May 29, 2018 Newsletter

Dear Friends,

Tangents:
May 29, 1453: Constantinople falls to the Turks

On May 29, 1953, Mount Everest was conquered as Edmund Hillary of New Zealand and sherpa Tenzing Norgay of Nepal became the first climbers to reach the summit.

Points of Progress:
Australia
Australia will invest $377 million to help preserve the Great Barrier Reef.  Listed as a UNESCO World Heritage Site in 1981, the reef, which can be seen from outer space, has lost nearly a third of its coral because of bleaching caused by warmer oceans, the invasive crown-of-thorns starfish species, and pollution, including pesticide-infused runoff from nearby farmland. -BBC

Cyprus
The Middle Eastern island nation has returned 14 ancient artifacts to Egypt, continuing a global trend of such repatriations.  The objects, which include an alabaster vase decorated with the name of King Ramses ll, were stolen and smuggled abroad in the 1980s.  -NEWS24.

Britain
The country’s corporate sector is making strides to eradicate plastic pollution.  Waitrose, a major supermarket chain, will stop using disposable coffee cups by the fall, a move it says will save 52 million coffee cups a year.  Separately, Starbucks reported in late April that six weeks into its trial of a 5-pence levy on disposable cups in its British outlets, the use of their reusable counterparts has shot up 150 percent.  Around 2.5 billion coffee cups are trashed in the nation each year, and almost none are recycled because of their plastic lining. -BBC, The Independent.

Denmark
The nation is improving at both ends of its food chain.  At the consumption end, Denmark reduced food waster by 14000 metric tons (15,432 tons), compared with 2011 levels.  Productionwise, the country, a world leader in organic farming, increased the amount of land devoted to the practice by 28,365 hectares (70,091 acres) during 2017, bumping the total to 245,000 hectares (605,408 acres), or 9 % of its cultivated land. -CPH POST ONLINE.
                                             -from the CSM.
PHOTOS OF THE DAY

A storm rages over Portsmouth harbour. Thunderstorm are set to hit southern parts of the UK as the hot weather brings with it torrential downpours. Credit: Islandvisions/BNPS

Canadian Mia Noblet walks on a slackline (25mm wide, 3mm thick and 60m long) during ‘Tianmen Mountain Female High-Heeled Highline Challenge’ at Zhangjiajie National Forest Park, China. Credit: The Telegraph

A visitor and her dog visit the 2018 Concorso d’Eleganza st Villa d’Esta in Cernobbio, Italy, on Saturday. Behind them are a 195 Maserati 250F, left, and a 1968 Alfa Romeo 33/2 Stradale, which won rhe Coppa d’Oro Villa d’Este. Credit The Telegraph
Market Closes for May 29^th, 2018

