April 17, 2020 Newsletter

Dear Friends,

Tangents: Happy Friday!

On this day in 1991, the Dow Jones Index topped 3,000 for the first time ever.  Today, 29 years later – after Y2K, the dot.com bubble bursting, the Sars, Ebola, H1N1 scares, the Global Financial Crises,
Covid-19….and all the other mini pull-backs along the way, the Dow closed today at 24,242.49 – an increase of +708% in 29 years.  That’s +24%/annum on an annualized basis.  And that, my friends, is the key to creating wealth and keeping that wealth once it’s created– buy excellent quality businesses and don’t ever get scared out of them.

1492 – Christopher Columbus signs a contract with the Spanish monarchs to find the “Indies” with the stated goal of converting people to Catholicism.  This promises him 10%  of all riches found, and the governorship of any lands encountered.

On April 17, 1961, about 1,500 CIA-trained Cuban exiles launched the disastrous Bay of Pigs invasion of Cuba in a failed attempt to overthrow the government of Fidel Castro. Go to article »

A star’s orbit around a black hole proves Einstein right again. (h/t Scott Kominers) -Bloomberg.

Here are some foods that can boost your mood during these anxious times
Shockingly, this isn’t just a long list of ice creams. –CNN

Are you bored of looking out your window? We asked 17 illustrators and artists in New York City to show us what they’re seeing out theirs. -from The NYTimes.

PHOTOS OF THE DAY

The biggest collect of Rhododendrons in Europe comes into bloom at the Tregothnan Estate in Cornwall.
CREDIT: SWNS

Irish dancer from the Moulin Rouge, Isabelle, practices in the street next to her home in Paris
CREDIT: FRANCK FIFE/ AFP

A man is silhouetted against the setting sun while taking in the view from a bluff overlooking downtown Kansas City
CREDIT: AP PHOTO/CHARLIE RIEDEL

Undated file handout artist’s impression of the orbits of stars very close to the supermassive black hole at the heart of the Milky Way. A star orbiting a supermassive black hole at the heart of the Milky Way moves in a way that was predicted by physicist Albert Einstein more than a century go, astronomers have found.
CREDIT: CALCADA/ESO/ SPACEENGINE. ORG/PA WIRE
Market Closes for April 17th , 2020 

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1837, three weeks before the stock market crashed in the Panic of 1837, John Pierpont Morgan was born in Hartford, Ct., to Juliet Pierpont and Junius Spencer Morgan, a merchant and stockbroker. The sickly baby, whom his parents called “Bub” and his friends called “Pip,” grew up to become the most powerful financier in American history.
Canada
By Michael Bellusci
(Bloomberg) — Canadian stocks rallied Friday, advancing 1.4% on the week as investors, speculated the U.S. economy would soon begin to emerge from a lockdown.
Shopify Inc. had a monster week, making the e-commerce retailer the third-largest company in Canada, underscoring the value of the virtual world in the time of the coronavirus.
The S&P/TSX Composite rose 3.3% Friday, with ten of eleven sectors rising. Information technology led in Toronto, while materials lagged. Bellwethers like Canadian Pacific Railway Ltd., Rogers Communications Inc. and Teck Resources Ltd. are set to provide a glimpse into their first quarter, which was barely half over when the coronavirus pandemic began. Some companies on Canada’s benchmark S&P/TSX Composite index have already temporarily suspended or cut dividends to shore up cash, providing some inkling of what to expect when quarterly results are released.
Oil traded near $18 a barrel in New York, the lowest intraday level since 2002, as a wave of gloomy demand forecasts and a cratering physical market outweighed an unprecedented deal to cut output.
Meanwhile, Prime Minister Justin Trudeau announced C$2.45 billion ($1.75 billion) to help workers in Canada’s energy sector, a smaller aid package than had been sought by an industry that has been hammered by the plunge in oil prices.
Commodities
* Western Canada Select crude oil traded at a $14 discount to West Texas Intermediate
* Spot gold fell 1.9% to about $1,684.98 an ounce
FX/Bonds
* The Canadian dollar rose 0.5% to C$1.4018 per U.S. dollar
* The 10-year government bond yield rose 3.2 basis points to 0.646%

