Skip to main content
top links

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

There’s a ton of NAFTA coverage elsewhere on the Globe and Mail site, but I’m curious as to how investors feel the Canadian negotiating team is doing.

Those that view U.S. President Donald Trump as a bully on trade, and this is by no means a stretch, are probably supportive of Canadian Foreign Affairs Minister Chrystia Freeland’s firm stance – standing up to bullies is a popular strategy learned on grade school playgrounds.

I’d guess that others who are worried primarily about damage limitation, notably on auto tariffs which are the new stocking point, are more worried.

“Canada, U.S. NAFTA talks on pause after two ‘tough’ days” – Report on Business

“A bad NAFTA deal? Canada should take it and run” – Report on Business

“NAFTA deal not yet in sight, Canada stands firm on auto tariffs” – Reuters

“Auto tariffs become sticking point in U.S.-Canada NAFTA talks” – Report on Business

“@markets A Nafta collapse would be bad for Canada but auto tariffs would be worse, Conference Board warns “ – Bloomberg

******

Futures markets provide strong evidence of bullishness among global oil producers,

“Small- and medium-sized oil producers, which generally sell forward or hedge a proportion of their output to lock-in prices, have scaled back their hedging this year in anticipation oil could rise further once U.S. sanctions against Iran’s oil sector kick in come November. Big oil consumers such as airlines, on the other hand, have started aggressively hedging their fuel purchases one to two years in the future as they try to cap their exposure to the crude price.”

“Bullish oil outlook upends hedging universe” – Financial Times (paywall)

******

Merrill Lynch quantitative strategist Savita Subramanian notes that the U.S. equity market continues to outperform the rest of the world and justifiably so,

“Fueled by the strongest macro backdrop in the US since the financial crisis, the S&P 500 continued its nine-year long trend of outperformance versus the rest of the world in August. The MSCI All Country World Index ex. US fell 2.3% in August, with EPS declining 2.4% and the P/E slipping to 15.2x, a complete contrast to the S&P 500 hitting an alltime high with positive revisions and multiple expansion. On earnings, the S&P 500 now trades at a 12% premium to MSCI ACWI ex. US, a high since 2009 … But we highlight that fundamentals continue to support the US, as it is the only region with more positive earnings revisions than cuts.”

Ms. Subramanian, in the same report, writes that U.S. biotechnology stocks are the most attractive market sector. See details in excerpt below.

“@SBarlow_ROB ML likes biotech, US relatively expensive” – (research excerpt) Twitter

“US stocks on track to extend record run after strong inflows” – Financial Times (paywall)

******

A very useful blog post from New York-based Ritholtz Wealth Management reminds investors that reading market information is not enough – it’s more of a minimum requirement,

“Almost everyone has the sum total of human knowledge in their handheld pocket supercomputer these days. It’s skill that now makes the biggest difference but even talent alone can only take you so far in life. Once a person reaches a certain level of performance, even additional years of practice won’t help them improve if they don’t approach it the right way. Going through the motions doesn’t improve your skills because you’re never pushed outside of your comfort zone.’

“Knowledge vs. Skill” – A Wealth of Common Sense

******

Tweet of the Day:

Diversion: “Wealthy L.A. Schools' Vaccination Rates Are as Low as South Sudan’s” – The Atlantic

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe