February 28, 2020 Newsletter

Dear Friends,

Tangents:  Happy Friday!

February 28, 1953 – Scientists James D. Watson and Francis H.C. Crick announced they had discovered the double-helix structure of DNA, the molecule that contains the human genes, at Cambridge University. Go to article »

Telescopes see the biggest explosion since the Big Bang. (h/t Scott Kominers, Bloomberg)

Tomorrow, Feb. 29., is a leap day — and your briefing writer’s birthday — a calendar oddity that gives us an extra day. It takes Earth a messy 365.2422 spins of the planet to complete its loop, or one orbit, of the sun, so every four years we add an extra day to balance it out and keep our seasons where they’re supposed to be.
The contortions are awkward, but they’re fairly straightforward compared with the adjustments that would need to be made to the calendars of alien civilizations if they existed elsewhere in our solar system. Luckily, astronomers, science-fiction writers and enthusiastic hobbyists have presented several proposals for Mars, Jupiter and Venus calendars. -from The New York Times.

PHOTOS OF THE DAY

The new Infinity Chamber, created using thousands of LED bulbs, encourages people to take five minutes out of their busy day and indulge in restorative colour therapy, in Conduit Court, Covent Garden, London.
CREDIT: VICTORIA JONES/ PA WIRE

Snow around the Jubilee tower in Darwen, Lancashire.
CREDIT: GREGG WOLSTENHOLME/BAV MEDIA

A land squirrel sniffs a dwarf sunflower in Vienna, Austria.
CREDIT: RENATO JUST/SWNS.COM

Market Closes for February 28^th, 2020 

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Charge it! On this day in 1950, New York City financial executive Frank McNamara and his attorney Ralph Schneider had dinner at the Major’s Cabin Grill Restaurant on 33rd St. in Manhattan. When the check came, Mr. McNamara handed the waiter a small paper Diners’ Club card and asked to charge the bill. After a year of preparation by the two men, the first charge-card transaction had taken place.
Canada
By Kristine Owram and Bloomberg Automation
(Bloomberg) — Canadian stocks ended their worst week since the financial crisis in late 2008 by tumbling 2.7%, the biggest one-day drop since 2015. The benchmark’s decline outpaced its U.S. peers as it played catch-up to Thursday’s coronavirus-related rout. A technical glitch forced the Toronto Stock Exchange to halt trading more than two hours early Thursday. The S&P/TSX Composite Index fell to 16,263.05, the lowest since August. It lost 8.9% this week, the biggest decline since December 2008. Today, materials stocks led the market lower, as all sectors declined; 200 of 231 shares fell, while 30 rose.
Commodities
* Western Canada Select crude oil traded at a $14.00 discount to West Texas Intermediate
* Spot gold tumbled 3.7% to $1,581.00 an ounce
FX/Bonds
* The Canadian dollar weakened 0.2% to C$1.3416 per U.S. dollar
* The 10-year government bond yield fell 2 basis points to
1.14%, the lowest since September
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | -138.9189| -2.6| 1/25
Materials | -95.3814| -5.2| 6/40
Energy | -44.9505| -1.7| 13/17
Industrials | -40.2671| -2.1| 2/29
Communication Services| -38.6921| -4.1| 0/8
Utilities | -32.1333| -3.6| 0/16
Real Estate | -22.7738| -3.7| 1/24
Consumer Staples | -20.8315| -3.1| 0/11
Consumer Discretionary| -8.9492| -1.4| 4/13
Information Technology| -6.7568| -0.7| 2/8
Health Care | -4.8024| -2.6| 1/9

