Skip to main content

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

Speeches by U.S. Federal Reserve members Tuesday indicated that the monetary punchbowl will not be as large as hoped. Markets reacted with petulance, selling stocks,

“St. Louis Federal Reserve Bank President James Bullard on Tuesday said he does not think the U.S. economic situation is dire enough to warrant cutting rates by a half-percentage point at its next meeting in July, even though he pushed to lower rates last week. “Just sitting here today, I think 50 basis points would be overdone,” Bullard said in an interview with Bloomberg Television.”

Story continues below advertisement

“Fed pushes back on aggressive U.S. rate cut views” – Reuters

***

Citi strategist Edward Morse noted “mid-year madness” in commodity markets,

“Recent darlings iron ore and grains will likely see their sharp returns fading into 2020, while crude oil and copper will likely move from the losing to the winning columns and gold and platinum continue to hold pole positions … with this week’s G-20 meeting and Citi’s view of at least a truce and a handshake between the leaders of the two largest national economies on the horizon, along with expectations of new stimuli from China’s Politburo meeting next month, we are bullish copper … Inventories look finally to be falling briskly, OPEC+ is keeping production cuts in place perhaps into 2020, and geopolitical risk is high – any American accidental loss of life in an accident-prone Middle East could on its own result in a $10 price spike on anticipation of military conflict rising and disrupting flows.’

“@SBarlow_ROB C: How to benefit from 'midyear mayhem' in commodities” – (research excerpt) Twitter

***

Also from Citi, Tony Larkin warns that rate cuts are not a panacea,

Story continues below advertisement

“Central Bank stimulus is no Panacea. Rate cuts/QE, assuming timed correctly and sufficiently outsized, would seek to avoid a deep recession and underpin economic growth (hopefully without an inflation shock) So, we are off to the races! We advise taking a step back and asking why CB intervention is required? Because all is not well. And it is not just the deepening negative impact of trade wars, many economies were already struggling to grow. Moreover, ‘kicking the can down the road’ and extending the cycle has the risk of creating bubbles and that suggests greater pain later.’

“@SBarlow_ROB C: rate cuts no panacea” – (research excerpt) Twitter

***

Goldman Sachs estimates that markets have priced in a 20-per-cent probability that upcoming trade talks between the U.S. and China will provide a significant resolution to the ongoing dispute.

According to the Financial Times, China might be more motivated as exporting firms warn of financial pressure,

“More than a quarter of [Chinese exporting] firms now believe that the trade war is a permanent fixture of relations with the US, and not just a passing feature of the Trump administration … our latest survey suggests the trade war is increasingly painful for exporters, with 37 per cent of the 200 companies polled in June saying it was having some or a very negative impact on their business. “

Story continues below advertisement

“China exporters warn of slowdown in trade war's shadow” – Financial Times (paywall)

“Trump’s Trade War With China Is Already Changing the World” – The Atlantic

***

Tweet of the Day:

Diversion: “Unprecedented intervention-based experiment suggests that internet use doesn’t change brain structure after all” – PsyArXiv

Related topics

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter
To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies