June 12, 2020 Newsletter

Dear Friends,

Tangents: Happy Friday.

Anne Frank, b. 1929
1939: National Baseball Hall of Fame opened.

A 50,000-year-old lake in India just turned pink, and no one knows why
Seems extremely normal during these troubling times, nothing to see here. –CNN.

New York’s La Guardia Airport, long maligned as decrepit, will open a new airy, art-filled $4 billion terminal this weekend. Yeah!  –The New York Times.

In a rare interview, the musician Bob Dylan talks about mortality, the gospel music of Little Richard, and his new album. –The NY Times.

How older adults can stay fit while staying home: A personal trainer who works with seniors has some lively tips to offer. –The Seattle Times.

With summer plans canceled, people are turning the backyard into vacation spot.   One family added an inflatable pool, trampoline, vegetable patch, climbing dome and butterfly garden. Find inspiration for your own backyard. – From At Home in the Northwest, Seattle Times.

June 12, 1987 –  President Reagan, during a visit to the divided German city of Berlin, publicly challenged Soviet leader Mikhail S. Gorbachev to “tear down this wall.” Go to article »

PHOTOS OF THE DAY

A section of the Ricer Spree next to the Reichstag building, seat of the German lower house of Parliament Bundestag in Berlin, Germany, is coloured green by activists from the “Extinction Rebellion” to protest the German government’s coal policies in Berlin.
CREDIT: TOBIAS SCHWARZ/AFP VIA GETTY IMAGES

People view” Claude Monet: The Immersive Experience” exhibition at Horta Gallery in Brussels, Belgium. With a sound and light show as well as virtual reality technology, the exhibition provides audience with immersive experience to appreciate the works and inspirations of Claude Monet. The exhibition will last until Sep. 6.
CREDIT: ZHANG CHENG

Bicycle and velomobile builder, multiple world champion in velomobile racing Sergei Dashevsky rides one of his bicycles by his house in Krasnodar, Russia.
CREDIT: IGOR ONUCHIN\\TASS VIA GETTY IMAGES
Market Closes for June 12th, 2020 

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1968, the New York Stock Exchange, inundated with trading paperwork and struggling to cope with antiquated recordkeeping technology, began closing every Wednesday to allow “back-office” trade processors to catch up with the flood of documents.
Canada
By Divya Balji
(Bloomberg) — There are two things to take away from this week’s Canadian stock-market performance: the one-way rocket ride is over and the U.S. seems destined to outperform.
The S&P/TSX Composite Index slumped 5.8% over three days, putting it in the red for only the second week since its March low. The retreat, spurred by fears over a another wave of the coronavirus and weaker-than-expected economic data, came as a nasty shock.
“The market had gone up too fast in the last month or so and I think having a correction is long-term healthy,” said Greg Taylor, chief investment officer at Purpose Investments. “It really had built in some excess and we needed to have some of this froth come out of the market.”
While the S&P 500 briefly turned green for 2020 before succumbing to the global rout, the TSX has its own particular challenges to deal with. As of Friday, the market was still 11% from being positive for the year, almost double the S&P 500‘s slump. That’s in part due to the small contribution of tech stocks to the main index, said Taylor. Lower oil prices are another reason.
For Philip Petursson, chief investment strategist at Manulife Investment Management concerns about a slump in the housing market amid high debt loads, and what that could mean for the country’s big banks, are also at play, he said. The banks make up about a fifth of the market. Canada’s household debt-to-disposable income ratio rose to 176.9% in the first quarter, the highest since the end of 2018, data on Friday showed.
     It will be a “tougher slog” for the Canadian stock market with more volatility in the pipeline, Petursson said. “The biggest risk going forward is an economic relapse, be it a second wave of Covid or underperformance of the economy, rising defaults etc.”
Sill, Taylor said a retest of the stock-market low in March is unlikely, with federal governments and central banks taking proactive stimulus measures and a promise to do everything to keep the economy going. “This is a learning curve for everyone,” he said. “There’s going to be some companies that don’t make it the other side but hopefully those that do are bigger and come out better.”
Here’s what happened this week.
Markets — Just The Numbers
* The TSX fell 3.8%, its biggest weekly drop since March 20. Tech only sector in the green for the week, while energy stocks slumped by the most.
* The Canadian 10-year bond yield rose to 0.53%, while two-year bond yields gained to 0.29%.
* The Canadian dollar weakened by 1.3% against the greenback on the week.
Economy
* Statistics Canada will start gathering labor force data by race beginning with its July employment report.
* Its monthly survey doesn’t track employment conditions by visible minority status, though it does include data on immigrants and more recently, figures on indigenous Canadians.
* The worst may be over for Canada’s economy, but the nation’s more cautious approach to reopening means a slower rebound than in the U.S. While real-time data show economic green shoots in Canada after nearly three  months of Covid-19 restrictions they also suggest its economy behind its largest trading partner.
* Prime Minister Justin Trudeau doesn’t appear to be in any rush to release a budget update showing a record deficit due to hundreds of billions in government Covid-19 relief.
* He stressed his government’s commitment to transparency but said the situation is changing too fast to make  reliable forecasts.  Ontario is moving to the next phase of reopening its economy after months of Covid-19  restrictions, but its financial capital is being excluded. Toronto and its suburbs are not part of second phase in the province’s three-stage restart.

