Scott Barlow
A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the Web
Three major Canadian banks posted strong earnings this morning. This is great, because if it had of gone the other way I would have looked like a complete moron after filing "Canadian bank investors: Get ready to be rewarded for keeping the faith" (based on the likelihood for a strong short covering rally) yesterday. It's a general rule of investing to avoid buying stocks in to earnings reports and I probably shouldn't write about them with strong conviction either.
"CIBC hikes dividend as profit rises, sets aside more funds for bad loans" – Report on Business
"RBC feels oil hit as bad loans climb 19 per cent" (but still showed strong profit growth) – Report on Business
"TD Bank's quarterly profit rises 10.4 per cent" – Report on Business
Related: "Bank of Montreal to cut 4% of workforce, memo says" – BNN
=====
West Texas Intermediate crude prices rose above $50 Thursday morning, but there's a catch, at least for the short term. Oil climbed yesterday after the U.S. Department of Energy announced a big inventory draw at 10:30. The problem is that there was a big inventory build in gasoline which might restrict short term oil demand from refineries. Longer term, however, insiders are predicting a sharp rise in oil price because the development of new supply has been minimal because of low investment.
"@SoberLook Chart: A drop in US crude oil in storage showed up as an increase in gasoline inventories - pic.twitter.com/eo9caABNpo " – (includes chart) Twitter
"Oil prices are above $50 a barrel again—but for how long?" – Quartz
"For Tanker Owners, Shrinking Oil Glut Is Least of Their Worries" – Bloomberg
"@EnergyRosen When we look at the longer term (3-5 years), from a consumer standpoint, this market is in trouble, big trouble." – Twitter
=====
Japan's Prime Minister Shinzo Abe inferred some deep concerns about the global economy at the ongoing G7 meetings,
"The premier said that global commodities prices have dropped 55 per cent since 2014 which 'is the same as the 55 per cent drop seen around the Lehman crisis.' He added that the growth rates of emerging economies are at a lower level than at the time of the crisis."
"Abe warns on Lehman-era crisis signals" - FastFT
"Global conditions echo post-Lehman crisis, Abe warns G7" – Financial Times
"@RobinBHardingThis is the chart Shinzo Abe showed G7 leaders today. Based on commodity prices, it's Lehman all over again! pic.twitter.com/BNc3VcDmMX " - Twitter
=====
Tony James, the president of U.S.-based financial behemoth Blackstone Group LP, was interviewed on Canadian media yesterday and he didn't have very nice things to say about the Canadian investing environment,
"'Canada has not been a prime market for us,' James said … Canada's [oil] industry might be left out of the private equity firm's sights because of a lack of pipeline capacity and the cost of production, he said… Real estate, which is Blackstone's biggest business, is also unattractive in Canada compared to the rest of the world, James said. 'Canada is not a real estate market we love," James said. "Prices are pretty full, yet it's much easier to have more supply.'"
"Blackstone Gives Pricey Canadian Energy and Property Thumbs Down" – Bloomberg
=====
Bloomberg's Luke Kawa parsed the Bank of Canada's statement yesterday for clues on future monetary policy,
"The bank may be signaling some doubt about whether the oil rally will endure, given that it has been buoyed by transitory factors…The reference to "disappointing" business investment and intentions is a reminder that this transition continues to take longer than anticipated, which justifies a stimulative stance from the Bank of Canada to assist this re-balancing of growth."
"Four Things You May Have Missed in the Bank of Canada's Statement" – Bloomberg
=====
Tweet of the day: "@Noahpinion Roger Farmer: Economists are just now realizing what blue-collar workers always knew about trade with China: rogerfarmer.com/rogerfarmerblo… " – Twitter
Diversion: "Ancient beer recipe found by archaeologists in China" – CNBC
Scott Barlow