International Markets

Bonds

Currencies

Commodities

Market Commentary:
~$$ On this day in 1962, the market soared as Wall Street’s jitters over Pres. John F. Kennedy’s attack on the steel industry subsided. The Dow Jones Industrial Average leapt 4.7% to close at 603.96.  Today, May 29^th, the Dow closed at 24,361.45.
Canada
By Kristine Owram
     (Bloomberg) — Canadian stocks extended their losing streak to six days amid a global equity selloff, as Bank of Nova Scotia tumbled the most since 2011.
     The S&P/TSX Composite Index lost 0.6 percent to 15,922.61, the lowest in three weeks. Financials slid 1.8 percent, weighed down by plunging bond yields and a 3.7 percent decline at Scotiabank on higher-than-expected expenses.
    Energy stocks gained 0.4 percent even as Kinder Morgan Canada Ltd. fell 3 percent. The Canadian government is buying Kinder’s Trans Mountain pipeline and its controversial expansion project for C$4.5 billion.
     In other moves:
                         Stocks
* Crescent Point Energy Corp. rose 2.9 percent. Chief Executive Officer Scott Saxberg stepped down following a shakeup attempt by an activist investor
* Corus Entertainment Inc. fell 5 percent, adding to Monday’s 3.2 percent drop, after Canada’s competition regulator rejected the sale of its French-language channels to BCE Inc.
* Air Canada lost 3.3 percent, the most since March, amid a broader selloff in airline stocks
                         Commodities
* Western Canada Select crude oil traded at a $19.50 discount to WTI, the widest gap since early April
* Gold fell 0.4 percent to $1,299.00 an ounce
                         FX/Bonds
* The Canadian dollar weakened 0.1 percent to C$1.3014 per U.S. dollar, the weakest since March
* The Canada 10-year government bond yield fell 11 basis points to 2.19 percent, the biggest drop in a year
US
By Randall Jensen
     (Bloomberg) — U.S. stocks tumbled the most in more than a month, joining a global equity selloff sparked by concern Italy’s political woes will destabilize Europe. Treasuries surged, oil plunged and the yen rallied.
     Selling in American equities picked up pace after European shares closed with the worst drop since March. Bank shares paced the rout as the 10-year Treasury yield sank as much as 17 basis points, the most since the U.K. voted to exit the European Union in June 2016. The dollar climbed as the euro plunged to its lowest since July 2017. Stock volatility soared and investors sought haven assets from the yen to the Swiss franc.
     The prospect that Italy might need a fresh election that could be a referendum on the nation’s inclusion in the euro zone rattled global financial markets. While U.S. assets looked like they’d avoid the worst of the selling, the risk-off tone gripped investors as Europe staggered to an ugly close. Investors are also keeping an eye on geopolitical issues, with the Trump administration giving conflicting signals on talks with North Korea and plowing ahead with plans for tariffs on Chinese goods.
     Here’s a Roundup of Italian Political Turmoil and its Impact on Market.
     Political turmoil in Italy is rekindling memories of the euro zone’s woes of the past decade, and caution is spilling over into global markets. Pro- and anti-European forces are at loggerheads in Rome, with another election expected as early as September after parties failed to form a government in the wake of a poll in March.
     “The political situation in Italy is troublesome and then you get broader concerns about the strength of the euro market in general and that in turn has some people thinking maybe the Fed here in the U.S. slows down on raising rates,” Peter Jankovskis, co-chief investment officer at Oakbrook Investments, said by phone. “That’s been a big pillar for the financials overall, that rates will continue to rise and their margins will continue to improve because of that.”
     Why ‘Risk On’ and ‘Risk Off’ Are How the Markets Roll:
     QuickTake    
     These are some key events to watch this week:
* EU trade chief Cecilia Malmstrom and U.S. Commerce Secretary Wilbur Ross are scheduled to meet Wednesday in an informal World Trade Organization ministerial in Paris.
* The U.S. employment report for May is due Friday. It’s the last before the June Fed meeting.
* Automakers report May U.S. sales the same day.
* Also Friday: China’s stock market joins MSCI Inc.’s global indexes.
* On Saturday U.S. Secretary of Commerce Wilbur Ross will travel to Beijing for more talks with Vice Premier Liu He on topics including ZTE Corp. and trade.
     These are the main moves in markets:
                          Stocks
* The S&P 500 Index declined 1.2 percent to 2,689.87 as of 4 p.m. New York time, dropping below its 100-day moving average for the first time since May 9.
* The Nasdaq Composite Index dropped 0.5 percent.
* The Stoxx Europe 600 Index sank 1.4 percent to the lowest since April.
* The U.K.’s FTSE 100 Index fell 1.3 percent, the most since March.
* Germany’s DAX Index decreased 1.5 percent, the most since the end of March.
* The MSCI Emerging Market Index slid 1.2 percent to the lowest since December 2017.
                           Currencies
* The Bloomberg Dollar Spot Index rose 0.4 percent to the highest in more than five months.
* The euro sank 0.8 percent to $1.1536, the weakest in more than 10 months.
* The British pound declined 0.5 percent to $1.3242, the weakest in about six months.
* The Japanese yen climbed 0.7 percent to 108.64 per dollar, the strongest in five weeks.
                           Bonds
* The yield on 10-year Treasuries declined 15 basis points to 2.78 percent, reaching the lowest since April 2.
* Germany’s 10-year yield dipped eight basis points to 0.26 percent.
* Britain’s 10-year yield fell 13 basis points to 1.197 percent.
* Italy’s 10-year yield climbed 48 basis points to 3.164 percent.
                          Commodities
* West Texas Intermediate crude declined 1.6 percent to $66.82 a barrel, reaching the lowest in four weeks.
* Gold rose 0.2 percent to $1,301.22 an ounce.
–With assistance from Anooja Debnath, Sarah Ponczek and Samuel Potter. 

Have a great night.

Be magnificent!

As ever,

Carolann

A man who limits his interests, limits his life.
                    -Vincent Price, 1911-1993

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