July 23, 2018 Newsletter

Dear Friends,

Tangents:
On July 23, 1914, Austria-Hungary issued an ultimatum to Serbia following the killing of Archduke Francis Ferdinand by a Serb assassin; the dispute led to World War I.
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PHOTOS OF THE DAY

A huge storm approaches the city Nagykanizsa, 210 kms southwest of Budapest, Hungary. CREDIT: GYORGY VARGA/MTI VIA AP

A flock of flamingos flies over one of a number of wetlands close to Kenya and Tanzania, where exceptionally heavy rainfall has filled the lakes to the brim, bringing mineral sediment to the surface to form stunning patterns. CREDIT: JEFFREY WU/MERCURY PRESS

A general view of alphorn blowers performing an ensemble piece on the last day of Alphorn International Festival on the alp of Tracouet in Nendaz, southern Switzerland. CREDIT: DENIS BALIBOUSE/REUTERS
Market Closes for July 23rd, 2018

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Canada
By Kristine Owram
     (Bloomberg) — Canadian stocks slid as falling gold prices and an executive departure at Barrick Gold Corp. pushed the materials sector to its lowest since early May.
     The S&P/TSX Composite Index lost 15 points or 0.1 percent to 16,420.84. Materials fell 1.4 percent as Barrick tumbled 4.3 percent, the most in nine months. The gold giant’s president, who was responsible for reducing debt and rationalizing operations, quit to become chief executive officer of AngloGold Ashanti Ltd.
     Health-care stocks jumped 2.8 percent, led by strong gains in cannabis growers. Aphria Inc. added 6.4 percent and Canopy Growth Corp. gained 6 percent.
     In other moves:
                             Stocks
* Chemtrade Logistics Income Fund fell 4.6 percent to the lowest since 2012. Desjardins downgraded the stock to hold, citing weaker caustic soda prices
* DHX Media Ltd. tumbled 7.3 percent to the lowest since 2013.  The company closed the sale of a minority stake in Peanuts to Sony Media Entertainment for C$235.6 million
* BRP Inc. gained 4.4 percent following a block trade of 256,300 shares or 0.7 percent of the float
                          Commodities
* Western Canada Select crude oil traded at a $26.50 discount to WTI
* Gold fell 0.5 percent to $1,225.60 an ounce
                            FX/Bonds
* The Canadian dollar weakened 0.2 percent to C$1.3167 per U.S. dollar
* The Canada 10-year government bond yield rose 5 basis points to 2.23 percent
US
By Sarah Ponczek and Olivia Schaber
     (Bloomberg) — U.S. stock indexes got a boost from bank shares in an otherwise lackluster session as investors digested warnings from the world’s financial leaders about the impact of protectionism on growth. Gains were extended in after-market trading as Alphabet Inc.’s sales topped estimates.
     The S&P 500 Index started the week higher, with financials leading the gainers amid below-average trading volume.
Amazon.com pulled consumer discretionary stocks lower after President Donald Trump renewed his public campaign against Jeff Bezos’s Washington Post. West Texas crude see-sawed as Trump’s warnings to his Iranian counterpart were offset by a strengthening dollar. Treasuries slipped.
     An exchange-traded fund tracking the Nasdaq 100 climbed about 0.5 percent after the 4 p.m. close in New York, helped by a rally in Google parent Alphabet. Surprisingly strong sales from the search-engine operator helped assuage concerns spurred by Netflix Inc.’s results last week.
     The world’s finance chiefs over the weekend said global growth remains robust and many emerging-market countries are better prepared to face crises, but risks to the world economy have increased. Also rattling investors, Trump took issue with the yuan’s six-week slide to the weakest level in more than year, raising concern that the America-China trade war is now spilling over into currency markets. The heated rhetoric is offsetting a mixed earnings season, keeping the S&P 500 hovering around 2,800.
     “Many eyes are focused here given that it’s a round number and that it’s proven to be impregnable since breaking below it in February,” Frank Cappelleri, senior equity trader and market technician at Instinet LLC, wrote in a message. “Given the plethora of earnings coming this week, there’s little reason to force the issue from either side thus far.”
     He added: “Simply holding steady in the face of all of this would be a net positive.”
     The Stoxx Europe 600 Index closed lower after sudden changes in leadership at Fiat Chrysler hit carmakers, while travel companies also declined after Ryanair posted a 20 percent decline in first-quarter profit.
     In Asia, Japan’s 10-year government bonds plunged, sending the yield up the most in almost two years. The yuan slipped.
Emerging-market stocks were little changed. Bitcoin pushed higher.
          Here are some key events coming up this week:
* Earnings season continues with the following tech companies among those reporting: Facebook, AT&T, Amazon.com, Twitter, Advanced Micro Devices, Qualcomm and Intel. They are joined by global financial giants Deutsche Bank, UBS, Nomura and Visa.
Others include Halliburton, Michelin, Boeing, Lockheed, Nissan and Shell.
* Pakistan holds national elections Wednesday.
* European Central Bank’s policy decision Thursday.
* U.S. gross domestic product probably increased by about 4 percent at an annualized rate in the second quarter, the most since 2014, economists forecast ahead of Friday’s data.

     These are the main moves in markets:
                             Stocks
* The S&P 500 Index gained 0.2 percent as of 4 p.m. New York time.
* The Stoxx Europe 600 Index fell 0.2 percent to its lowest in a week.
* The U.K.’s FTSE 100 Index fell 0.3 percent, the biggest fall in a week.
* The MSCI Emerging Market Index decreased less than 0.05 percent.
                           Currencies
* The Bloomberg Dollar Spot Index advanced 0.1 percent.
* The euro fell 0.2 percent $1.1697.
* The British pound declined 0.2 percent to $1.3106.
* The Japanese yen gained less than 0.05 percent to 111.40 per dollar.
                             Bonds
* The yield on 10-year Treasuries gained six basis points to 2.96 percent, the highest in more than a month.
* Britain’s 10-year yield advanced four basis points to 1.272 percent.
* Germany’s 10-year yield climbed four basis points to 0.41 percent, the highest in over five weeks.
* Japan’s 10-year yield gained five basis points to 0.086 percent, the largest rise in almost two years.
                          Commodities
* West Texas Intermediate crude fell 0.7 percent to $67.80 a barrel, the first retreat in a week.
* Gold declined 0.3 percent to $1,225.31 an ounce.
* LME copper dropped 0.3 percent to $6,130 a metric ton.
–With assistance from Katherine Greifeld, Mark Cranfield, Adam Haigh, Andreea Papuc, Cecile Gutscher, Matthew Miller, Cecile Vannucci and Eddie van der Walt.

Have a great night. 

Be magnificent!

As ever,

Carolann

Enthusiasm is the most important thing in life.
                -Tennessee Williams, 1911-1983

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