A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web
I was a much more full-throated capitalist before the financial crisis, but I'm now having trouble stomaching the fawning coverage from the World Economic Forum in Davos, which has become the Oscars for the Oblivious.
I'll be avoiding Davos reports this week even if discussions this year are allegedly centered on economic inequality,
"Alpha Agenda, Davos > DC edition" – Scaggs, FT Alphaville
"The Global Economy Is Doing Just Fine, But the Davos Elite Is Worried" – Bloomberg
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CNBC's Michael Santoli noted this morning (on CNBC's flash briefing for Amazon Echo devices, which I'd recommend) that the S&P 500 is on pace to climb 125 per cent in 2018, an obviously unsustainable path. Similarly, Citi strategists are fretting about the potential for market euphoria and a deep correction,
"In recent Weekly publications we have highlighted several tactical indicators making us worry about the strong risk rally in the new year (including RSIs, the Panic- Euphoria model, stretched retail sentiment, very positive analyst earnings revisions and very low pairwise correlations within equity indices … Whilst the S&P 500 rallied to new highs, credit spreads have widened slightly of the tights and implied equity vols have also increased. Especially the latter is odd and usually only occurs in an equity market dip"
"@SBarlow_ROB Citi: more reasons to worry about stocks" – (research excerpt) Twitter
"@SBarlow_ROB Citi: euphoria, how bubbles could form" – (research excerpt) Twitter
"Risky Business" – Housel, Collaborative Fund
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Gadfly (skeptically) posits the possibility of $100 per barrel oil in the near future,
"Broad-based economic recovery is setting the world up for demand growth of 1.7 million barrels a day in 2018, and there's a chance that it could be as high as 2 million barrels, according to Energy Aspects. Certainly there's a lot of expansion about … What happens to car owners in rich nations isn't the only source of strain on demand. Many developing countries took the opportunity of the sharp fall in prices to reduce subsidies on oil products … And some less-developed countries are shifting to natural gas from oil."
"Oil's Rout Is Over, Hail the Return of $100 Crude! Maybe" – Gadfly
"Does $70 a barrel mark the high point for oil?" – Financial Times
"Oil edges lower as Libyan output undermines 2018 rally" – Reuters
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Gluskin Sheff economist David Rosenberg announced his outlier view that the bank of Canada won't raise rates again in 2018. Consensus view is for two more hikes. Mr. Rosenberg thinks NAFTA and weakening economic data will prevent the Bank of Canada from reducing stimulus,
""What happens if NAFTA uncertainty is sustained into the summer and we don't get the impulse from capital spending or from exports and the economy underperforms expectations?" he added. "I fully understand that the bank says that interest rates will probably have to be 'higher … over time', I'm not so sure that means in the first half of the year." Rosenberg – who recently said Statistics Canada's December jobs report was "highly skewed" and overstated Canada's economic strength – said that data along with market expectations fueled the Bank of Canada's first move of 2018."
"Rosenberg: Bank of Canada 'done for the year' with raising rates" – BNN
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Tweet of the Day: "@TheStalwart Maybe keep an eye on high-yield spreads. bloomberg.com/news/articles/… " – Twitter
Diversion: "David Eagleman - Interview with a Neuroscientist" – YouTube
Scott Barlow