A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web
Markets are lower Tuesday morning because no one is really sure what exactly was agreed between China and the U.S. during their trade talks,
“No one can seem to say what, exactly, Trump and Xi agreed to. Statements from each country are contradictory about fundamental issues and offer no specifics about what might happen next … What the US and China have agreed to is ‘not necessarily a trade deal, but stuff they are going to look at,’ Kudlow said at one point, noting that nothing at all may come of the talks.”
The impressions of cooling trade tensions was largely responsible for yesterday’s equity rally.
“No one can say for sure what Trump and Xi just agreed to” – Quartz
Citi equity strategist Tobias Levkovich is one of the few firmly bullish sell-side pundits out there among major research firms,
“With 42% of the S&P 500 constituents already in so-called bear market territory (down 20%+ from 52-week highs), much damage has occurred. While prior lows over the past 10 years in the market saw 50% levels (excluding the 2008-09 financial crisis), the numbers seem close enough to argue for buying into recent weakness. Both our Panic/Euphoria Model and normalized earnings yield gap valuation work imply a 90% probability of gains over the next 12 months. Moreover, double-digit returns seem reasonable at this juncture over the next year with our 2019 year-end S&P 500 target at 3,100 … equities generally do not decline when EPS trends remain positive.”
“@SBarlow_ROB C: 90% chance of SPX gains in next 12 months” – (research excerpt) Twitter
In what has become my favourite Maclean’s report every year (and not just because I am asked to contribute), Jason Kirby has compiled strategist and pundit selections for the most important investing chart for 2019.
The charts, which include brief commentary, cover every important issue including oil, inflation, domestic household balance sheets, real estate prices and the loonie.
“ The most important charts to watch in 2019” – Kirby, Macleans
I’ll be doing more work on this today, but Morgan Stanley has released a list of top secular growth stocks. The word “secular” indicates the highest probability of continued market-beating growth. The stock selection process includes positive revenue growth for the past 12 quarters, 15-per-cent annual profit growth expectations, and 10-per-cent annual revenue growth projections.
“@SBarlow_ROB MS’ top secular growth stocks” – (full table of stocks) Twitter
Tweet of the Day:
Diversion: “Canada is a tinderbox for populism. The 2019 election could spark it” – Maclean’s
Read more from source here…