Scott Barlow
A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web
Goldman Sachs economist Michael Cahill has a novel view of Bank of Canada interest rate policy. Mr. Cahill believes that with inflation pressures low, the central bank's recent hawkish noises are part of a 'we're serious this time' warning to markets and that the first hike will occur in October,
"What's the rush? While certainly a close call, we expect the BoC to hike rates for the first time in October, not [this] week. Our view is that the decidedly hawkish BoC communications were a direct response to the lack of market reaction to the incremental hawkish changes at recent meetings. When markets did not pick up on subtle hints, the BoC decided to be blunt. But that does not necessarily mean that a hike is days away."
"@SBarlow_ROB GS asks 'what's the rush?' on Canadian rate hikes" – (research excerpt) Twitter
"Materials Stocks Set to Shine With Poloz Preparing Rate Hikes" – Bloomberg
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The trend towards higher central bank rates is global and bond prices have been falling worldwide. Gluskin Sheff economist David Rosenberg, however, thinks investors should worry more about equity prices than bond prices,
"The economy may end up being spared, but what we do know about these three prior episodes, in fact, what we know about all 13 periods of Fed tightening in the post-Second World War era, is that these cycles don't end without the financial excess of the bull market condition becoming exposed, and then expunged."
"Everyone's scared of the wrong thing when it comes to the Fed's plan for its $4.5-trillion balance sheet" – Business Insider
"Deutsche Sees Trouble Ahead for the World's 'Frothy' Stock Markets" – Bloomberg
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A research team at Bloomberg forecasts that electric vehicle sales will surpass gasoline and diesel-powered cars by 2038,
" 'This is economics, pure and simple economics,' BNEF's lead advanced-transportation analyst Colin McKerracher said before forecasts were published on Thursday. 'Lithium-ion battery prices are going to come down sooner and faster than most other people expect.' "
"The Electric Car Revolution Is Accelerating" – Bloomberg
"Energy Technology Perspectives 2017" – International Energy Agency
"GOLDMAN SACHS: It looks like demand for Teslas has peaked" – Business Insider
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Facebook, Google and Amazon.com are consumer focused so I'm leaning towards using NVIDIA – heavily involved in gaming, artificial intelligence/machine learning, and virtual reality – as a primary benchmark for technology. Motley Fool recently published analysis of the high-flying stock,
"Why Is Everyone Talking About NVIDIA Stock?" – Motley Fool
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Tweet of the day: "@chris1reuters Global #oil surplus will return in 2018, says @tchiling @BNPParibas as he slashes #Brent forecasts by up to $15" – (chart) Twitter
Diversion: "Google Home Breaks Up Domestic Dispute By Calling the Police" – Gizmodo
Scott Barlow