Scott Barlow
A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the Web
British Petroleum's chief economist Spencer Dale believes that the longer-term future for the oil industry is less a matter of when we run out, and more a case of how much will be left in the ground after being replaced by alternative power,
"'I think it is increasingly likely that there will be technically recoverable oil reserves which will never be extracted and if I was the owner of one of those companies which owned that oil I would have every incentive to make sure it wasn't mine [left in the ground]."' Pricing pressure is likely to come from the supply side, because of strong growth in US shale oil, and the demand side as the rise of renewable energy, including electric vehicles, gradually slows growth in oil consumption."
"BP warns of price pressures from long-term oil glut" – Financial Times
"Oil rises on weaker dollar, U.S. supply caps gains" – Reuters
Gary Mason: Our future wealth is dwindling – one barrel at a time
Opinion: Like it or not, Canada's edge is resources
Related: Is Canada's economy breaking free of its 'staples trap'?
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The S&P/TSX Composite exceeded its record close and the Dow hit 20,000 Wednesday, but I don't think I've ever seen a major market milestones greeted with such trepidation and disdain,
"Strategists and money managers surveyed Wednesday by Bloomberg warned about chasing performance this time, citing concerns from stretched valuations to uncertainty over Donald Trump's policies. And history may be on their side. Data on market returns after 1,000-point milestones in the Dow show that while stocks tend to rise more than the historic average a month later, the performance over six- and 12-month periods trailed, 'Once retail comes in, that's the time to get out.'' -- Weeden & Co. strategist Michael Purves."
"Does Dow 20,000 Mean It's Time to Get Out?" – Bloomberg
"Dow 20000: Don't Be Euphoric. Be Very Cautious" – Wall Street Journal
"The high-flying TSX: More a reason for caution than celebration" – Barlow, Inside the Market
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Merrill Lynch strategist Michael Hartnett believe the market will get one more rally before heading lower for a significant period,
"'We believe positioning, profits and policy are consistent with one last melt-up in risky assets.' Targets such as the S&P500 reaching 2500 (it's now at around 2300), oil reaching $70 (Brent is now at $55.24) and the dollar index reaching 110 (now 100.23) are 'all plausible but ultimately, unsustainable targets,' it says. 'When will it end? Our best guess remains some time in the summer.'"
"'One last melt-up': Risky assets will top out this year, warns BAML" – FastFT
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Business Insider details a JP Morgan research report listing the most important market indicators for 2017. These include U.S. fiscal stimulus, slowing job growth, and the U.S. dollar. JP Morgan is looking for an acceleration in U.S. economic growth,
"there may well be more to the story than demographics — labour productivity has also been stagnant, at least according to the official measures of GDP. To some observers, this may seem peculiar. Businesses are embracing new technologies — such as mobile commerce, cloud computing and automation — that should boost their employees' productivity. Yet any improvement has failed to find its way into the official statistics. This year could bring a surge in labor productivity as the business cycle nears its peak and capital investments in technology begin to pay off. Stable wage growth and low inflation are likely signs that the economy still has room to grow."
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Tweet of the Day: "@chigrl US #Gasoline Demand #OOTT " – (chart) Twitter
Diversion: "Doomsday prep for the super-rich" – New Yorker