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

Citi U.S. equity strategist Tobias Levkovich publishes a weekly “Monday Market Musings” report that has provided valuable insights during the recent bout of market volatility. This week, Mr. Levkovich argues that the S&P 500 has not made a sustainable bottom,

“Too many clients are asking about seasonal rallies. There is reason to argue for an equity market rebound over the last two months of the year but we suspect that the damage done in the past few weeks may require further “repair” work. Fund manager confidence is shaken and may take some time to be regained as was the case after February’s pullback with the current correction feeling far worse. Questions about which sectors to buy and at what price levels should one just lean into stocks does not reflect a fearful investment community.”

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The strategist is threading a needle here by writing both that fund managers are lacking confidence while simultaneously looking for a seasonal rally. My suspicion is that he’s assessing which managers are showing each tendency, and reaching the conclusion that the reflexive buy the dip managers are wrong.

“@SBarlow_ROB Levkovich: “too many clients are asking about seasonal rallies”” – (research excerpt) Twitter

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A number of factors, the potential for trade wars most trenchantly, have major investors concerned about global economic growth,

“The most likely fundamental trigger for the severity of the equity correction was an increase in investors’ perceptions of downside, or even recessionary, risks to the global economy… According to the latest nowcasts, activity growth in the world economy has slowed from a peak of 5 per cent a year ago to only 3 per cent now, about 0.7 per cent below trend. Much of this decline has occurred in the last couple of months. Growth has declined almost everywhere. China has slowed from 7.4 per cent a year ago to 5.3 per cent now, the lowest growth rate since the serious downturn in 2015. The Eurozone has also reported disappointing data throughout 2018”

“Global slowdown begins to look more troublesome” – Davies, Financial Times (paywall)

“Premarket: Stock rally peters out as trade, Fed worries dominate” – Globe Investor

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“Global synchronized growth is back...with everyone slowing down” – Bloomberg

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Global oil prices are lower Monday, although not by much.

Energy markets had expected U.S. sanctions on Iranian oil to cause a supply shortage but president Trump granted a number of waivers late last week permitting some of Iran’s biggest customers to continue importing the country’s oil,

“The oil market's two-year bull run is running into one of its biggest tests in months, facing a tidal wave of supply and growing worries about economic weakness sapping demand worldwide. After topping out at more than $75 and $85 a barrel just a month ago, both U.S. crude and Brent benchmark futures have grappled with near-relentless selling. For a time, prices had some support on hopes that renewed U.S. sanctions on Iran would force barrels off the market. That changed in the last week. The world's three largest producers - Russia, Saudi Arabia and the United States - all indicated they were pumping at record or near-record levels, while the United States said it would allow waivers that could allow buyers to keep importing Iranian oil, lessening the threat of a supply crunch..”

“Oil rally faces tidal wave of supply” – Reuters

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“Oil slips as U.S. sanctions on Iran begin, Tehran defiant” – Reuters

Counterpoint: “Worst may be over for Canada's oil market: Scotiabank analyst” – BNN Bloomberg

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Tweet of the Day:

Diversions:

“Canada’s 20 most dangerous places” – Macleans

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“These are the safest places in Canada” – Macleans

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