* The benchmark 10-year bond rose and the yield fell 3 basis points to 1.127%

US
By Jeremy Herron and Vildana Hajric
(Bloomberg) — The spread of the coronavirus rattled global financial markets, sending U.S. stocks to their worst week since the financial crisis more than a decade ago. Demand spiked for safe assets from Treasuries to the yen. The S&P 500 plunged 11% in the five days and the Dow Jones Industrial Average careened to the lowest since June, wiping out almost $3 trillion in value from American equities. Treasuries surged, pushing yields on the 10- and 30-year notes to record lows during the period. Oil plunged toward $45 a barrel in its biggest weekly rout since 2008. “Investors are selling stocks first and asking questions later,” Keith Lerner, SunTrust’s chief market strategist, wrote in a note. “We are seeing signs of pure liquidation. ‘Get me out at any cost’ seems to be the prevailing mood. There is little doubt the coronavirus will continue to weigh on the global
economy, and the U.S. will not be immune. There is much we do not know. However, it is also premature to suggest the base case for the U.S. economy is recession.” Battered bulls got a boost Friday when Federal Reserve Chairman Jerome Powell said the central bank is monitoring the virus and will act as appropriate, adding that the “fundamentals of the economy remain strong.” Bank of America strategists now expect the Fed to cut rates by 50 basis points at its March meeting. White House Economic Adviser Larry Kudlow suggested investors “buy the dip.” The S&P 500 fell 0.8% in the final day of the week, rallying back in the final 15 minutes of trading from losses that topped 3%. The index still dropped for a seventh day, its longest slide since 2016. The Cboe Volatility Index hit the highest in two years. The Nasdaq indexes ended higher. Banks led Friday’s drop, with JPMorgan sinking 4%, as travel restrictions took hold and trading floors scrambled for contingency plans if offices are required to close. Airlines tumbled after Lufthansa curbed short-haul flights and United pared back travel in Asia.
U.S. equity markets shuddered as the World Health Organization raised its global risk level for the virus and a White House official suggested some schools could close. More major companies warned that disruptions could upend sales and profit forecasts. Germany said it will intensify border checks and Switzerland banned large events, leading to the Geneva car show being canceled. Iran and South Korea revealed more infections while the first cases appeared in Mexico and Nigeria, Africa’s most populous country. Downgrades to the global outlook keep rolling in and money markets now see three Federal Reserve interest-rate cuts this year. Bank of America predicted that the global economy will see its weakest year since the financial crisis as the virus damages demand in China and beyond. “Asset prices diverged significantly from growth in the past year, in part because of central bank policy, but also because passive investment’s main signal is price action,” reckons James McCormick, global head of desk strategy at NatWest Markets. “The COVID-19 escalation runs a real risk of virtuous cycle turning to a vicious one. Either way, given where growth estimates are heading for the next few months, I’d expect more downside.”
These are the main moves in markets:
Stocks
* The S&P 500 Index fell 0.8% as of 4 p.m. New York time.
* The Nasdaq 100 Index rose 0.3%.
* The Dow slid 1.4%.
* The Stoxx Europe 600 Index decreased 3.5%.
* Germany’s DAX Index slid 3.9%.
* The MSCI Asia Pacific Index dropped 2.6%.
Currencies
* The Bloomberg Dollar Spot Index rose 0.2%.
* The euro fell less than 0.1% to $1.10.
* The British pound dipped 1% to $1.2760.
* The Japanese yen strengthened 1.28% to 108.20 per dollar.
Bonds
* The yield on 10-year Treasuries declined nine basis points to 1.17%.
* The yield on two-year Treasuries decreased 13 basis points to 0.93%.
* Germany’s 10-year yield decreased five basis points to -0.60%.
Commodities
* West Texas Intermediate crude sank 5% to $44.73 a barrel.
* Gold futures decreased 3.4% to $1,586 an ounce.
* Bloomberg’s commodity index sank 2%.
–With assistance from Sam Potter, Cormac Mullen, Anchalee Worrachate, Gregor Stuart Hunter and Adam Haigh.
Have a wonderful weekend everyone.

Be magnificent!

As ever,

Carolann

It is strange that the years teach us patience;
that the shorter our time, the greater our capacity for waiting.
                                                         -Elizabeth Taylor, 1932-2011

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