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A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web

Merrill Lynch quantitative strategist Savita Subramanian provided a counterintuitive warning for holders of prominent dividend sectors in a Thursday report. Importantly, Ms. Subramanian is speaking from a U.S. perspective but Canadian investors should test their existing holdings in real estate and utilities for earnings stability,

“Some say quality is expensive, as low beta stocks are trading at premia to high beta counterparts. But low beta ≠ safety: the probability of losing money in low beta stocks rivals that of the riskiest stocks. In contrast, high quality stocks tend to offer a lower probability of loss. We think ‘fundamental beta,’ or earnings stability, is a better gauge. Some of the highest beta sectors exhibit the most stable earnings (Industrials, Tech), while some of the lowest beta sectors exhibit significant earnings volatility (Utilities, Real Estate).”

“@SBarlow_ROB ML: Low beta is not low risk” – (research excerpt) Twitter

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Strong earnings from TD and Royal Bank have brightened the outlook for domestic bank profits after CIBC’s weaker results earlier in the week raised questions.

“RBC, TD profits beat analysts’ estimates, powered by loan growth” – Report on Business

“TD sails past Q2 estimates amid profit surge in U.S. banking” – BNN Bloomberg

“RBC beats profit estimates on gains in core retail banking” – BNN Bloomberg

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Ongoing trade concerns have S&P 500 futures 26 points or 0.9 per cent lower ahead of Thursday trading. Chinese officials said the U.S. must ‘correct their wrong actions’ overnight, knowing full well that the current president is not prone to admitting mistakes and is unlikely to react well.

At the same time, the Financial Times quotes experts noting that an unclear trade environment has stalled corporate investment, and this will negatively affect global growth,

“The effect on investment is easy to understand," [Angel Gurría, OECD secretary-general ] adds. “We invest to produce, ultimately to sell. If you don’t know if you have access to markets or at which tariff, you simply don’t invest.” That, too, is correct, and the stalling of investment in the past four quarters is as striking as that of trade… it is clear that the trade slowdown is caused by protectionism, and weak investment is the casualty rather than the culprit.”

“China says U.S. needs to correct wrong actions to continue trade talks” – Reuters

“Trade slowdown is more dangerous than in the past’ – Financial Times (paywall)

“Optimism for a trade deal is fading” – Bloomberg

“ARM supply halt deals fresh blow to Chinese tech giant Huawei” – Reuters

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Tweet of the day: “@RBAdvisors Yesterday it was problems for auto makers. Today it is home improvement. The front-end of the #economy (#housing and #autos) is clearly starting to have problems. Meanwhile everyone watching the #Fed today…a lagging indicator.” – Twitter

Diversion: “Blue-Collar and Service Workers Fare Better Outside Superstar Cities” – Florida, CityLab

Newsletter: “The internet is slowing big time, what do investors do now?” – Globe Investor

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