A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web
U.K. politics are no more than a passing interest for domestic investors, if that, but since it's also the case that the queen's face is still on our money and Brexit still represents a global economic risk, we'll start with links detailing one of the biggest developed world political blunders in the modern era,
"May to try to form government after UK election debacle, uncertainty over Brexit talks" – Reuters
"@kadhimshubber Morgan Stanley thinks the election means a lumpy but soft Brexit" - (research excerpt) Twitter
"@SBarlow_ROB Citi: "Brexit risks rising, both ways" " – (research excerpt) Twitter
====
Highly regarded Credit Suisse strategist Andrew Garthwaite outlines six reasons why the rally in technology stocks will continue. These are: [Tech is] a cyclical play, strong sector profit growth, high cash levels gives tech stocks defensive characteristics, reasonable valuations, oligopolistic competition in many areas, and thematic investing.
The growth statistics related by Mr. Garthwaite are perhaps the most compelling argument,
"The [annual growth rate] of tech sector revenue has been about 7p.p. above the market in the past 10 years, and we think this can accelerate. IDC estimates that the quantity of data subject to analysis will rise 50-fold by 2025, while Gartner estimates that the total addressable cloud market will expand by a c.20% [annual growth rate] to 2021."
"@SBarlow_ROB Garthwaite: 6 reasons to stick with IT stocks " – (research excerpt) Twitter
====
Morgan Stanley provided a well-needed bullish chart for oil sector investors but there's a catch,
"@chris1reuters Global #oil stocks to fall 700,000 bpd this year as #OPEC cuts bite, but rise again in 2018 by 400,000 bpd, says @MorganStanley #OOTT #gas " – (chart) Twitter
"Oil's price fall stalls despite supply glut" – Reuters
====
The "death of value investing" theme reminds of the pundits in 1998 that thought Warren Buffett was "past it" because he didn't own technology stocks. These things are cyclical in my experience and value investors will have their days in the sun eventually.
"Goldman Sachs Mulls the Death of Value Investing" – Bloomberg
"Death of Value? ETFs Show Strategy Favored Over Growth: Chart" – Bloomberg
====
The creeping automation of cars continues,
"Twenty years ago, cars had, on average, one million lines of code. The General Motors 2010 Chevrolet Volt had about 10 million lines of code — more than an F-35 fighter jet. Today, an average car has more than 100 million lines of code. Automakers predict it won't be long before they have 200 million."
"Car fact of the day" – Marginal Revolution
====
Tweet of the day: "@CovfefeCapital Jim Rogers has called 174 of the last 3 market declines " (story link) Twitter
Diversion: "The Power of Failing Well" – Collaborative Fund
Scott Barlow