A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web
Goldman Sachs published a list of secular growth stocks with reasonable valuation levels over the weekend.
The key word here is "secular," which implies these companies will be able to generate revenue growth no matter what happens with the overall economy.
There are some unfamiliar names at the top of the table including Ulta Beauty Inc. and Syneos Health Inc. before we get to the usual suspects, like Alphabet Inc. The inclusion of Amazon.com Inc. suggests that the "reasonable" in reasonable valuations is in the eye of the beholder.
"@SBarlow_ROB More GS: secular growth stocks w/o nosebleed valuations. Some surprises" – (table) Twitter
See also: "@SBarlow_ROB Good summary [of the investing backdrop] from GS's 'Where to Invest Now? '" – (research excerpt) Twitter
It's a day ending with 'y' so we have conflicting views on crude forecasts,
"Brent crude eases, while lower Canadian supply boosts U.S. futures" – Reuters
"'Red flags' for the oil market are popping up all over the world" – Business Insider
"U.S. Oil's Costly Again as It's Stored Less and Shipped Abroad More" – Bloomberg
"Brent Drops From 2-Week High as U.S. Warns of `Phenomenal' Surge" – Bloomberg
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Prominent Morgan Stanley strategist presented a surprisingly pessimistic 2018 forecast for equity markets by warning that recent market volatility was "just an appetizer, not the main course" and pricing swings will get steadily more severe as interest rates and bond yields climb,
"'It's when growth softens while inflation is still rising that returns suffer most,' the strategists wrote. 'Strong global growth and a good first-quarter reporting season provided an important offset. We remain on watch for 'tricky hand-off' in the second quarter, as core inflation rises and activity indicators moderate.'"
"Morgan Stanley Says Stock Slide Was Appetizer for Real Deal" – Bloomberg
"Morgan Stanley's US equity chief explains why the recent meltdown signaled the 'final stage' of the bull market" – Business Insider
"Say Goodbye to Stocks and Bonds Moving in Opposite Directions" – Bloomberg View
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As I've written previously, I'm watching U.S. high-yield bond spreads as an indicator that the market cycle and equity rally are over. There's no real signs of crisis yet but Bloomberg is warning about 'tourists; in the market who might have one foot out the door already,
"A decade of ultra-loose monetary policy has created a group of hot-money investors in high-yield bonds -- and these tourists may soon be buying a return-ticket home. Their line in the sand: the 10-year German government debt trading with a yield of more than 1 percent, according to a monthly poll of investors conducted by Bank of America Corp. A higher German benchmark, which currently offers a 0.74 percent yield, was cited as a top concern for money managers over the next 12 months.
"At these levels 'tourist' investors in credit might begin selling corporate bonds and flock back to government debt," according to strategists led by Barnaby Martin in London."
"Junk-Bond Exodus by `Tourists' Seen When Bunds Hit 1 Percent" – Bloomberg
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Tweet of the Day: "@CharlesSizemore A classic by @MebFaber: How to Beat 98% of all Mutual Funds mebfaber.com/2016/01/05/how… $STUDY $BRK.B " – Twitter
Diversion: This story is straight madness. Chinese company appears to have bought a U.S. protectorate country to launder billions of dollars,
"A Chinese Casino Has Conquered a Piece of America" – Business Week
Scott Barlow