Scott Barlow
A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the Web
Citi economist Dana Peterson joined her HSBC counterpart in predicting an imminent rate cut for the Bank of Canada as the consensus view slowly evolves. For Ms. Peterson, the clincher was Governor Stephen Poloz's admission that the Bank considered a rate cut yesterday while cutting its forecast for domestic economic growth.
The loonie has been holding steady recently, but the combination of a Federal Reserve rate increase and a BoC rate cut will likely send the domestic currency much lower,
"We view the GDP and inflation downgrades, identification of more downside risks than upside risks to the outlook, and exploration of further interest rate cuts as unambiguously dovish. These factors support our call for further monetary policy easing within the next 3-6 months."
"@SBarlow_ROB Citi: December rate cut for Canada ' – (research excerpt) Twitter
"Lower for Longer Now Applies to Canada's Exports, Not Just Rates" – Kawa, Bloomberg
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There are very few finance writers that will make me drop everything and read them as soon as I see it. Credit Suisse head of global financial strategies Michael Mauboussin is one of them. Mr. Mauboussin's recent interview with Motley Fool gets a bit technical in parts – he discusses why return on invested capital is his favoured equity valuation measure - but also contains general words of wisdom for all investors,
"A strong empirical finding is that companies with rapid asset growth tend to have poor total shareholder returns and companies with slow, or even contracting, asset growth have good returns. This tells you that it's hard to grow rapidly and create a lot of value at the same time. Also, actions such as divestitures, spin-offs, and buybacks can add value."
"Interview With Michael Mauboussin" – Motley Fool
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A Bloomberg report highlights how investors are increasingly flying blind as market indicators cease to function,
"Tthe once-dependable indicators traders relied on for decades to send out warnings are no longer up to the task. The so-called yield curve isn't the recession predictor it once was. Swap spreads are so distorted they can't be trusted. Even the vaunted VIX -- sometimes referred to as the 'fear gauge,' is leading its followers astray, strategists say."
"Broken Indicators Mean It's Growing Harder to Spot Troubles in the Market" – Bloomberg
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Financial Times writer Simon Kuper argues that driverless cars are less than four years away and their proliferation will result in major job losses. Mr. Kuper describes the numerous benefits of the trend – one expert predicted a 90 per cent reduction in traffic accidents – before writing,
"On the other hand, driverless cars will bring catastrophe. The best thing about the automobile age was that it employed tens of millions of people to make, market, insure and drive vehicles. Over the next 20 years, the mostly low-skilled men who now drive trucks, taxis and buses will see their jobs decimated. Instead of taxi drivers setting Uber cars on fire, we could see taxi and Uber drivers get together to set driverless cars on fire. If you thought Donald Trump was bad, wait for the next wave of male losers from modernity."
"Driverless cars will change everything" – Financial Times
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Tweet of the Day: "@FukuyamaFrancis The real worry is that @realDonaldTrump 's banner will be picked up by someone much smarter and more self-disciplined next time. " – Twitter
Diversion: "Watch New York City Chess Hustlers Get Pwned By Grandmaster Magnus Carlsen" – Gizmodo
Scott Barlow