Scott Barlow
A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the Web
U.S. portfolio manager and media pundit Jeff Macke is a gift to the daily links post because of his habit of providing quotes that are both hilarious and instructive. Mr. Macke was asked this morning whether Apple Inc., in the wake of a uniformly disappointing earnings report, was a bad company or a broken stock. He responded that "Apple is not a great company anymore. That doesn't make Apple bad. It makes Apple Cisco [Systems]."
This sentiment echoes other investors, notably Ritholtz Wealth Management's Josh Brown, who believe that Apple is morphing from a growth company to more of a consumer staples stock, one that generates oceans of cash but little profit growth.
"@jeffmacke $AAPL is not a great company anymore. That doesn't make Apple bad. It makes Apple $CSCO." – Twitter
"Did we just hit peak Apple?" – Vox
"Apple suffers first quarterly revenue fall in 13 years" – Financial Times
"Tim Cook: We're Seeing 'Extreme Conditions Unlike Anything We've Experienced Before' in the Global Economy" – Bloomberg
"@ReformedBroker Everyone who wants an iPhone has one. $AAPL is now a consumer staple stock and will trade on replacement / shareholder yield." – Twitter
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Crude prices continue to ramp higher this morning despite a supply glut that only gets larger.
Does this mean oil prices are set for a hard landing? Not necessarily.
Industry experts more or less agree that rising global demand will be high enough to absorb supply by the end of 2017. The surprising strength in crude, boosted by a weaker U.S. dollar, could very well represent the market positioning for a balance of supply and demand next year. Importantly, investment in new oil supply has collapsed in the past 18 months, which means that there could be a scarcity of available crude by 2018.
"Oil's Magic Number Becomes $50 a Barrel for Promise of Recovery" – Bloomberg
"Oil prices hit highest level since November" – Financial Times
@chigrl Someone might want show [Marketwatch] the chart below>>Oil prices add to rally on signs glut is dwindling on.mktw.net/1NyM0sW pic.twitter.com/Ayp858B35h " – Twitter (chart shows extent of current supply glut relative to 2014)
See also: "Saudis open new phase in Asia oil market turf war with China spot sale" – Bloomberg
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China's economic data has improved in recent weeks, but the country's financial system is still a mess. The scale of credit expansion it took to stabilize the economy is almost incomprehensively vast and yet gross domestic product growth continues to slow. Commodity markets on the mainland, notably rebar and iron ore futures, are rocketing higher, but Bloomberg quotes a metals expert as saying " "I don't think most people who trade it know what it is."
The Financial Time sis reporting that unpaid receivables for Chinese corporations are on the rise as customers aren't bothering to pay for deliveries and capital flight, wealthy Chinese moving their funds out of the country, continues at a half trillion dollar per year pace.
"LME Head Says China Traders Don't Know What They Buy in Boom" – Bloomberg
"Unpaid bills add to China debt problems as receivables mount" – Financial Times
"China's great wall of money just sprang another leak" – Quartz
"'What if China lands hard?' they asked in 2013" – Keohane, FT Alphaville (free to read with registration)
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Tweet of the Day: "@etleggett The FOMC Cycle of Life and Death pic.twitter.com/jjoWo17xjO " – Twitter
Diversion: "To Boldly Go Provides a Rare Look Behind the Scenes of Star Trek" - i09
Scott Barlow