A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the Web
Ernest Wong, research analyst at Baskin Wealth Management, argues that just because Vancouver and GTA real estate is unaffordable for many (or most), this doesn't mean it's a housing bubble,
"The most common explanation for why GTA housing is 'unsustainable' is that it has risen beyond household income levels. Many economists state a relatively arbitrary figure of 3x gross household income as a reasonable benchmark for housing prices. The median home in Toronto is now priced at around 7-8x the median household wage… from an economics perspective, there is no particular reason why housing has to be affordable for the average person. Real estate in Hong Kong has been expensive since the handover in 1997, and continues to be exceptionally expensive. In desirable places where people want to live, it is natural that good real estate is expensive."
"A contrarian view on Canadian housing" – Baskin Wealth Management
"Home Capital Woes 'Not a Systemic Issue,' Brookfield CEO Says" – Bloomberg
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A slowdown in U.S. auto sales, a plummeting Citi Economic Surprise Index and weaker-than-expected oil demand are creating consternation among economists,
"Auto workers may be getting some extra time off around Independence Day, but they won't be celebrating. They'll know it means sales are weak and that profits -- and profit-sharing checks -- could be shrinking. Manufacturers used to shut plants for a week or two in July for maintenance and to keep inventories in check. As sales boomed in recent years, most factories cranked out cars without a break. This summer, widespread closures may be back, and for weeks longer than before. The reason: four straight months of declining sales and little expectation the trend will reverse anytime soon. "
"Big Summer Shutdowns Loom for U.S. Auto Plants as Sales Sputter" – Bloomberg
"@chris1reuters U.S. #oil demand growth is falling and likely to stay subdued this year as #gasoline #diesel #jet use stay weak - JBC #Energy #OOTT #OPEC" – (chart) Twitter
"@lisaabramowicz1 U.S. economic data has been increasingly disappointing, as displayed on the Citi Economic Surprise Index." – (chart) Twitter
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Starting with a Trump election victory, prominent bond fund manager Jeffrey Gunlach has correctly predicted a few things lately that sounded crazy at first. Mr. Gundlach is now forecasting an equity market correction this summer,
"Gundlach expects the 10-year Treasury yield to move higher, and a summer interest rate rise should 'go along with a correction in the stock market.' 'I think it's more likely that equities drop when yields are rising,' he said in response to a separate question."
"Jeff Gundlach sees summer correction in the stock market" – CNBC
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I don't normally mention individual company profit results but not only are Apple Inc.'s finances comparable to a medium sized country's GDP, it's also the center of an ecosystem that includes many other technology equipment and media content providers.
"Here's what Wall Street analysts are saying about Apple's results" – Business Insider
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Tweet of the day: I keep pointing out the ongoing strength in technology and health care companies and, if website traffic data is any indication, people keep ignoring me, "@bespokeinvest Tech and Health Care are the only two sectors that have moved higher within their ranges over the last week: bespokepremium.com/morning-lineup… $XLK " – (chart) Twitter
Diversion: "The tricks that nature documentaries use to keep you watching" – Vox
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Scott Barlow