June 2, 2020 Newsletter

Dear Friends,

Tangents:
1692: Salem witch trials begin.
On June 2, 1953, Queen Elizabeth II of Britain was crowned in Westminster Abbey, 16 months after the death of her father, King George VI. Go to article »

Why Bach sounded like Bach. -Bloomberg.

New study challenges “collapse” hypothesis of Easter Island. (h/t Scott Kominers) -Bloomberg.

PHOTOS OF THE DAY

A surfer heads out into the ocean in Cape Town, South Africa. South Africa’s lockdown regulations were eased as part of a phased risk adjusted strategy by government in dealing with the coronavirus SARS-CoV-2 which causes the Covid-19 disease. The country has moved from level 4 to level 3 lockdown but there is still much confusion as to some of the regulations. Non-contact sport has been permitted but beaches remain closed.
CREDIT: NIC BOTHMA/EPA-EFE/SHUTTERSTOCK

Villagers walking in terraced fields in Jiabang Township, Congjiang Country of southwest China’s Guizhou Province.
CREIDT: XINHUA NEWS AGENCY/EYEVINE

Pigeons belonging to members of the Barnsley Federation of Racing Pigeons are released at Wicksteed Park in Kettering, Northamptonshire, as pigeon racing is the first spectator sport to return following the easing of lockdown restrictions in England.
CREDIT: JACOB KING/PA WIRE

Market Closes for June 2^nd, 2020 

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1985, R.J. Reynolds Industries took a deep breath and gobbled up Nabisco Brands in an acquisition valued at $4.9 billion, the largest takeover yet on record outside the oil industry. RJR bought Nabisco for $85 a share—a huge premium over the $60 share price only a month earlier. William Leach, a leading food-industry analyst at Donaldson, Lufkin & Jenrette, said the deal wasn’t likely to have much effect on the food industry and doubted that more mergers would follow. Three months later, Philip Morris bought General Foods.
Canada
By Aoyon Ashraf
(Bloomberg) — Canada stocks rose with global markets as investors weighed new bouts of stimulus and positive economic signals as coronavirus lockdowns ease. The S&P/TSX Composite Index rose 1% in Toronto. Consumer discretionary and energy stocks outperformed, while materials fell. Meanwhile, one of Canada’s railways is seeing signs the economy is slowly bouncing back from the coronavirus pandemic. Volumes rose 4% at Canadian National Railway Co. in the last week of May as manufacturing and construction sectors reopened, said Chief Financial Officer Ghislain Houle. While the recovery is expected to be slow, it’s a positive sign after shipments hit bottom last month, he said. On the deals front, Fairfax Financial Holdings Ltd. said it isn’t making and isn’t engaged in making a bid for BlackBerry Ltd., BNN Bloomberg reported, citing an email from Fairfax’s general counsel. BlackBerry rose 7.6%, bringing its two-day gain to 13%.
Commodities
* Western Canada Select crude oil traded at a $7.70 discount to West Texas Intermediate
* Spot gold fell 0.8% to $1,726.39 an ounce
FX/Bonds
* The Canadian dollar strengthened 0.4% to C$1.3520 per U.S. dollar
* The 10-year government bond yield rose slightly to 0.542%

