Scott Barlow
A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the Web
Tuesday's market supports the notion that U.S. interest rate expectations are all investors need to know to understand price movements. At noon eastern time, a speech by Fed Chairwoman Yellen alleviated any concerns about imminent interest rate hikes. The market reacted quickly, selling the U.S. dollar and taking equities, commodities (except for oil, interestingly) and risk currencies like the loonie higher. In short, no rate hike equals "risk on".
Brenda Kelly from U.K.-based London Capital wrote, "[Ms Yellen's comments] led to some yield seeking in risk assets and the 'Dovish Janet' effect on global indices has been palpable with the S&P500 finally breaking above 2050."
"Dollar falters - Risk on" – Kelly, London Capital (early morning note)
"Dollar in retreat on 'striking dovishness' from Yellen" – FastFT
See Also: "The market's looming test: John Authers looks at the market reaction to Janet Yellen's speech, and at expectations for earnings and unemployment" – Financial Times (video)
=====
The Wall Street Journal's Jason Zweig tweeted an excellent metaphor for portfolio manager behaviour lately, writing that "'smart' money is at it again: chasing performance like dogs chasing parked cars." Large speculative investors have been slopping all over the place in 2016, from short oil to long, short copper to long, short Treasuries to long. The trend continues as large investors pour funds back into venture capital after getting their fingers burned earlier in the year. It really looks like there's too much money chasing too few profit opportunities.
"Funds Flow to Venture Firms: Endowments and pensions help raise $13 billion this year, the most since 2000" – Wall Street Journal
=====
In the free e-book Big Data: Beyond the Hype , IBM executives compared the 'Big Data' investment opportunity to gold mining. A new report from the Financial Times this morning strongly implies there is A LOT of metaphorical gold to be uncovered,
"Big Data is the simple, descriptive moniker given to the information explosion of recent years, powered by the online revolution. There are more than 1bn websites with more than 10tn individual web pages, with 500 'exabytes' of data, according to Deutsche Bank. An exabyte is 1m terabytes, or 1bn gigabytes. And the data deluge is growing every day. Over 100m websites are added to the internet every year…. 'It's a new age, this is the new way of doing analysis,' says Justin Zhen, a former hedge fund analyst and one of the founders of Thinknum. "People want data. This is a high-growth area.'"
"Investors mine Big Data for cutting-edge strategies" – Financial Times
See also (Big Data stock ideas included): "Credit Suisse thinks you should buy these stocks" – Barlow, Report on Business (March 22)
=====
A New York Times report on Anbang Insurance Group of China , the source of a takeover bid for Starwood Hotels & resorts, highlights the odd, pervasive sketchiness of Chinese corporate finance,
"[Anfbang Chairman Wu Xiaohui] avoids interviews. The fax number on his company's website connects to a dentist's office. And, unlike Mr. Buffett, whose net worth can be easily calculated, Mr. Wu's fortune is a cipher, lost in Anbang's labyrinthine shareholding structure made up of 37 interlocking holding companies… In 2014, the name of Levin Zhu, the son of former Premier Zhu Rongji, also showed up on Anbang's list of directors ... Mr. Zhu told local media last week that he never agreed to be on Anbang's board."
"Starwood Bidder Is a Reclusive Chinese Insurer With Opaque Backing" – New York Times
=====
Tweet of the Day: "@M_McDonough First Quarter U.S. Growth Prospects Dwindling: pic.twitter.com/dn5a1PMipU " – Twitter
Diversion: "Something Just Slammed Into Jupiter" – Gizmodo
Scott Barlow