February 6, 2018 Newsletter

Dear Friends,

Tangents:
On Feb. 6, 1952, Britain’s King George VI died; he was succeeded by his daughter, Elizabeth II.
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PHOTOS OF THE DAY

A wintry snow shower over the Stade fishing beach this morning in Hastings, East Sussex, England.
Credit: The Telegraph

Fools dressed as balloonists celebrate in the streets of Damme near Osnabrueck, northern Germany, during a traditional carnival parade. The small town of Damme traditionally organises its carnival parade one week ahead of Rose Monday.
Credit: The Telegraph

A woman looks at an art installation titled Temple of the Soul – Two Suns is seen on Gyeongpo Beach as part of the Fire Art exhibition with the Pyeongchang Cultural Olympiad in celebration of the 2018 Pyeongchang Winter Olympics, in South Korea. The Olympic opening ceremony will be held this Friday, February 9^th. Throughout the Olympics each of the 23 pieces of art will be burned as part of the art exhibit.
Credit: The Telegraph
Market Closes for February 6^th, 2018

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Number of the Day
503 
The number of components in the (slightly misnamed) S&P 500 that fell in Monday’s trading. Two were up. None were unchanged.
Canada
By Kristine Owram
     (Bloomberg) — Canadian stocks rose for the first time in seven trading days after a turbulent session that saw the benchmark tumble 2.5 percent at the open.
     The S&P/TSX Composite Index rose 29 points or 0.2 percent to 15,363.93, the first increase since Jan. 26. Cannabis stocks led the gains, with Canopy Growth Corp. jumping 19 percent and Aphria Inc. rising 18 percent.
     The consumer discretionary index rose 1.2 percent. Auto supplier Magna International Inc. jumped 4.7 percent, the most since May, following stronger-than-expected results from customer General Motors Co.
      In other moves:
                         Stocks
* Element Fleet Management Corp. fell 29 percent, the most ever, after the company said it was no longer exploring a sale
* Nutrien Ltd. lost 2.9 percent. The potash company’s 2018 outlook and fourth-quarter results missed most analyst estimates
* Superior Plus Corp. rose 4.6 percent after the stock was rated a new buy at Desjardins Securities
                         Commodities
* Western Canada Select crude oil traded at a $30 discount to WTI
* Gold fell 0.5 percent to $1,326.10 an ounce, the lowest since Jan. 11
                          FX/Bonds
* The Canadian dollar strengthened 0.2 percent to $1.2511 per U.S. dollar
* The Canada 10-year government bond yield rose seven basis points to 2.36 percent
US
By Sarah Ponczek and Kailey Leinz
     (Bloomberg) — U.S. stocks rebounded from a violent selloff to post the biggest rally in 15 months as investors poured back into some of the most beaten-down sectors.
     Technology, materials and consumer shares paced a 1.7 percent gain in the S&P 500 Index, while DowDuPont and Home Depot led a 567 point surge in the Dow Jones Industrial Average, the biggest gain in two years. The ride wasn’t straight up, though. The Dow plunged more than 500 points at the open, adding to anxiety after Monday’s rout — the worst in almost seven years. Stocks swung between gains and losses no fewer than a dozen times before a late-session rally.
     The benchmark for U.S. share volatility went through wild gyrations after hitting a two-year high. Treasury yields swung before nudging higher. The greenback was little changed after two days of gains.
     Earlier, the Stoxx Europe 600 Index slumped the most since June 2016, and Japan’s Nikkei entered a correction as most of the shares on the 1,000-plus member MSCI Asia Pacific Index declined. European bonds traded higher.
     What began with rising bond yields became a selloff across global equity markets late last week, as investors feared the return of inflation and higher rates that could erode profitability for companies already trading at elevated valuations. Traders are watching how the moves unfold from here — a sustained stock slump has the potential to undermine consumer and business sentiment, crimp borrowing and so start to curtail global growth.
    “Based on where we stand relative to historic averages, there may be more pain ahead,” David Lebovitz, global market strategist at JPM Asset Management, said in a message. “However, with economic growth solid, profits rising and central banks only normalizing policy at a gradual pace, it seems reasonable to expect that we will look back on this a few months from now and not even remember what the initial plunge felt like.”
     Earlier Tuesday, the Cboe Volatility Index, a gauge of implied volatility for the S&P 500 Index over the next month, breached 50 to touch its highest level since the aftermath of China’s devaluation of the yuan in 2015.
     Elsewhere, oil declined and metals fell. Bitcoin traded around $7,600 after at one point sinking below $6,000 for the first time since October.
     Here are some key events scheduled for this week:
* Monetary policy decisions are due in Russia, India, Brazil, Poland, Romania, the U.K., New Zealand, Serbia, Peru and the Philippines.
* Earnings season continues with reports from Walt Disney, SoftBank, Sanofi, Philip Morris, Tesla, Rio Tinto, L’Oreal and Twitter.
* Dallas Fed President Robert Kaplan and New York Fed President William Dudley are among policy officials due to speak in Frankfurt and New York.
     These are the main moves in markets:
                           Stocks
* The S&P 500 Index gained 1.7 percent as of 4 p.m. New York time, the biggest surge in 15 months.
* The Stoxx Europe 600 Index decreased 2.4 percent.
* The U.K.’s FTSE 100 Index dipped 2.6 percent.
* The MSCI Emerging Market Index sank 2.5 percent to the lowest in almost five weeks.
                           Currencies
* The Bloomberg Dollar Spot Index fell less than 0.05 percent.
* The euro climbed less than 0.05 percent to $1.2371.
* The British pound declined 0.1 percent to $1.3949.
* The Japanese yen declined 0.4 percent to 109.56 per dollar.
                           Bonds
* The yield on 10-year Treasuries climbed nine basis points to 2.80 percent.
* Germany’s 10-year yield declined four basis points to 0.69 percent.
* Britain’s 10-year yield fell four basis points to 1.521 percent, the biggest fall in almost five weeks.
                          Commodities
* West Texas Intermediate crude dipped 1 percent to $63.43 a barrel.
* Gold fell 1.3 percent to $1,322.74 an ounce.
* Copper fell 1.3 percent to $7,076 per metric ton.
–With assistance from Adam Haigh, Samuel Potter, Luke Kawa, Lu Wang and Julie Verhage.

Have a wonderful evening everyone.

Be magnificent!

As ever,

Carolann

Alone we can do so little; together we can do so much.
                                     -Helen Keller, 1880-1968

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

Queensbury Securities Inc.,
St. Andrew’s Square,
Suite 340A, 730 View St.,
Victoria, B.C. V8W 3Y7

Tel: 778.430.5808
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