A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web
The annual onslaught of year ahead market previews is underway and so far, projected weakness in the loonie is a trend. Morgan Stanley writes,
"High real returns and balance sheet clean-up make EM attractive – the opposite is true of our 'canaries in the coal mine', a group of the DM economies with stretched balance sheets, high leverage, and waning asset quality. Top of the list here are CAD, AUD, and NZD."
Barclays is also looking for a lower Canadian dollar, but this is more of a trade idea for the very near term. The research team believes the loonie's value is re-coupling with oil prices and they see scope for a crude sell-off on OPEC news,
"Trade for the week ahead: Long USDCAD spot, as OPEC could disappoint market expectations and Canada's GDP is likely to show a slower pace of activity in Q3."
"@SBarlow_ROB MS: Canada, "stretched balance sheet, high leverage, declining asset quality" – (research excerpt) Twitter
"@SBarlow_ROB Barclays is betting against CAD" – (research excerpt) Twitter
=====
Bloomberg's Gadfly site notes the extreme level of confusion the shale oil boom is causing among energy forecasters,
"As [OPEC] prepares to decide on Nov. 30 whether to extend output cuts to the end of 2018, it has no idea how much competition to expect from shale. Nor does anybody else, for that matter… Now, lead times [for increased production] are measured in weeks rather than years for new shale projects, and the large number of companies operating in the sector have made forecasting oil output growth almost impossible."
"Shale Is Confounding Everybody, But Never Mind" – Gadfly
"Oil Options Are the Cheapest in Three Years With OPEC Meeting Approaching" – Bloomberg
=====
Economics writer Kevin Carmichael wrote a rare balanced piece on the Canadian housing market,
"Let's get something out of the way: this may be another story about Canada's housing mania, but this isn't a story about bubbles and crashes. Bad things could happen; of course they could. It would probably take a recession to do the damage, and Canada's economy hasn't looked this good in years. Yes, higher interest rates could cause indebted households some pain. The Bank of Canada knows that, which is why it has been clear in saying that it intends to raise interest rates slowly."
"Why Canada's Real Estate Market Is Becoming Too Big to Fail" – Sharp
=====
The Stumbling and Mumbling blog written by deeply socialist U.K. economist Chris Dillow continues to offer a thoughtful counterpoint to conventional finance industry wisdom. Here, he warns against turning the wealthy into heroes,
"The Rich as Heroes' – Dillow, Stumbling and Mumbling
=====
BNN joins my quixotic quest to get Canadian investors, particularly those with mining or energy stocks, to read anything about economic developments in China,
"Why Canadian investors need to watch the selloff in Chinese markets" – BNN
=====
Tweet of the Day: "@carlquintanilla - @mcuban, talking about the future of artificial intelligence" – Twitter
Diversion: "Dog Poo, an Environmental Tragedy" – The Atlantic
Scott Barlow