Aug 7, 2020 Newsletter

Dear Friends,

Tangents: Happy Friday.

August 7, 1959: First photo of Earth from space taken by US satellite Explorer VI.
1882~Hatfield-McCoy feud erupts.
Mata Hari, Dutch spy, b.1876.
On Aug. 7, 1964, Congress passed the Gulf of Tonkin resolution, giving President Johnson broad powers in dealing with reported North Vietnamese attacks on United States forces. Go to article »
August 7, 1991~Tim Berners-Lee releases files describing his idea for the World Wide Web.  WWW debuts as a publicly available service on the Internet.

Airports may do away with check-in and security lines. -Bloomberg.

Black hole planets may exist. -Bloomberg.

Looking at deep red light may help eyesight. –Bloomberg.
PHOTOS OF THE DAY
A view of a room transformed by the artist Tuomas Kiuru inside a former residential building in Kerava, about 40 kilometers north of Helsinki, Finland
CREDIT: MAURI RATILANINEN/EPA -EFE/SHUTTERSTOCK

A bear cub cling to his mother’s back as they hitch a ride across a wide river in Lake Clark National Park, Alaska
CREDIT: PATTIE WALSH/SOLENT NEWS & PHOTO AGENCY

SpaceX’s Starship SN5 full-size prototype completed its first successful test flight, soaring to 490 ft(150 metres) over Boca Chica Texas
CREDIT: UP/ALAMY LIVE NEWS

People enjoy a warm day at La Concha beach in San Sebastian, Basque Country, northern Spain
CREDIT: JAVIER ETXEZARR
Market Closes for August 7^th , 2020 

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1990, The Wall Street Journal published market guru Joe Granville’s forecast that the stock market would “crash within a few days.” Mr. Granville called for the Dow to fall below 2,200 by the end of August and to drop below 1,750 by the spring of 1992. Unfortunately for him, and fortunately for everyone who ignored him, the Dow barely budged, finishing the month at 2,614 and soaring past 3,200 by the spring of 1992.
Canada
By Divya Balji
(Bloomberg) — After an epic rally from its pandemic low, Canada’s equity market may be losing some steam.
The S&P/TSX Composite Index has made a remarkable comeback since March. It still needs to rise another 519 points, or 3.1%, to break even for the year. The index has been carried by big gains in gold and technology: Only 41% of its members (91 of 221) are in the green for 2020, according to data compiled by Bloomberg.
As the coronavirus outbreak ravages economies and businesses around the globe, Canadian companies have shown some resilience — with a majority of firms beating analyst estimates in the second quarter. A jump in commodity prices and Shopify Inc.’s big leap have pushed the nation’s equity benchmark to its longest monthly rally since September.
In the 96 trading days since the March low, the TSX has closed in the green on 61 days, or 64% of the time. That’s higher than the 54% seen annually going back two decades, according to data compiled by Bloomberg. But a resurgence in virus cases, stalled U.S. fiscal stimulus talks ahead and geopolitical tensions — all in the midst of America’s tumultuous presidential election campaign –have renewed volatility.
The abrupt plunge in stocks earlier this year was met with an equally rapid bounce thanks to fiscal and monetary stimulus, “and now that shock effect seems to be wearing off and we’re dealing with the ‘what’s next?’,” said Greg Taylor, chief investment officer at Purpose Investments Inc. Equity markets are painting a more optimistic picture than bonds. Stocks bulls are focused on the economic recovery, while fixed-income markets suggest the growth profile will be a slow and long grind, according to Kevin McCreadie, chief executive officer of AGF Management Ltd.
“You have to barbell a little bit of both in your portfolio right now to position,” he said on BNN Bloomberg.
The tug-of-war for investor sentiment can be seen in Canada’s economic recovery. While the country has a handle on the virus outbreak and has seen a strong recovery in employment numbers, a larger part of the economy is still dependent on its major trading partners and many of them are still in crisis mode against Covid-19, said Ed Moya, a senior market analyst at Oanda Corp.
What could provide a solid boost to Canada’s market is bank earnings results due later this month. The nation’s Big Six banks — which make up almost a fifth of the S&P/TSX Composite — are slated to report in about two weeks. Strong profit growth or an improving outlook for loan losses, indicating projections
a solid economic recovery, could help with giving the equity market a lift.
Investment firms that have reported so far have seen strong growth in assets under management and trading activity, which could be also a positive indication for earnings at Canada’s biggest banks. “People are starting to realize that there’s potential the Canadian banks could have a positive surprise, and that’s really not priced in stocks at all given how much they’ve underperformed other sectors this year,” Purpose’s Taylor said.
Economy
*Canada’s economy recorded a third straight month of strong employment gains that have recouped more than half of losses from Covid-19. Employment rose by 418,500 in July, bringing to 1.7 million the number of jobs reclaimed over the past three months.
*Visible minorities were among those hardest hit by Canada’s recession, with some groups reporting jobless rate increases about double those of the least affected.

