July 3, 2019 Newsletter

Dear Friends,

Tangents:  Dog Days – hottest days of the year July 3-August 11

July 3, 1934 – Finance – Bank of Canada Act receives royal assent, following recommendations of the 1933 Royal Commission on Banking and Currency; the Bank will open for business March 11, 1935 under Governor Graham Towers; has a mandate to issue currency and regulate the money supply; will begin as a privately owned institution, with shares sold to the public; shortly becomes a government-owned central bank. Ottawa, Ontario  Go to article >>

The Banking Dynasty Older Than the Rothschilds

In the U.K. there’s old money, really old money and then there’s C. Hoare & Co. The London firm was started in 1672 by Richard Hoare and has tended to the affairs of diarist Samuel Pepys, poet Lord Byron and novelist Jane Austen. That’s almost a hundred years older than the famous Rothschild dynasty, which was founded in the 1760s. After more than three centuries of continuous operation, the family still runs the show, overseeing about 4.4 billion pounds ($5.6 billion) of deposits and sticking to a traditional way of doing business. –from Bloomberg Pursuits.

I am proud to tell you that I belong to a religion in whose sacred language, the Sanskrit, the word exclusion is untranslatable. -Swami Vivekananda, 1863-1902.

PHOTOS OF THE DAY

A colossal 7,500 light years away from Earth, beans of red, white and blue gas shoot from Eta Carinae, one of the Milky Way’s most “petulant” star systems. The image is the latest from Nasa’s Hubble Space Telescope
CREDIT: ESA/HUBBLE/SWINS.COM

Attendees perform indigenous dance during a celebration for Mexican President Andres Manuel Lopez Obrador in Mexico City, Mexico
CREDIT: ALEIANDRO CEGARRA/BLOOMBERG

Former Scotland Rugby international and Motor Neurone campaigner Doddie Weir, with wife Kathy and their three sons (from left) Angus, Ben and Hamish, after receiving his OBE from Queen Elizabeth II during an Investiture ceremony at the Palace of Holyroodhouse in Edinburgh
CREDIT: JANE BARLOW/PA WIRE
Market Closes for July 3^rd, 2019

