A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web
CNBC's Michael Santoli offered some good perspective on ongoing market upheaval by starting his column with "This is the market dip you wanted."
After two years of record-low volatility and U.S. equities that went higher in a seemingly unbroken line, higher bond yields are reminding investors on both sides of the border that risks have been building.
Mr. Santoli went on to suggest significantly more selling for the S&P 500, a possible test of the 200-day moving average which is eight per cent below current levels. I'm not sure about that.
The domestic earnings reporting season is only just heating up, but U.S. results have shown extremely strong results. Global economic growth is similarly healthy which should help cyclical companies – Caterpillar Inc. announced enviable sales momentum recently – and commodities.
Markets will have to recalibrate for higher borrowing costs, but hopefully that's all that's happening now.
'Watch for another selling wave in the stock market as investors are forced out of their low volatility bets" – Santoli, CNBC
"Amid stock market selloff, U.S. profit forecasts rise" – Reuters
"Don't Panic. This Slump's Just a Blip: Treasury yields north of 3 percent won't stop the party" – Gadfly
"UBS Says Now's Not the Time to Sell Stocks—If Bond Yields Behave" – Bloomberg
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Oil prices are significantly lower as part of general risk aversion as U.S. crude production continues to climb,
"'Oil is caught up in this general risk-off move, not helped at the margins by a little bit of strength in the U.S. dollar,' said Ric Spooner, chief market analyst at CMC Markets in Sydney … 'We're really going into a period of a lot of refining maintenance so it's not unexpected that (the sell-off) is happening,' Petromatrix strategist Olivier Jakob said."
"Oil skims one-month low, investors punish equities and commodities" – Reuters
"Brent Slips to One-Month Low as U.S. Drilling Grows, Stocks Drop" – Bloomberg
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The sectors I'm watching for hints of a deeper sell-off are in the riskier end of the global credit market,
"Global Rout Takes Hold of Junk-Bond and Emerging-Market Funds" – Bloomberg
"@LJKawa Cumulative weekly outflows from HYG & JNK hit second-highest level on record: >$2.5B." – (chart) Twitter
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Tweet of the day: "@francesdonald Check this chart from National Bank Econ. If the BoC hikes another time this year (they will) for a total of 100bps since July'17, homeowners in Vancouver and Toronto will need about 9% more income to cover the total payment shock. (Wages are up 2.9% y/y right now, btw)." – Twitter
Diversion: How the Vanderbilt heirs managed to blow a US$5-billion fortune,
"The Best Way to Lose $5 Billion Dollars" – Of Dollars and Data