A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web
The Teranet-National Bank housing price indices were releaseD this morning. The aggregate increase of 0.6 per cent hides a lot of action under the surface as National Bank’s Marc Pinsonneault explains,
“The national HPI has been depressed by 12 consecutive months without a rise in Vancouver’s index, which dropped a cumulative 6.6%. Other Western metropolitan areas (Victoria, Calgary, Edmonton, and Winnipeg) also contributed to slow the national HPI. At the opposite, annual growth has been decent in most of the regions located in the central and eastern part of the country (left chart). That being said, home sales in August were up 55% from March in Vancouver, where market conditions went from “favorable to buyers” to “balanced” (right chart). Over that period, home sales rose 19% in Calgary and 12% in Edmonton. These improvements, if sustained, will sooner or later help limit home-price deflation in this region.”
“@SBarlow_ROB Ottawa is Canada’s hottest housing market” – (research excerpt, chart) Twitter
Markets have been preoccupied with central bank policy, but we still have this growth and earnings problem.
Economically sensitive companies, like FedEx Corp. and steelmaker Nucor Corp., are guiding earnings lower and the OECD lowered its global growth forecast Thursday,
“The global economy will see its weakest growth since the 2008-2009 financial crisis this year, slowing from 3.6 per cent last year to 2.9 per cent this year before a predicted 3.0 per cent in 2020, the OECD said… “What looked like temporary trade tensions are turning into a long-lasting new state of trade relationships,” OECD chief economist Laurence Boone told Reuters.”
It’s third- and fourth-quarter profit estimates that should concern investors, in my opinion.
Third-quarter S&P 500 earnings are expected to come in below zero, but there’s optimistic forecasts for the fourth quarter that are increasingly in danger of coming down, which will likely cause equity selling. U.S. profit estimates for the next fiscal year have been cut by 0.44 per cent in the past month, which doesn’t sound like much, but it adds up in a hurry if the trend continues.
“OECD cuts global economic growth outlook to post-crisis low” – Report on Business
“ OECD warns of weakest global economic growth in a decade” – Bloomberg
“@SBarlow_ROB Bespoke: "FedEx (FDX) Delivers an Earnings Bust" – (research excerpt) Twitter
Nomura chief economist Richard Koo, among the industry’s more interesting thinkers, published a report after a series of meetings with Chinese officials,
“People in China are uncertain how to respond to the US president’s unpredictable behavior and that (2) a wide rift exists between their views of the US and what is actually going on in Washington. Many of those I spoke to felt that most of Mr. Trump’s demands made sense and should be accepted. Their concern, however, was that if China were to acknowledge that in the negotiations, the US would respond by ratcheting up its demands even further… there appears to be much debate over the question of whether China should try to hammer out a deal with Mr. Trump or instead wait a few years and try negotiating with someone else.”
“@SBarlow_ROB Koo: "much debate over the question of whether China should try to hammer out a deal with Mr. Trump or instead wait a few years and try negotiating with someone else" – (research excerpt) Twitter
CIBC’s synopsis of the Fed decision on monetary policy was the most efficiently succinct,
“If a central bank can seems a bit hawkish on the very day they announce a rate cut, the Fed may have managed to do just that … While approving a quarter point cut on the target rate … the Fed avoided promising a lot more to come. The “dot” forecast doesn’t have any further cuts this year or next, in terms of the median dot’
“@SBarlow_ROB CIBC on the Fed” – (research excerpt) Twitter
Tweet of the Day:
Don’t give V for victory sign with fingers in photos, as criminals can extract the fingerprint data for cybercrime if photo taken from less than 5 feet away, Shanghai security expert says. https://t.co/niyuU42CKW— Keith Bradsher (@KeithBradsher) September 19, 2019
Diversion: “A few years ago, each 1-gallon bottle of organic, fair-trade vanilla set him back $64. Today, it’s $245, more than Newman can comfortably stomach” ... “Our Love Of ‘All Natural’ Is Causing A Vanilla Shortage” – NPR
Newsletter: “Wall Street turns against dividend stocks” - Globe Investor