*Canadian households are showing a newfound economic optimism, a good sign for the nation’s nascent recovery. After stalling at the end of June, sentiment around personal finances, job security, economic growth and real estate are all beginning to march higher again, telephone polling shows.
*Home sale numbers in Toronto and Vancouver also picked up in July with a 29.5% gain year-over-year in Canada’s most- populous city and 22.3% in the latter.
Politics
*Canada will hit the U.S. with retaliatory tariffs after President Donald Trump announced plans to impose duties on Canadian aluminum. Deputy Prime Minister Chrystia Freeland released a list of more than 60 U.S. aluminum-containing products that could face higher tariffs, but vowed not to escalate the situation beyond what she said was a dollar-for-dollar equivalent duties, totaling C$3.6 billion ($2.7 billion) in goods.
*Ontario Premier Doug Ford also joined the spat, urging consumers to shift purchases away from U.S. goods to fight against the tariffs.
–With assistance from Brandon Kochkodin and Shelly Hagan.

By Bloomberg Automation:
(Bloomberg) — The S&P/TSX Composite fell 0.2 percent at 16,544.48 in Toronto. The move follows the previous session’s increase of 0.5 percent. Shopify Inc. contributed the most to the index decline, decreasing 2.7 percent. Cominar Real Estate Investment Trust had the largest drop, falling 12.7 percent.
Today, 113 of 221 shares fell, while 105 rose; 5 of 11 sectors were lower, led by materials stocks.
Insights
* So far this week, the index rose 2.3 percent
* The index advanced 1.7 percent in the past 52 weeks. The MSCI AC Americas Index gained 15 percent in the same period
* The S&P/TSX Composite is 7.9 percent below its 52-week high on Feb. 20, 2020 and 48.1 percent above its low on March 23, 2020
* S&P/TSX Composite is trading at a price-to-earnings ratio of 23.5 on a trailing basis and 25.2 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.2 percent on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$2.53t
* 30-day price volatility fell to 12.37 percent compared with 12.48 percent in the previous session and the average of 16.46 percent over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Materials | -52.9709| -2.0| 11/39
Information Technology | -45.0039| -2.5| 3/7
Health Care | -7.7484| -4.6| 3/5
Consumer Staples | -3.6103| -0.5| 3/8
Communication Services | -1.5768| -0.2| 3/5
Consumer Discretionary | 0.4276| 0.1| 8/5
Real Estate | 0.7303| 0.1| 12/13
Energy | 5.6852| 0.3| 15/9
Utilities | 6.1748| 0.8| 12/4
Industrials | 20.7259| 1.1| 15/13
Financials | 42.5331| 0.9| 20/5
US
By Claire Ballentine and Katherine Greifeld
(Bloomberg) — Tech shares fell as the White House ramped up its confrontation with China, while a better-than-forecast jobs report helped fuel advances for smaller U.S. companies.
The Nasdaq Composite Index pared a weekly increase as heavyweights including Apple Inc., Microsoft Corp. and Amazon.com Inc. fell. Gains for smaller banks, manufacturers and utilities helped lift the Russell 2000. Investors kept a close eye on efforts by the White House and lawmakers to reach a deal to extend a coronavirus relief package, with Treasury Secretary Steven Mnuchin saying he’ll recommend President Donald Trump move ahead with executive actions to halt evictions and possibly restore some unemployment aid after talks stalled.
Tech shares were also among the worst performers in Asia after the White House’s latest attack on Chinese tech companies and a plan to sanction Hong Kong’s chief executive. The dollar strengthened on haven demand, while gold retreated for the first time in six days. Europe’s benchmark stock gauge ended higher.
Trump Ban on Top Messaging App Risks Snarling Global Business Investors have bid up U.S. stocks back toward record-high levels and a global gauge of equities has almost wiped out losses for the year. But with elevated levels of unemployment, investors had been seeking a new U.S. relief package to cushion the blow for consumers.
“The risk is that a policy failure drains the tentative strength that had been creeping back into the economy in recent months,” said Seema Shah, chief strategist at Principal Global Investors. WeChat operator Tencent Holdings Ltd. slumped 5% in Hong Kong after Trump signed executive orders prohibiting U.S. residents from doing any business with WeChat, TikTok or the apps’ Chinese owners.
Elsewhere, oil slumped along with copper.

     These are some of the main moves in markets:
Stocks
* The S&P 500 Index rose less than 0.1% at 4 p.m. New York time.
* The Stoxx Europe 600 Index rose 0.3%.
* The MSCI Asia Pacific Index declined 1.3%.
* The MSCI Emerging Market Index declined 1.6%.
Currencies
* The Bloomberg Dollar Spot Index gained 0.5%.
* The euro sank 0.8% to $1.1786.
* The Japanese yen weakened 0.4% to 105.96 per dollar.
Bonds
* The yield on 10-year Treasuries rose three basis points to 0.56%.
* Germany’s 10-year yield rose two basis points to -0.51%.
* Britain’s 10-year yield rose three basis points to 0.14%.
Commodities
* West Texas Intermediate crude fell 1% to $41.52 a barrel.
* Gold weakened 1.6% to $2,030.99 an ounce.
* Copper fell 4% to $2.793 per pound.

–With assistance from Jeanny Yu, Adam Haigh, Robert Brand, Yakob Peterseil and Vildana Hajric.
Have a wonderful weekend everyone.

Be magnificent!
As ever,

Carolann

The world turns aside to let any man pass who knows where he is going.
                                                                 –Epictetus, 50 AD-135 AD

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