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1884, Charles Dow, partner in Dow Jones & Co., published the first modern index of American stocks in his “Customer’s Afternoon Letter,” a two-page financial bulletin. The 11 stocks included nine railroads (Chicago & North Western, Delaware, Lackawanna & Western, Lake Shore, New York Central, St. Paul, Northern Pacific, Union Pacific, Missouri Pacific, and Louisville & Nashville), a steamship company (Pacific Mail) and telegraph giant Western Union.
Canada
By Aoyon Ashraf
     (Bloomberg) — Canadian stocks closed higher Wednesday, led by consumer staples and real estate shares. The energy complex also aided the rally after crude oil rebounded on drop in U.S. gasoline supplies.
     The S&P/TSX Composite Index gained 0.6% to 16,576.52. Materials and communication services were the worst performing sectors in the index. Cascades Inc. was among top gaining stocks after an upgrade to outperform at National Bank.
     Meanwhile, Bruce Linton, who founded Canopy Growth Corp. in an abandoned chocolate factory and turned it into the world’s biggest cannabis firm, has been ousted as chief executive officer effective immediately. The stock pared early losses and advanced 2%.
In other moves:
Stocks
* Mullen Group Ltd. advanced +3.3% after the company announced acquisitions of trucking/logistics companies and got upgraded by CIBC
* Alaris Royalty Corp. rose 4.6% after falling for 7 straight days
* Linamar Corp. fell 3.3%
* Knight Therapeutics Inc lost 2.3% after rising for 2 days
* Transat A.T. dropped 8.2% after report that Group Mach withdrew its bid for the company
Commodities
* Western Canada Select crude oil traded at a $13.10 discount to WTI
* Spot gold fell 0.06% to $1,417.80 an ounce
FX/Bonds
* The Canadian dollar gained 0.3% to C$1.3064 per U.S. dollar
* The Canada 10-year government bond yield fell to 1.453%
US
By Vildana Hajric and Jeremy Herron
     (Bloomberg) — Major U.S. indexes rose to all-time highs in thin trading ahead of a holiday and the rally in global bonds extended as investors weighed the prospect of more dovish appointees to two of the world’s major central banks.
     The Dow Jones Industrial Average notched its first record since October, while the S&P 500 climbed a fifth day to extend its high. Futures on the broader index briefly topped 3,000 for the first time. The Nasdaq indexes rose past closing records set in early May. Stock investors piled into high dividend-yielding sectors like utilities and REITs after 10-year Treasury yields dipped to the lowest since November 2016 on rising market bets that the Federal Reserve will cut rates this month. Markets closed at 1 p.m. ahead of the July 4 holiday.
     “We’ve seen continued doubt and worry over this bull market for a decade now, yet it continues to defy all skeptics,” said Ryan Detrick, senior market strategist for LPL Financial. “The bottom line is the dual benefit of both fiscal and monetary policy should help extend this business cycle potentially much longer than many expect.”
     The dollar fell after jobless claims came in broadly as forecast and private hiring numbers missed expectations. A reading on the services sector fell to the lowest since 2017, but Wednesday’s batch of data did little to move markets, with jobs numbers coming Friday. The euro erased a small drop as purchasing manager data for the region was revised slightly higher. Europe’s leaders have nominated Christine Lagarde to take the helm of the ECB later this year, ushering in a candidate analysts anticipate will take up departing President Mario Draghi’s mantle in providing stimulus. And U.S. President Donald Trump said he’s planning to nominate Christopher Waller and Judy Shelton to serve on the Fed Board, candidates both seen as likely to advocate lower interest rates.
     The yield difference between Italian 10-year government bonds and the equivalent German securities fell to below 200bps for the first time since May 2018 after the European Commission deciding not to penalize Italy for breaking government spending limits. “An absence of inflation, the shortages of ‘safe’ positive yielding bonds that is a legacy of QE, geopolitical concerns and a dovish monetary policy bias almost everywhere are seeing the bond rally go on, and on,” Kit Juckes, chief global FX strategist at Societe Generale, wrote in a note.
     Meanwhile, Cleveland Fed President Loretta Mester said she’d need to see more data before supporting an immediate rate cut, while many of her colleagues are leaning toward loosening policy.
     Elsewhere, oil rebounded after tumbling Tuesday. Shares in Japan, China and South Korea led losses in Asia as equities in Australia edged higher. The yen strengthened after the Bank of Japan made small tweaks to its bond buying program.
Here are some key events coming up:
* U.S. markets equity markets close at 1 p.m. on Wednesday and remain shut Thursday for the Independence Day holiday.
* The U.S. jobs report is due Friday and is projected to show non-farm payrolls rose by 164,000 in June, rebounding from 75,000 the month prior.
Here are the main moves in markets:
Stocks
* The S&P 500 Index increased 0.8% as of 1 p.m. New York time, hitting the highest on record with its fifth straight advance.
* The Dow rose 0.7% for its first record since Oct. 3.
* The Stoxx Europe 600 Index jumped 0.8%, reaching the highest in almost 13 months on its fifth consecutive advance and the biggest increase in more than two weeks.
* The MSCI Emerging Market Index dipped 0.5%, the biggest decrease in more than a week.
* The MSCI Asia Pacific Index fell 0.3%, the largest fall in a week.
Currencies
* The Bloomberg Dollar Spot Index decreased 0.1%, the biggest dip in more than a week.
* The euro increased less than 0.05% to $1.1282.
* The Japanese yen climbed 0.1% to 107.82 per dollar, the strongest in more than a week.
Bonds
* The yield on 10-year Treasuries declined two basis points to 1.95%, the lowest in more than two years.
* The two-year rate was little changed at 1.76%.
* Italy’s 10-year rate fell 25 basis points to 1.58%.
* Germany’s 10-year yield dipped two basis points to -0.38%, hitting the lowest on record with its fifth straight decline.
Commodities
* West Texas Intermediate crude gained 1% to $56.82 a barrel.
* Gold futures increased 0.8% to $1,419.30 an ounce, the highest in more than a week.
–With assistance from Laura Curtis.

Have a great night.

Be magnificent!
As ever,

Carolann

The stories of past courage can teach, they can offer hope,

they can provide inspiration.  But they cannot supply courage

itself.  For this each man must look into his own soul.

                                   -John F. Kennedy, 1917-1963

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