By Bloomberg Automation:
(Bloomberg) — The S&P/TSX Composite rose 3.3 percent at 14,359.88 in Toronto. The move was the biggest since rising 5.1 percent on April 6 and follows the previous session’s decrease of 0.4 percent. Shopify Inc. contributed the most to the index gain, increasing 12.2 percent. MEG Energy Corp. had the largest increase, rising 19.2 percent.
Today, 189 of 230 shares rose, while 39 fell; 10 of 11 sectors were higher, led by financials stocks.
Insights
* In the past year, the index had a similar or greater gain five times. The next day, it advanced three times for an average 2.1 percent and declined twice for an average 6.3 percent
* So far this week, the index rose 1.4 percent
* The index declined 13 percent in the past 52 weeks. The MSCI AC Americas Index lost 2.7 percent in the same period
* The S&P/TSX Composite is 20.1 percent below its 52-week high on Feb. 20, 2020 and 28.5 percent above its low on March 23, 2020
* S&P/TSX Composite is trading at a price-to-earnings ratio of 14.2 on a trailing basis and 17.5 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.6 percent on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$2.12t
* 30-day price volatility rose to 90.95 percent compared with 90.39 percent in the previous session and the average of 85.29 percent over the past month
===================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
===================================================
Financials | 185.7498| 4.5| 25/1
Information Technology | 80.8926| 7.5| 9/1
Energy | 73.8557| 4.2| 29/1
Industrials | 39.8523| 2.4| 29/1
Consumer Discretionary | 31.4058| 6.3| 15/0
Utilities | 21.2394| 2.8| 15/1
Communication Services | 17.4262| 2.0| 8/0
Consumer Staples | 16.0111| 2.5| 10/1
Real Estate | 11.9508| 2.7| 22/4
Health Care | 4.1382| 2.9| 7/2
Materials | -21.9514| -1.1| 20/27
US
By Rita Nazareth and Vildana Hajric
(Bloomberg) — Stocks extended their weekly rally as investors speculated the American economy would soon begin to emerge from a lockdown amid a glimmer of hope in the race to find a coronavirus treatment.
The S&P 500 posted a second week of gains — the longest run since mid-February — after the U.S. government issued guidelines toward restarting the economy. Gilead Sciences Inc. soared after a report that a group of patients were “seeing rapid recoveries in fever and respiratory symptoms.” Meanwhile, Apple Inc. sank after Goldman Sachs recommended selling the shares. Oil traded near $18 a barrel. Treasuries fell.
Some other corporate highlights:
* Boeing Co. plans to restart jetliner manufacturing in the Seattle area next week.
* Procter & Gamble Co.’s organic sales rose 6% as the coronavirus pandemic prompted panic-buying of household staples.
* Schlumberger Ltd. reduced its dividend for the first time in more than 40 years amid a historic crude market crash.
* Ford Motor Co. is taking its first drive through the high- yield market in years, looking to shore up liquidity after reporting one of its largest ever quarterly losses.
The week ended on an upbeat note for stocks after the White House issued guidelines for states to consider as they decide whether to relax stay-at-home orders and other social-distancing measures. The government is under pressure, with 22 million Americans applying for unemployment benefits in a month, erasing a decade worth of job creation. Meanwhile, China pledged stronger policies, including rate cuts, after the pandemic pushed the economy into its first contraction in decades.
“The market is fueled by hope and optimism — hope for a vaccination and optimism around reopening the economy,” Mike Loewengart, managing director of investment strategy at E*Trade Financial, noted. “That said, these are relatively fragile indicators. There is still plenty of uncertainty in the near term.”
The rally on Friday showed there’s an “enormous amount of cash on sidelines, there’s an enormous amount of desire for people to get invested and participate in the recovery,” said Mike Swell, co-head of global portfolio management at Goldman Sachs Asset Management.
In fact, weekly flow data from Bank of America Corp. and EPFR Global highlighted a clear investor preference for money- market funds. Assets under management in this category have swelled to $4.5 trillion following seven week of inflows that added $877 billion to the cash pile.
These are some of the main moves in markets:
Stocks
* The S&P 500 climbed 2.7% at 4 p.m. New York time.
* The Stoxx Europe 600 Index increased 2.6%.
* The MSCI Asia Pacific Index gained 2%.
Currencies
* The Bloomberg Dollar Spot Index dipped 0.5%.
* The euro advanced 0.3% to $1.0868.
* The Japanese yen strengthened 0.3% to 107.60 per dollar.
Bonds
* The yield on 10-year Treasuries increased two basis points to 0.65%.
* Germany’s 10-year yield advanced less than one basis point to -0.47%.
* Britain’s 10-year yield climbed less than one basis point to 0.304%.
Commodities
* The Bloomberg Commodity Index added 0.1%.

–With assistance from Adam Haigh, Todd White, Sam Potter, Cameron Crise, Nancy Moran, Sophie Caronello, Claire Ballentine, Sarah Ponczek and Luke Kawa.
Have a wonderful weekend everyone.

Be magnificent!

As ever,

Carolann

You can’t go back and change the beginning, but you can start where you are and change the ending.
                                                                                                          -C. S. Lewis, 1898-1963

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