February 27, 2020 Newsletter

Dear Friends,

Tangents:

A sobering first day of Lent.

This isn’t a great time to be Corona beer. -Bloomberg.

Give to the world what you want to receive from the world, because that is what you will receive. -Gary Zukav, the Path Made Clear.

Branson Bombs
Wearing a black suit and harness, Richard Branson once leaped from the roof of a Las Vegas casino to launch one of his ventures. His fortune headed in the same direction this week. The value of the British billionaire’s stake in Virgin Galactic has fallen about $1.1 billion since the company reported widening losses in the fourth quarter from a year earlier. The firm’s shares tumbled 24% to close at $21.97 in New York and have plunged 35% since Tuesday, but the Las Cruces, New Mexico-based firm is planning to resume ticket sales for future space flights to show Wall Street that affluent customers are willing to pay for such adventures. Space tourism is one of the latest bets from Branson, a serial creator of companies including everything from record labels to fizzy drinks to bridal gowns. Virgin Galactic was the first billionaire betting on space, following a merger with U.S. investment firm Social Capital Hedosophia four months ago. It’s since become a highly speculative stock, more than doubling this year before Tuesday’s after-market results as hedge funds and other investors predict it will establish a new space-tourism industry. -Bloomberg.

-from today’s New York Times:

The Leopard Cub with the Lion Mom

A lioness with her adopted leopard and biological son in Gir National Park in Gujarat, India.Dheeraj Mittal

By Cara Giaimo
The lions and leopards of Gir National Park, in Gujarat, India, normally do not get along.

“They compete with each other” for space and food, said Stotra Chakrabarti, a postdoctoral researcher at the University of Minnesota who studies animal behavior. “They are at perpetual odds.”
But about a year ago, a young lioness in the park put this enmity aside. She adopted a baby leopard.

The 2-month-old cub — all fuzzy ears and blue eyes — was adorable, and the lioness spent weeks nursing, feeding and caring for him until he died. She treated him as if one of her own two sons, who were about the same age. This was a rare case of cross-species adoption in the wild, and the only documented example involving animals that are normally strong competitors, Dr. Chakrabarti said. He and others detailed the case last week in the ecology journal Ecosphere.

PHOTOS OF THE DAY

During the carnival in Alsasua, Northern Spain, characters called “Momotxorros” come out onto the streets wearing horns, hiding their faces under headscarves and dressed in a white sheet stained with blood.
CREDIT: ALVARO BARREINTOS/AP

Revellers, knows as ‘Caretos’ wear brass or wooden masks and dress-up in costumes made of dyed wool and with cowbells in their belts for the Caretos Carnival, Portugal.

Revellers shout and chase people in the streets to scare them, with single women being their main target. Once they corner someone, they bang their cowbells against the person.
CREDIT: OCTAVIO PASSOS/GETTY IMAGES

Revellers from the Portuguese village of Podence wearing a traditional costume during the annual Carnival festivities.
CREDIT: OCTAVIO PASSOS/GETTY IMAGES

People stand in front of the international gene bank Svalbard Global Seed Vault (SGVS) on Spitsbergen, Norway.

The Arctic “doomsday vault” is set to receive 60,000 samples of seeds from around the world as the biggest global crop reserve stocks up for a global catastrophe.
CREDIT: LISE ASERUD/NTB SCANPIX/AFP/GETTY IMAGES

Market Closes for February 27^th, 2020 

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1933, less than a week before President Franklin D. Roosevelt was inaugurated, the stock market was forecasting a gruesome future. The Dow Jones Industrial Average closed at 50.16, a new low for the year and barely above its all-time nadir of 41.22, set on July 8, 1932. Stocks were selling at 0.65 times book value and 10.3 times reported earnings, with an average dividend yield of 8.7% (among those that could afford to pay dividends). Five trading days later, after Mr. Roosevelt’s banking moratorium and financial reforms kicked in, the market was 23.8% higher; by the end of June, it had doubled.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the fifth day, dropping 1.9 percent, or 324.48 to 16,717.44 in Toronto. The index dropped to the lowest closing level since Nov. 5. Today, financials stocks led the market lower, as all sectors lost; 201 of 231 shares fell, while 29 rose. Toronto-Dominion Bank contributed the most to the index decline, decreasing 3.0 percent. Ballard Power Systems Inc. had the largest drop, falling 12.6 percent.
Insights
* In the past year, the index had a similar or greater loss once
* So far this week, the index fell 6.3 percent, heading for the biggest decline since the week ended Sept. 23
* This month, the index fell 3.5 percent
* The index advanced 4 percent in the past 52 weeks. The MSCI AC Americas Index gained 6 percent in the same period
* The S&P/TSX Composite is 7 percent below its 52-week high on Feb. 20, 2020 and 5.2 percent above its low on March 8, 2019
* The S&P/TSX Composite is down 6.8 percent in the past 5 days and fell 4.2 percent in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 16.8 on a trailing basis and 15.2 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.1 percent on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$2.6t
* 30-day price volatility rose to 12.17 percent compared with 10.96 percent in the previous session and the average of 6.80 percent over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | -115.0081| -2.1| 2/24
Energy | -63.0318| -2.3| 3/27
Materials | -60.9772| -3.2| 3/44
Utilities | -17.0786| -1.9| 1/15
Industrials | -14.5741| -0.8| 10/20
Real Estate | -12.4509| -2.0| 0/25
Information Technology| -10.7191| -1.0| 2/8
Consumer Staples | -7.8876| -1.2| 2/9
Health Care | -7.8732| -4.1| 1/9
Consumer Discretionary| -7.5146| -1.1| 4/13
Communication Services| -7.3575| -0.8| 1/7

