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

Equity markets are likely to be moving in a big way when trading begins next week as Donald Trump and Chinese leadership are set to discuss trade policy Saturday.

The most probable outcome of the talks is a temporary truce, as Merrill Lynch quantitative strategist Savita Subramanian writes,

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“Expect the expected: de-escalation but no deal . Presidents Trump and Xi will hold an "extended meeting" at the upcoming G-20 summit, raising hopes of a trade truce. Consensus expects can-kicking, but no rolling back of tariffs that are already in place. With above-trend economic growth and the S&P 500 at an all-time high, there is no sense of urgency on the part of the US to reach an agreement. Under a "real deal", the S&P 500 could rally as high as 3100 (more below). But if additional tariffs are implemented, the S&P 500 could sustain a 5%+ move lower.”

“@SBarlow_ROB ML: Expect the expected Saturday” – (research excerpt) Twitter

“Trade uncertainty stops world stocks in their tracks” – Report on Business

“In conversations with world leaders, Xi spared no opportunity to paint the U.S. as the bad guy without naming Donald Trump ahead of their G-20 meeting” – Bloomberg

“Trump says no tariff reprieve for China, expects productive talks with Xi” – Reuters

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Barclays research provides three reasons crude is set to rally,

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“We see several supply-side risks likely offsetting slower demand growth. First, tighter U.S. sanctions have caused a greater-than-expected reduction in Iranian supplies … we also forecast Venezuela crude production to average 0.9 mb/d in the second half but the odds of a prolonged crisis, in which output drops to as low as 0.5 mb/d by year-end, are rising… Third, U.S. crude production in recent months reflects a continued slowdown in yoy growth”

“@SBarlow_ROB Barclays: 3 reasons oil is headed higher” – (research excerpt) Twitter

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Legendary industrial designer Jony Ive announced he is set to leave Apple Inc. in a move that, to me, feels like the severing of the last link to Steve Jobs,

“Apple said Ive will continue work on its products at his new venture, but shares fell as much as 1.5% to $197.44 in after-market trading, wiping about $9 billion from the firm’s value. Ive spent nearly three decades at Apple, leading the design of the candy-colored iMacs that helped Apple re-emerge from near death in the 1990s to the iPhone, regarded by some experts as one of the most successful consumer products of all time. “It’s the most significant departure of somebody who was a core part of the growth story” under Jobs, said Ben Bajarin, analyst with Creative Strategies.”

“Apple design chief Jony Ive, Steve Jobs' confidant, to leave and start own firm” – Reuters

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I agree with the Financial Times’ Gillian Tett – markets are not worried enough about the patent absurdity of US$13-trillion in negatively yielding bonds,

“Some investors might feel tempted to shrug their shoulders. When negative rates first appeared two decades ago in Japanese yen money markets, they triggered so much shock that local bank computing systems went haywire … However, it would be a profound mistake for investors to ignore what is now under way or simply presume that they have seen it before… investors, economists and policymakers are increasingly pointing to long-term structural explanations for the shift to negative rates. They cite demographics, specifically that the ageing of developed world populations may be suppressing demand, and speculate that technological innovation may be dragging prices down. Some also argue for secular stagnation, which is when low demand and a reluctance to invest creates a self-reinforcing downward loop.”

“Negative interest rates take investors into surreal territory” – Financial Times (paywall)

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Tweet of the Day: “@CNBC A trade war would have a “devastating effect on the global economy,” Morgan Stanley CEO James Gorman said. cnb.cx/2NfZJuM “ – (link to video) Twitter

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Diversion: “ All 21 Pixar movies, definitively ranked” – Vox

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