A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web
The gambling impulse has always created numerous similarities between casinos and the finance industry. Casinos have flashing lights and the satisfying click of poker chips and brokerage offices have expensive wood paneling, $3000 suits and skyline views from the 35th floor. The house tends to win.
Dina Isola of Ritholtz Wealth Management delved deeper into this topic with "Nailing Financial Predators," identifying the six common marketing tricks that help finance professionals can separate clients from more of their savings than necessary to advise them,
"Social Proof – When there is uncertainty, we look for direction. "Helpful" sales guys always have the solution and it always benefits them. I cannot tell you how many times I have seen someone talked out of their low-cost 529 College Savings Plan that involves no commissions, in favor for an inferior product laden with fees and heavy commissions."
"Nailing Financial Predators" – Isola, Real$martica
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Longer-term forecasts for electric vehicle sales are all over the map and this is creating a lot of confusion in metals markets where demand for nickel, copper and lithium is in part dependent on EV sales. Bloomberg cites analyst views that the nickel price is very much ahead of itself at the moment,
"'The market has been getting too excited, too soon because of the whole EV thematic -- we think that has been misplaced,' said Lachlan Shaw, an analyst at UBS Group AG in Melbourne. 'It's only really 12-18 months hence that we will have an idea of what's really happening in the battery space, and by 2020 it could be a big part of demand growth. In the short term, nickel will remain a conventional stainless steel trade.'"
A separate report, however, predicts that EV sales will create a global shortage of copper,
'Demand for copper globally is set to jump 22 percent in as soon as five years on increasing usage of the metal in electric vehicles, solar and wind power sectors, according to Indian billionaire Kumar Mangalam Birla's Hindalco Industries Ltd."
"Nickel Supply Rush Seen Cooling Rally Before Batteries Boost" – Bloomberg
"The Electric Car Revolution Will Need a Lot of Copper" – Bloomberg
"GM's electric car sales will meet quotas by 2019, says China chief" – Reuters
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Investors looking for something to worry about can focus on U.S. high yield debt this week. Junk debt has been a boon for companies looking to buy back shares or increase shale oil production, and rising rates makes this process less attractive. Weakness in corporate debt markets presaged overall market weakness last week,
"Junk-Bond ETFs Shed $1.3 Billion in a Week as Rout Picks Up Pace" – Bloomberg
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Things might be getting a bit frothy in the technology sector,
"Between the FAANG quintet and China's rivaling BAT companies, gains in the world's top technology shares are nearing a whopping $1.7 trillion in market value this year.
That's more than Canada's entire economy, and exceeds the worth of Germany's biggest 30 companies put together. The eight tech giants -- Facebook Inc., Amazon Inc., Apple Inc., Netflix Inc. and Google parent Alphabet Inc., as well as their Asian peers Baidu Inc., Alibaba Group Holding Ltd. and Tencent Holdings Ltd. -- have amassed as much money in 2017 as Pacific Investment Management Co., one of the world's biggest fund managers, has done in about 46 years."
"World's Top Tech Giants Amass $1.7 Trillion in Monster Year" – Bloomberg
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Tweet of the Day: "@MaleehaMBCC #Gasoline stocks have fallen by 27 million barrels since the start of the year, the biggest draw for over a decade, and are now 12 million below year-ago levels." – Twitter
Diversion: "female-initiated disruption of a male hierarchy incites hostile behaviour from poor performing males who stand to lose the most status."
"Insights into Sexism: Male Status and Performance Moderates Female-Directed Hostile and Amicable Behaviour" – PLOS One
Scott Barlow