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

BMO economist Doug Porter warns that storm clouds are on the horizon for domestic manufacturers,

“The household survey suggests a cooldown is coming (where manufacturing jobs were up just 0.2% y/y in October). Similarly. U.S. factory employment is up just 0.4% y/y as of October. Tuesday brings Canadian manufacturing sales for September, always a key piece of the puzzle for monthly GDP. We look for sales to have dropped 0.8% m/m, reversing the August rise, and leaving them down more than 2% y/y”

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The domestic economy has been remarkably resilient in the face of a slowing global economy but this trend is being challenged.

“@SBarlow_ROB BMO: storm clouds ahead for Canadian manufacturing” – (research excerpt, chart) Twitter

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Citi’s “Global Theme Machine” is my favourite of the Wall Street thematic investment reports.

The most recent update sees U.S. defence stocks as the top-performing theme for 2019 so far,

“We see a fair bit change, however, with a number of Themes breaking into the Top Quintile: new joiners include #6-ranked Defence (up from #17), #9 Virtual Reality (#21) tied with Smart Grids (#35), #11-ranked Wearable Tech (up from #27), #12-ranked Consumer Health & Wellness (#29), #15 Cloud Computing (#23), and #16 Urbanisation (#25)… Bottom Quintile sees far less change, with just 1 Theme – #78-ranked China Tourism Spend (3 months prior was #59) – newly falling into this quintile vs 3 months prior. Agricultural Tech, Deepwater, Biotech, Light-Weighting of Cars, & Immunotherapy all comprise the Bottom 5 Themes, in ascending order. .. In terms of overall 2019 year-to-date the strongest performing Theme is #6-ranked Defence, +30.8% vs MSCI World’s +21.2%”

“C: top performing investment themes” – (research excerpt) Twitter

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“ @SBarlow_ROB C: stocks with highest exposure to top performing/worst performing themes” – (table) Twitter

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Also from Citi, Montreal-born U.S. equity strategist Tobias Levkovich analyzed the top holdings of the country’s actively managed mutual funds,

“Health Care and Information Technology were preferred at 50 of the top mutual funds and hedge funds in 3Q19. For 50 actively managed mutual funds, Health Care names represented 19.6% of the most common top-ten holdings in 3Q19 compared with 2Q19’s 15.1%. IT names comprised 18.3% of the top-ten positions of 50 mutual funds in 3Q, versus 17.1% in 2Q. Similarly, hedge funds’ weightings displayed a preference for Information Technology (18.8% of the largest 50 top-ten equity positions in 3Q versus 18.5% in 2Q) and Health Care (17.7% of the top-ten equity positions in 3Q versus 18.9% 2Q”

For hedge funds specifically, most widely held stock are (in order), Amazon.com Inc., Microsoft Corp., Facebook Inc. and Alphabet Inc.

“@SBarlow_ROB C: "Health Care and Information Technology were preferred at 50 of the top mutual funds and hedge funds in 3Q19" – (research excerpt) Twitter

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“ @SBarlow_ROB C: Top stock holdings for hedge fund managers” – (full table) Twitter

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Newsletter: “Seven investing lessons from ‘the man who solved markets’ – Globe Investor

Diversion: “Air Pollution Reduces IQ, a Lot” – Marginal Revolution

Tweet of the Day:

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