April 2, 2018 Newsletter

Dear Friends,

Tangents:

April’s here! That means showers, flowers and…taxes.

April 2, 1513 – Juan Ponce de Leon reaches Florida.
April 2, 1975 – CN Tower topped off by high rigger Paul Mitchell; at 555.35 metres, the world’s tallest free-standing structure until 2010.

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PHOTOS OF THE DAY

Hot air balloons glide in the sky during a trip over historical Cappadocia region, in Nevsehir, Turkey. Credit: Behcet Alkan/Anadolu Agency/Getty Images

Faces in things: a house in Hiddensee Vitte, Germany, seems to be peering through the snow. 
Credit: Waltraud Grubitzsch/DPA-Zentralbild/DPA

High tides and burst river banks in Richmond, London, meant this car was swimming with the fishies. Credit: Toby Melville/Reuters
Market Closes for April 2^nd, 2018

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1799, the New York State legislature approved the corporate charter for the Manhattan Co., a corporation founded by Alexander Hamilton and Aaron Burr that planned to build dams, divert streams and lay pipes that would help supply New York City with fresh water. It quickly morphed into the Bank of the Manhattan Co., ancestor of Chase Manhattan Corp.
Canada
By Kristine Owram
     (Bloomberg) — Canadian stocks tumbled on the first trading day of the second quarter as retaliatory tariffs from China renewed fears of a trade war, sending oil prices down the most in nearly two months.
     The S&P/TSX Composite Index lost 154 points or 1 percent to 15,213.45, adding to the first quarter’s 5.2 percent slump. Energy shares fell 2.1 percent as crude prices tumbled 3 percent. Trade tensions pushed investors to sell risky assets.
     The technology index lost 1.7 percent and consumer discretionary stocks fell 1.3 percent. Materials eked out a small gain of 0.1 percent as gold prices rallied.
     In other moves:
                          Stocks
* ProMetic Life Sciences Inc. fell 16 percent to the lowest since 2013 after the stock was downgraded for the third time in less than a week
* Transcontinental Inc. rose 9.7 percent, the most since 2009, on a deal to buy packaging company Coveris Americas for $1.32 billion
* BlackBerry Ltd. fell 6.8 percent to the lowest since December. The stock has lost 14 percent since the company failed to provide software-revenue guidance with its fourth-quarter results
                          Commodities
* Western Canada Select crude oil traded at a $22.00 discount to WTI
* Gold rose 1.5 percent to $1,342.10 an ounce
                           FX/Bonds
* The Canadian dollar weakened 0.2 percent to C$1.2915 per U.S. dollar
* The Canada 10-year government bond yield rose three basis points to 2.12 percent, the first gain in a week
US
By Jeremy Herron and Sarah Ponczek
     (Bloomberg) — The deepening rout in once high-flying technology shares sent U.S. stocks tumbling to start the second quarter, as fresh presidential criticism of Amazon.com and retaliatory tariffs from China rattled markets. Gold rose on haven demand.
     The S&P 500 Index closed at the lowest level since early February and finished below its average price for the past 200 days for the first time since June 2016. The index is now lower by more than 10 percent from its January record. The Cboe Volatility Index jumped to 23.
     Selling was heaviest in technology stocks. The Nasdaq 100 Index lost 2.9 percent as investors continued to offload some of the bull market’s biggest gainers. Amazon, up 50 percent in the past year, sank after Donald Trump renewed his attack on the online retailer. Netflix slid 5 percent, while chipmakers in the S&P 500 plunged 4.3 percent thanks to Intel’s worst day in two years. Bonds erased declines and gold spiked higher as the equity selling picked up steam.
     “This is definitely a flight to safety type of market,”  said Peter Jankovskis, co-chief investment officer at Oakbrook Investments. “You’re seeing people coming out of the stocks that had been performing well. There’d been various stories that momentum was extended in the market place, and I would say today’s activity supports that trying to unwind a bit.”
     Trump and renewed trade concerns roiled U.S. financial markets to start the second quarter after the worst three months for global stocks in more than two years. The risk-off tone comes just two weeks before earnings season starts, with investors still anticipating a strong showing even as signs have emerged that the synchronized global growth story is faltering just as the Federal Reserve steps up its tightening.
     “The US markets will likely serve as a focal point as investors stateside and elsewhere consider what tact the administration will take toward trade in the weeks ahead and what effects it could have on the US economy and the economies of its trading partners,” John Stoltzfus, the chief investment strategist of Oppenheimer & Co., wrote in a note to clients Monday.
     “The U.S. economy is showing a lot of symptoms of being late-cycle,” said Marc Chandler, global head of currency strategy at Brown Brothers Harriman & Co. “I’m looking for a downturn in maybe late next year or early 2020, with the fiscal stimulus they’re getting from the White House giving us a little bit of late-cycle expansion, but nothing that changes the game plan.”
     Here are some key events coming up this week:
* Easter Monday is a public holiday in many major markets including the U.K., Australia, and most of Europe.
* U.S. manufacturing PMI and ISM manufacturing data due Monday.
* Reserve Bank of Australia April monetary policy decision due Tuesday.
* New York Fed debuts the Secured Overnight Financing Rate on Tuesday.
* Reserve Bank of India April policy decision due Thursday.
* U.S. employment data due Friday; jobless rate probably fell in March after holding at 4.1 percent for five straight months.
     These are the main moves in markets:
                          Stocks
* The S&P 500 Index declined 2.2 percent as of 4 p.m. New York time.
* The Nasdaq 100 was off 2.9 percent and the Dow Jones Industrial Average fell 459 points. It was down as much as 758 points earlier in the session.
* The MSCI Emerging Market Index dropped 0.1 percent.
                          Currencies
* The Bloomberg Dollar Spot Index fell less than 0.05 percent to 1,124.38.
* The euro was virtually unchanged at $1.2303, while the yen rose 0.3 percent to 105.92.
* The British pound increased 0.2 percent to $1.4046, the first advance in a week.
                          Bonds
* The yield on 10-year Treasuries was little changed at 2.74 percent.
* The yield on two-year Treasuries fell two basis points to 2.25 percent.
                          Commodities
* Gold futures rose 1.3 percent to $1,345.10 an ounce.
* West Texas Intermediate crude fell 2.8 percent to $63.14 a barrel.
–With assistance from Adam Haigh, Todd White and Samuel Potter.

Have a wonderful evening.

Be magnificent!

As ever,

Carolann

Facing it, always facing it, that’s the way to get through.  Face it.
                                                -Joseph Conrad, 1857-1924

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM
Senior Investment Advisor

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

Tel: 778.430.5808
(C): 250.881.0801
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www.carolannsteinhoff.com