February 15, 2018 Newsletter

Dear Friends,

Tangents:
On this day in 1965, Canada raised its new national flag–featuring the red maple leaf–over Parliament Hill in the capital of Ottawa. Canada had formerly flown a flag featuring the U.K.’s Union Jack before then.

Also on this day in 1968 – Nancy Greene wins Gold in Giant Slalom at the 10th Winter Olympics in Grenoble.
PHOTOS OF THE DAY

Chinese people walk in a maze at the Tang Paradise Park in Xi’an, Shaanxi province, China, ahead of the coming Lunar New Year.
CREDIT: FRED DUFOUR/AFP/GETTY IMAGES

Mount Vesuvius is seen covered by snow in Naples, Italy.
CREDIT: TONY GENTILE/REUTERS

A red kite in the snow at Girgrin Farm in Rhayader, Wales.
CREDIT: SEAN WEEKLY/SWNS.COM
Market Closes for February 15^th, 2018

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Number of the Day
$3.82 trillion
Consumers are borrowing more on credit cards or through auto loans than they have in years, and lenders seeking growth are happy to oblige them.  In the fourth quarter, consumer debt, excluding mortgages and other home loans, rose 5.5% from a year earlier to $3.82 trillion.
Canada
By Kristine Owram
     (Bloomberg) — Canadian stocks closed at the highest in nearly two weeks and have retraced about one-third of the benchmark’s recent decline, boosted by strong earnings and deal activity.
     The S&P/TSX Composite Index added 79 points or 0.5 percent to 15,407.66. Real estate shares were the biggest gainers, rising 2 percent as Canadian Real Estate Investment Trust jumped
16 percent, the most ever. Choice Properties REIT is buying Canadian REIT for C$3.93 billion.
     The materials index was the only decliner, losing 0.4 percent amid concerns about gold miners’ ability to contain costs. Kinross Gold Corp. tumbled 7.3 percent, the most since 2016, after reporting weaker-than-expected quarterly results.
     In other moves:
                          Stocks
* Bombardier Inc. jumped 11 percent after reporting the highest cash flow in seven years
* Canadian Tire Corp. rose 6.6 percent to a record high. Fourth- quarter earnings per share beat the highest estimate
* Cenovus Energy Inc. fell 5.3 percent to the lowest since August. The company will consider selling more of its holdings to speed up efforts to repair its balance sheet, its CEO said
                          Commodities
* Western Canada Select crude oil traded at a $26.50 discount to WTI, the widest in eight trading days
* Gold fell 0.3 percent to $1,352.10 an ounce
                          FX/Bonds
* The Canadian dollar strengthened 0.1 percent to C$1.2485 per U.S. dollar
* The Canada 10-year government bond yield was little changed at 2.38 percent
US
By Kailey Leinz
     (Bloomberg) — U.S. stocks capped their best five-day run since 2011, extending a global rally as equities rebounded from the worst of this month’s correction. The dollar slumped to a three-year low and oil rallied.
     The S&P 500 topped the 2,700 level and the Dow Jones Industrial Average climbed above 25,000 following gains in Europe and Asia. The yield on 10-year Treasuries hovered near 2.9 percent. The yen ascended to a 15-month high, while South Africa’s rand traded at its strongest level in almost three years after President Jacob Zuma resigned.
     Stock investors brushed off a report on U.S. wholesale prices that underscored signs of stronger inflation even as a growing number of economists now expect the Federal Reserve to step up the pace of its interest-rate increases this year. A report yesterday showing faster consumer-price increases gave rise to debate on the breakdown in the greenback’s correlation to interest rates, as currency investors focused instead on the U.S.’s twin deficits.
     The S&P 500 closed at a two-week high and above its 50-day moving average after climbing 5.8 percent in the past five days. Equities remain cheap relative to bonds and won’t be affected by higher long-term interest rates as long as the 10-year Treasury yield stays below 4 percent, according to Gina Martin Adams and Peter Chung, equity strategists at Bloomberg Intelligence.
     “The market is figuring out that 3 percent is digestible on the 10-year yield,” said Leo Grohowski, the chief investment officer of BNY Mellon Wealth Management. “As long as the reason you’re getting to the 3 percent level is driven by a better feeling about economic growth, which therefore leads to a better feeling about corporate profits. And that’s what I sense taking place.”
     Japan’s Finance Minister Taro Aso’s comments that the yen’s gain isn’t abrupt enough to require intervention supported the Japanese currency’s rally. Hong Kong equities sealed their best three-day run in more than two years in shortened trading ahead of the Lunar New Year holiday. China, South Korea, Taiwan, Vietnam markets are closed Thursday.
     Here are some important things to watch out for this week:
* A handful of European Central Bank officials are due to speak Friday.
* Earnings season continues in full swing.
* Lunar New Year celebrations for the Year of the Dog begin, affecting China, Hong Kong, Taiwan, Singapore, Malaysia and Indonesia. Chinese mainland markets are closed Feb. 15-21.
     These are the main moves in markets:
                            Stocks
* The S&P 500 rose 1.2 percent at the close of trading in New York.
* The Stoxx Europe 600 Index climbed 0.5 percent.
* The MSCI All-Country World Index advanced 1.3 percent.
                            Currencies
* The Bloomberg Dollar Spot Index declined 0.5 percent to a three-year low.
* The euro gained 0.4 percent to $1.2507, reaching the strongest in two weeks.
* The Japanese yen climbed 0.9 percent to 106.05 per dollar.
* South Africa’s rand advanced 0.7 percent to 11.6314 per dollar.
                             Bonds
* The yield on 10-year Treasuries was little changed at 2.9 percent, near the highest in more than four years.
* Germany’s 10-year yield rose one basis point to 0.76 percent.
                             Commodities
* West Texas Intermediate crude rose 1.7 percent to $61.61 a barrel.
* Gold rose 0.3 percent to $1,354.26 an ounce.
* Copper futures rose 0.4 percent.
–With assistance from Adam Haigh, Nancy Moran, Natasha Doff, Todd White and Christopher Anstey.
 

Have a wonderful evening everyone.

Be magnificent!

As ever,

Carolann

It always seems impossible until it’s done.
-Nelson Rolihlahla Mandela, 1918-2013

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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