April 6, 2020 Newsletter

Dear Friends,

Tangents:
I hope in the years to come everyone will be able to take pride in how they responded to this challenge.  
Britain’s Queen Elizabeth II, in a rare televised speech to the nation calling for unity in the coronavirus crisis. 

Raphael, painter, b. 1483

April 6, 1896: First Modern Olympics, Athens, Greece.
On April 6, 1909, explorers Robert E. Peary and Matthew A. Henson became the first men to reach the North Pole. The claim, disputed by skeptics, was upheld in 1989 by the Navigation Foundation. Go to article »

April 6, 1917: US declares war on Germany.
April 6, 1955: US nuclear test at Nevada Test Site.

The Seattle Mariners on April 6, 1977 play their first baseball game in Seattle, losing to the California Angels, 7-0, before 57,762 in the Kingdome. The Mariners’ starting pitcher is Diego Segui, and the first hit is by Jose Baez. The Mariners get their first win two days later, 7-6, against the Angels, and end the season with a 64-98 record. -The Seattle Times.

All Things Pass
 -Lao-Tzu

All things pass
A sunrise does not last all morning
All things pass
A cloudburst does not last all day
All things pass
Nor a sunset all night
All things pass
What always changes?

Earth…sky…thunder…
   mountain…water…
   wind…fire…lake…

These change
And if these do not last

Do man’s visions last?
Do man’s illusions?

Take things as they come

All things pass
PHOTOS OF THE DAY

A woman practices yoga during the sunrise from Primrose Hill in London
CREDIT: JEFF MOORE

A photo session is held at the Yonago Castle ruins in Yonago, Torrori Prefercture, western Japan
CREDIT: NEWSCOM/ ALAMY LIVE NEWS

Surfers walks past a Beach Closed sign at Manly Beach in Sydney, Australia.
Northern Beaches Council closed Manly, North Steyne, Queenscliff, Freshwater and Palm Beach after crowds were seen gathering there defying social distancing regulations put in place by the government to combat the spread of COVID-19 in Australia
CREDIT: CAMERON SPENCER/GETTY IMAGES

Priest Joachim Giesler holds a mass with photos of believers who were asked to send in pictures after the service was closed due to the spread of coronavirus disease (COVID-19) in Achern, Germany.
CREDIT: KAI PFAFFE/ REUTERS
Market Closes for April 6th ,2020 

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1988, the S&P 500 index was overhauled. Instead of being made up of 400 industrial stocks, 40 utilities, 40 financial stocks and 20 transportation issues, its industry weights were allowed to float freely, so that stocks from all sectors were represented by market value.
Canada
By Divya Balji, Eddie van der Walt and Michael Bellusci
(Bloomberg) — As quickly as the Canadian stock market fell into a bear market, it has even more rapidly surged 21% from its bottom. Yet, few are willing to call the rally by its technical definition — a bull market.
In 10 trading days, the S&P/TSX Composite Index jumped from its March 23 low to enter the bull zone, its quickest rebound since the index was created in 1977, according to data compiled by Bloomberg. It took 14 days to plunge into a bear market as the Covid-19 pandemic escalated through February and March.
But strategists are calling for caution with the gauge still 4,351 points or 24% away from its Feb. 20 record high. The surge in volatility also implies that investors should continue to expect large daily market moves — both up and down. “When you drop so far, so fast, people say it’s not really a bull market until you get back to new highs,” Greg Taylor, chief investment officer at Purpose Investments, said by phone. “I think people would be a lot more comfortable if we were back to new highs but that’s so far away I don’t think we’re at risk of that any time soon.” More are comfortable with calling this a bear-market rally as they wait for the number of coronavirus cases to plateau with governments across the world focused on flattening the infection curve.     And while some countries have signaled that the virus rate is starting to slow, the economic hit from lockdowns and shuttered borders that could last months has been devastating — Canadian consumer confidence has fallen to a record low as 2.5 million people applied for employment insurance.
A plethora of companies listed on the benchmark gauge have withdrawn their financial forecasts, not just for the first quarter but for the whole year, leaving analysts and investors in the dark on what to expect during the upcoming earnings season as non-essential businesses shut and people stay home to
stem the spread of Covid-19. “A bull market has a connotation to it that there’s a strong trend behind it that it’s going to be a persistent rally,” Brooke Thackray, an analyst at Horizons ETFs Management (Canada) Inc. said by phone. “People are scared to call it a bull market because it just could be a bear trap and not a bull market at all.”
The spat between Saudi Arabia and Russia over oil production and the slump in demand amid the virus outbreak have also taken its toll on the Canadian economy with the energy sector making up about 9% of the nation’s output. Energy stocks represent 13% of the Canadian stock market and they are among the worst performers this year. Tensions may be easing there as crude prices surged primarily due to speculation that the world’s largest producers might reach some sort of truce to the price war.
“This will be a big week for the TSX though given our larger exposure to energy stocks and further visibility on OPEC and production cuts via their meeting on Thursday,” said Martin Pelletier, managing director and portfolio manager at TriVest Wealth Counsel in Calgary.
* Cboe Volatility Index — “Getting the VIX below 30 would be a huge step. It’s a huge positive that it’s back below 50 but it still has a lot more to go.” It is about 45 now.
* U.S. 10-year bond yields — “If we can get them to stabilize potentially get back above 0.75% or 1%, that would be a really nice signal that the markets are starting to work together on the bond side. And that would give a lot more confidence in what the equities are doing.” The T-note yielded 0.67% Monday.
* Stability in banks — “You can’t have a bull market without the banks starting to go higher.”
* Crude prices — “As long as oil can eventually get back to above $30, it’s not perfect but it would be a good positive to keep the rest of the market to keep going.” West Texas Intermediate last traded at about $26 per barrel.

