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

The Federal Reserve is expected to leave rates unchanged today, but the accompanying statement or the press conference has the ability to move bond markets and currencies if more hawkish (unlikely) or dovish (much more likely) than expected.

For Canadians, tomorrow’s report on November gross domestic product “growth” is bigger news as an economic contraction is expected,

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“Data from Statistics Canada on Thursday is expected to show the Canadian economy shrank in November from the previous month, adding to evidence that growth slowed in the last quarter of 2018. Gross Domestic Product (GDP) is expected to have contracted by 0.1 per cent in November from 0.3 per cent in October, according to a Bloomberg poll of economists, conducted from Jan. 25 to 29. A combination of plunging oil prices, U.S.-China trade tensions hitting equity markets and fallout from the Bank of Canada's fifth interest rate hike in late October since mid 2017 all weighed on the economy, according to economists.”

“Canadian economy likely shrank in November, dragging down quarterly growth” – CBC

“ Investors, beware: There may be some turbulence in store for the loonie” – Barlow, Inside the Market

“Fed likely to hold rates steady as it navigates data blind spots” – Reuters

***

I’ve read a lot of Apple research in the past 24 hours ahead and after the company’s earnings report. This view from Jefferies analyst Timothy O’Shea is among the most notable,

“Services gross margin of 63% was strong, in-line with our expectation for ~64%. But for now this is not enough to offset the eroding margins in the hardware business and we are now reducing near-term estimates for the third time in 2 months. Hardware is beset by a number of issues including China macro, lengthening smartphone upgrade cycles, and FX ... issues unlikely to be fixed in the near term.’

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“@SBarlow_ROB Jefferies on Apple” – (research excerpt) Twitter

“‘Bad news is over’ — here’s what every major analyst says about Apple’s earnings” – CNBC

***

Financial Times writer Katie Martin is a must-follow on Twitter but also produces great content like today’s “Why investors suck at selling stocks,”

“Buying a new stock is a weighty process for a long-only investor. A fund manager will research the company, analyse its financials and its stock performance, closely ponder the risks of getting involved, or of missing out… When it comes to selling, however, decisions are often “driven by an asymmetric allocation of cognitive resources”. In other words, investors are just not paying attention. Any proven skill for analysis and stock selection goes out of the window… The relationship between investors and the stocks they have sold is also fascinating. One told the researchers behind this paper that he or she does not just sell stocks. “When I sell, I’m done with it,” the fund manager told the researchers. “After I sell, I go through and delete the name of the position from the entire research universe.” This is the financial-market equivalent of cutting exes’ faces out of old photographs.”

“Why investors suck at selling stocks” – Martin, Financial Times

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Citi analyst Edward Morse is concerned about a global gasoline glut that will limit any rally in crude prices,

“Gasoline [crack spreads] have been weakening since summer 2018 and look to stay under pressure as inventories stay high and keep rising, yet overall refinery gasoline yields are barely responding to this crack weakness. On a macro level, the recovery in crude prices has been an underlying driver of weaker gasoline cracks … New refinery capacity, particularly in China, is significantly tilted toward the light end of the barrel and could continue boosting supply of light ends, keeping gasoline yields high even as cracks are weak.”

“@SBarlow_ROB C: gasoline glut isn’t going anywhere” – (research excerpt) Twitter

“U.S. gasoline consumption stalls, adding to oil producers' problems: John Kemp” – Reuters

“Oil prices rise 1 percent on Venezuela sanctions” – Reuters

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***

Tweet of the day:

Diversion: “Explainer: What is the polar vortex and why is it so cold?” – Reuters

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