A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web
Trade tensions between China and the U.S. have re-intensified, the entire German yield curve is now negative-yielding, and Japan and South Korea are also fighting a pitched political battle over trade.
The trade frictions will slow global economic growth, and any global bond manager will be re-allocating to U.S. Treasuries and Canadian bonds to increase portfolio income.
In short, there is nowhere to go but down for North American bond yields for the foreseeable future.
“China warns of ‘necessary countermeasures’ to Trump’s increased tariffs” – Report on Business
“@daniburgz *GERMAN 30-YEAR YIELD FALLS BELOW ZERO PERCENT FOR FIRST TIME like what, did you expected to hold the entire German curve and not pay a fee? get outta here. “ – (chart) Twitter
“South Korea says ‘won’t be defeated again’ as Japan trade row spirals” – Reuters
“@SBarlow_ROB Jefferies: global bond fund buying of USTs likely to set record” – (research excerpt) Twitter
Crude prices were thrashed Thursday in the wake of Donald Trump’s announcement of new tariffs on Chinese goods.
Oil markets have regained their footing a bit Friday morning,
“Front-month Brent crude futures slumped more than 7%, a percentage change equivalent to more than 3 standard deviations for all daily price moves since 1990. Futures prices have fallen by 7% or more on only 44 days out of more than 7,500 trading days in the last three decades, suggesting traders were blindsided by the White House move. The last time prices moved 7% in either direction was on Dec. 26, 2018, in thin post-Christmas trading, and before that on Nov. 30, 2016, when OPEC announced output cuts.”
“Oil plunges as U.S. tariff threat boosts probability of recession: Kemp” – Reuters
“Oil prices rebound more than 2% after plunge on Trump’s tariff vow” – Reuters
Citi strategist Robert Buckland chose “global cash cows” as his top investment strategy.
Mr. Buckland screens for “highly profitable, capex-light global companies that are returning more to shareholders than they reinvest in their businesses.”
Top picks in the theme include Visa Inc., Checkpoint Software Technologies Ltd., Proctor and Gamble Co , McDonalds Corp. and Cisco Systems Inc..
Full table of cash cow stocks posted on social media here .
Tweet of the Day:
I find this chart endlessly fascinating. Here, writ large, are the hopes and dreams and inherent biases of humanity manifesting themselves over and over again. It's like a painting of the futility of trying to escape human nature. We are doomed to repeat EPS forecasts every year. pic.twitter.com/zwm96wUCnb— Tracy Alloway (@tracyalloway) August 2, 2019
Diversion: “Scientists are making human-monkey hybrids in China” – M.I.T. Technology Review