No matter what, the road to bull market recovery in Canada will be bumpy as provincial and federal leaders rush to unleash stimulus packages to help ailing sectors and the unemployed and health officials work on slowing the infection rate. “It’s important to remember that we’re not out of the woods quite yet, but the market appears to be taking an optimistic approach to the coronavirus impact being dealt with in a timely fashion so we hope it isn’t disappointed,” Pelletier said. “This correction has happened so fast and judging by today’s action it has the potential to rebound just as quickly.”

By Bloomberg Automation:
(Bloomberg) — The S&P/TSX Composite rose 5.1 percent at 13,592.70 in Toronto. The move was the biggest since rising 12 percent on March 24 and follows the previous session’s decrease of 1.2 percent. Toronto-Dominion Bank contributed the most to the index gain, increasing 5.7 percent. Lightspeed POS Inc. had the largest increase, rising 23.1 percent.
Today, 216 of 230 shares rose, while 14 fell; all sectors were higher, led by financials stocks.
Insights
* In the past year, the index had a similar or greater gain two times. The next day, it declined 9.9 percent once and advanced 4.5 percent once
* The index declined 17 percent in the past 52 weeks. The MSCI AC Americas Index lost 9.7 percent in the same period
* The S&P/TSX Composite is 24.4 percent below its 52-week high on Feb. 20, 2020 and 21.7 percent above its low on March 23, 2020
* The S&P/TSX Composite is up 4.3 percent in the past 5 days and fell 16 percent in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 13.6 on a trailing basis and 15 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.8 percent on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$1.97t
* 30-day price volatility rose to 90.34 percent compared with 88.64 percent in the previous session and the average of 70.77 percent over the past month
================================================
Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================
Financials | 208.1223| 5.2| 26/0
Materials | 74.0820| 4.5| 47/0
Industrials | 71.7995| 4.6| 28/3
Energy | 68.1883| 3.9| 23/7
Information Technology | 56.9891| 6.7| 10/0
Utilities | 52.5547| 7.4| 16/0
Consumer Discretionary | 38.7177| 9.2| 14/1
Consumer Staples | 29.8780| 5.0| 10/1
Communication Services | 28.5475| 3.4| 8/0
Real Estate | 17.0743| 4.2| 25/1
Health Care | 8.4558| 6.7| 9/1
US
By Sarah Ponczek and Vildana Hajric
(Bloomberg) — Stocks surged the most in almost two weeks after the reported death tolls in some of the world’s coronavirus hot spots showed signs of easing. The yen weakened and Treasuries fell.
The benchmark S&P 500 Index surged late in the trading session to finish up 7%, closing at the highest level since March 13. New York Governor Andrew Cuomo said earlier that deaths were showing signs of hitting a plateau in the state that has become the epicenter of the U.S. outbreak. Italy had the lowest number of new coronavirus infections in nearly three weeks and France reported a continued leveling-off of cases, helping to send European and Asian shares higher.
“You can’t say that we’ve definitely turned the corner for certain but it does appear as though that is a good sign,” said Mark Heppenstall, chief investment officer at Penn Mutual Asset Management, which oversees $28 billion.
The number of deaths in the U.S. is still expected to peak on April 16, though the cumulative number of Americans likely to die from Covid-19 was revised downward to 82,000, from an estimate of 94,000 less than a week ago. But its apex, 3,130 Americans will die per day, up from the previous estimate of 2,644.
