June 6, 2019 Newsletter

Dear Friends,

Tangents:
From The Economist archive:

Our leader on the D-Day landings of June 6th 1944

Charlemagne’s notebook
Jun 6th 2014
by The Economist
The following leader was published on the cover of The Economist on June 10th 1944, following the D-Day landings of June 6th.
FOUR years ago almost to a day the last man was taken off the beaches at Dunkirk. Then, under a pitiless and unopposed German bombardment from the air, the shattered remnants of an Allied army, without stores, without food, without equipment, were rescued from Europe in tugs and trawlers and yachts and rowing boats, in any odd scratch vessel that could make the Channel crossing. This is the picture of defeat and disarray which today can be set against the massive pageant of invasion—the armadas of 4,000 and 6,000 ships, the great armies equipped to the last detail of mechanised armament, the Allied air forces in thousands of sorties raking the French skies empty of all German opposition. It is a tremendous and exhilarating contrast, and in the first hour of relief and jubilation it is only right that the British people should offer their thanks to the one man who, before all, is responsible for the greatest reversal of fortune in this island’s history. Mr Churchill is the supreme architect of this achievement. It was his leadership and inspiration that made possible Britain’s resolve in 1940 “to ride out the storm of war and to outlive the menace of tyranny, if necessary for years, if necessary alone.” It was his vision on the very morrow of Dunkirk that saw the forging of a future alliance, the new world stepping forth “with all its power and might ” to the liberation of the old, the rallying of the world against tyranny, the long struggle and the final success. This, in June, 1940, was not an easy or an obvious vision. When Mr Churchill said
we shall fight on the seas and oceans, we shall fight with growing confidence and growing strength in the air . . . . whatever the cost may be, we shall fight on the beaches, we shall fight on the landing grounds, we shall fight in the fields and in the streets, we shall fight in the hills. . . .
he spoke in terms only of defence and of no surrender. But his words had a prophetic ring, and now indeed Britain and its Allies fight on the landing grounds and on the beaches, not on British soil, but on the liberated soil of Europe. If there is any one man of whom it can be said that he won this war, that man is Mr. Churchill.

The vision was his, but it could not have been fulfilled without the forging of the Grand Alliance and the enormous efforts and sacrifices of Britain’s friends. If British armies can enter the Continent in such strength and so well equipped, it is because the Americans are at their side and the flood of American war production has helped lavishly to swell their armament. And if they face a German army and a German air force reduced to a shadow of their former strength, it is because the Russians have whittled away Germany’s military strength by their own stupendous sacrifices. The Russian cry for a Second Front was always a cry of bitterest need, and now that the Second Front has come, it is only fitting that the Allies in the West should recognise the scale of their obligation to Russia’s efforts on the Eastern front. But gratitude is the last thing the Russians want. They want heavy blows, hard fighting and rapid victory. The British and Americans are now in a position to repay their debt to Russia in the best and most acceptable coin.
Even if the Great Powers have been the chief engineers of Germany’s deepening defeat, in the next weeks, the nations of Western Europe will bear the full brunt of the fighting. The hour for their active participation has not yet come, and all the Allied leaders have warned their peoples against premature uprisings which would lead to a loss of life and effort before the crisis is reached. But even during the passive phase, the peoples of Western Europe will be one of the factors in Allied victory. Their bearing under bombardment, their discipline in the midst and in the rear of the advancing armies have military importance, just as, in the past, their refusal to accept the New Order and their four years’ underground struggle have been military factors of the highest significance. To them, too, the Allies owe a tremendous debt and one which they will pay only in part by the act of liberation. Inevitably the Allies’ tanks and artillery and transport will add to the destruction which Allied bombing has begun. As passive or active agents in their own liberation, the peoples of Western Europe are paying a heavy price. It is not enough to free them. Behind the guns must come the food lorries and the mobile canteens. The physical basis of reconstruction barely exists in some areas. Invasion threatens to overlap the narrow margin of subsistence. The Allies will need to act vigorously if their friends are not to be liberated only to starve. Much, too, will depend upon the behaviour of the invading armies. The lessons taught by the Italian campaign on the dangers of overspending by the troops have presumably been learnt, and while it is too much to hope that men worn out from battle will always be the surest ambassadors of good will, each unit could at least go out with some instruction on the degree to which good behaviour, good discipline, good humour and kindliness can oil the wheels of occupation and lay the foundations of lasting friendship. Britain and America are, with whatever tact and reserve they may be compelled to act, in some sense the trustees of the future political freedom of the peoples they are liberating. Darlanism and expediency belong to the phase of military weakness and insufficiency. The Allies’ overwhelming strength enables them to choose where they will. If their choice is faulty or compromised, they may play a decisive part in undermining the peoples’ freedom and the nations’ friendship.

Yet when all the thanks are made and all the contributions measured, there still remain the final artificers of victory, the men who, in the King’s words “man the ships, storm the beaches and fill the skies.” Although the first advances have been secured with surprisingly little loss of life, the hardest fighting lies ahead. In the weeks to come, thousands of men will lay down their lives or suffer disablement, will endure pain and hardship and strain, will throw everything they have into the balance of victory without particularly asking why or counting the cost. For them at the moment there is not very much that the people who stay behind can do. They can keep vigil, as the King has asked. They can face anxiety steadfastly. They can accept the losses when they come; but the real effort of gratitude will only be needed later on, when the men come home. They will not have been given victory, they will have toiled and sweated for it, all the way from Alamein to Bizerta, from Sicily to Rome, in the jungles of Burma, on the landing beaches in France. They have been the active agents of every military success. It is their courage and initiative and adaptability and common sense that have completed the historic reversal of the last four years. It will not be enough for their elders to give them “food, work and homes”—the essentials of a decent post-war society. They must be allowed their place in that society, they must be given scope and opportunity and responsibility to run it themselves.

