A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web
There is coverage of the attack on Saudi oil facilities everywhere. I’ll focus on research reports in the links below.
The only thing I have to add is that the six-month WTI oil futures are up 7.5 per cent, implying that the supply disruption won’t be fixed quickly.
“Citi’s @SBarlow_ROB Levkovich on oil disruption: "The notion of a $5-$10 increase for WTI with maybe a simultaneous $0.10-$0.25 per gallon of gasoline jump would not be that disruptive to US GDP" – (research excerpt) Twitter
“ @SBarlow_ROB CS on oil disruption: "While an update on how long it will take to restore production will be provided on Tuesday, early third-party reports indicate it will be weeks, not days." – (research except) Twitter
“Brent crude sees biggest intraday gain since Gulf War after attack on Saudi facilities” – Report on Business
Useful chart: “@JavierBlas CHART OF THE DAY: The sudden loss of 5.7m b/d of #oil production is the single largest outage the market has ever suffered (larger in volume than the loss of Iraqi and Kuwaiti output in the 1990 Gulf War, and the loss of Iranian oil in the 1979 Islamic Revolution) “ – (chart) Twitter
“ Analyst View: Saudi attacks raise specter of oil at $100/barrel” – Reuters
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This CNBC headline "The Dow is on a big winning streak, but top corporate executives fear a drop to 23,000″ is highly indicative of the market mood over the past ten days – rising stocks prices combined with pessimism.
The cliché is accurate - the market always climbs a wall of worry – but equities have shown expert level mountaineering skills lately.
Citi’s chief global economist Catherine Mann reiterated her view that investing risks remain tilted to the down side in a report over the weekend and Morgan Stanley strategists needed two separate reports to contain all the bearishness,
“The recent momentum breakdown is much worse than what we saw during the growth scares of 2015-16 and 4Q2018. We think momentum has rolled over because the market thinks it's the end of "Goldilocks." … The last two times we've experienced a momentum breakdown this severe, it preceded or coincided with an economic recession … we think the secular growth part of the long momentum strategy is more at risk than the defensives “
“@SBarlow_ROB MS' Wilson on MOMO: "we think the secular growth part of the long momentum strategy is more at risk than the defensives" – (research excerpt) Twitter
And from Morgan Stanley strategist Michael Zesas,
“We expect more ‘cheap talk’ than ‘real [trade] deal’… negotiators will be left to look for an arrangement that freezes tensions without compromising either side’s core views. This will be difficult to achieve… the core issue: Little progress has been made on how to resolve key issues, like enforcing a deal.”
“@SBarlow_ROB MS' Zesas on U.S./China negotiations: " we expect more ‘cheap talk’ than ‘real deal’" – (research excerpt) Twitter
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Tweet of the Day:
Diversion: “ The 100 best albums of the 21st century” – Guardian
Scott Barlow