A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web
As former CNBC stalwart Jeff Macke is fond of pointing out, markets do not make sustainable bottoms on Fridays, so investors should take today's market activity with a grain of salt.
Ritholtz Wealth Management's Michael Batnick published a joking 35 Steps to a Market Bottom that begins with "1%: Mock the Permabears," proceeds to "33%: I don't even care anymore" and ends with "35%: Market bottom."
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Canadian employment data was announced at 8:30 am this morning and on the surface, the results were terrible. CIBC, however, is suspicious,
"January saw an 88K drop in employment, reversing about half of the spectacular gains we registered late last year. But the details also looking wonky, with all of the job losses in part time work (-137K), and the jobless rate only moving up one tick to 5.9% as the participation rate took a big three point drop. Those looking for the impact of the minimum wage hike in Ontario might find evidence in a 51K drop in that province's employment (all of which was in part time, where we would be looking for that impact), but curiously, all of that was due to a drop in labour force participation (with the jobless rate actually edging lower)."
"@SBarlow_ROB CM is suspicious re Canadian employment numbers" – (research excerpt) Twitter
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I'm watching U.S. high-yield bond spreads as a key indicator of how bad the sell-off will get. The news there is not great this morning as investors flee the related ETFs,
"@lisaabramowicz1 State Street's high-yield bond ETF that trades at JNK has lost about $4 billion of assets since the start of the year, with assets going from $13.86 billion to $9.78 billion in a little more than a month." – (chart) Twitter
"Junk Bonds Are Starting to Crack as Stock Selloff Persists" – Bloomberg
"This indicator will tell you when this bull market truly is over" – Barlow, Inside the Market
"Bond Traders Have Gone From Hoping for Volatility to Worrying About It" – Bloomberg
See also: "US leads record $30.6bn outflow from global stock funds" – FastFT
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The PM visited with Jeff Bezos in private yesterday. Bloomberg took the opportunity to point out that Canada's technology sector is treading water as a percentage of the overall economy,
"The Amazon headquarters in particular offers the biggest potential prize for Trudeau, who's become the salesman-in-chief for an industry he hopes will transform the Canadian economy into a center for brainy tech companies, from its traditional role as commodity producer. Yet, given the sector only represents 4.5 percent of the nation's gross domestic product, a level that's changed little over the past 10 years, it's an ambitious goal."
"Trudeau Meets Bezos in San Francisco. Here's How Canada Is Doing on Tech" – Bloomberg
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Bloomberg helpfully reminds investors that, while market corrections are disconcerting, they are a normal part of market rallies,
"this is the fifth correction since 2009, according to Yardeni Research, and as of right now the latest one is the smallest. The S&P 500 Index dropped 19.4 percent in 2011 before recovering. The index was down 16 percent during a stretch the year before that, during the European debt crisis."
"Don't Forget This Bull Market Hasn't Been Correction-Proof" – Gadfly
"@CNBCClosingBell .@michaelsantoli putting the sell-off into perspective. "Draw a line from the start point [on a 2-year S&P 500 chart] up to where we are right now...we're back to basically where we were in November."" – Twitter
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Tweet of the Day: "@LJKawa Still dying to hear any more theories or thoughts on why this is happening. bloomberg.com/news/articles/… Because it's still happening." – (chart) Twitter
Diversion: "When will the world reach 'peak child'?" – Our World in Data
Scott Barlow