The men who ruled the country in 1913 were still ruling it in 1923, and in all too many dismal cases were still doing so in 1939. After this war, let the debt of gratitude be more adequately paid. The men who are air-marshals and generals in their thirties must not wait until the sixties for honour and responsibility in civilian life. The change cannot be brought about overnight, least of all while the war continues, but now is the time, when the men are fighting and dying and everyone with a heart and conscience is deeply aware of a tremendous debt, to register the firm resolve that, after this war, youth and enthusiasm will not be actual disqualifications for responsibility and that the new world will not only be built for the war generation but round them and by them as well.
Market Closes for June 6th, 2019

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1934, the Securities Exchange Act—which created the Securities & Exchange Commission, required companies to file registration documents with stock exchanges and required them to file quarterly financial statements with the SEC—was signed into law by President Franklin D. Roosevelt
Canada
By Kristine Owram
     (Bloomberg) — Technology stocks rose to their highest level since 2008, leading Canada’s equity benchmark to a third consecutive gain.
     The S&P/TSX Composite Index added 0.1% to 16,227.80. The S&P 500 increased 0.6% as the U.S. weighs delaying President Donald Trump’s threatened tariffs on Mexico. Technology stocks rose 1% in Toronto, while defensives like real estate, utilities and telecom companies also gained. Consumer staples were the biggest decliners, falling 0.9% as dairy producer Saputo Inc. tumbled 6.6%, the most since 2011. The company missed earnings and revenue estimates due to lower international prices and a fluctuating Canadian dollar.
     In other moves:
Stocks
* Just Energy Group Inc. jumped 12% to the highest since December. The company said it’s reviewing strategic alternatives after receiving expressions of interest
* Transcontinental Inc. gained 2% after the printing company reported earnings and revenue that beat analyst estimates
* Bombardier Inc. fell 4.2%, erasing some of Wednesday’s 9.7% gain. Shares of Mitsubishi Heavy Industries Ltd. also fell as analysts criticized its talks with Bombardier to buy its regional jet program
Commodities
* Western Canada Select crude oil traded at a $13.85 discount to WTI
* Gold rose 0.7% to $1,337.60 an ounce, the highest since February
FX/Bonds
* The Canadian dollar strengthened 0.4% to C$1.3369 per U.S. dollar
* The Canada 10-year government bond yield rose 1 basis point to 1.46%
US
By Rita Nazareth
     (Bloomberg) — U.S. stocks climbed after a report the U.S. is considering delaying President Donald Trump’s plan to impose tariffs on Mexico. Treasuries pared gains and the peso rebounded from Thursday’s lows.
     The S&P 500 Index extended its advance as Bloomberg News reported that Mexico is pushing for more time to negotiate. Treasuries rose on speculation that major central banks will keep a dovish stance as the trade war jeopardizes growth. The euro climbed as European Central Bank President Mario Draghi touted “somewhat better” than expected first-quarter data. Read: U.S. Weighs Delaying Mexico Tariffs as Time for Deal Runs Short Investors pushed up the value of American equities after the news report as the tariff threat has led several analysts to forecast increased risk of a recession in the world’s largest economy. Sentiment remained fragile, though, with a U.S. official saying the most likely outcome is still that a 5% tariff goes into effect. Goldman Sachs Group Inc. put the odds that the U.S. imposes duties on imports from Mexico at 70%, according to a note dated June 5.
     As trade tension spurs speculation that rate cuts are coming, Friday’s jobs report will be especially scrutinized for signs of cracks in the economy. The International Monetary Fund said the U.S. expansion risks being knocked off course by a further escalation of the trade conflict or a significant downturn in financial markets.
     Read: Dollar Bears May Be Let Down by Rate Cuts, Morgan Stanley Says Bets the Federal Reserve will slash borrowing costs have risen since Chairman Jerome Powell signaled this week he’s open to easier policy amid trade tension. Draghi used similar tactics in promising to react to any deterioration in the outlook. Australia this week cut rates for the first time in three years, and there’s speculation the Bank of Japan will add stimulus.
     Here are some notable events coming up:
* Theresa May steps down on Friday as leader of the Conservative Party.
* Friday’s U.S. jobs report is projected to show payrolls rose by 175,000 in May, unemployment held at 3.6%, a 49-year low, and average hourly earnings growth sustained a 3.2% pace.
* Finance ministers and central bank governors from the G-20 nations gather in Fukuoka, Japan this weekend.
     These are some of the main moves in markets:
Stocks
* The S&P 500 climbed 0.6% to 2,843.49 as of 4 p.m. New York time.
* The Stoxx Europe 600 Index declined less than 0.05%.
* The MSCI Asia Pacific Index fell 0.3%.
Currencies
* The Bloomberg Dollar Spot Index decreased 0.1%.
* The euro climbed 0.5% to $1.1273.
* The Japanese yen declined less than 0.05% to 108.51 per dollar.
Bonds
* The yield on 10-year Treasuries fell one basis point to 2.13%.
* Germany’s 10-year yield slid one basis point to -0.24%.
* Britain’s 10-year yield declined four basis points to 0.825%.
Commodities
* The Bloomberg Commodity Index gained 0.8%.
* West Texas Intermediate crude climbed to $52.59 a barrel.
–With assistance from Jake Lloyd-Smith, Adam Haigh, Samuel Potter, Todd White, Vildana Hajric, Lu Wang and Sarah Ponczek.

Have a great evening.

Be magnificent!
As ever,

Carolann

 Until you value yourself, you won’t value your time.

                                  -M Scott Peck, 1936-2005

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM
Senior Investment Advisor

Queensbury Securities Inc.,
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