical Level more on @TheTerminal via @jessicaisummers #OOTT " – (chart) Twitter
"OPEC May Need to Extend Production Cuts to End of Next Year" – Bloomberg


FT Alphaville remains the best site for the thinking investor in my opinion (no FT subscription required). Tuesday, writer Alexandra Scaggs turned her attention to U.S. corporate earnings,

"Materials and industrials were the two sectors with the highest share of companies beating both earnings and sales forecasts, according to BofA. Those two sectors also benefitted from the Trump trade.. Unfortunately, corporate earnings growth isn't the same thing as economic growth. A closer look at results from Caterpillar — a large-cap industrial company that beat Wall Street estimates by a wide margin — doesn't really back up our #AWABGA idea. The company's management said strong demand in China is driving its improving outlook for construction-industry sales, and added that they 'have yet to see retail stats in the rest of the world turn positive.' That doesn't exactly raise confidence for the domestic manufacturing boom we were promised."

"It's the corporate earnings growth hope that kills you" – Scaggs, FT Alphaville


Tweet of the day: "@ReutersJamie The long-awaited US capex it finally upon us? Morgan Stanley thinks it might be." – (chart) Twitter

Diversion: "The Reactionary Temptation" – New York

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