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

Canadian GDP growth results for Q4 were released at 8:30 a.m. ET.

The domestic economy grew at 0.4 per cent annualized when 1.0 per cent was expected by economists.


Riholtz Wealth Management director of research Michael Batnick writes that the year to date equity rally “makes a mockery of risk management,"

“The S&P 500 just rocketed 18% higher in only 44 days. A bounce of this magnitude makes a mockery of risk management. This is the ninth time stocks have experienced a killer vee bottom since 1970. I refer to them as killer vees because they suck for everyone. It makes buy and hold investors sweat and it makes mincemeat of most tactical investors… Vee bottoms suck for tactical strategies, but they’re alright for the do nothing portfolio. A Jekyll and Hyde portfolio can be frustrating at times, but diversification is the hardest free lunch in investing.”

“Killer Vees” – Irrelevant Investor

Newsletter (also featuring Mr. Batnick): “Why the numbers always count, 15 TSX dividend stocks with solid fundamentals, and Canadian investors slow to join the indexing bandwagon” – Globe Investor


Citi analyst Robert Buckland warns global investors that defensive, (usually dividend paying) stocks aren’t very defensive,

“[Developed market]- listed company net debt/EBITDA has converged on 1.5-2.0x. In [emerging markets] it has dropped to 0.8x. Investors worried about DM company debt levels should favour EM companies, which are paying down debt. Defensive Stock Leverage Up, Cyclical Stock Leverage Down — Since 2014, net debt/EBITDA for the global defensive sectors has risen from 1.9x to 2.1x. For cyclical sectors it has fallen from 1.4x to 1.2x. Undefensive Defensives — Price behaviour in financially leveraged defensive stocks is changing. They no longer outperform a falling market. Their share prices are increasingly correlated to credit spreads”

“@SBarlow_ROB C: Undefensive defensives” – (research excerpt) Twitter

“ Should wealth managers be buying cyclical or defensive stocks?” – (paywall) Financial Times


BMO economist Benjamin Reitzes reports that Canadian trade “got ugly” in late 2018,

“Canada’s current account deficit widened more than expected in Q4, extending the string of annual deficits to a full decade … things don’t look pretty, with the deficit needing to clock in at more than $4 bln (which would be a record) to hit the figures in Thursday’s current account report… the weaker trade backdrop introduces some meaningful downside risk to [GDP] forecasts, which are clustered around 1%.”

“@SBarlow_ROB BMO: Trade Got Ugly in Q4” – (research excerpt) Twitter


Manufacturing data was released overnight from Europe and China and it included fodder for bulls and bears on the global economy. Europe-wide results were terrible, China’s were still weak but showed signs of recovery,

“ China's manufacturing activity shrinks again in February but at slower pace” – Reuters

“ Eurozone manufacturing sector contracts in February” – Markit


Tweet of the day:

Diversion: “Workism Is Making Americans Miserable” – The Atlantic

My print column for Friday: “Here’s how to tell how much longer this market rally will last” – Barlow, Inside the Market