By Bloomberg Automation:
(Bloomberg) — The S&P/TSX Composite rose for the second day, climbing 1 percent, or 158.15 to 15,394.36 in Toronto. The move was the biggest since rising 1.1 percent on May 25. Royal Bank of Canada contributed the most to the index gain, increasing 2.6 percent. Baytex Energy Corp. had the largest increase, rising 34.1 percent. Today, 146 of 229 shares rose, while 83 fell; 8 of 11 sectors were higher, led by financials stocks.
Insights
* This quarter, the index rose 15 percent, heading for the biggest advance in at least 10 years
* The index declined 4 percent in the past 52 weeks. The MSCI AC Americas Index gained 11 percent in the same period
* The S&P/TSX Composite is 14.3 percent below its 52-week high on Feb. 20, 2020 and 37.8 percent above its low on March 23, 2020
* The S&P/TSX Composite is up 1.6 percent in the past 5 days and rose 5.3 percent in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of
19.2 on a trailing basis and 25.2 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.4 percent on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$2.31t
* 30-day price volatility fell to 20.54 percent compared with
22.93 percent in the previous session and the average of 29.69 percent over the past month
================================================================
| Index Points | | Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 97.6713| 2.2| 24/2
Energy | 47.4146| 2.3| 29/1
Information Technology | 24.0993| 1.7| 8/2
Consumer Discretionary | 17.6127| 3.3| 14/0
Industrials | 12.2311| 0.7| 19/12
Communication Services | 10.8584| 1.2| 7/1
Consumer Staples | 5.9113| 0.9| 5/6
Utilities | 2.1387| 0.3| 13/3
Real Estate | -1.6864| -0.4| 8/18
Health Care | -1.9782| -1.3| 3/7
Materials | -56.1284| -2.6| 16/31
US
By Katherine Greifeld
(Bloomberg) — U.S. stocks rose alongside equities in Europe and Asia amid new bouts of stimulus and positive economic signals as coronavirus lockdowns ease. The dollar slumped for a fourth consecutive day. Two shares rose on the S&P 500 Index for every one that fell, lifting the benchmark to its highest since March 4. Gunmakers extended rallies in the wake of President Donald Trump’s promise to deploy large numbers of troops if cities and states don’t act to contain violence from protests over police brutality. Stocks are hovering near their highest in three months as businesses reopen around the world and manufacturing gauges show economies stabilizing following coronavirus shutdowns. That’s despite a slew of risks still on the horizon, including tense U.S.-China relations that may jeopardize a hard-won trade deal. The sometimes violent demonstrations across U.S. cities over the killing by police of George Floyd, an unarmed black man, aren’t yet seen as a major drag on the economy and corporate profits. “Everyone who is assessing what they’re seeing on the news every night is recognizing things getting worse, and yet the markets are focusing on things that they believe are getting better,” said Brian Levitt, a global market strategist at Invesco. Coronavirus “cases have plateaued in aggregate and compressed in some of the hardest hit areas. Mobility is starting to pick up, reopenings are starting to pick up.”
Stimulus hopes powered Europe’s Stoxx 600 to a 12-week high as Chancellor Angela Merkel sought to thrash out a second aid package for Germany. Oil gained as investors eyed a potential extension of record production curbs by OPEC+. Treasuries edged lower, while the pound gained on positive news in trade negotiations between Britain and the EU. Elsewhere, emerging-market stocks rallied alongside currencies. Australia’s dollar rose to its highest level since January. In Asia, Tokyo equity benchmarks outperformed.
Here are some key events coming up:
* In Europe, the ECB is expected to top up its rescue program with an additional 500 billion euros of asset purchases at a meeting on Thursday. Anything less than an expansion would be a big shock, Bloomberg Economics said.
* The U.S. labor market report on Friday will probably show American unemployment soared to 19.6% in May, the highest since the 1930s.

These are the main moves in markets:
Stocks
* The S&P 500 Index rose 0.8% at the close of trading in New
York for its third straight gain.
* The Stoxx Europe 600 Index advanced 1.6%.
* The MSCI Asia Pacific Index increased 1%.
* The MSCI Emerging Market Index gained 1.7%.
Currencies
* The Bloomberg Dollar Spot Index decreased 0.3%.
* The euro increased 0.3% to $1.1169.
* The British pound gained 0.4% to $1.2546.
* The Japanese yen weakened 1% to 108.66 per dollar.
Bonds
* The yield on 10-year Treasuries rose two basis points to 0.68%.
* Germany’s 10-year yield declined one basis point to -0.42%.
* Britain’s 10-year yield fell one basis point to 0.22%.
Commodities
* West Texas Intermediate crude increased 4% to $36.84 a barrel.
* Gold fell 0.7% to $1,728.12 an ounce.
–With assistance from Andreea Papuc, David Wilson and Michael Hunter.

Have a great night.

Be magnificent!
As ever,

Carolann

Doing the best at this moment puts you in the best place for the next moment.
                                                                          -Oprah Winfrey, b. 1954

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