July 17, 2018 Newsletter

Dear Friends,

Tangents: 
Carolann is out of the office this afternoon, I will be writing the newsletter on her behalf.

PHOTOS OF THE DAY

The Red Arrows, Royal Air Force Aerobatic Team, are joined by a Spitfire at the opening of the Farnborough Airshow, in Farnborough, UK. CREDIT: REUTERS/PETER NICHOLLS

A fossil-mad teenager has stunned his teacher by creating a life-size dinosaur from scrap metal for an A-level project. William Wisson-Burton, 17, spent eight months creating the 27-foot-long, 15ft high Allosaurus in his dad’s workshop. The giant model has taken 400 hours of work and was made using cast off metal and pieces of chain. The finished model is now proudly standing outside the teenagers home and will be submitted as part of his A-level in paleontology – the study of fossils. CREDIT: SWNS.COM

A plane battling the Ferguson Fire passes the setting sun in unincorporated Mariposa County California USA, near Yosemite National Park. CREDIT: AP PHOTO/NOAH BERGER
Market Closes for July 17th, 2018

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Canada
By Kristine Owram
     (Bloomberg) — Canadian stocks closed higher after spending much of the morning in the red, with consumer-discretionary shares leading the gains amid flickers of trade optimism.
     The S&P/TSX Composite Index added 25 points or 0.2 percent to 16,519.24. The consumer discretionary sector rose 1.3 percent, the most in six weeks, with Linamar Corp. up 3 percent and Magna International Inc. gaining 1.7 percent. Europe is said to be exploring talks with U.S. President Donald Trump on reducing car tariffs.
     Technology shares rose 0.9 percent, tracking a recovery in their U.S. counterparts. Shopify Inc. added 2.5 percent.
     In other moves: 
                             Stocks
* Nevsun Resources Ltd. jumped 13 percent after Lundin Mining Corp. went hostile with a C$1.4 billion acquisition offer; Lundin rose 0.5 percent
* First Majestic Silver Corp. tumbled 8.5 percent, the most since December. The miner said it produced 2.8 million ounces of silver in the second
quarter
* Hive Blockchain Technologies Ltd. added 24 percent as Bitcoin prices surged through the $7,000 level for the first time in more than a month 
                          Commodities
* Western Canada Select crude oil traded at a $17.30 discount to WTI
* Gold fell 1 percent to $1,227.30 an ounce, the lowest in a year, as the dollar advanced and the Federal Reserve signaled more rate hikes are coming
                            FX/Bonds
* The Canadian dollar weakened 0.4 percent to C$1.3194 per U.S. dollar
* The Canada 10-year government bond yield fell 1 basis point to 2.13 percent
US
By Sarah Ponczek and Olivia Schaber
     (Bloomberg) — The Nasdaq Composite Index closed at a record high as a recovery in technology shares emboldened investors and Federal Reserve Chairman Jerome Powell reiterated his upbeat assessment of the economy.
     The dollar extended gains and Treasuries were little changed after Powell told a Senate committee that the Fed will continue to gradually raise interest rates “for now’’ to keep inflation near target amid a strong U.S. labor market.
Technology shares had started the day lower after disappointing subscriber growth at Netflix weighed on the rest of the FAANG stocks.
     “The ability of Netflix to bounce off its opening lows, and Amazon to do the same, has given investor’s confidence that the big momentum stocks are not suddenly going to fall out of bed,”
said Matt Maley, equity strategist at Miller Tabak + Co. “The other thing is Chairman Powell did not say anything that was overly hawkish in his opening statement.”
     Earnings and U.S. monetary policy have become the main drivers of market sentiment this week. That’s giving respite from a backdrop of worsening trade relations between the world’s biggest economic powers. Company results have been mixed thus far, with Deutsche Bank AG and Bank of America Corp. beating estimates, counterbalancing the Netflix reading.
     “The concern is as interest rates rise, what has been a market that’s stretched the bounds of valuation is going to have to be repriced to reflect higher rates,” Michael Arone, chief investment strategist at State Street Global Advisors, said in an interview at Bloomberg’s New York headquarters. “Any time there’s relief to that, folks are applauding the fact that valuations can stay a bit elevated for longer.”
     Powell addressed Congress with the underpinnings of the U.S. expansion looking solid. Unemployment stands close to an 18-year low and inflation is around the Fed’s 2 percent target, though some sentiment indicators are starting to flash warning signs over escalating trade disputes. He will appear before the House Financial Services Committee Wednesday.
     Crude recovered after tumbling more than 5 percent in two days and breaching key price levels as focus shifted to declining stockpiles in the U.S. In the U.S., crude stockpiles dropped by an estimated 4.2 million barrels last week, according to a Bloomberg survey of analysts ahead of an Energy Information Administration report on Wednesday and the industry-funded American Petroleum Institute later Tuesday.
     These are some key events coming up this week:
* Earnings season continues, with reports due from companies including: Morgan Stanley, American Express, Microsoft, Taiwan Semiconductor Manufacturing, Unilever and IBM.
* Fed’s Powell delivers the semi-annual Monetary Policy Report to a House panel on Wednesday, and will answer lawmakers’ questions.
* Euro-zone inflation data for June is expected on Wednesday to show the annual rate inched higher to 2 percent.
     These are the main moves in markets:
                             Stocks 
* The S&P 500 Index rose 0.4 percent to 2,809.58 as of 4:03 p.m. in New York.
* The Dow Jones Industrial Average gained 0.2 percent to 25,119.89.
* The Nasdaq Composite Index rallied 0.6 percent to a record 7,855.12.
* The U.K.’s FTSE 100 Index gained 0.3 percent.
* The MSCI Emerging Market Index slumped 0.1 percent.
* The Stoxx Europe 600 Index rose 0.2 percent.
                           Currencies
* The Bloomberg Dollar Spot Index rose 0.4 percent, the first increase in four days.
* The euro slipped 0.4 percent to $1.1664.
* The British pound dropped 0.9 percent to $1.3115.
* The Japanese yen weakened 0.5 percent to 112.84 per dollar.
* South Africa’s rand fell 0.4 percent to 13.27 per dollar.
                             Bonds
* The yield on 10-year Treasuries rose less than one basis points to 2.86 percent.
* Italian 10-year yields fell 11 basis points to 2.47 percent.
* Germany’s 10-year yield fell two basis points to 0.35 percent.
                          Commodities
* West Texas Intermediate crude was little changed at $68.11 a barrel.
* Gold fell 1.1 percent to $1,227.61 an ounce, the third straight daily decline.
–With assistance from David Wilson.

Have a great evening.

Be magnificent!

As ever,

Megan

A man grows most tired while standing still. 
-Chinese Proverb

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