A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web
Canadian and U.S. employment results were released pre-market Friday.
Domestically, employment declined by 7200 jobs, when a gain of 6000 was expected.
For the Americans, 196,000 new jobs were announced, versus projections for 177,000.
Merrill Lynch strategists believe that the 2019 equity market rally is almost played out,
“The U.S. benchmark S&P 500 stock index will scale new peaks above 3,000 in the second quarter before topping out, Bank of America Merrill Lynch (BAML) said on Friday … The bank’s strategists said they expect the U.S. stock market to peak in the current quarter after hitting all-time highs fueled by gains in banks and oil stocks.”
“Beginning of the end: BAML sees S&P500 rally topping out in second quarter” – Reuters
Credit Suisse economists have a much more optimistic outlook,
“Turning point, not tipping point… the slowdown may already be over. We remain of the view that cyclical momentum will improve through the remainder of this year, and maintain our forecast of 2.9% global GDP growth in 2020. There are signs of improving economic momentum in Asia – the origin of much of the recent weakness. Policy has eased substantially in China. Domestic demand in developed economies, and its drivers, remains resilient.”
The report goes on to compare the near term outlook to the market recovery in 1998 and 1999, but I personally don’t remember that time fondly. The large cap technology companies drove indexes into the stratosphere but the rest of the market was a minefield, with the crushing disaster of 2000 just around the corner.
“@SBarlow_ROB CS: Turning Point, not tipping point.” – (research excerpt) Twitter
Real estate expert John Pasalis discussed why the Toronto and Vancouver housing markets are moving in different directions for BNN Bloomberg,
“Why is Toronto's Real Estate Market Doing Better Than Vancouver's” – Move Smartly / BNN Bloomberg
Jim O’Neill, the economist who invented the BRIC acronym, is concerned about the Chinese economy,
“Jim O’Neill said that China has become an integral part of the global economy, and any slump would have the potential to drag other major economies lower. ‘I have to say, for the past year, for the first time in 30 years I have been a bit more troubled about some aspects of China’s path than I have been before,’ the former Goldman Sachs Asset Management chairman told CNBC’s Steve Sedgwick on Thursday… “'I hope the policy initiatives that the Chinese authorities have just undertaken since the turn of the year, which are very geared towards the consumer are going to help. Because otherwise that would be troubling,' he said.”
Canadian investors are very much exposed to Chinese growth through mining and energy stocks.
“Economist Jim O’Neill says his fears over China are at a 30-year high” – CNBC
“We won't have to wait long for a clearer picture of China's economy” – Bloomberg
Tweet of the day:
BAML: "It's the best year ever…commodities annualizing a price return of 84.8% YTD, i.e., better than 1973, best year ever for commodities; global stocks annualizing 67.9%, i.e., better than 1933, best year ever for stocks."— Katie Martin (@katie_martin_fx) April 5, 2019
Diversion: “This life-size Flintstones replica home is creating a rocky public spat between the owner and a San Francisco suburb” – Bloomberg
Newsletter: “Real estate vs. equities” – Globe Investor