The pound weakened after British Prime Minister Boris Johnson was taken into a hospital intensive care unit for treatment for coronavirus after his condition worsened.
The mostly upbeat tone in markets followed another negative week, and the mood among investors remains divided. Bulls are pointing to more attractive valuations, unprecedented stimulus and now slowing death rates in several major countries. Bears are fretting the continued spread of the disease, dismal economic data and the rising corporate costs of the pandemic and subsequent shutdown. “For now the markets will likely remain hostage to news on how long it will take to ‘get back to business’ and ‘the good life.”’ John Stoltzfus, the chief investment strategist at Oppenheimer & Co., wrote to clients. “We’d expect markets to continue trading on a combination of fear, technical factors and wistful hope with fundamentals clouded by the uncertainty weaved by the insidious virus.”
In Asia, Japan’s benchmark ended almost 4% higher even as that country moved closer to declaring a state of emergency. The yen dropped as haven demand receded. Shares in Hong Kong rose while Shanghai was closed for a holiday.
Elsewhere, crude oil fell on signals that a glut is growing at America’s key oil storage hub, offsetting earlier support from signs that Saudi Arabia and Russia are making progress toward a supply-curb agreement.

These are some of the main moves in markets:
Stocks
*The S&P 500 Index increased 7% to 2,663.68 as of 4:14 p.m. New York time, the highest in more than three weeks on the largest
climb in almost two weeks.
*The Dow Jones Industrial Average increased 7.7% to 22,679.99, the highest in more than three weeks on the biggest climb in
almost two weeks.
*The Nasdaq Composite Index increased 7.3% to 7,913.24, the highest in almost four weeks on the largest climb in almost two weeks.
*The MSCI All-Country World Index increased 5.5% to 448.84, the highest in more than three weeks on the biggest climb in almost two weeks.
Currencies
*The Bloomberg Dollar Spot Index declined 0.1% to 1,267.59.
*The Japanese yen depreciated 0.5% to 109.12 per dollar, the weakest in more than a week.
*The euro was little changed at $1.0798, hitting the weakest in almost two weeks with its sixth consecutive decline.
*The British pound fell 0.2% to $1.2241, the weakest in more than a week.
Bonds
*The yield on two-year Treasuries increased four basis points to 0.26%, the highest in more than a week on the largest climb in almost two weeks.
*The yield on 10-year Treasuries climbed eight basis points to 0.67%, the highest in a week on the biggest surge in almost three weeks.
*Germany’s 10-year yield increased two basis points to -0.43%, the highest in more than a week.
*Britain’s 10-year yield increased two basis points to 0.334%, the biggest climb in almost two weeks.
Commodities
*Gold strengthened 2.8% to $1,665.97 an ounce, the highest in four weeks on the largest climb in almost two weeks.
*West Texas Intermediate crude declined 7.3% to $26.26 a barrel, the biggest drop in more than a week.
–With assistance from Claire Ballentine.
Have a great night.

Be magnificent!

As ever,

Carolann

What is life?  It is the flash of a firefly in the night.  It is the breath of a buffalo in wintertime. 
It is the little shadow which runs across the grass and loses itself in the sunset.
                                                       -Crowfoot, or Isapo-Muxika, Last words.
                                                   (chief of the Blackfoot First Nation), 1830-1890.

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