By Bloomberg Automation:
     (Bloomberg) — The S&P/TSX Composite rose 1.4 percent at 15,256.57 in Toronto.
The move follows the previous session’s decrease of 4.1 percent.
Toronto-Dominion Bank contributed the most to the index gain, increasing 2.6 percent. ShawCor Ltd. had the largest increase, rising 35.9 percent.
Today, 195 of 229 shares rose, while 33 fell; 10 of 11 sectors were higher, led by financials stocks.
Insights
* So far this week, the index fell 3.8 percent, heading for the biggest decline since the week ended March 20
* This quarter, the index rose 14 percent, heading for the biggest advance in at least 10 years
* The index declined 6 percent in the past 52 weeks. The MSCI AC Americas Index gained 4.5 percent in the same period
* The S&P/TSX Composite is 15.1 percent below its 52-week high on Feb. 20, 2020 and 36.6 percent above its low on March 23, 2020
* S&P/TSX Composite is trading at a price-to-earnings ratio of 19.1 on a trailing basis and 25.3 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$2.28t
* 30-day price volatility rose to 20.78 percent compared with 20.75 percent in the previous session and the average of 24.12 percent over the past month
================================================================
|Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 83.3604| 1.9| 24/2
Energy | 32.1106| 1.6| 26/3
Industrials | 27.2231| 1.5| 28/3
Information Technology | 20.2618| 1.5| 9/1
Utilities | 14.9975| 2.0| 16/0
Real Estate | 14.0702| 3.0| 26/0
Consumer Discretionary | 9.6384| 1.8| 14/0
Communication Services | 3.4654| 0.4| 7/1
Health Care | 2.9893| 2.0| 10/0
Consumer Staples | 2.7432| 0.4| 10/1
Materials | -5.2078| -0.3| 25/22
US
By Rita Nazareth and Claire Ballentine
(Bloomberg) — U.S. stocks rebounded from the biggest rout in 12 weeks as dip-buyers emerged for companies that bore the brunt of Thursday’s selling. Treasuries fell, while the dollar rose.
Real-estate, financial and energy companies led gains in the S&P 500. Cruise operators and airlines that were among the hardest-hit during the rout soared. Earlier Friday, the gauge fell as the World Health Organization said the risk of a second wave of coronavirus is present for any country exiting lockdowns. States and cities might have to resume shutdowns if cases surge dramatically, top officials at the U.S. Centers for Disease Control and Prevention said.
While U.S. stocks recovered Friday, all three major equity gauges fell for the week on concern over the pace of recovery following months of lockdown. Arizona and Oklahoma were among U.S. states to report record one-day increases in new coronavirus cases, a month after easing restrictions. Florida had the biggest daily jump since May 1. White House economic adviser Larry Kudlow said a new wave of cases hasn’t appeared.
“I don’t think that much has really changed. It’s just investors are so trained to buy that dip, they are riding that now,” said Shahnawaz Malik, senior investment advisor at Cornerstone Capital. “We’re going to continue to see these bouts of volatility until we have a vaccine” for the coronavirus.
These are some of the main moves in markets:
Stocks
* The S&P 500 advanced 1.3% as of 4 p.m. New York time.
* The Stoxx Europe 600 Index advanced 0.3%.
* The MSCI Asia Pacific Index decreased 1.2%.
Currencies
* The Bloomberg Dollar Spot Index advanced 0.1%.
* The euro decreased 0.4% to $1.1256.
* The Japanese yen weakened 0.5% to 107.36 per dollar.
Bonds
* The yield on 10-year Treasuries gained four basis points to 0.71%.
* Germany’s 10-year yield decreased three basis points to -0.44%.
* Britain’s 10-year yield advanced one basis point to 0.208%.
Commodities
* The Bloomberg Commodity Index sank 0.6%.
* West Texas Intermediate crude advanced 0.1% to $36.38 a barrel.

–With assistance from Hilary Clark, Adam Haigh, Constantine Courcoulas, Yakob Peterseil, Sophie Caronello and Nancy Moran.

Have a wonderful weekend everyone.

Be magnificent!
As ever,

Carolann

Baseball is 90% mental and the other half is physical.

 –Yogi Berra, 1925-2015.

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