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Oil storage tanks in Cushing, Oklahoma, U.S., on March 24, 2015.Daniel Acker/Bloomberg

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

The oil price is lower by 3 per cent at the time of writing, providing further evidence that oil patch investors have fallen victim to a twisted form of Gambler's Fallacy. A central concept in logic, Gambler's Fallacy describes a punter who, seeing consecutive coin tosses come up heads four times in a row, bets heavily on tails for the next turn of the coin. This "feels" right, but it's wrong – the odds of heads versus tails are 50 per cent no matter what happened in the previous 4 or 200 tosses.

Strong bids in the energy sector accompany every bit of half-positive news, seemingly in the belief that "it's been so bad it has to get better." But as long as the oil glut remains, the odds of a sustainable rally are less than 50 per cent.

London Capital's Brenda Kelly writes,

"We're back to the same old story today with materials and energy providing a drag on the FTSE as BP delivered what was frankly a terrible set of results – its worst loss in 20 years. Adding insult to injury, oil prices are 1.50 per cent lower this morning, with downside momentum and basic economic fundamentals all conspiring to ensure that it will revisit the $30 support in the near term."

"Groundhog day- miners lead FTSE lower." – Kelly, London Capital Group
"For Once, Low Oil Prices May Be a Problem for World's Economy" – Bloomberg
"BP Profit Tumbles 91% Amid Oil Slump, Falling Short of Estimates" – Bloomberg

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The most important question in global economics is whether a weaker global economy will de-rail a U.S. recovery in wages and consumption. Goldman Sachs economist Jan Hatzius – arguably the most respected sell-side economist covering the U.S. – is not overly concerned about a U.S. recession because of strong employment data.

At the same time, however, global economic data is deteriorating at an alarming rate,

"A raft of national manufacturing surveys at the start of the month either missed expectations or fell into contractionary territory. Notably, China's manufacturing sector continued to shrink in January, according to both official data and Caixin-Markit's private survey.

"January also proved a trying time for factories in the US, thanks to a stronger buck. The dollar index, a measure of the US currency versus a basket of peers, is steady on the day at 98.98 but sits less than 2 per cent shy of a 12-year high."

"How High Is the Risk of a Recession in the U.S.?" (video) - Bloomberg
"Growth concerns gnaw at global markets" - FastFT
"Negativity all the way down" – Keohane, FT Alphaville

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Google's parent company Alphabet is set to become the world's largest corporation, overcoming Apple,

"The only thing that matters for Alphabet is Google and the health of its advertising business. And the real Google, we learned Monday, is more profitable than most people expected. (Although no one really knew or knows anything about the company's finances. More on that in a moment.) Separated from the financial drain of Alphabet's futuristic experiments, Google - that is, the search engine, YouTube, Android, etc. - posted an operating profit margin of 32 percent, before subtracting payments Google makes to its ad partners. That is a level of profitability Google hasn't seen since 2012."

Google's dominance underscores a broader economic issue that I'm writing about for publication today, specifically that in a technologically driven economy the largest companies hire very few people. At its peak when one of the world's largest companies, General Motors employed 400,000 people. Facebook, with a market cap of $327-billion that's not far behind GOOG's $523-billion, has 450 employees.

"G-O-O-G-L-E Still Rules the Alphabet" - Bloomberg

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Tweet of the Day: "@kitjuckes @georgemagnus1 Effect of No2 global economy putting up walls, on money flows, confidence, growth, seems to me to get too little attention" – Twitter

Diversion: "How Operation Avalanche's Filmmakers Duped NASA to Make 'the Most Illegal Movie Ever'" – Wired

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