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

Bank of Montreal economist Doug Porter noted the Bank of Canada’s “Canadian hat trick” Wednesday with its allusions to beer, Wayne Gretzky and caution,

“BoC Governor Poloz gave us the full Canadian hat trick on Wednesday: comments on Gretzky, beer, and caution. While there were few major surprises, and markets, on net, barely budged on the statement/press conference combo, there were some pretty significant forecast changes. The shifts mostly brought the BoC in line with a more downbeat consensus. But, in some cases, the Bank is now actually a tad below average. “

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“@SBarlow_ROB BMO: Bank of Canada with the 'Canadian hat trick'” – (research excerpt) Twitter

“@BNNBloomberg 'Not the last stop' for BoC growth forecast cuts: Rosenberg” – (video) BNN Bloomberg

“@francesdonald Short version of BoC: 'Most everything we look at is worse... but we still want to hike over time cause #normalization... and we're purposefully vague about timing ¯\_(ツ)_/¯....happy new year.'” – Twitter

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Nomura quantitative strategists believe that U.S. equity markets are reaching a “tipping point,”

"It is, in our view, time for a reality check as to whether the market will head toward a more optimistic, risk-seeking period… some important indicators have approached an important turning point. Nomura’s estimated fear and greed barometer to gauge US stock market sentiment (current: -3.3) is approaching the level seen just before the market plunge caused by the inverted UST yield curve in the first half of December. The US economic surprise index has risen to -8.5 from the recent low in December… overall hedge fund buying of US stocks has been very modest, and they seem suspicious of the sustainability of the current risk rally. However, if the market does actually break each turning point mentioned above and moves into risk-seeking mode, then HFs are likely to be forced to increase their exposure to US equity. US equity markets are at a critical tipping point, in our opinion.”

“@SBarlow_ROB Nomura: Markets at a 'critical tipping point'” – (research excerpt) Twitter

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“Here comes the reversal of last year's flight to cash. Investors pulled $745 million yesterday from Vanguard's $27.2 billion short-term bond ETF, the fund's biggest one-day withdrawal in its history” – Twitter

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Heated arguments among economists, portfolio managers and market strategists over the influence of the Federal Reserve’s run-off of balance sheet assets continue.

Morgan Stanley’s Brian Hayes has contributed by uncovering an interesting link between the Fed’s holdings of mortgage backed securities and the overall S&P 500,

“Since September 2017, the Fed has been reducing its balance sheet – gradually at first, then more rapidly since the spring of 2018… Main results: S&P 500 returns have a significant positive correlation with MBS changes: since 2009, each $20bn change yields a 37bp expected return … Based on the recent MBS runoff of $15bn per month, the projected S&P 500 return impact is -3.3% for 2019.”

“@SBarlow_ROB MS: “Based on the recent MBS runoff of $15bn per month, the projected S&P 500 return impact is -3.3% for 2019 “ – (research excerpt) Twitter

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“Fed may be open to changes to balance sheet plan, minutes show” – Reuters

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Tweet of the Day:

Diversion: “The Weight I Carry: What it’s like to be too big in America” – The Atlantic

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