Every day roundup of analysis and evaluation from The Globe and Mail’s market strategist Scott Barlow
BofA Securities’ weekly Circulation Present report, written in blunt model by strategist Michael Hartnett, stays as quotable as ever,
“Heard on the Road I: ‘Anybody who made cash final 12 months has zero threat on proper now.’ Heard on the Road II: ‘200bps of Fed cuts priced-in and the Nasdaq nonetheless can’t get above its 200-week transferring common. What extra do it’s essential to know..’ The Massive Image: largest inflows into EM debt & fairness funds ever ($12.7-billion) as world capitulates into China reopening; ‘an excessive amount of, too younger?’ … yep, however bull commerce ain’t completed … China was ‘uninvestable’ in Oct, 1.4 billion individuals ending 2-years of lockdown, SPX +44% throughout lockdown, +34% throughout partial reopening, +11% after full reopen. Story of the Tape: there are bull markets …. China shares up 52% from lows, Eurozone 33%, copper 32%, UK 29%, supplies 28%, EM 23%; however no Massive Bull with out the Massive Canine…NYSE Composite (NYA) must convincingly break 16200 (presently 15600).”
In regards to the first heard on the road quote, it was not straightforward to earn cash in 2022. It did contain threat, significantly relative to the index, often within the type of an enormous obese in power and an underweight place in beforehand profitable expertise shares.
“Hartnett: “Heard on the Road I: “Anybody who made cash final 12 months has zero threat on proper now.“”” – (analysis excerpt) Twitter
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Morgan Stanley economist Lenoy Dujon is bullish on the loonie,
“On condition that 20 foundation factors are priced for the January [Bank of Canada] assembly, the 25bp hike we anticipate will possible be mildly constructive for CAD. Nevertheless, we anticipate the short-term charges and USD/CAD response to the assembly will rely upon whether or not the BoC indicators that one other 25bp hike is probably going on the March assembly. On condition that our economist expects one other hike, we proceed to advocate quick USD/CAD positions. These positions must also profit from China reopening its economic system, and the implications of demand from China for commodity costs and world development expectations.”
“Morgan Stanley likes the loonie:” – (analysis excerpt) Twitter
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Jefferies strategist Christopher Wooden’s GREED & worry report emphasizes bearishness on U.S. equities,
“Whereas all fairness buyers needs to be conscious that the 2-year Treasury bond yield has declined by 32 foundation factors from 4.43 per cent to 4.11 per cent for the reason that begin of the 12 months , GREED & worry’s base case stays US recession, which implies appreciable earnings downgrade threat in America, as mentioned within the newest Asia Maxima (Pattern change, 4 January 2023), and an S&P500 which may decline considerably from present ranges. To be crystal clear, GREED & worry could be Underweight the US, not solely relative to rising markets, but in addition relative to Europe and Japan…
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BMO economist Robert Kavcic famous a decline in mortgage lending however not a contraction,
“Canadian mortgage credit score development continued to sluggish in November, with residential lending up 7.6 per cent year-over-year within the month. That marks a big downshift from the near-11-per-cent year-over-year tempo seen on the heights final 12 months. From a shorter-term perspective, development on a month-to-month foundation (seasonally adjusted) has cooled to three.7 perf cent annualized, matching the lows seen on the depth of the pandemic … and through the sluggish pre-COVID interval in 2018/19. Once more, that’s a sudden change from pre-BoC tightening, when residential borrowing was operating on the quickest clip in over a decade. We envision residence gross sales volumes firming no less than considerably within the spring, albeit at decrease/still-falling costs. That ought to permit residential mortgage development to stabilize, however at round these a lot cooler ranges”
“‘Borrowing chills’ in Canada (BMO)” – (analysis excerpt) Twitter
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Diversion: “Will the Metaverse Stay As much as the Hype? Sport Builders Aren’t Impressed” – Wired
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