A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web
UBS research has released a list of top equity ideas that include 15 buy options and five shorts.
Strategist Joseph Parkhill believes there is a catalyst that will move each stock in the next six months, but unfortunately the reasoning isn’t listed in the report.
Notable buy suggestions include video game developer Electronic Arts Inc., Eli Lilly and Co. and Southern Copper Corp.. Short ideas feature Monster Beverage Corp. and U.S. Steel Corp.
“@SBarlow_ROB Top long and short stock ideas from UBS” – (full table) Twitter
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Chief economist Michael Darda from MKM Partners believes investors should take the U.S. yield curve inversion seriously as a sign of upcoming equity market volatility,
“'Different this time,' the three most dangerous words in the financial lexicon … former Fed Chair Ben Bernanke cited the ‘global savings glut’ as a reason for the flat-to-inverted yield curve to be nothing more than a benign artifact of the financial architecture. During the year 2000, then Fed Chair Alan Greenspan was convinced that fiscal surpluses (what happened to those?) were responsible for driving down Treasury yields and hence ‘distorting’ the yield curve.”
“@tracyalloway Michael Darda at MKM nails the big question over yield curve inversion - is it different this time? “ – (research excerpt) Twitter
“Morgan Stanley says the U.S. yield curve now clearly spells downturn” – Bloomberg
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I’ve been following Nomura quantitative research closely recently for analysis of global speculative and algorithmic asset flows.
Today’s report offers some reassurance, if temporary, for investors,
“The selloff currently under way appears to us to be led by [trend following, algorithmic Commodity Trading Advisor funds] , risk-parity funds and other such systematic traders closing out existing positions; we see no sign of panic selling by fundamental driven traders.”
“@SBarlow_ROB Nomura Quant: sell-off driven by removal of spec longs, things still orderly” – (research excerpt) Twitter
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The JP Morgan Global Manufacturing PMI index, one of my favourite economic indicators for its correlation with global metals prices, is due to be updated in the next couple of trading days. The index, while backward looking, helps verify or contradict bullish reports like this one,
“Copper inventories data show there is still demand in China: McKinsey” – BNN Bloomberg (video)
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Tweet of the Day: “@TheStalwart Whoa! That People’s Daily article included a very specific, ominous phrase that has historically preceded the outbreak of war”
Diversion: “Five Investment Lessons from History” – Collaborative Fund
Newsletter: “We’re a lot richer than our grandparents, but not relative to our neighbors.” – Globe Investor
Scott Barlow