A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web
Canadian retail sales results for November were released at 8:30 a.m. ET, and they were not terrific,
“Consumers were apparently in no mood to spend the gains they've made from increasing job totals nor the savings from lower gasoline prices. Retail sales plunged 0.9% on the back of a decline in auto sales and falling gasoline prices. But, even outside of those two volatile components, sales were up only a meagre 0.2%. … So, combined with yesterday's disappointments on manufacturing and wholesaling, the economy looks likely to have shrunk slightly in November, taking our fourth quarter tracking forecast down to around 1%. Today's retail sales figures will have the Canadian dollar trading weaker and bond yields lower.”
“@SBarlow_ROB CM on Cdn retail sales. Not great” – (research excerpt) Twitter
“Canada’s economy may soon endure something it hasn’t faced in 68 years: A recession without the U.S. in the same boat” – Bloomberg
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Michael Batnick, the director of research at New York-based Ritholtz Wealth management, makes an interesting point,
“'Should I get out of the market?' This is a question that ought to be eliminated from the investor lexicon. Healthy investing, like everything else, is all about moderation. The most likely wrench that knocks us off our course is ourselves. We use short-term declines as an excuse to abandon a long-term plan … The behaviorally aware investor has a plan in place to insulate themselves from their worst instincts, which is to sell everything when stocks decline and buy back only when “the dust has settled,” whatever that means”
“In or Out” – Batnick, Irrelevant Investor
“Stocks reverse losses in fragile rebound; U.S. dollar falls” – Reuters
“Why markets are suddenly spooked again (and why it may not end here)” – Babad, Report on Business
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Credit Suisse analyst Johnathan Golub believes markets are trading on risk, not guided by a U.S. earnings season where results have been mediocre,
"It’s hard not to notice a deceleration in earnings and economic growth. Perhaps the most extreme example of this trend is the falloff in consensus EPS estimates (3Q18A: 27.5%, 4Q18E: 13.4%, 1Q19E: 2.7%). While our work indicates that analysts are likely too harsh in their 2019 numbers, it nonetheless confirms the downward trajectory. .. Despite these trends, we believe investors will focus on a Fed that has likely concluded its rate hike cycle and the renormalization of market volatility… a rising VIX explains the equity selloff in 4Q, as well as the 13.6% bounce since December 24.’
“@SBarlow_ROB Equities trading off VIX, not earnings” – (research excerpt) Twitter
“@LJKawa S&P 500 2019 earnings estimates are down 1.6% since the start of the year:” – (table) Twitter
“ The global economy isn't heading into a recession, IMF's Christine Lagarde says” – Bloomberg
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Tweet of the day:
Diversion: “Holy Crap, the Moon Was Struck by a Meteorite During the ‘Super Wolf Blood Moon’ Eclipse” – Twitter
Newsletter: “Trendless markets not out of the woods yet’ – Globe Investor
Scott Barlow