A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web
Goldman Sachs U.S. equity strategist David Kostin highlighted increasing policy risk for markets and suggested a list of “idiosyncratic” growth stocks – those without sensitivity to the global economy – for outperformance,
“In the US, the performance of stocks exposed to US government spending and US-China trade demonstrates ongoing investor uncertainty. Our preference for the Info Tech and Communication Services sectors is reinforced by their relatively low historical correlations with economic growth. Similarly, the idiosyncratic growth profiles of the 27 stocks in our updated global secular growth screen are particularly attractive in an environment of elevated economic policy uncertainty.”
The list of stocks includes Amazon.com Inc., PDC Energy Inc. and ASOS PLC . Full table below
“@SBarlow_ROB GS: "In an environment of elevated global policy uncertainty, focus on stocks with strong idiosyncratic growth " – (research excerpt) Twitter
@SBarlow_ROB GS: ‘idiosyncratic’ growth stocks to outperform” – (full table) Twitter
“27 stocks for indiosyncratic growth theme” – Bloomberg
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Huffington Post is not my favourite source for economic analysis (I don’t think it’s uniformly bad either), but “ 10 Charts That Show How Out Of Whack Things Are In Canada’s Housing Markets” is data focused, allowing readers to make their own conclusions. The house prices to income and “There aren’t enough new residents to prop up Vancouver’s market” charts were most notable for me,
“10 Charts That Show How Out Of Whack Things Are In Canada’s Housing Markets” – Huffington Post
“These Are The Most Unaffordable Property Markets” – Bloomberg
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HSBC believes that fears regarding the Chinese economy are overdone, which is good news for investors as the country has generated about 30 per cent of global GDP growth and 50 per cent of global commodity demand in recent years,
“We see three major reasons to be more positive on China: China growth to stabilize: Recent concerns have flared on the back of a run of weak data; we expect this to stabilize… Policymakers have sufficient levers to counter headwinds and we expect modest monetary stimulus and tax cuts. Sentiment on China has deteriorated meaningfully: .. The latest readings suggest sentiment of analysts has deteriorated, while corporates remain more confident. As such, any trade deal between the US and China could provide considerable support and slow the downward momentum in earnings revisions. Valuations look to be pricing in the risks: DM stocks with China exposure are trading at a 1.5 standard deviation discount. These stocks have on average typically outperformed the MSCI World by over 20% one-year forward when our China sentiment indicator falls to current levels.”
“@SBarlow_ROB HSBC: Market too bearish in China “ – (research excerpt) Twitter
“Oil edges down as slowing China economy undermines markets” – Reuters
“China's economy slows to the weakest pace since 2009” – Bloomberg
“Mixed bag: Economists see positives and negatives in China data” – Financial Times (paywall)
“China has ample room for macro policy support: stats bureau chief” – Reuters
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Tweet of the Day:
Diversion: “ Runner found to be a hitman after GPS Watch ties him to crime scene” – Runner’s World
Scott Barlow