A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web
Housing affordability has been a big issue for Canadians in recent years and now there’s a new problem – rent inflation is spiking,
“A new source of shelter inflation has burst onto the scene in 2019. Rent costs have jumped this year and are now up 3.7% y/y, the fastest pace since 1991. StatsCan started using a new (and we believe more realistic) methodology at the start of the year for rent costs. The result is clear: After 25 years of reportedly averaging just 1.3% annualized growth, rents have broken higher out of a mild range. This factor alone has added 2 ticks to overall Canadian inflation in the past year”
When houses are to expensive to afford even with low borrowing costs, and rent is rising beyond the capacity of more people, political pressure and public policy can’t be too far behind.
“@SBarlow_ROB Nowhere to live - Canadian rental costs rise at fastest pace in almost 30 years” – (research excerpt, chart) Twitter
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CIBC interest rate strategist Ian Pollick predicted a more difficult year ahead for fixed income investors as inflation pressure re-emerges next year,
“Our expectation for GoC total-return profiles (ie beta) in 2020 is not great, reflecting a stabilizing macro backdrop that should support higher yields. And these higher yields are likely to be facilitated by term-premiums that begin to rebuild as inflation dynamics — and sentiment — improve… we think positioning for a steeper 2s10s [yield curve] vs the U.S. makes a lot of sense.”
“@SBarlow_ROB CM's rate strategist Pollick, "we think positioning for a steeper 2s10s (cash) vs the U.S. makes a lot of sense" – (research excerpt) Twitter
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I don’t usually comment on individual companies, but NVIDIA Corp. is a special case.
Once dubbed “the smartest company in the world” by M.I.T. Technology Review, NVIDIA is a bellweather for global trade, the advancement of artificial intelligence, eSports, automation, self-driving vehicles and other important trends.
Merrill Lynch analyst Vivek Arya published an extremely bullish report on the stock Wednesday after visiting with management,
“NVDA management discussed several growth engines - AI, High Performance Computing (HPC), Gaming, Autos, movie rendering - that we estimate can help reaccelerate topline growth to an industry leading 20% pace next year. Importantly these products take advantage of a common base of silicon, software and developers which is unrivaled in the industry. We maintain Buy on NVDA, a top pick, and $275 PO”
“@SBarlow_ROB Merrill really bullish on NVDA. I just have to decide whether I need more volatility in my life “ – (research excerpt) Twitter
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Newsletter: “Are central banks really ‘printing money’ and driving asset prices higher?" – Globe Investor
Diversion: Yikes. “Infant Skeletons Wearing ‘Helmets’ Made of Other Children’s Skulls Stun Archaeologists” – Gizmodo
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Scott Barlow