March 21, 2018 Newsletter

Dear Friends,

Tangents:
POINTS OF PROGRESS:

ENGLAND:
Rhodes scholars can now come from anywhere in the world – even Britain.  For the first time in the 116-year history of the prestigious Oxford University scholarship, students from regions including Africa, China, and the Middle East are eligible, after a multiyear push to raise funding and broaden the program.  The scholarship, named for staunch British imperialist Cecil Rhodes, was awarded to 97 students in December, the most in any year so far. -The NY Times.

AUSTRALIA:
Solar panel installations are set to boom in the land Down Under.  In 2017, workers installed 5 million panels, but that number is set to grow to 13 million this year, increasing Australia’s solar power capacity by 70%. -World Economic Forum.

INDIA:
The state of Tamil Nadu is a leader in India’s push to hit ambitious renewable energy targets.  It produces more wind power than Denmark  or Sweden.  Tamil Nadu is the country’s third largest producer of solar energy.  Its population of about 70 million is set to get half of its power from renewables by 2027. -World Economic Forum.

PHOTOS OF THE DAY

The sun rises over Mumbles Head in Swansea, South Wales. 
Credit: Aled Llywelyn

A phenomenon dubbed Steve, more properly described as a Strong Thermal Emission Velocity Enhancement, which was seen during displays of the Aurora Borealis overnight from the isles of Skye and Lewis in Scotland. 
Credit: John-GM7PBB

A Kangaroo on the empty street of Wildlife Drive in Tathra following the bushfire on the NSW south coast, Australia.
Credit: Alex Ellinghausen/Fairfax Media/Fairfax Media
Market Closes for March 21^st, 2018

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1868, the prospectus for the earliest known mutual fund was published in London. The fund, the Foreign & Colonial Government Trust, still exists today.
Number of the Day
$768 billion
Amazon.com Inc.’s market value rose to $768 billion on Tuesday, surpassing that of Alphabet Inc. to become the second-largest U.S. company.
Canada
By Kristine Owram
     (Bloomberg) — Canada’s equity benchmark gained as energy shares jumped the most since November after an unexpected decline in U.S. crude inventories sent oil prices soaring, while the loonie rallied on growing trade optimism.
     The S&P/TSX Composite Index rose 0.4 percent to 15,675.28 after gaining as much as 0.8 percent earlier in the session. Energy stocks rose 2.6 percent, with Precision Drilling Corp. up 9.4 percent and Encana Corp. gaining 7.5 percent.
     The materials index added 1.3 percent as both precious and base metals gained. Ivanhoe Mines Ltd. rose 9 percent and Torex Gold Resources Inc. gained 8.3 percent.
     In other moves:
                          Stocks
* BRP Inc. jumped 9.5 percent, the most since June. The Ski-Doo maker is considering spending more than C$500 million on acquisitions
* Magna International Inc. rose 2.1 percent, Linamar Corp. added 2.5 percent and Martinrea International Inc. gained 1.5 percent amid indications the U.S. is willing to budge on a key auto demand in trade talks
* First Quantum Minerals Ltd. gained 3.7 percent after its chief executive said he’s hoping to talk his way out of a $7.9 billion tax bill in Zambia.
                          Commodities
* Western Canada Select crude oil traded at a $24.50 discount to WTI
* Gold rose 0.7 percent to $1,321.50 an ounce, the highest in a week
                          FX/Bonds
* The Canadian dollar strengthened 1.4 percent to C$1.2899 per U.S. dollar, the biggest gain since December
* The Canada 10-year government bond yield rose five basis points to 2.26 percent, the highest in a week and a half
US
By Sarah Ponczek
     (Bloomberg) — U.S. stocks fell, while the dollar tumbled and Treasuries gained after the Federal Reserve’s first decision under Chairman Jerome Powell came in less hawkish than some investors had been anticipating.
     Following a whipsaw session, the S&P 500 closed lower as the central bank raised rates and signaled it will do so two more times this year as the economy continues to pick up speed. Treasuries briefly erased gains before turning higher, sending rates lower amid relief that the Fed isn’t spoiling to increase the pace of tightening. The dollar added to losses sparked when the U.S. made concessions in trade talks with its neighbors.
     The Fed raised the benchmark lending rate a quarter-point and forecast a steeper path of hikes in 2019 and 2020, citing an improving economic outlook. Powell did little to rattle markets during his first press conference at the helm of the central bank, downplaying the individual forecasts from policy officials. His basic message was that the fiscal policies will continue to improve economic growth without an outsize increase in inflation.
     “Despite speculation that the Fed might signal a more aggressive approach to tightening monetary policy this year, the projection of three rate hikes in 2018 is in line with expectations,” Bob Baur, chief global economist at Principal Global Investors, which manages $445 billion, said in an email. “All of the salient economic and market data supports the Fed’s decision to maintain the status quo.”
     The vote to lift the federal funds rate target range to 1.5 percent to 1.75 percent was a unanimous 8-0. In the forecasts, U.S. central bankers projected a median federal funds rate of 2.9 percent by the end of 2019, implying three rate increases next year, compared with two 2019 moves seen in the last round of forecasts in December. They saw rates at 3.4 percent in 2020, up from 3.1 percent in December, according to the median estimate.
     Energy producers led earlier gains in the major U.S. benchmarks, with trading about 20 percent below the 30-day average as a snowstorm battered New York. An index tracking the dollar’s value against trading partners earlier dropped the most in two weeks, with Canada’s dollar and Mexico’s peso surging after some concessions in trade talks.
     Here are some key events on the schedule this week:
* The Bank of England is expected to keep interest rates and its asset-purchase program unchanged on Thursday. Attention will be on language and the odds for a May hike.
* New Zealand has a monetary policy decision Thursday.
     And these are the main moves in markets:
                           Stocks
* The S&P 500 Index fell 0.2 percent as of 4:09 p.m. New York time, while the Dow Jones Industrial Average dropped 0.2 percent and the Nasdaq Composite Index dipped 0.3 percent.
* The Stoxx Europe 600 Index fell 0.2 percent and the MSCI Asia Pacific Index decreased 0.1 percent.
* The U.K.’s FTSE 100 Index dipped 0.3 percent, after touching the lowest in 15 months.
* The MSCI Emerging Market Index rose 0.3 percent.
                           Currencies
* The Bloomberg Dollar Spot Index declined 0.9 percent, the largest drop since January.
* The euro advanced 0.8 percent to $1.2340.
* The British pound jumped 1.1 percent to $1.4145.
* The Japanese yen gained 0.6 percent to 105.91 per dollar.
* The MSCI Emerging Markets Currency Index rose 0.1 percent.
                            Bonds
* The yield on 10-year Treasuries fell one basis point to 2.88 percent, while two-year yields dropped five basis points to 2.30 percent.
* Germany’s 10-year yield advanced one basis point to 0.59 percent, the highest in more than a week.
* Britain’s 10-year yield climbed four basis points to 1.53 percent, close to the highest in more than three weeks on the largest increase in more than three weeks.
                            Commodities
* West Texas Intermediate crude increased 3 percent to $65.50 a barrel, the highest in almost seven weeks.
* Gold rose 1.9 percent to $1,325.51 an ounce, the biggest rise since May 2017. 
–With assistance from Eddie van der Walt.

Have a wonderful evening.

Be magnificent!

As ever,

Carolann

Common sense is instinct and enough of it is genius. -Josh Billings, 1818-1885

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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