A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web
BNN Bloomberg has made the TSX’s attractiveness relative to global markets a theme lately to its viewers’ benefit.
On Tuesday, Edward Jones’ Canadian investment strategist Craig Fehr acknowledged the index’s strong year-to-date return – which he attributed to extreme pessimism at the beginning of 2019 – but warned that the domestic equity market is not “the horse you want to fully bet on.”
Reasons for caution from this point include high consumer debt, a softening real estate market and mediocre wage growth.
Mr. Fehr was concerned primarily about the Canadian consumer.
“Canadian equity market ‘not the horse you want to fully bet on’: Strategist” – BNN Bloomberg (video)
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Credit Suisse U.S. strategist Johnathan Golub warned clients that the Fed rate cut is likely not a big positive for the S&P 500,
“Conventional wisdom holds that falling rates are positive for stocks. The data refutes this view. Historically, stocks have declined on down interest rate days. While this relationship has reversed over the past month, we believe that rates and stock prices will move in tandem going forward as they have throughout the recovery."
“@SBarlow_ROB CS's Golub with The Heresy: "Conventional wisdom holds that falling rates are positive for stocks. The data refutes this view"” – (chart) Twitter
Counterpoint: Bloomberg’s Luke Kawa published a rebuttal to Golub’s conclusions on social media
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There is much excitement over U.S. profit reports so far with profits coming in almost five per cent above forecasts. But the year-over-year growth rates are still anemic despite the recent rally in stock prices. Sales are higher by 2.8 per cent and profits by 2.9 per cent.
Too much focus on beat rates in my opinion, not enough on growth rate.
“@SBarlow_ROB SPX earnings coming in 4.37 per cent above expectations ....” – (chart) Twitter
“@SBarlow_ROB ... but still mediocre in yoy terms” – (chart) Twitter
“Earnings and trade optimism push Wall St. toward record high” – Reuters
See also: “@RBAdvisors The cycle is always determined by #cyclicals. The profits cycle is deteriorating and earnings season is still young but so far deeper cyclicals have indeed produced deeper disappointments.” – (chart) Twitter
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Tweet of the day:
Diversion: “Huge swathes of the Arctic on fire, ‘unprecedented’ satellite images show” – The Independent