A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web
CIBC’s Ian de Verteuil put two and two together in a Monday report, noting that the U.S. and China trade agreement is not good for Canada,
“The big concern is that this deal effectively sees two of the world’s biggest economies striking an arrangement, which provides the U.S. with preferred supplier status on a variety of products. The major risk comes from the EU It is already embroiled with the U.S. on steel and aluminum tariffs, tit-for-tat action over subsidies for aircraft manufacturers, an outstanding risk on auto tariffs and an emerging debate related to digital services taxes (targeting big U.S. technology companies)… [the deal] should also rightly be a concern for Canada, Brazil and Australia, all of whom have been big agricultural suppliers to China. It is difficult to see how China would fulfill its commitments to the U.S. without scaling back purchases from these three agriculture powerhouses.”
“ @SBarlow_ROB CM: "The big concern is that this [trade] deal effectively sees two of the world’s biggest economies striking an arrangement which provides the U.S. with preferred supplier status" – (research excerpt) Twitter
BoA Securities (the renamed Merrill Lynch), published the results of their widely read survey of global portfolio managers.
The most relevant findings were (my emphasis):
“January FMS [ Fund manager Survey] bullish, but not euphoric; BofA Bull & Bear Indicator holds at 6.9, below "extreme bullish" 8.0 level … FMS investor equity overweight creeps up to 32% from 31%; historic "tops" in stocks have coincided with FMS equity allocation >50% .. global growth expectations rose, but did not surge to "boom" levels … On crowded trades: #1"long US tech & growth stocks" (50%...most extreme FMS long position since "long FAANG+BAT" in Aug'18); #2 "long IG corporate bonds" … Contrarian trades: if macro surprises to upside…buy industrials & energy, UK stocks; if US dollar depreciation too consensus…sell EM, gold; if Fed liquidity spigot to tighten sell US tech & growth”
“@SBarlow_ROB BoA global fund manager survey summary’ – (research excerpt) Twitter
See also “ @SBarlow_ROB ... "a distinct sense of client confusion"’ – (Citi research excerpt) Twitter
Collaborative Fund’s Morgan Housel wrote what might be the best sentence on personal finance I have ever read, “When most people say they want to be a millionaire, what they really mean is ‘I want to spend a million dollars,’ which is literally the opposite of being a millionaire”.
In a Monday post, Mr. Housel expanded on this theme using exercise and diet as a metaphor,
“The majority of those exercising for weight loss either lose no weight or not nearly as much as they should. The reason, the researchers found, is simple. Exercising makes you feel like you accomplished something healthy, which can rationalize a post-workout food binge… Financial wellbeing can’t be measured by merely looking at how much you earn. The gap between what you earn and how much you avoid offsetting those earnings is the figure that matters most. And even though the majority of Americans earn more today than ever before, it might not feel that way because the gains have been offset with higher spending.”
“Wealth Is What You Don’t Spend” – Housel, Collaborative Fund
Newsletter: “America’s fading brands a trap for investors” – Globe Investor
Diversion: “ China is taking its rivalry with the U.S. to Mars” – Bloomberg
Tweet of the day: