A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web
Maclean's detailed the high emotions surrounding the domestic housing market and it's an important topic in my opinion.
On one hand, the lack of affordability in some cities is indicative of economic problems. Specifically, it is indicative of an ongoing global trend where asset values are rising at the expense of labour power and wages (although it's key to recognize that this problem is much, much worse in the U.S., so look out for cross-border news creep). Foreign investment is an issue that needs to be addressed.
On the other hand, real estate-related rage does, on occasion take on an unfortunate moralist tone in a "you took on more debt than I was willing to and you should be punished, not financially rewarded" way, whether consciously or not.
"Praying for a real estate crash" – Maclean's
"Toronto, Vancouver see home-sales rush ahead of new stress-test rules" – Report on Business
"One of Alberta's largest homebuilders falls into receivership" – CBC
=====
As someone who'd be surprised if the current U.S. administration could arrange a one car funeral without disastrous results, I'm not expecting wide-reaching tax reform south of the border. The release of a tax reform outline, however, has caused market results in the electric vehicle space,
"The tax bill introduced Thursday by the House Ways and Means Committee would end the credits of as much as $7,500 given to buyers of electric vehicles. The proposed repeal poses risk to the more mainstream consumers Chief Executive Officer Elon Musk's is pursuing with the Model 3 sedan, which starts at $35,000."
Lithium miners' stocks were also weaker on the news Thursday.
"Musk's Math on Model 3 Affordability Muddled by GOP Tax Bill" – Bloomberg
(somewhat) related: "Commerce Finds Dumping and Subsidization of Imports of Softwood Lumber from Canada" – International Trade Administration
=====
In this week's Inside the Market newsletter available later today, I discuss growing risk in global credit markets. Friday, Bloomberg published a column forming a counterpoint to these concerns, arguing that bond markets are more sane than they look,
"Beneath the bullish surface … a slew of investors have the guts to push back against the market euphoria, while idiosyncratic risk -- the extent debt obligations are priced on the basis of fundamentals -- is alive and well. .. "Performance in October and year-to-date is consistent with investors avoiding deep credit risk and highly levered names," says Stephen Caprio, a New York-based UBS Group AG credit analyst. "But I still think investors are too sanguine about liquidity risk and fund outflows, looking at where BB rated high-yield spreads are trading.""
Oh, and if readers felt like being nice to me today, they could sign up for the Inside the Market newsletter if they haven't already. Link here.
"U.S. Credit Markets Are More Sane Than the Frenzy Suggests" – Bloomberg
"The Age of Easy Money Is Nearly Over" – Businessweek
=====
Tweet of the Day: "Fritz844 Bernstein on why the Chinese property market is the most important asset class in the world " – Twitter
Diversion: "Why McDonald's fries don't taste as good as when you were a kid" – Business Insider