Juggling Dynamite

Despite all the usual consensus happy talk, selling pressure has been dominating Canadian bank shares since last June, when the price of oil began to tank in earnest. Here is a one year portrait of the finance sector ETF (XFN).
With oil breaking below $50 in January, Canadian economic indicators (that typically lag the price of WTI by 3 months, see Citi chart below) are likely to disappoint over at least the next couple of quarters.  (Hint:  Not yet priced into lofty Canadian stock prices, least of all the banks.)

Lacy Hunt’s Hoisington Review is something I look forward to each quarter. The latest 4th quarter 2014 review can be seen here. Hunt recently taped a discussion with Gordon Long which offers some worthwhile historical context and can be seen here: direct video link. If you find the volume low, you can increase it on the clip bar.

In a world where growth is scarce and prospects aren’t improving, an unspoken currency war has broken out. The short term pay-off might be a boost in exports, but, according to Bloomberg View’s Mark Gilbert, there can be no real winners in the end. Here is a direct video link.