US
By Vildana Hajric and Katherine Greifeld
(Bloomberg) — Global stocks plunged to four-month lows, government debt yields sunk to unprecedented levels and crude oil extended declines as anxiety over the spread of the coronavirus deepened. The S&P 500 tumbled 4.4% to close at the lowest levels of the day. It whipsawed investors earlier, turning lower late after California’s governor said the state was monitoring 8,400 people for signs of the virus after they traveled to Asia. The decline of more than 10% since last Friday has the benchmark on pace for its worse week since the 2008 global financial crisis and helped push the index into what is known as a correction. The MSCI All-Country World Index fell to the lowest since October, while the Stoxx Europe 600 also entered a correction. “Stocks and bonds say we’re doomed,” said Chris Rupkey, chief financial economist for MUFG Union Bank. “Anyone who has a better idea for what lies ahead please let us know because right now the direction ahead for the economy is straight down.” The outbreak has the potential to become a pandemic and is at a decisive stage, the head of the World Health Organization said Thursday.

     The global economy is on course for its weakest year since the financial crisis as the virus damages demand in China and beyond, Bank of America predicted. Earlier, Goldman Sachs slashed its outlook for U.S. companies’ profit growth to zero. Germany is examining potential stimulus measures to stem the economic impact. Saudi Arabia halted religious visits that draw millions. Haven assets continued to be in demand, and the yen strengthened as yields on 10-year U.S. and Australian government bonds hit fresh record lows. Oil sank further. The pound reversed a gain after the U.K. told the European Union it could walk away from the negotiating table in June if progress isn’t being made toward a trade deal. Investors are pricing in a Federal Reserve easing in April followed by another rate cut in July, swaps data show, while bets for easing from Japan to Australia have also increased after the International Monetary Fund cut global growth forecasts. Losses continue to mount as investors weigh each gloomy headline on the virus. U.S. health authorities on Wednesday said they found the first case of the illness that does not have ties to a known outbreak. Microsoft Corp. joined an expanding list of companies warning over the impact of the virus on operations. “The way the market is going down, it’s happening pretty quickly, but it’s very difficult to say that it’s over,” said Sameer Samana, senior global market strategist for Wells Fargo Investment Institute. “Bottoming is a multistep process and you’re probably still in step one.”

* Japan industrial production, jobs, and retail sales figures are due on Friday.

These are the major moves in markets:
Stocks
*The S&P 500 Index sank 4.4% to 2,978.48 as of 4:02 p.m. New York time, hitting the lowest in 19 weeks with its sixth consecutive decline and the largest tumble in more than eight years.
*The Dow Jones Industrial Average decreased 4.4% to 25,763.96, reaching the lowest in six months on its sixth consecutive decline and the biggest dip in about two years.
*The Nasdaq Composite Index sank 4.6% to 8,566.48, the lowest in almost 12 weeks on the largest tumble in more than eight years.
*The MSCI All-Country World Index sank 3% to 521.99, reaching the lowest in 19 weeks on its sixth consecutive decline and the biggest tumble in almost four years.
Currencies
*The Bloomberg Dollar Spot Index dipped 0.3% to 1,211.80.
*The euro gained 1% to $1.0989, the strongest in almost three weeks on the biggest climb in 21 months.
*The Japanese yen appreciated 0.5% to 109.85 per dollar, the strongest in more than a week.
Bonds
*The yield on 10-year Treasuries fell five basis points to 1.28%, reaching the lowest on record with its sixth straight decline.
*The yield on 30-year Treasuries declined four basis points to 1.78%, hitting the lowest on record with its sixth straight decline.
*Britain’s 10-year yield fell three basis points to 0.47%, reaching the lowest in almost 20 weeks on its eighth straight decline and the biggest fall in almost four weeks.
*Germany’s 10-year yield dipped four basis points to -0.54%, the lowest in almost 20 weeks.
Commodities
*Gold weakened 0.1% to $1,637.44 an ounce.
*West Texas Intermediate crude declined 3.8% to $46.68 a barrel, hitting the lowest in 14 months with its fifth straight decline and the largest drop in almost seven weeks.
–With assistance from Luke Kawa and Claire Ballentine.

Have  a great night.

Be magnificent!
As ever,

Carolann

If you are distressed by anything external, the pain is not due to the thing itself
but to your estimate of it; and this you have the power to revoke at any moment.
                                                                         -Marcus Aurelius, 121-180

You don’t have to be great to start, but you have to start to be great.
                                                              -Zig Ziglar, 1926-2012

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