May 25, 2018 Newsletter

Dear Friends,

Tangents:
On this day in 1977, the first of George Lucas’ blockbuster Star Wars movies hit American theaters.

Also, on May 25, 2006, Kenneth L. Lay and Jeffrey K. Skilling, the chief executives who guided Enron through its spectacular rise and even more stunning fall, were found guilty of fraud and conspiracy.
Go to article »

PHOTOS OF THE DAY

Visitors admire Luke Jerram’s installation Museum of the Moon at Liverpool Cathedral. The 23ft replica of the moon uses detailed NASA imagery of the lunar surface and includes a sound composition created by BAFTA and Ivor Novello award-winning composer Dan Jones. Credit: Christopher Furlong/Getty Images

Lightening in the sky above Chongqing, southwest China. Credit: Zuma Press, Inc./Alamy Live News

Lucy Clare from Guildford in the Great Pavilion at the Chelsea Flower Show in London. Credit: Geoff Pugh for the Telegraph

Helen Tulloch of the Yorkshire Sculpture Park with Luce e ombra (bronze and granite) on the pieces in a new exhibition at the Yorkshire Sculpture Park by Italian artist Giuseppe Penon. Credit: Asadour Guzelian
Market Closes for May 25^th, 2018

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Number of the Day
88%
The share of corporate bond issuers in China that have a domestic credit rating of AA or higher—grades that big rating agencies typically reserve for only the safest and most financially-sound companies. S&P Global, which is set to start a ratings business in China, will have to adjust to a market where most issuers are used to lofty grades.
Canada
By Carolina Wilson
     (Bloomberg) — Canadian stocks closed at the lowest in two weeks, falling for a fourth day after an 11-day advance for the benchmark index.
     The S&P/TSX Composite Index fell 38 points or 0.2 percent to 16,075.67 on Friday. Industrials and consumer staples stocks gained the most, adding 1 percent and 0.9 percent, respectively.
     Energy fell the most, declining more than 1.7 percent, as crude fell the most in 11 months as Saudi Arabia said it expects OPEC and its partners to boost supplies later this year, easing restraints intact since early 2017. The $2.83-per-barrel decline pushed the price below $70 at the close of trading for the first time since May 8.
     In other moves:
                          Stocks
* CAE Inc. gained 5.2 percent to a record after fourth quarter revenue met the average analyst estimate
* Computer Modelling Group fell as much as 8.7 percent, the most intraday since November 2016, as Industrial Alliance Securities downgraded its recommendation to hold from buy
* Baytex Energy lost 5 percent amid the declining crude price
* First Quantum Minerals fell 3.9 percent after the collapse of a pact with Northern Dynasty Minerals regarding the financing of the controversial Pebble mining project in Alaska
                          Commodities
* Western Canada Select crude oil traded at a $17.25 discount to WTI
* Gold fell 0.3 percent to $1,305.90 an ounce
                          FX/Bonds
* The Canadian dollar weakened 0.7 percent to C$1.2975 per U.S.dollar
* The Canada 10-year government bond yield fell to 2.35 percent, the lowest intraday since May 8
US
By Janine Wolf and Sarah Ponczek
     (Bloomberg) — U.S. stocks bounced between gains and losses as plummeting oil prices rocked energy shares and investors weighed what U.S. President Donald Trump called North Korea’s “warm and productive” response to his decision to cancel a summit with the nation’s leader Kim Jong-Un. The dollar rose with Treasuries, while gold sank.
     The S&P 500 Index and Dow Jones Industrial Average fell on lighter than normal volume heading into the long Memorial Day holiday weekend, but the Nasdaq benchmarks rose on strength in semiconductor stocks. The S&P 500 Energy Index plunged more than 2.5 percent as oil posted its biggest decline in roughly a year after a Saudi minister said that petroleum supply would likely rise in the second half.
     “The market itself really isn’t doing a whole lot, but crude oil sure is,” said Joe “JJ” Kinahan, chief market strategist at TD Ameritrade. “Crude oil is down pretty good, and I think that the fact that you’re seeing the S&P down and you’re seeing the Dow down, you can point to crude oil and say that’s just weighting heavily on those indexes right now.”
     Investors would also be forgiven if they felt rattled by recent geopolitical developments. On Thursday, stocks tumbled after President Donald Trump scrapped his planned meeting with Kim Jong-Un because of what he called the “tremendous anger and open hostility” from Pyongyang. But then on Friday, the U.S. president pivoted and said the meeting could happen next month.
     “The markets reacted negatively when Trump pulled out,” said Jeffrey Saut, chief investment strategist at Raymond James. “And then we got the little soothing news over night, so the market’s just adrift here until we get into next week when the players get back.”
     Stoxx Europe 600 Index pared gains, with Spain’s benchmark gauge underperforming as the prospect of a snap election in that country increased. Core European bonds advanced, while Italy led peripheral debt lower as worries mounted over the leadership there and in Spain.
     Meanwhile, other global risks remain on the minds of investors. Spain’s biggest opposition party is ready to push for a no-confidence motion against Prime Minister Mariano Rajoy. And trade tensions surrounding the U.S. and China haven’t abated.
     The Turkish lira headed for its worst week in two years after the central bank said it would allow exporters to repay dollar-denominated loans in the local currency. The pound weakened and gilts advanced after the European Union dismissed many of the U.K.’s plans for their post-Brexit relationship.
     These are the main moves in markets:
                           Stocks
* The S&P 500 fell 0.2 percent to 2,721.33, while the Nasdaq 100 Index added 0.2 percent.  The Stoxx Europe 600 Index rose 0.1 percent.
* The U.K.’s FTSE 100 Index added 0.2 percent.
* The MSCI Emerging Market Index increased 0.1 percent.
* The MSCI Asia Pacific Index declined 0.2 percent.
                           Currencies
* The Bloomberg Dollar Spot Index rose 0.3 percent.
* The euro dropped 0.5 percent to $1.166.
* The British pound fell 0.5 percent to $1.3313.
* The Japanese yen slipped 0.2 percent to 109.49 per dollar.
                            Bonds
* The yield on 10-year Treasuries decreased five basis points to 2.9313 percent.
* Germany’s 10-year yield dropped seven basis points to 0.406 percent, the lowest since December.
* Britain’s 10-year yield plunged eight basis points to 1.322 percent, the lowest in more than four months.
* Italy’s 10-year yield rose six basis points to 2.461 percent, the highest since October 2014.
                            Commodities
* West Texas Intermediate crude sank 4.4 percent to $67.59 a barrel, the biggest drop since June 2017.
* Gold fell 0.3 percent to $1,300.28 an ounce.
–With assistance from Cormac Mullen and Yakob Peterseil. 

Have a great weekend.

Be magnificent!

As ever,

Carolann

Never argue with stupid people, they will drag you down
to their level and then beat you with experience.
                                     -Mark Twain, 1835-1910

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
Toll Free: 1.877.430.5895
Fax: 778.430.5828
www.carolannsteinhoff.com