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

Merrill Lynch economist Carlos Capistran is part of the chorus predicting a Bank of Canada rate hike Wednesday morning, citing wage growth and a desire to keep up with Fed rate raises,

“Hourly earnings growth slowed to 3.5% yoy (E. 3.7%) from 3.9% a month ago, but the pace remains strong. Goods-producing industry wages increased 3.7% yoy from 4.2% yoy in May; however, this level remains above the average since January 2000, while in services wages increased 3.6% yoy from 3.9% yoy in May. The increase in wages continues to show that the labor market is tight and that it will put pressure on inflation in the following months. We expect the Bank of Canada to hike 25bp on July 11. The labor market remains tight enough to warrant further rate hikes. Furthermore, inflation is above the target and the US Fed continues hiking.”

“@SBarlow_ROB ML: BoC will hike” – (research excerpt) Twitter

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In a separate report, Merrill Lynch removed Tiffany and Co from their list of top U.S. stock tips. The full list (link HERE ) includes Goldman Sachs, NVIDIA and Northrup Grumman.

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A Financial Times column warns that technology stocks are becoming dangerous investments,

“On some measures the gap between unloved value stocks and hot growth ones matches the excesses of the peak of the internet bubble in 2000... Such polarisation is typical of a very late stage bull market. Average stocks of average companies are being shunned in favour of an elite group of stocks that appear immune to economic headwinds and competitive pressures. This narrowing of focus is never healthy, especially when the ascent of the chosen few becomes parabolic as investors grow increasingly worried about everything else.’

“Why investors should be worried by all-conquering tech stocks” – Financial Times (paywall)

“Morgan Stanley turns more defensive on stocks, downgrades technology” – CNBC

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I didn’t intend to make today Merrill Lynch Day, but their research makes up the majority of the best stuff I have. The company’s energy strategist Francisco Blanch outlined how a combination of Iran sanctions and Saudi production struggles could push crude prices higher by US$50 per barrel,

“With OECD oil inventories coming down and the oil market poised to remain in deficit, the core question here is if Saudi can fill the gap as the US increases the pressure on Iran. How high could oil prices go from here? It may be complicated politics, but it is simple math. We estimate that every million b/d shift in S&D balances would push the oil price by $17/bbl on average. So based on those assumptions, we estimate zero Iran exports could push oil up by $50/bbl if Saudi caps out”

“@tracyalloway Zero oil imports from Iran and a tapped-out Saudi would add $50 to the price per barrel, according to BAML estimates.” – (research excerpt) Twitter

“OPEC says it’s doing best to supply #oil market but won’t overdo it” – Bloomberg

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Tweet of the Day: This graphic from Reuters underscores the extreme difficulty of the Thai cave rescue,

Diversion: ““People who think their opinions are superior to others are most prone to overestimating their relevant knowledge...” – Climateer Investing

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