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Doves sit on an oil pump at sunset in the desert oil fields of Sakhir, Bahrain, Sunday, Dec. 13,Hasan Jamali/The Associated Press

A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the Web

Weak economic data and a sharp market sell-off in China will make for a nasty start to trading in 2016.

Equity trading in Shanghai was shut down after the benchmark fell seven per cent. The catalyst was the release of the Caixin China Manufacturing PMI index which came in at 48.2 , well below the 50 level that indicates flat growth. In the background, however, the selling was exacerbated by the expected end of a ban on equity selling by major pension and mutual funds. The Euro Stoxx 50 benchmark for European equities was lower by three per cent at time of writing and Dow Jones Industrial Average futures implied a 300 point drop at market open.

"China's market nosedive triggers shutdown, sparks fears for 2016" – Globe and Mail
"China's Seven-Minute Selling Frenzy That Shook Global Markets" – Bloomberg
"@ericbeebo SHCOMP: pending end to ban on major shareholder selling & circuit breaker impact among factors cited in 6.9% slide " – Twitter
"Dow futures plunge more than 300 points as China fears return" – WSJ Marketwatch
"Ending of China's super-boom spells pain with no end seen yet" – Reuters
"China Factories Haven't Fought Off Overcapacity, Weak Demand" – Wall Street Journal


The broad equity weakness has overshadowed political tensions in the Middle East to some extent, but WTI oil prices are higher by 1.8 per cent. The Saudi Sunni government executed a prominent Shiite cleric who had been critical of the Saudi government, setting off a storm of protest in Riyadh. Iran's Shiite leadership protested vehemently and, in response, the Saudis kicked the Iranian ambassador out of the country. I will be writing more on this situation and its effects on oil prices later on Monday.

"Who Was the Cleric Saudis Executed and Why His Death Matters" – Bloomberg
"Iran says boosting oil exports depends on future demand" – Reuters
"Saudi Oil War Goes MAD" – Gadfly (Bloomberg)
"Look for oil prices to spike if hostility between Iran and Saudi Arabia gets worse" – Quartz
Related: "U.S. oil 'strippers' maneuver to keep pumping amid crude slump" – Reuters


The highly-respected Financial Times columnist John Authers warns that U.S. markets, with so few stocks performing well, are set for a correction,

"Some very high numbers for a group of four companies that have come to be known as the "Fangs" — Facebook, Amazon, Netflix and Google — and for a slightly wider group that added Microsoft, Salesforce, eBay, Starbucks and Priceline to create the "Nifty Nine". Both groups gained more than 60 per cent for the year… Away from the excitement generated by these hot companies, things were dire…a "narrowing" of the market is a classic symptom of a lengthy rally — this one has lasted almost uninterrupted since 2009 — that is coming to an end. Investors run out of ideas and instead pour money into a few companies with a positive story to tell. The underperformance of smaller companies is a sign that investors are growing more cautious."

"Equities: And then there were nine" – Authers , Financial Times


Tweet of the Day: BMO and Royal Bank are among the banks in this chart. "@TheStalwart Citi charts the big global banks active in the non-investment grade commodity space. " – Twitter

Diversion: "The Most Important Cars of 2015" – Wired