May 1, 2019 Newsletter

Dear Friends,

Tangents: Happy May Day!

Polydore Virgil says that the Roman youths used to go into the fields and spend the Calends of May in dancing and singing in honour of Flora, goddess of fruits and flowers.  The English celebrated May Day with games and sports, particularly archery and Morris Dances and the setting up of the Maypole.  In due time Robin Hood and Maid Marian came to preside as lord and Lady of the May, and by the 16^th century May Day was Robin Hood’s Day and Robin Hood plays became an integral part of the festivities.
May Day was also formerly the day of the London chimney-sweepers festival.  -from Brewer’s Phrase & Fable.
1707 – The Kingdom of Great Britain was created as a treaty merging England and Scotland took effect.   Go to article »

PHOTOS OF THE DAY

Gardner Eric Drennon in the maze at Traquair House in Peeblesshire, Scotland’s oldest inhabited House. The maze was planted in 1981 and is the largest hedged maze in Scotland. Planted originally with 1500 Leylandi Cyprus trees the maze suffered from an extraordinarily harsh winter in 1983 when over two thirds of the trees died. It was decided to replant with the hardier beech trees which has added colour to the maze.   CREDIT: OWEN HUMPHREYS/PA

Cars drive through a street in Iraq’s central city of Najaf during a sand storm. CREDI: HAIDAR HAMDANI/AFP/GETTY IMAGES

Charolais cows are pictures in a filed in La Jauniere, western France. CREDIT: GUILLAUME SOUVANT/AFP/GETTY IMAGES

Market Closes for May 1^st, 2019

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1975, Wall Street cried “May Day” as brokerage commission rates were deregulated by the SEC, a move that despite criticism made Wall Street more lucrative than ever as rising volume made up for lower fees. Additionally, money management giant Vanguard Group began operations, overseeing $1.8 billion in mutual-fund assets.
Canada
By Carolina Wilson
     (Bloomberg) — Canadian stocks fell for a third day, dragged down mainly by mining and energy stocks, while U.S. equities got whipsawed by Fed Chairman Jerome Powell’s remarks. The dollar surged.
     The S&P/TSX Composite Index fell 0.5 percent to 16,502.75. Metals and mining stocks were worst performers as a slowdown in global manufacturing and disappointing U.S. auto sales last month fueled angst among base metal investors. Meanwhile, gold miners also tumbled as bullion fell after U.S. dollar climbed on U.S. Fed comments.
     Meanwhile, analysts are growing more bullish on Shopify Inc., one of the best performing Canadian stocks. The average 12-month price target on the stock rose above the share price for the first time since February. The e-commerce platform has “only scratched the surface” with its “stellar” gross merchandise volume trajectory, Rosenblatt Securities wrote in a note.
     In other moves:
Stocks
* Centerra Gold rose 6.6 percent, after the company reported first quarter adjusted EPS that beat the highest estimate
* Osisko Gold tumbled 8.7 percent after reporting impairment and getting downgraded at National Bank
* Ero Copper, First Quantum, Teck Resources were among the base metals miners that underperformed
* Baytex Energy, MEG Energy, Kelt Exploration were among the underperformers within the energy sector
Ratings
* ECA CN: Encana Downgraded to Market Perform at Bernstein; PT Set to $8
* MG CN: Magna International Downgraded to Peer Perform at Wolfe
* OR CN: Osisko Gold Royalties Cut to Sector Perform at National Bank
* RCI/B CN: Rogers Communications Upgraded to Buy at Desjardins; PT C$79
Commodities
* Western Canada Select crude oil traded at a $12.50 discount to WTI
* Gold spot prices fell 0.6 percent to $1,275.97 an ounce
FX/Bonds
* The Canadian dollar fell about 0.4 percent to C$1.3445 per U.S. dollar
* The Canada 10-year government bond yield fell to 1.705%
US
By Rita Nazareth, Vildana Hajric and Sarah Ponczek
     (Bloomberg) — U.S. stocks fell with Treasuries, while the dollar advanced as the Federal Reserve pushed back on market expectations that its next move would be a rate cut.
     The S&P 500 Index posted its biggest decline in almost six weeks after Fed Chairman Jerome Powell said the central bank has no bias to either tighten or ease policy — noting that weak inflation readings may be “transitory.” Stocks had been higher for most of the session after Apple Inc.’s sales forecast boosted technology shares.
     The Fed decision to hold rates steady and Powell’s subsequent comments sparked a modest repricing of assets from the dollar to Treasuries and equities. Two-year Treasury yields turned positive, while the dollar erased a deep loss to strengthen against major peers.
     Read more: ‘Leaning Too Dovish’: Wall Street Adjusts to Powell on Inflation “The markets have by and large convinced themselves the Fed’s next move will be a cut, and it’s going to happen sometime soon,” said Jeffery Elswick, director of fixed income at Frost Investment Advisors, which has $4.7 billion in assets under management. “The scenario of the largest probability does not include a cut. Or the data gets worse, and then the markets will be proven right for a different reason.”
     The market action suggests that expectations were a bit too high with respect to the likelihood of a much more dovish outcome, including the potential for a cut, Bob Miller, BlackRock head of Americas fundamental fixed income, told Bloomberg TV.
     Fed officials also lowered the rate on one of their policy levers: the interest paid on excess reserves, which dropped to 2.35 percent from 2.40 percent. They want to stimulate more trading in the fed funds market, an attempt to get better control over short-term rates.
     “I also think the market misread the technical adjustment to IOER, which was a reduction of 5 bps, as increasing the probability of a rate cut, Miller said.
     Developments in the trade conflict between America and China were also on the radar, with U.S. Treasury Secretary Steven Mnuchin calling the latest round of meetings “productive.” Negotiations will continue in Washington next week.
     Elsewhere, oil slid as a report showed U.S. crude stockpiles swelled to their highest levels since 2017 while American production set a new record. Holidays across much of Asia, Europe and Latin America crimped trading volumes.
     Here are some notable events this week:
* Companies reporting earnings include: HSBC, Macquarie and Royal Dutch Shell.
* The Bank of England sets interest rates Thursday.
* Friday brings the U.S. jobs report: non-farm payrolls are projected to rise by 187,000 in April. Economists expect an unemployment rate of 3.8 percent, with average hourly earnings growth picking up to 3.3 percent.

These are the main moves in markets:
Stocks
* The S&P 500 Index decreased 0.8 percent to 2,923.73 as of 4 p.m. New York time.
* The Stoxx Europe 600 Index lost 0.1 percent.
* The MSCI Asia Pacific Index increased 0.1 percent.
Currencies
* The Bloomberg Dollar Spot Index advanced 0.2 percent.
* The euro declined 0.2 percent to $1.1193.
* The British pound increased 0.1 percent to $1.3044.
* The Japanese yen little changed at 111.45 per dollar.
Bonds
* The yield on 10-year Treasuries was little changed at 2.5 percent.
* Germany’s 10-year yield was unchanged at 0.01 percent.
* Britain’s 10-year yield fell four basis points to 1.15 percent.
Commodities
* The Bloomberg Commodity Index decreased 0.2 percent.
* West Texas Intermediate crude dipped 0.5 percent to $63.60 a barrel.
* Gold fell 0.6 percent to $1,277.40 an ounce.
–With assistance from Adam Haigh, Brad Olesen, Yakob Peterseil and Samuel Potter.

Have a great night.

Be magnificent!
As ever,

Carolann

Rank does not confer privilege or give power.  It imposes responsibility.

                                                       -Dr. Peter Drucker, 1909-2005

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