February 1, 2019 Newsletter

Dear Friends,

Tangents: Happy Friday!

February is black history month.
On Feb. 1, 1960, four black college students began a sit-in protest at a lunch counter in Greensboro, N.C., where they’d been refused service. Go to article »
Tomorrow is Groundhog Day.

Investors Eye Super Bowl-Based Market Predictor
By William Power, News Editor, WSJ

The Rams are bulls on Sunday, as far as the possible impact on the stock market./PHOTO: Scott Cunningham/Getty Images

Bullish investors who look at an unscientific but popular indicator will be rooting for the Los Angeles Rams on Sunday when they face the New England Patriots in the Super Bowl.
The Super Bowl Predictor—popularized by market analyst Robert H. Stovall— foretells the stock market for the full year based on who wins the big game in February.
The quirky indicator, which has even been studied by academics, goes like this: Stocks go up for the calendar year if an original National Football League team (like the Rams) wins, but down if the winner is from the old American Football League (like the Patriots). Teams added after the two leagues’ long-ago merger count for either the National or American side depending on which of today’s two conferences they play in.
But after a strong run of success, the Predictor has misfired for three straight years. It now has been accurate after 40 of the 52 Super Bowls, or a 77% rate.
That’s better than most of the scientific indicators that Wall Street uses, but still…
It didn’t work for 2018 because the Philadelphia Eagles’ win incorrectly predicted that the stock market would rise in 2018. It looked good for a while but was ultimately a fumble. Not even a replay challenge can change that market result.
The Eagles have now been to three Super Bowls in their history: 1981, 2005 and 2018. The first two times, they lost, and the Dow fell, so the Predictor worked. But last year, the market didn’t follow the Eagles’ winning lead.
If New England wins its second Super Bowl in three years, bulls will be hoping for a repeat of 2017, when the Predictor failed and stocks surged following a Patriots victory. -bill.power@wsj.com
PHOTOS OF THE DAY

People walk under decorative lanterns ahead of the Chinese New Year in Yangon’s Chinatown district, Myanmar. Credit: Ye Aung Thu/AFP/Getty Images

Redzone.bet cheerleaders perform in from on anti-Brexit demonstrators outside the Houses of Parliament, London, ahead of the Superbowl between the Los Angeles Rams and the New England Patriots on Sunday. Credit: Victoria Jones/PA Wire

This picture taken on January 31, 2019 shows a hot air balloon flying over the southern Egyptian city of Luxor, about 650 kilometres (400 miles) south of the capital Cairo. Credit: Mohamed El-Shahed/AFP/Getty Images
Market Closes for February 1^st, 2019

International Markets

Bonds

Currencies

Commodities

Market Commentary:
The Dow industrials and the S&P 500 have both climbed 15% since Dec. 24, their largest such percentage gain between the trading day before Christmas and the end of January since 1975, according to Dow Jones Market Data.
On this day in 1869, the New York Stock Exchange required listed companies to register their securities to prevent “watered stock,” or the manipulated over-issuance of shares by insiders.
Canada
By Aoyon Ashraf
     (Bloomberg) — Canadian stocks fell, snapping a six-day winning streak, while U.S. stocks were mixed as traders weighed a better-than-expected job report with unclear progress in China trade talks and a disappointing sales forecast from Amazon.
     The Canadian benchmark fell about 0.2 percent on the first trading day of February. Materials were the worst performing stocks while pot company shares were the best.
     Canada’s economy contracted for the second time in three months on lower energy production, the clearest evidence yet of a soft patch that’s expected to linger through the first part of this year. Gross domestic product declined 0.1 percent in November, Statistics Canada said Thursday from Ottawa, matching the median forecast in a Bloomberg survey of economists.
Stocks
* Aphria rose 10 percent after short-seller Citron bailed out after Aphria rally, bet against Cronos shares, which rose 6.1 percent
* Eldorado extends rally as stock gets three upgrades and one downgrade after suspending construction of Kisladag mill project.
* Open Text Corp. climbed 4.2 percent after reporting a second quarter adjusted EPS that beat the highest estimate 
* Celestica Inc. plunged as much as 19 percent after updating guidance and getting a downgrade from Macquarie
* Teck Resources fell 3.9 percent after company said 4Q results will be “significantly below” consensus estimates
Commodities
* Western Canada Select crude oil traded at a $11 discount to WTI
* Gold fell about 0.3 percent to $1,317.93 an ounce
FX/Bonds
* The Canadian dollar rose about 0.3 percent to C$1.3089 per U.S. dollar
* The Canada 10-year government bond yield rose to 1.959%
US
By Sarah Ponczek and Reade Pickert
     (Bloomberg) — U.S. stocks eked out a small gain as a better-than-expected jobs report and signs of progress in trade talks overshadowed a disappointing sales forecast from Amazon.
     The S&P 500 Index rose less than 0.1 percent, extending a weekly advance to 1.6 percent. Tech-heavy gauges slumped as Amazon capped a 20 percent drop from its September high. Energy companies were the best performers as oil rose to the strongest in more than two months and data showed nonfarm payrolls increased by 304,000 last month, the most in almost a year. The dollar was steady and U.S. Treasury yields rose.
     After U.S. stocks posted their best month in three years in January on the back of dovish Federal Reserve comments, traders are keeping a careful watch on earnings season for signals about the outlook for growth. China promised to boost purchases of U.S. goods after the latest round of trade talks, and both sides planned further discussions.
     “Having strong data back up the view that the economy is on a strong footing is good, but still there’s some lingering uncertainties out there, particularly with global trade,” said Charlie Ripley, a senior investment strategist for Allianz Investment Management.
     Oil climbed past $55 a barrel in New York, reaching the highest since November, amid falling OPEC production and speculation that a robust economy will fuel demand.
     Elsewhere, European equities climbed. The pound weakened as data showed U.K. manufacturing fell to a three-month low in January. Asian stocks headed for a fourth consecutive weekly advance.
Among key events in the coming days:
* The coming week will see central banks reviewing monetary policy, including the Bank of England, in Australia, Brazil, Mexico, Russia, Serbia, Philippines, Thailand and India. 
* Earnings season rolls on with notable releases from Alphabet, Toyota, BP and Disney.
* Chinese financial markets will close next week for the Lunar New Year holiday.
These are the main moves in markets:
Stocks
* The S&P 500 Index rose 0.1 percent at the close of trading in New York.
* The Stoxx Europe 600 Index rose 0.3 percent.
* The MSCI Emerging Market Index was little changed.
Currencies
* The Bloomberg Dollar Spot Index rose 0.1 percent.
* The euro increased 0.1 percent to $1.146.
* The British pound declined 0.2 percent to $1.3082.
* The Japanese yen fell 0.6 percent to 109.5 per dollar.
Bonds
* The yield on 10-year Treasuries rose six basis points to 2.69 percent.
* Germany’s 10-year yield climbed two basis points to 0.16 percent.
* Britain’s 10-year yield rose three basis points to 1.24 percent.
* Italy’s 10-year yield jumped 16 basis points to 2.74 percent.
Commodities
* West Texas Intermediate crude rose 2.9 percent to $55.33 a barrel.
* Gold fell 0.2 percent to $1,319.07 an ounce.
–With assistance from Adam Haigh, Yakob Peterseil, Eddie van der Walt, Samuel Potter and Sophie Caronello.

Have a wonderful weekend.

Be magnificent!

As ever,

Carolann

Mistakes are the portals of discovery.
             -James Joyce, 1882-1916

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