Scott Barlow
A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the Web
Prognostication-wise, I've had a good few weeks, but markets have a way of consistently proving I'm a moron. On the plus side, a bullish column on domestic bank stocks and another warning that gasoline inventories threatened oil prices worked well.
But, after identifying cloud computing and health care as my two favourite investment themes three years ago, I've been too paralyzed by market volatility to buy any. Thursday, Amazon's earnings and a variety of other news highlighted how much of an opportunity my portfolio has missed.
Amazon.com blew away profit estimates thanks to cloud-related earnings Thursday, Microsoft did the same previously, and Oracle Corp bought cloud specialists Netsuite Inc. for $9.3 billion. In the words of HBO sports media mogul Bill Simmons, " the lesson, as always, I'm an idiot."
The health care sector continues to grind higher with rare profit growth stability and I've yet to capitalize on that either. I will be looking more closely at orthopedic and medical equipment stocks in the days ahead.
"Amazon Enjoys Cloud Cover" – Gadfly
"Oracle to gain cloud clout with NetSuite deal; Ellison profits" – Reuters
"Google's cloud investments are finally starting to pay off" – Wired
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The West Texas Intermediate crude price has dropped 20 per cent from recent highs, which puts it officially into bear market territory. The crude price also fell below its 200-day moving average, which means it's officially in a technical downtrend also.
"Goldman says oil's rebalancing remains fragile amid macro headwinds" – Reuters
"@liamdenning Crude oil skids toward a crash barrier bloomberg.com/gadfly/article… via @Bfly ' – Twitter
"@OilSheppard Brent crude #oil enters bear market (down 20% from high for year) and drops below 200-day moving average #OOTT pic.twitter.com/qtuKk6avVl " – (includes chart) – Twitter
"Supertankers turn UK into centre of global oil glut: Weak demand from refineries prompts traders to store North Sea oil on vessels " – Financial Times
"Oil rally to resume later this year, demand to offset glut: Reuters poll" – Reuters
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The tiny minority of readers who saw my "Don't trust government? You're threatening the economy" column know I'm fascinated with the role of trustworthy institutions – government, media, finance, law enforcement – in fostering national economic growth. Prominent University of California-Berkeley economics professor Brad Delong added to the conversation yesterday with a fascinating post on wages and trade. Historically, manufacturing activity did NOT flow to low wage countries,
"You would imagine … that once the iron-hulled ocean-going screw-propellered steamship and the submarine telegraph cable had made their appearance, factory work worldwide would have rapidly gone to where labor was cheap. Yet from 1850-1980 that was not the case. Factory work by and large stayed where labor was expensive. And those economies that did manage to figure out how to utilize British Industrial Revolution and Second Industrial Revolution technologies at near-frontier levels of efficiency rapidly joined the club of rich economies that was the Global North."
"Thinking About "Premature Deindustrialization": An Intellectual Toolkit I" – Bradford-delong.com
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Tweet of the Day: "@SBarlow_ROB RELEVANT from @tylercowen "Is there a safe asset shortage?" marginalrevolution.com/marginalrevolu… " – Twitter
Diversion: "Breakthrough solar cell captures carbon dioxide and sunlight, produces burnable fuel" – Phys.org