May 29, 2019 Newsletter

Dear Friends,

Tangents:
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. 
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1453: Constantinople falls to the Turks
Bob Hope, comedian, b. May 29, 1903.
John F. Kennedy, b. 1917.

“We need men who can dream of things that never were.” -John F. Kennedy.
PHOTOS OF THE DAY

Two arguing chicks on the back of their Grebe mother on Conalero Reservoir County Park, San Jose, California
CREDIT: PHOO CHAN/ SWNS.COM

The Chateau de Versailles “Fetes Galantes” masked ball
CREDIT: LUDOVIC MARIN/AFP/GETTY IMAGES

A speeding driver in Germany was saved from a €105 (£93) fine when a snow-white dove interceded on his behalf. The driver was caught on speed cameras – but his identity was hidden by the bird’s wings spread in flight.
CREDIT:VIERSEN DISTRICT POLICE
Market Closes for May 29^th, 2019

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1946, with the stock market still euphoric over peace, the Dow hit its immediate post-World War II high of 212.50, a level it wouldn’t surpass again until April 12, 1950, after nearly four years of chronic doldrums.  Today, the Dow close at 25,126.41.
Canada
By Michael Bellusci and Carolina Wilson
     (Bloomberg) — Canadian stocks dropped Wednesday, mimicking a U.S. market retreat that was spurred by heated trade war rhetoric and a plunge in the price of crude oil. 
     The S&P/TSX Composite Index fell as much as 1.2% to 16,104.98 in Toronto, the most for any full day since Dec. 21. Health care stocks — mainly cannabis firms — led decliners while Canada Goose Holdings Inc. dragged consumer discretionary companies lower after its first-quarter revenue missed estimates.
     Meanwhile, the Bank of Canada expressed growing confidence that the country’s economy is rebounding from its recent soft patch. In a decision Wednesday, policy makers in Ottawa left interest rates unchanged for a fifth straight meeting and continued to indicate they see no need to move borrowing costs anytime soon.
In other moves:
Stocks
* New Gold Inc. fell 5.4% after a drilling update
* Turquois Hill rose 5.8%
* B2Gold gained 5.5%, the most since October 2018 
* Cronos Group Inc. dropped 5.2% and Canopy Growth declined more than 5% as pot stocks fell 
* Bank of Montreal fell 2.4% after 2Q adj. EPS missed
* Champion Iron gained 4.3% on a refinancing pact and plan to buy Bloom Lake asset 
Commodities
* Western Canada Select crude oil traded at a $16.75 discount to WTI
* Gold rose 0.2% to $1,284.90 an ounce
FX/Bonds
* The Canadian dollar fell 0.2% to C$1.3513 per U.S. dollar
* The Canada 10-year government bond yield rose to 1.578%
US
By Vildana Hajric and Jeremy Herron
     (Bloomberg) — U.S. stocks fell to a 12-week low, while Treasuries advanced amid persistent concern the bond-market recession warning is growing louder as the trade war shows no signs of easing.
     The S&P 500 closed at the lowest since March 11, though it cut a drop that reached 1.3% by half late in the session. The index dipped below its average price for the past 200 days for the first time since March before bouncing back. It ended under its 100-day moving average for the first time since February.
     The 10-year Treasury yield dipped below 2.21% before rebounding to 2.26% — still the lowest since September 2017. The yield gap between three-month and 10-year Treasuries, often watched as an early signal of pending recession, slid to a 2007 low of minus 13 basis points. Investors will get a closer look at the health of the American economy when a batch of data lands Thursday morning.
     “After months of over-optimism, investors are finally realizing a quick fix isn’t likely on US-China trade,” said Alec Young, managing director of global markets research for FTSE Russell. “In fact, an escalation in trade tensions increasingly seems more likely than a near-term resolution.” The risk-off tone was set in overnight as Chinese media reports suggested Beijing may cut exports of rare-earth minerals used in the defense and energy sectors, opening another front in its trade war with the U.S. The dollar rose for a third day versus major peers, including the yen. Gold climbed and oil retreated.
     “The news from China just keeps getting a little more nerve-wracking. I don’t know what the final tally could be in terms of tariff or tariff-related damage if we keep proceeding but it’s a new line in the sand on a daily basis,” said Tom Stringfellow, president at Frost Investment Advisors, which has $4.7 billion in assets under management. “It’s a balancing act for investors and the market. I find it amazing how well consumer sentiment and investor sentiment seems to be holding up.”
     Investors are gauging warning signals in fixed-income markets with little expectation of a quick improvement in the global growth outlook or the U.S.-China trade war, as the full impact of American tariff hikes is yet to kick in. Beijing is gearing up to use its dominance of rare earths as a counter. A raft of American data tomorrow and Friday will give traders more to chew on as they reassess the Federal Reserve’s policy path.
Here are some key events coming up:
* China provides a first peek at its May economic performance on Friday, with economists anticipating the official manufacturing PMI will tick down to 49.9 amid the worsening trade war with the U.S.
* U.S. first-quarter revised GDP data are due Thursday.
* On Friday, data is due on the Fed’s preferred measure of price pressures; the gauge, which excludes food an energy, is forecast to be steady at an annual 1.6%.
And these are the main moves in markets:
Stocks
* The S&P 500 fell 0.7% at 4 p.m. in New York.
* The Dow Jones Industrial Average slid 0.9% to the lowest since Feb. 11. The Russell 2000 Index dropped to its lowest since Jan. 30.
* The Stoxx Europe 600 Index fell 1.4% to the lowest since Feb. 21.
* The MSCI All-Country World Index declined 1.1%, the lowest since February.
Currencies
* The Bloomberg Dollar Spot Index jumped 0.3%, the highest in more than five months.
* The euro decreased 0.2% to $1.1134, the weakest in a week.
* The British pound declined less than 0.05% to $1.2647, the weakest in almost 21 weeks.
* The Japanese yen fell 0.1% to 109.445 per dollar.
Bonds
* The yield on 10-year Treasuries dipped one basis points to 2.26%, the lowest since September 2016.
* Germany’s 10-year yield declined two basis points to -0.18%, the lowest in about three years.
* Japan’s 10-year yield dipped two basis points to -0.09%, thelowest in almost three years on the largest decrease in almost six weeks.
Commodities
* West Texas Intermediate crude dipped 0.6% to $58.79 a barrel.
* Gold futures advanced 0.4% to $1,287.20 an ounce.
–With assistance from Andreea Papuc, Adam Haigh and Todd White.

Have a great night.

Be magnificent!
As ever,

Carolann

Life is the art of drawing without an eraser.

                -John W. Gardner, 1912-2002

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