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A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web

Investors shouldn’t hold their breath for a return in capital investment when, as Bloomberg reports, three quarters of U.S. chief financial officers are battening down the hatches for a recession,

“While almost all economists surveyed by Bloomberg expect growth to stay positive this year – which would crown the current expansion the longest on record, at more than 10 years – the risk of a recession is seen at a six-year high. In fact, more than three-quarters of corporate chief financial officers expect one by the end of 2020. Meanwhile, it’s getting harder to avoid prominent voices talking about the possibility of a contraction these days, such as Nobel laureates Paul Krugman and Robert Shiller.”

“These Are the Signs a U.S. Recession May Be Coming” – Bloomberg

“ @jsblokland Confirmed! Eurozone Q4 #GDP growth +0.2%, YoY growth pace slowed to 1.2%, slowest in five years.” – (chart) Twitter

“ @toby_n Global GDP was doing great but deceleration been the theme since beginning of 2018” – (chart) Twitter

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I’m not usually a big fan of sell-side theme-based investing reports because they often confuse topical issues for the best long-term investments. Citi’s Global Theme Machine has been a very helpful exception in recent years,

“IT Services, Services Offshoring, and Medical Tech are the Top Three Themes from January. Other Themes that continue to screen attractively in the Theme Machine are Artificial Intelligence (#4), CyberSecurity (#6), Healthcare IT (#10) and Value Healthcare Spend (#12). Video Games makes a return to the Top Quintile (#14 from #23) as China regulatory news flow improved at the margin. Notable decliners into the bottom quintile include Natural Gas (#30 previous quarter to #78), Agricultural Demand (#54 to #81) and Light-Weighting of Cars (#53 to #76)… It’s notable that a number of Healthcare Themes continue to screen attractively (Medical Technology, Medical Tourism, Healthcare IT, Value Healthcare Spend), with a common thread of companies that seek to be part of the ‘costs solution’ for governmental and corporate payers”.

“@SBarlow_ROB I’m not usually a fan of Thematic Investing reports – too much flavour of the month – but Citi’s has been helpful” – (research excerpt) Twitter

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Morgan Stanley analyst Piyush Sood published a compelling bullish case for copper miner stocks,

“Copper market tightness in 2019-20 and copper equities finally offer appealing risk-reward. In our recent Global Insight, our global Metals & Mining team expects copper market tightness to emerge from 2Q19 as China’s demand improves combined with falling global production and low visible inventories, driving price to US$3.12/lb by year end, or 12 per cent upside from spot. On average, the copper sector has de-rated to 6.0 times N12M EV/EBITDA versus a recent peak of 9.0 times at the end of 2016. Shares are now discounting close to or less than spot price, our team estimates. The risk-reward ratio now looks attractive with upside to price targets on most base metals producers with large copper exposure.”

“@SBarlow_ROB MS likes copper, FCX” – (research excerpt) Twitter

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Tweet of the day: “@Reuters China’s bad debt managers risk becoming bad credits themselves reut.rs/2DAql1r”

Diversion: “Canada’s unprecedented trust gap: Who will build the bridge for a country divided?” – Globe and Mail

Column: I found a must-read paper by Michael Mauboussin and wrote a column about it,

“The other side of the trade thinks they’re smarter than you” – Barlow, Inside the Market

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