A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web
Employment data on both sides of the border were released Friday morning at 8:30 a.m. ET.
Domestically, a loss of 2,200 jobs was reported when a gain of 9,900 jobs was expected.
In the U.S., the economy added 224,000 new jobs when a smaller gain of 160,000 was predicted.
Citi strategist Robert Buckland believes there’s a market dip coming and it will be a great time for investors to buy,
“Citi strategists forecast a 3% gain in global equities to mid-2020. Our Bear Market Checklist (4/18 red flags) would buy the next dip. We are Overweight US and UK equities, which look cheap despite Brexit concerns. A sharp global economic slowdown remains the biggest risk to our optimistic view. More Downgrades Likely — While the analyst consensus for global 2019 EPS now looks realistic, 2020 still looks too high to us. The bottom-up forecast of 11% growth compares to our top-down 7% estimate. Downgrades are unhelpful, although not necessarily fatal for market returns.’
“@SBarlow_ROB C: Buy the next dip” – (research excerpt) Twitter
CIBC ‘s interest rate strategist Ian Pollick should be wider-read in my opinion.
In his report issued Friday, Mr. Pollick discusses the “ONLY” question for Canadian investors,
“The ONLY question in Canada right now: is the data simply rebounding or going through a renaissance? … Our partners in CIBC Economics had been forecasting a rebound in growth to 2.60% in Q2-19, but yesterday's international merchandise trade report now puts considerable upside to this forecast … the paramount question is whether or not the recent strength in Canadian data is the start of something 'bigger' or, a reversal of transitory factors that suppressed growth for the past six months. If we dissect the trade report yesterday, it is readily apparent to us that some of the sectors that contributed the most to export growth exhibited very large standard-deviation moves relative to normal trends.”
“@SBarlow_ROB More Pollick – (research excerpt) Twitter
A Bloomberg report highlighted the “unseemly” reach for yield in Europe amidst negative-yielding government bonds,
“A pervasive fear of missing out on even the slightest hint of yield has created an unseemly buying frenzy that has swept across Europe … fund managers who, all year, had sat on the sidelines in the belief that they could not get any lower are now finding that their performance has fallen behind... this tectonic shift in fixed income is forcing them to make purchases that in the cold light of day defy logic… One important law of financial logic – if you lend money for longer, you should see a higher return – has been broken. Long bond yields around the world have dropped below the official overnight rates of central banks. The time value of money has essentially disappeared. ‘
“Is It a Bond? Please Can I Have It? Right Now?” – Bloomberg
Tweet of the Day:
Diversion: “The global capital flows cycle and its drivers: Not only a US monetary policy story” – VoxEu