February 2, 2018 Newsletter

Dear Friends,

Tangents: Happy Friday!

On this day in 1887, Groundhog Day is celebrated for the first time at Gobbler’s Knob in Punxsutawney, Penn. The groundhog saw its shadow.

6 More Weeks of Winter: Punxsutawney Phil Sees His Royal Shadow
                     -By Jeanna Bryner, Live Science Managing Editor 

Punxsutawney Phil, the seemingly immortal and consistently cute groundhog and weather prognosticator, has emerged from his burrow on Gobbler’s Knob in Punxsutawney, Pennsylvania, this morning (Feb. 2) only to see his shadow, indicating six more weeks of winter.
The furry, well-fed groundhog — also called a woodchuck, marmot and whistle-pig — was welcomed by flashing TV cameras and a cheering crowd. And he apparently had something to say, speaking Groundhogese to the Punxsutawney Groundhog Club president, Bill Deeley, who reported that Phil directed him to a scroll that read: “… My faithful followers, your hands and my paws are getting cold, so here’s my forecast, not lead but solid gold. I see my royal shadow, six more weeks of winter to go.” Lots of cheering, and some boos, followed from the huge crowd that turned out in front of Gobbler’s Knob.
This is Phil’s 132nd weather forecast. And while your average groundhog (Marmota monax) in captivity lives about 10 years, the marmot’s caregivers maintain there has been only one furry forecaster.
Another claim of Phil’s handlers: that the well-pampered (he lives next to the children’s library the other 364 days of the year) rodent is spot-on with his forecasts every year.
“He sees his shadow about 80 percent of the time and the other 20 percent he doesn’t,” Deeley told Live Science previously. “He’s pretty darn accurate.”
The various incarnations of Punxsutawney Phil have seen their shadow 103 times (more winter) and reported no shadow, or early springs, 18 times. And in 1942, apparently, Phil saw a partial shadow, which was counted as “no shadow,” according to Stormfax Almanac. There is no record for nine years. Overall, Phil has swung it out of the park about 39 percent of the time, according to Stormfax Almanac.
Last year, Phil reported seeing his shadow, suggesting six more weeks of winter. At the end of February, forecasters did predict winter would stay around into spring, AccuWeather reported.
The weather-forecasting powers of woodchucks seem to date back to medieval Europe and were brought to the United States by German immigrants in the 1880s, Live Science previously reported.
Original article on Live Science.

On Feb. 2, 1943, the remainder of Nazi forces from the Battle of Stalingrad surrendered in a major victory for the Soviets in World War II.
Go to article ??

PHOTOS OF THE DAY

A super blue blood moon behind a mountain is seen from Longyearbyen, Svalbard, Norway.

A Soyuz 2.1a rocket booster with a Frigate upper stage block launched from the Vostochny Cosmodrome. The Soyuz 2.1s rocket booster is to deliver Russian Kanopus-V No3 and No4 remote sensing satellite and 9 small satellites to orbit.

An Indian Hindu devotee touches the water of the river Ganges on its pass through Brijghat in the Indian state of Uttar Pradesh.
Market Closes for February 2^nd, 2018

