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

The U.S. Federal Reserve did roughly as expected Wednesday by raising rates by 25 basis points and signaling fewer hikes in 2019. The market didn’t like it. The equity sell-off intensified during Fed Chair Jerome Powell’s press conference when he noted that the reduction of the Fed’s balance sheet will continue but I don’t want to put too much emphasis in that yet. Famed hedge fund manager David Tepper dramatically announced that ‘the Fed put is dead’ and the rally is over but I’m not putting a lot of faith in that either.

“David Tepper: Fed is done supporting stock prices, so cash is ‘not so bad’ as an investment now” – CNBC

“Merrill and Goldman comments on Fed Rate Hike” – Calculated Risk

“The Fed has badly misjudged the level of anxiety in markets, says John Authers” – Bloomberg

“Fed Hikes Rates, Market Tumbles” – Tim Duy

“@ReutersJamie Message to Fed from world bond markets is pretty clear: you’re making a policy error. U.S. 10y yield falls to 2.75%. U.S. 2s/10s curve flattens to 10 bps. German 30y yield falls to a two-year low of 0.82%.” – (charts) Twitter


Oil is trading below US$47 at time of writing, down 3.2 per cent. Shale production increases and slowing global growth are cited as the causes,

“Both major oil futures contracts rallied sharply on Wednesday but are now at or close to their lowest levels for over 15 months, more than 30 per cent below multi-year highs reached at the beginning of October. ‘Wednesday’s recovery was short-covering,’ said Xi Jiarui, chief oil analyst at consultancy JLC. ‘Investors quickly moved their attention to deteriorating fundamentals in the oil markets, including more signs of slowing economic growth next year, record production and the lack of confidence with OPEC’s pledge to curb production.’ "

“Oil slumps 4% to lowest in a year as stock markets sink” – CNBC


A report by Citi global strategist Robert Buckland provided a contrarian investor’s guide to 2019, but noted that contrarians in 2018 got beat up by markets,

“Our simple global contrarian strategy buys the worst performing 10 stocks of the previous year and sells the best performing 10. The universe is the biggest 250 stocks from the MSCI ACWI … 6 out of the 10 bull picks underperformed again 2018. Contrarians were especially hurt by General Electric (down another 59 per cent) and their Energy picks (down 23 per cent on average) … Our global contrarian stock-picker failed in 2018. But that won’t stop them trying again in 2019. We show their 10 global bull and bear stocks picks in Figure 9. The bulls represent a wide spread of cyclicals (European Financials, US Energy, GE again) and defensives (European Staples and Health Care). The big bear call is: sell U.S. Health Care. 6 out of 10 short picks are from that sector.”

“@SBarlow_ROB C: Contrarian investor guide to 2019” – (research excerpt) Twitter


Tweet of the Day: “@carlquintanilla “The Year No One Made Money”” – (table) Twitter

Diversion: “The most-Googled search terms of 2018” - Bloomberg

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