A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web
Merrill Lynch economist Carlos Capistran begins his 2018 growth forecast for Canada by explaining why the domestic economy grew twice as fast as expected in 2017 – basically a recovery in capital expenditure in the energy sector and stronger-than-expected global growth.
Mr. Capistran sees a 2.1-per-cent domestic expansion in 2018 but warns the risks are to the downside,
"The main external risk is US withdrawal from the North America Free Trade Agreement (NAFTA)… We see the chance of the US withdrawing from NAFTA as one in three, but the probability will increase if the Trump Administration does not pass tax reform, in our view… [If NAFTA is terminated] we estimate a 10% drop in Canadian exports to the US will lower GDP growth by 210bp.. The main domestic risk is the potential impact of higher interest rates on the balance sheet of highly indebted households, which can decelerate consumption more than we expect."
"@SBarlow_ROB ML: For Canadian economy 'risks are to the downside'" – (research excerpt) Twitter
"'Investors should protect themselves against NAFTA termination risk'" – Babad, Report on Business
See also: "Goldman 'Pretty Optimistic' for 2018 Despite China Debt Unknowns" – Bloomberg
=====
Merrill Lynch is also out with its oil price forecast for 2018,
"Global crude oil prices, particularly Brent, have firmed up more than we expected and we see Brent crude oil averaging $60 in 4Q17 and $56.50/bbl in 1H18, compared our previous forecasts of $54 and $52.50/bbl, respectively ... Our revised global oil supply and demand forecasts point to a sizeable deficit in 2017 of -230 thousand b/d and a more balanced market in 2018 "
"@SBarlow_ROB ML: Oil Outlook" – (research outlook) Twitter
=====
Bloomberg reports on a big jump in electric vehicle sales, thanks primarily to China,
"Sales of battery electric vehicles and plug-in hybrids exceeded 287,000 units in the three months ended in September, 63 percent higher than the same quarter a year ago and up 23 percent from the second quarter, according to a report released Tuesday by Bloomberg New Energy Finance. China accounted for more than half of global sales as its market for electric cars doubled amid government efforts to curb pollution."
A lot of these Chinese cars are powered by coal-generated electricity, but it's progress nonetheless.
"Global Electric Car Sales Jump 63 Percent" – Bloomberg
=====
RBC is out with its Canadian market strategy for the coming year, but I didn't find "bullish on banks, cautiously optimistic on energy" to be all that helpful. If that's what they see, however, the lack of drama in the projections are not their fault,
"@SBarlow_ROB RBC recommended positioning for 2018 in Canada. Like banks, cautious on oil sector" – (research excerpt) Twitter.
=====
Tweet of the Day: "@LizAnnSonders In an Internet minute...(make that 452,001 Tweets sent) " – (graphic) Twitter
Diversion: "Dazzling Origami Creatures Designed To Impress" – News of the Month
Scott Barlow