I trust his math, but strongly suspect this trade idea from U.S. investor and author Michael Batnick is tongue in cheek in the sense that it’s too high risk to implement now. It does highlight the past strength of both momentum investing strategies and FANG stocks,
“This strategy has returned 2,520 per cent over the last 10 years: If the S&P 500 closes above the 200-day moving average, buy Amazon. If it closes below, don’t worry about it.” – Twitter
Right now, the 200-day moving average is at 2679, more than 100 points below the current trading level of about 2,798.
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UBS strategists have attempted to estimate the effects of a trade war on equity markets,
“In our Trade War scenario we see Global GDP growth decelerating by 108 basis points led by the U.S. (245 bps) and China (233bps)… Implications for equity markets could be severe, ranging from the U.S. down 21 per cent, Europe down 25 per cent and Asia ex-Japan down 24 per cent. “
“@SBarlow_ROB UBS: Trade war could send SPX down 21%” – (research excerpt) Twitter
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Merrill Lynch economists have an interesting interpretation of the Bank of Canada’s rate hike intentions, emphasizing that the central bank might not be much moved by trade concerns when raising rates,
“Many times trade uncertainty has been used to argue that the BoC should not be hiking, as an increase in U.S. protectionism would decelerate Canadian activity. But Governor Stephen Poloz made two points clear today. The first is that an increase in U.S. protectionism would weaken Canadian growth but also would put upward pressure on inflation by increasing prices and weakening the Canadian dollar. Monetary policy is therefore ‘ill-suited’ to help cushion the potential blow to activity because it has to make sure inflation expectations remain well anchored. We could not agree more. “
“@SBarlow_ROB ML on BoC: “Monetary policy “ill-suited” to counter protectionism”” – (research excerpt) Twitter
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Oil markets are enduring their worst week in months but Citi joined the chorus of experts who believe the selling is overdone,
“The sharp move looks to have been driven down by machine trading… The fundamentals for oil continue to look tight for the summer, where crude demand is some 2-m b/d above April given refinery dynamics, and which should last through the summer. Oil inventories remain low on an absolute level as well as on days of demand cover, and are expected to draw further through 2H’18.”
“@SBarlow_ROB Citi: Crude sell-off ‘machine driven’” – (research excerpt) Twitter
“Oil falls for second week as supply concerns ease” – Reuters
“Oil is set for its worst week in 5 months” – Bloomberg
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Tweet of the Day: “@RobinWigg Goldman Sachs recommends investors buy cybersecurity stocks ahead of the mid-term election.... “ – (research excerpt) Twitter
Diversion: “Canadian immigration sentences to ponder” – Marginal Revolution
Scott Barlow