February 22, 2018 Newsletter

Dear Friends,

Tangents:
On Feb. 22, 1980, in a stunning upset, the United States Olympic hockey team defeated the Soviets at Lake Placid, N.Y., 4-to-3. (The U.S. team went on to win the gold medal.
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PHOTOS OF THE DAY

The ruins of Little Bavington Tower rise above low lying mists rolling across the Northumberland countryside at sunrise this morning as temperatures dropped below zero overnight.
CREDIT: The Telegraph

Glenridding UK. A boat reflects into the calm water of Ullswater lake this morning on a sunny day in Cumbria.
CREDIT: The Telegraph

Drones are about to fly for a light show in Xi’an, capital of northwest China’s Shaanxi Province. A total of 300 drones in 2 groups performed a light show in Xi’an to celebrate the Spring Festival holiday.
CREDIT: The Telegraph

Artists perform during the 134^th Carnival parade in Nice, France.
CREDIT: The Telegraph
Market Closes for February 22^nd, 2018

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Number of the Day
27%
The surge in Amazon.com Inc. shares has driven 27% of the S&P 500 index’s gain this year through Tuesday. Tech titans Amazon, Microsoft Corp. and Netflix Inc. have driven nearly half of the S&P 500’s 1.6% gain this year, a worrying sign for investors who expected tech’s dominance to give way to cyclical sectors, like materials or industrials, as the economy improved.
Canada
By Kristine Owram
     (Bloomberg) — Canadian stocks were unable to hold onto earlier gains, closing lower as consumer staples and financials weighed on the benchmark and bond yields tumbled.
    The S&P/TSX Composite Index lost 16 points or 0.1 percent to 15,508.17 after earlier gaining as much as 0.7 percent. Consumer staples fell 0.5 percent as Loblaw Cos. fell 1.8 percent after reporting fourth-quarter results.
     Financials lost 0.3 percent despite strong results from Canadian Imperial Bank of Commerce, which rose 0.4 percent. Fairfax Financial Holdings Ltd. fell 1.7 percent.
     In other moves:
                         Stocks
* Stantec Inc. lost 11 percent, the most since 2015. The stock was downgraded at National Bank, which said it expects the shares to be range-bound after earnings missed the lowest estimate
* CCL Industries Inc. rose 9.3 percent to the highest since October after fourth-quarter earnings beat the highest estimate
* Iamgold Corp. lost 8.4 percent after reporting an unexpected loss for the fourth quarter
                        Commodities
* Western Canada Select crude oil traded at a $28.75 discount to WTI
* Gold rose 0.1 percent to $1,330.60 an ounce
                        FX/Bonds
* The Canadian dollar weakened 0.1 percent to C$1.2715 per U.S. dollar
* The Canada 10-year government bond yield fell five basis points to 2.30 percent after retail sales missed forecasts
US
By Jeremy Herron and Kailey Leinz
     (Bloomberg) — U.S. stocks eked out a gain to halt a two- day slide, but not before erasing an advance that topped 1 percent as investors grappled with the threat from higher interest rates. Treasuries edged higher and the dollar slumped.
     The S&P 500 Index barely held above 2,700 after dipping below that round number in the final 15 minutes of trading. It’s faded from session highs in afternoon trading for a fourth straight day. ended in the green after briefly turning lower in last trading as the index coughed up its biggest advances for a fourth straight day. Energy producers led advances as crude jumped more than 1.5 percent. The 10-year Treasury yield interrupted its march toward 3 percent. The dollar snapped a four-day rally.
     Rate-hike jitters returned to the market after the Fed’s January meeting minutes showed a central bank confident the economy is poised to take off. Subsequent data confirmed that view, but also brought signs of rising inflation that central bank had warned might fall short of its targets.
     “Investors are just nervous about interest rates,” said Paul Nolte, a portfolio manager at Kingsview Asset Management in Chicago. “Everybody is waiting for more economic data to confirm or deny whatever the Fed position is. It’s a big case of the nerves.”
    With recent data underpinning the view that inflation is no longer lagging, the OIS space shows traders pricing in just shy of three U.S. rate hikes over the next 12 months. The S&P 500 remains more than 5 percent from its all-time high, as February shapes up as one of the worst months for global equities in more than a year. The Cboe Volatility Index slipped below 20, well above its average for the past year, when unprecedented calm gripped markets.
     “We’re in the clear from that initial correction,” Peter Jankovskis, co-chief investment officer at Oakbrook Investments, said by phone. “Right now the trend is going to be to continue a recovery from that absent some other upset in the marketplace. Whether we’re totally clear of volatility, I would come down on the opposite side of that.”
     In Europe the Stoxx 600 Index slid as almost all the major national equity gauges in the region fell. It was a similar picture across Asia, though China’s market bucked the trend as it reopened after a holiday.
     Elsewhere, gold erased a drop to trade little changed as most commodities retreated. The pound was weaker as data showed the U.K. economy expanded less than previously estimated in the fourth quarter, and the euro edged up as minutes from the European Central Bank showed officials continue to lay the ground for a shift in policy language in the first half of the year.
     Here are some key events scheduled for this week:
* U.K. PM Theresa May is locking down her ministers in a bid to agree what kind of post-Brexit trade deal they want from the EU.
* Companies announcing earnings include Woolworths and Royal Bank of Scotland.
     These are the main moves in markets:
                           Stocks
* The S&P 500 rose 0.1 percent at 4 p.m. in New York, paring a gain that reached 1.1 percent.
* The Nasdaq Composite Index ended lower, while the Dow Jones Industrial Average rose 165 points.
* The Stoxx Europe 600 Index decreased 0.2 percent.
* The MSCI Asia Pacific Index dipped 0.6 percent to the lowest in a week.
* The MSCI Emerging Market Index sank 0.7 percent, the largest decrease in almost two weeks.
                          Currencies
* The Bloomberg Dollar Spot Index dipped 0.4 percent, the first retreat in a week.
* The euro gained 0.3 percent to $1.2325, the largest advance in a week.
* The Japanese yen jumped 1 percent to 106.701 per dollar, the first advance in a week and the largest climb in more than two weeks.
* The MSCI Emerging Markets Currency Index rose 0.2 percent.
                          Bonds
* The yield on 10-year Treasuries fell three basis points to 2.92 percent.
* The two-year yield fell one basis point to 2.25 percent.
* Germany’s 10-year yield decreased two basis points to 0.706 percent.
                         Commodities
* West Texas Intermediate crude rose to the highest in two weeks as American supplies unexpectedly shrank. Futures rose 1.8 percent to settle at $62.77 a barrel.
* Gold futures climbed 0.1 percent to $1,333.60 an ounce, the first advance in a week.
–With assistance from Samuel Potter and Sarah Ponczek.

Have a wonderful evening everyone.

Be magnificent!

As ever,

Carolann

All life is an experiment.  The more experiments you make the better.
                                           -Ralph Waldo Emerson, 1803-1882

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

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