Citi's top stock picks for value and price momentum – The Globe and Mail

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

There’s a lot of news this morning, but much of it is the province of other sections of the newspaper.

Market-wise, an anti-corruption campaign in Saudi Arabia with echoes of Turkish leader Tayyip Erdogan has oil prices sharply higher. Billionaire investor Al-Waleed bin Talal is among those detained by the government, albeit at the Ritz Carlton, and the crash of a helicopter killing Prince Mansour Bin Muqrin has generated considerable suspicion,

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“Oil Trades Near 2-Year High After Saudi Prince Purges Officials” – Bloomberg

“Arrests put Saudi Prince investments, including Canadian hotels, in spotlight” – Globe and Mail

“Alwaleed, Caught in Saudi Purge, Has Assets Across the World” – Bloomberg

“Oil price hits 2-year high as Saudi Arabia targets elite” – Financial Times

“Mexico declares 1.5 billion barrel oil discovery” – PressTV


The most vicious Venn diagram I’ve ever seen highlights investor anxiety regarding Tesla Inc.’s prospects as an investment,

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“Thursday wasn’t a good day for Tesla Inc. The stock fell almost 7 percent and closed below $300 for the first time since May. These days, though, there’s another price marker for Tesla out there: the yield on its $1.8 billion high-yield bond, launched in August. This has spiked in the past week to 6.12 percent.”

“Tesla’s Shareholders Had a Bad Week. They Weren’t Alone.” – Gadfly


Citi quantitative strategists published a report outlining their top global stock picks for price momentum and value. The choices are topped by JP Morgan Chase, IBM, Amgen, Goldman Sachs and American Express. The stock selection methodology is described here .

“Top global stock picks by value and momentum ‘world radar methodology’ ‘ – (table) Twitter


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Market news from China is unwelcome according to our website traffic statistics, but I still believe that, at some point, domestic investors will have to catch up on China quickly. The country remains the dominant source of demand for virtually every commodity and at the same time, a central bank official is warning repeatedly and stridently about major risks in the country’s debt-swamped credit system,

“China’s financial system is becoming significantly more vulnerable due to high leverage, according to central bank governor Zhou Xiaochuan. Latent risks are accumulating, including some that are “hidden, complex, sudden, contagious and hazardous,” even as the overall health of the financial system remains good, Zhou wrote in a lengthy article published on the People’s Bank of China’s website late Saturday.”

“China’s Central Bank Chief Warns of ‘Sudden, Contagious and Hazardous’ Financial Risks” – Bloomberg


Deutsche Bank economists threw some raw meat to gold bugs by positing the end of fiat currency in a thought-provoking research report called “Start of the End of Fiat Money”,

“The basic premise is that a fiat currency system – the likes of which we’ve had since 1971 – is inherently unstable and prone to high inflation all other things being equal. However, for the current system to have survived this long perhaps we’ve needed a huge offsetting disinflationary shock. .. In “The Next Financial Crisis” we suggested how China’s fairly sudden integration into the global economy at the end of the 1970s and a very favourable once-in-alifetime shift in demographics from around 1980 onwards could have contributed to the modern boom/bust culture … The argument is based around a view that a positive labour supply shock from China and developed countries’ demographics between 1980-2015 has allowed inflation to be controlled externally as the surge in the global labour supply at a time of rapid globalisation has suppressed wages … It could be argued that this external disinflation shock has perhaps ‘saved’ fiat currencies after the runaway inflation of the 1970s.”

“@SBarlow_ROB DB heads into strange territory: Start of the End of Fiat Money” – (research excerpt) Twitter


Tweet of the Day: “@business BREAKING: Broadcom proposes to buy Qualcomm in a deal valued at $130 billion ” – Twitter

Diversion: “The myth of Medieval Small Beer” – IanVisits

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