Scott Barlow
A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the Web
The International Energy Agency has all-but declared the end of the oil glut, predicting that demand will outstrip supply during the first half of 2017,
"Oil stockpiles will decline by about 600,000 barrels a day in the next six months as curbs by OPEC and its partners take effect, said the agency, which had previously assumed inventories wouldn't drop until the end of 2017…"Before the agreement among producers, our demand and supply numbers suggested that the market would re-balance by the end of 2017," the Paris-based agency said in its monthly market report. "If OPEC promptly and fully sticks to its production target" and other producers cut as agreed, "the market is likely to move into deficit in the first half of 2017."'
"OPEC Deal to Create Oil-Supply Deficit Next Half, IEA Says" – Bloomberg
"Oil demand to grow more swiftly, too early to assess global output cut" – Reuters
"IEA predicts oil glut will end if producers deliver deal" – Financial Times
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Richard Bernstein, founder of RB Advisors and still my pick as the best market strategist working, is predicting that the bond market now is equivalent to technology stocks right before the tech bubble blew up,
"Investors are typically the most bullish about an asset class in the very last stages of a bull market. To use a baseball analogy, investors become most bullish with 2 strikes on the batter with 2 outs in the bottom of the 9th inning … Investors were most bullish about Technology stocks in March 2000 and the most bullish on housing in the fall of 2007. The "New Economy" and "housing never depreciates" were the widely accepted economic themes with 2 outs and 2 strikes in the bottom of the 9th … Investors' rabid fervor for bonds and income during 2016 might ultimately prove to be the bond market's equivalent of March 2000's over-enthusiasm for technology stocks.'
"2017 – Inflation returns" – RB Advisors
"BlackRock warns of bond market 'pain' in the coming months" – Report on Business
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My favourite Maclean's feature is now out. Jason Kirby has collected strategist and economist picks for most important chart to watch for Canadian investors. There's 72 and all of them are interesting. Highlights include BMO economist Doug Porter's chart on domestic demographics, Macquarie's chart highlighting the economy's current dependence on real estate for growth, and Trivest Wealth's chart on interest rates and housing prices.
"75 charts every Canadian should watch in 2017" – Kirby, Macleans
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The institutionalist view of economics – that strong, trustworthy political, economic and social institutions are the difference between advanced and developing economies – has always fascinated me. Current trends – no one trusts anyone, basically, is terrible news for future growth as the FiveThirtyEight site details.
"Americans Don't Trust Their Institutions Anymore" – FiveThirtyEight
See also: "Why Nations Fail"
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Tweet of the day: "@JavierBlas2 The @IEA has published an S/D assumption up to Q2 2017 of impact of #OPEC cuts. Using same IEA data, here chart rolled to Q4 2017 #OOTT #oil " – (includes chart) Twitter
Diversion: "Top 10 Photos of the Year ' – Time
Scott Barlow