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A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web

David Stockman, former director of the Office of Management and Budget under U.S. President Ronald Reagan, became the latest market expert to predict certain doom for equity investors,

"'This is one of the most dangerous market environments we've ever been in. It's the calm before a gigantic, horrendous storm that I don't think is too far down the road.'"

Picking market tops is notoriously difficult (ie impossible, except by luck or by predicting a market crash every year) but there's been a growing chorus of prominent Chicken Littles of late.

"'Horrendous storm' to hit stocks, Wall Street not rational: David Stockman" – CNBC
"Strike While the Iron is Hot: The Role of Momentum and Timing in the Stock Market" – Of Dollars and Data
"@ReutersJamie More fund managers think world stocks are overvalued now than during the tech/dotcom bubble - BAML survey " – (chart) Twitter

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More usefully (in my opinion), FT Alphaville's Cardiff Garcia outlines the three basic ways in which economic expansions end. The first, over-investment, is relevant for Canadians. The second, international shocks, is self-explanatory and the third, central bank tightening, is topical in light of the Federal Reserve meeting on interest rate policy that begins today,

"Deutsche economists write that the Fed typically tightens excessively in response to the economy overheating. Yet the Fed is currently in the midst of a tightening cycle despite an inflation rate that remains beneath the Fed's target, as it has for most of the recovery — and which in recent months has been trending lower."

"Why expansions die" – Garcia, FT Alphaville (free to read with registration)
"Tumbling U.S. inflation expectations another warning bell: NY Fed" – Reuters
"Why keeping the balance sheet of the Federal Reserve constant is equivalent to a gradual exit" - VoxEU

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The loonie continues to be the best performer among major currencies as the stronger-than-expected economic data supports higher domestic bond yields relative to the U.S. RGMP's James Price notes that credit markets are indicating a 50 per cent chance of a Bank of Canada rate increase by the end of the year.

"Loonie Extends Rally as Funds Cover Shorts on BOC Comments" – Bloomberg
"@LJKawa Canada's 2017 GDP growth forecasts just keep going up. Trouncing the Americans." – (Chart) Twitter

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Tweet of the Day: "@vsualst Hewers of wood, drawers of debt: Canadian marginal job growth since 2000 largely occurring in household-debt-fuelled sectors" (chart) Twitter

Bonus Tweet of the Day (because it made me laugh out loud): "@realbryanmiller All the other Batmen should go to Adam West's funeral, like when a former president dies." – Twitter

Diversion: "Is optimism or pessimism correct?" – Marginal Revolution

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