A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the Web
The phrase "cash on the sidelines" was a running joke in the finance industry – a go-to broker phrase for generating transactions in difficult markets – but it might not be a laughing matter now,
"The share of cash hasn't been higher than that since November 2001, shortly after the terrorist attacks in the U.S. The amount of dry powder in portfolios is above that seen during both Europe's sovereign-debt crisis and the U.S. debt-ceiling debacle, according to Bank of America Merrill Lynch's monthly survey of money managers. 'This month's cash levels indicate that investors are bearish, with fears of an EU breakup, a bond crash and Republicans winning the White House jangling nerves,' said Michael Hartnett, the bank's chief investment strategist."
Cash levels are so high at them moment that if even a smaller percentage of the assets move to the markets, they will push it higher.
"Investor Cash Levels Jump Toward Levels Not Seen Since 9/11" – Bloomberg
The credit rating agencies did not exactly cover themselves in glory before the financial crisis so when Moody's predicts that there will be no domestic housing price crash, readers are likely to take it with a grain of salt,
"'While there has been much concern in Canada about an overheating housing market, we expect national house prices to avoid a significant correction,' Moody's economist Andres Carbacho-Burgos said. According to the report, Canadian detached single family house prices are expected to increase by nine per cent this year, and by 2.9 per cent annually over the next five years. Meanwhile, condominium prices are forecast to grow by 4.6 per cent this year, and 2.2 per cent per annum over the next five years."
"No 'hard landing' for Canadian house prices, says Moody's Analytics" – CBC News
In oil-related news, Reuters reports that profit margins will be thin for U.S. refiners. Demand from refiners is an important, and sometimes primary, driver of North American crude prices and when they're not making money, they demand less oil.
"Another quarter of weak results looms for U.S. refiners" – Reuters
Counterpoint: "World's Top Miner Sees Signs of Commodity Markets Recovery" – Bloomberg
See also: "Oil majors experiment with technology to weather crisis" – Reuters
There are few more polarizing figures in business than Elon Musk. Opinions range from modern day Thomas Edison, to complete charlatan, to an equal mix of both. The Economist discussed Mr. Musk's business acumen and future in a video detailing the current financial stress on his companies. They note that "financial gymnastics" are currently keeping Tesla afloat.
"Countdown for Tesla" – The Economist
Tweet of the day: "@ArmineYalnizyan Canada's richest 10% of families account for 50% of all household net worth. How do we compare to the rest of the OECD? #cdnecon " – (chart) Twitter
Diversion: A remarkable scientific discovery – partially an accident - could go a long way to ensuring the world's energy future,
"Scientists Accidentally Discover Efficient Process to Turn CO2 Into Ethanol" – Popular Mechanics