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Number of the Day
$546 million
Tesla Inc. sold $546 million of bonds backed by lease payments on Model X and Model S vehicles on Thursday, the latest sign of how yield-hungry investors continue to soak up corporate debt of all flavors.
CANADA
By Kristine Owram
     (Bloomberg) — Canadian stocks posted their worst week since January 2016, falling to the lowest in nearly five months amid a broader global rout.
     The S&P/TSX Composite Index tumbled 255 points or 1.6 percent to 15,606.03. The benchmark fell 3.9 percent on the week as a combination of rising bond yields and worsening sentiment weighed on stocks.
     The health-care index was the biggest decliner, losing 5.4 percent as marijuana stocks Canopy Growth Corp. and Aphria Inc. led the drop with double-digit losses.
     Materials tumbled 2.8 percent as precious and base metals fell, and energy lost 2.1 percent as the gap between Canadian crude and West Texas Intermediate widened to the largest since 2013.
     In other moves:
                          Stocks
* Canada Goose Holdings Inc. was one of the few gainers, adding 1.6 percent ahead of next week’s earnings release
* Imperial Oil Ltd. fell 4.3 percent after fourth-quarter earnings per share missed the average analyst estimate
* Norbord Inc. lost 2.8 percent even as fourth-quarter earnings beat estimates
                          Commodities
* Western Canada Select crude oil traded at a $30.55 discount to WTI, the widest since 2013
* Gold fell 0.8 percent to $1,333.70 an ounce
                           FX/Bonds
* The Canadian dollar weakened 1.2 percent to $1.2419 per U.S. dollar as U.S. jobs data strengthened the greenback
* The Canada 10-year government bond yield was little changed at 2.36 percent
US
By Jeremy Herron
     (Bloomberg) — The Dow Jones Industrial Average tumbled 666 points in the biggest plunge since June 2016, as the worsening bond rout stirred angst that the Federal Reserve will accelerate its rate-hike schedule.
     Solid jobs data that underscored the strength of the economy sent bond bulls scurrying and rattled equity investors who haven’t seen a week this bad in two years. The tandem selling accelerated after Dallas Fed President Robert Kaplan suggested officials may need to hike more than three times this year to cool the advance. The 10-year Treasury yield popped above 2.85 percent for the first time since January 2014.
     “Yields have risen, inflation evidence is rising rather broadly. It’s that combo of factors that’s starting to mount,” Jim Paulsen, chief investment strategist at Leuthold Weeden, said by phone. “And then you get a report, and that’s the straw that breaks the camel’s back, and that’s kind of what we got into today.”
     There was nowhere to hide on the stock market, with all 11 S&P 500 sectors lower. The index’s five-day rout reached 3.9 percent — marking its first pullback of at least that much in a record 404 days. Energy shares sank 4.1 percent as earnings disappointed and crude slumped. The tech selloff worsened, sending the Nasdaq 100 Index lower by 2.1 percent. Its weekly rout hit 3.7 percent, most since February 2006. Not even a record rally at Amazon.com Inc. could rescue the measure, as the world’s biggest company, Apple Inc. hit its lowest since October.
     “People are finally starting to reprice reflation, it’s about time,” Jeanne Asseraf-Bitton, head of global cross-asset research at Lyxor Asset Management, said by phone. “Global economic growth is strong and corporate earnings are very solid, so there’s no reason to question the equity bull market. The rise in bond yields is good, it’s just the speed at which it’s happening that is making investors nervous. Bottom line: this is a healthy correction.”
     U.S. hiring picked up in January and wages rose at the fastest annual pace since the recession ended, as the economy’s steady move toward full employment extended into 2018. Equities are being tested by the surge in bond yields, with some fund managers saying 3 percent U.S. 10-year rates would signal a bond bear market. The level is seen by many stock-watchers as a potential trigger for a correction in equities.
     In Europe, a bond selloff deepened across the continent, and equities dropped for a fifth straight day, the longest streak since November. Disappointing results from companies including Deutsche Bank AG and BT Group Plc. paced losses, with Germany’s DAX giving up the year’s gains, capping the worst weekly decline since 2016. Bund yields reached a fresh two-year high, while the euro and British pound weakened. Japanese debt gained and the yen declined after the Bank of Japan intervened to stem the rise in rates.
     These are the main moves in markets:
                        Stocks
* The S&P 500 Index fell 2.1 percent to 2,761.91 at 4 p.m. in New York.
* The Dow Jones Industrial Average lost 668.64 points to close at 25,518.07, the lowest since Jan. 10.
* The Nasdaq 100 Index lost 2.1 percent.
* The Stoxx Europe 600 Index decreased 1.4 percent, wiping out gains this year with its fifth consecutive decline. It lost 3.1 percent in the week.
* Germany’s DAX Index sank 1.7 percent, the most since June. It closed a four-month low.
* Emerging market stocks lost 1.6 percent, for a weekly drop of 3.5 percent, the most since May 2016.
* The MSCI Asia Pacific Index fell 0.7 percent.
* Topix index fell 0.3 percent, Hong Kong’s Hang Seng Index dropped 0.1 percent, the Kospi index declined 1.7 percent, Australia’s S&P/ASX 200 Index rose 0.5 percent.
                        Currencies
* The Bloomberg Dollar Spot Index gained 0.8 percent, the largest rise in more than 10 weeks.
* The euro declined 0.4 percent to $1.2457.
* The British pound fell 1 percent to $1.4123.
* The Japanese yen fell 0.7 percent to 110.144 per dollar, the weakest since Jan. 23.
                         Bonds
* The yield on 10-year Treasuries rose five basis points to 2.834 percent. It touched 2.8525 earlier.
* Germany’s 10-year yield rose five basis points to 0.77 percent, the highest in more than two years.
* Japan’s 10-year yield dipped one basis point to 0.086 percent.
                         Commodities
* West Texas Intermediate crude fell 0.5 percent to settle at $65.45 a barrel.
* Gold posted the biggest weekly drop since early December. Futures on Friday decreased 0.8 percent to settle at $1,337.30 an ounce.
–With assistance from Masaki Kondo, Cormac Mullen and Robert Brand 

Have a wonderful weekend everyone.

Be magnificent!

As ever,

Carolann

I always pass on good advice.  It is the only thing
to do with it.  It is never of any use to oneself.
                       -Oscar Wilde, 1854-1900

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM
Portfolio Manager &
Senior Vice-President

Queensbury Securities Inc.,
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