A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web
Blowout Canadian employment numbers were released at 8:30 a.m. ET.
Economists expected 5,000 new jobs and got 67,000 instead. The loonie jumped about half a cent higher on the results.
Equities sold off Thursday on news from the U.S. government that negotiations on a U.S./China trade deal are going nowhere. Recognition of a slowing global economy was also cited , but that’s really been a consistent part of the investing backdrop in recent weeks during the market rally.
“Stocks fall on renewed pessimism over U.S.-China trade deal” – BNN Bloomberg
“Premarket: Global markets cautious as ‘economic skies darken’” – Report on Business
“The Stock Market Finally Acknowledges Reality” – Bloomberg
Bloomberg provided another example of how the Canadian small-cap market can be a cesspool,
“Eleven Canadian penny stocks hoped a name change would propel them into the next investor frenzy. Last year, these stocks, hovering around $1 changed their name to include "cannabis" in the hopes that their share price would get a lift from the pot investing craze. But they weren’t so lucky. Since each changed their name, the penny stocks dropped an average of 30.2 percent through Feb. 6 and only one -- Trulieve Cannabis Corp. -- rose through yesterday’s close… Prior to the name change, more than half of these penny stocks were involved in the precious metals business.”
“Penny Stocks Foray Into Cannabis Fails to Catch Investor Fever” – BNN Bloomberg
Financial Times columnist John Dizard throws cold water on the outlook for infrastructure-related investment. I was struck by how contrarian this seems,
“According to IJGlobal’s estimate, infrastructure funds raised a record$102.3bn last year, beating the previous high of $88.2bn in 2015… My view is that since infrastructure funds are now really big, as in trillions and trillions, along with more trillions available from co-investment, they cannot be counted on to earn higher rates of return than the long-term growth of population and productivity."
"In advanced countries with the rule of law, both working-age population and productivity growth are declining. Promises of double-digit returns for years and years or decades cannot be true. Sorry.”
“Investors are wrong about both hedge funds and infrastructure” – Financial Times (paywall)
The Massachusetts Institute of Technology’s Technology Review site provided some analysis on the Green New Deal environmental strategy proposed (quixotically, in the short term) by U.S. Democrats,
“the proposal betrays a clear preference for natural solutions and renewable power, with perhaps a grudging acceptance that other technologies may be required. The broader question, of course, is how much this proposal will matter. It certainly won’t become law in anything like this form under the current Congress and president. And whether it’s economically feasible to overhaul nearly the entire energy sector in a decade is highly questionable. Energy researcher Christopher Clack, chief executive of Vibrant Energy, found it would cost around $27 trillion "to build, operate and retire" all the necessary plants by 2030, he said on Twitter. That would run approximately $2.7 trillion a year.”
“The Green New Deal has been released. Here are four key tech takeaways” – M.I.T. Technology Review
Tweet of the Day:
"if you want a rough idea of bitcoin’s recent trajectory, imagine a group of drunk teenagers falling down a London Underground escalator — while lecturing each other on the future of capitalism."— Katie Martin (@katie_martin_fx) February 8, 2019
Read this! It has crypto and Crohn's disease and everything https://t.co/yBRjObzext
Diversion: “For a commission of inquiry into SNC-Lavalin and the Prime Minister’s Office” – Maclean’s
Newsletter: Diary of a Failed Stock Trade – Globe Investor