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

The Financial Times discussed my current biggest concern about equity markets – prices are drifting higher while U.S. earnings expectations are being cut significantly,

“With nearly four-fifths of America’s largest companies now having reported their third-quarter figures and updated investors on the outlook, earnings are forecast to rise just 0.8 per cent in the final three months of the year. That is down from a forecast of 4.1 per cent at the start of October, according to Refinitiv, and a far cry from the 7.2 per cent expected as recently as July”

Markets appear to be pricing in a global economic recovery, and there are hints of that, but profit growth remains the biggest fundamental underpinning for stocks, and forward earnings multiples are climbing as earnings expectations decline. Energy stocks are among the sectors where forecasts are being cut most, which doesn’t bode well for the TSX.

“Wall Street slashes forecasts for US corporate earnings” – Financial Times (paywall)

“Running well ahead of earnings growth” – Financial Times (paywall)


Equity futures were higher on news that the U.S. and China are set to reduce tariffs on bilateral trade. Chinese officials subsequently sounded some noises of equivocation on the good news which removed some of the optimism,

“China and the United States have agreed to cancel in phases the tariffs imposed during their months-long trade war, the Chinese commerce ministry said on Thursday, without specifying a timetable… The proportion of tariffs canceled for both sides to reach a “phase one” deal must be the same, but the number to be canceled can be negotiated, [ ministry spokesman Gao Feng] added, without elaborating’

“China says it has agreed with U.S. to cancel tariffs in phases” – Reuters

“ Premarket: U.S.-China trade deal hopes restart stocks rally” – Report on Business

“Exclusive: U.S.-China trade deal signing could be delayed to December; London a possible venue – source” – Reuters


Efficiency gains have made wind power a focus for business media in recent weeks. Vestas Wind Systems reported strong profit results early Thursday, as Reuters reports,

“Wind turbine maker Vestas’ sales, orders and profit surpassed analysts expectations in the third quarter as the Danish firm enjoys one of its busiest periods on record, lifting its shares nearly 11 percent on Thursday’ … Operating profit before special items rose 55% to 429 million euros, topping the 351 million forecast in a Refinitiv poll. Its adjusted EBIT margin improved to 11.8% from 9.8% a year earlier”

And from the Financial Times,

“In the US, wind is already the lowest-cost electricity available, says Paul Veers, chief engineer at NREL. In Germany, wind power is economic without public subsidy. “Those cost reductions are spreading around the world.”

“Wind turbine maker Vestas benefits from climate change action, sees orders jump’ – Reuters

“Prices are down and capacity is up as solar and wind take hold” – Financial Times (paywall)

“Massive wind turbine blade arrives in Massachusetts for testing” – CNBC


Diversion: “I treat teens who attempted suicide. Here’s what they told me” – Vox

Newsletter: “Myths about real estate investment” – Globe Investor

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