August 27, 2020 Newsletter

Dear Friends,

Tangents:
Mother Teresa, b. 1910
If you judge people, you have no time to love them. –Mother Teresa, 1910-1997.
1979 – Lord Mountbatten assassinated.
On Aug. 27, 1962, the United States launched the Mariner 2 space probe, which flew past Venus the following December.  Go to article »

By 2245, half the atoms on Earth could be digital data. (h/t Mike Smedley)-Bloomberg.

Rare Indonesian plants can “mine” nickel.-Bloomberg.

PHOTOS OF THE DAY

A demonstrator dressed as Spider-Man raises his fist in the air while protesters in the street, in front of law enforcement in Kenosha, Wisconsin. As the city declared a state of emergency curfew, a third night of civil unrest occurred after the shooting of Jacob Blake, 29, on August 23.
CREDIT: BRANDON BELL/GETTY IMAGES

A young girl collects bricks as she works as a labourer at a brick factory on the outskirts of Herat, Afghanistan.
CREDIT: HOSHANG HASHIMI/AFP VIA GETTY IMAGES

Market Closes for August 27th, 2020 

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1878, the day after he returned to his laboratory in Menlo Park, N.J., from a trip to St. Louis, Thomas Edison began experimenting with electric light. By the middle of September (the final date is uncertain), Edison had solved the problem of creating incandescent light.
Canada
By Aoyon Ashraf
(Bloomberg) — Canadian equity markets failed to hold on to the earlier morning gains after tech and materials stocks declined. The S&P/TSX Composite index fell 0.4% in Toronto, reversing an early gain of as much as 0.3%. A dip in Shopify and gold stocks weighed on technology and materials stocks on Thursday. Gold swung sharply as traders parsed comments from Federal Reserve Chair Jerome Powell, who announced a more relaxed stance on inflation while saying that the central bank wouldn’t hesitate to act if consumer prices rose much above its goal. Meanwhile, Toronto-Dominion Bank and Canadian Imperial Bank of Commerce fiscal third-quarter results topped analysts’ estimates as soaring capital markets earnings softened the economic impact of the coronavirus pandemic.
Commodities
* Western Canada Select crude oil traded at an $11.50 discount to West Texas Intermediate
* Spot gold fell 1.2% to $1,931.13 an ounce
FX/Bonds
* The Canadian dollar fell slightly to $1.3125 per U.S. dollar
* The 10-year government bond yield rose about 5 basis points to 0.661%

By Bloomberg Automation:
(Bloomberg) — The S&P/TSX Composite fell 0.3 percent at 16,731.49 in Toronto. The move follows the previous session’s increase of 1 percent. Shopify Inc. contributed the most to the index decline, decreasing 3.8 percent. Real Matters Inc. had the largest drop, falling 5.1 percent. Today, 127 of 221 shares fell, while 92 rose; 5 of 11 sectors were lower, led by materials stocks.
Insights
* So far this week, the index rose 1.3 percent
* This month, the index rose 3.5 percent
* The index advanced 3.4 percent in the past 52 weeks. The MSCI AC Americas Index gained 21 percent in the same period
* The S&P/TSX Composite is 6.9 percent below its 52-week high on Feb. 20, 2020 and 49.8 percent above its low on March 23, 2020
* The S&P/TSX Composite is up 0.8 percent in the past 5 days and rose 3.5 percent in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 25.4 on a trailing basis and 24.6 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.1 percent on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$2.56t
* 30-day price volatility rose to 9.53 percent compared with 9.48 percent in the previous session and the average of 11.47 percent over the past month
================================================================
| Index Points | | Sector Name | Move | % Change | Adv/Dec
================================================================
Materials | -54.1431| -2.1| 4/46
Information Technology | -43.7271| -2.5| 4/6
Utilities | -4.2513| -0.5| 3/13
Consumer Discretionary | -1.4081| -0.2| 6/7
Health Care | -1.0058| -0.6| 4/4
Consumer Staples | 1.0423| 0.2| 4/7
Industrials | 1.7403| 0.1| 14/14
Real Estate | 2.1843| 0.4| 17/9
Communication Services | 3.8486| 0.4| 6/2
Energy | 4.9951| 0.2| 12/12
Financials | 32.2581| 0.7| 18/7
US
By Katherine Greifeld and Vildana Hajric
(Bloomberg) — U.S. stocks’ record-breaking rally continued and bond yields surged after Jerome Powell reiterated that the Federal Reserve will remain accommodative. The dollar climbed from a two-year low. The S&P 500 reached an all-time high for a fifth day. The Nasdaq Composite also set a record before closing in the red. The yield premium demanded by investors on long-maturity U.S. debt compared to short-term notes increased to the most in two months after Powell said the Fed will seek inflation that averages 2% over time, a step that implies allowing for periods of overshoots. The financial and real estate sectors were the biggest gainers in the S&P, with banks seen benefiting from the higher yields. The benchmark index has surged about 56% from its March lows.
“Powell was hugely dovish,” said Peter Boockvar, chief investment officer for Bleakley Financial Group. “Then bonds woke up, said this guy wants higher inflation, sell!” Abbott Laboratories jumped 8% after winning clearance for a 15-minute Covid test. Reports showed that U.S. weekly jobless claims remained above 1 million and the economy contracted slightly less than forecast in the second quarter. “The takeaway for the real economy is that wages will be allowed to run higher which could benefit low-income households most affected by Covid-19,” said Nela Richardson at Edward D Jones & Co. A bevy of central bankers and economists also spoke at the Fed’s Jackson Hole economic symposium via webcast, entirely viewable by the public for the first time. Traders were also monitoring news of medical advancements for the coronavirus, from Moderna Inc.’s vaccine trials to the Abbott test that will be priced at just $5. Crude oil declined as Hurricane Laura weakened while crossing over land in the refinery and LNG-rich Gulf of Mexico region. Gold retreated for the fourth time in five trading sessions.
Here are some key events coming up:
* The U.S. Republican National Convention continues.
* Personal spending and the PCE Deflator data are due Friday in Washington.
Here are the main market moves:
Stocks
The S&P 500 Index increased 0.2% to 3,484.55 as of 4:03 p.m. New York time, hitting the highest on record with its sixth consecutive advance.
The Dow Jones Industrial Average advanced 0.6% to 28,492.07, the highest in about six months.
The Nasdaq Composite Index declined 0.3% to 11,625.34, the first retreat in more than a week.
The Stoxx Europe 600 Index fell 0.6% to 370.72, the biggest fall in a week.
Currencies
The Bloomberg Dollar Spot Index gained 0.2% to 1,171.71.
The euro dipped 0.1% to $1.1819.
The Japanese yen depreciated 0.6% to 106.61 per dollar, the weakest in two weeks on the largest drop in more than a week.
Bonds
The yield on two-year Treasuries increased one basis point to 0.16%, the highest in two weeks.
The yield on 10-year Treasuries climbed five basis points to 0.74%, the highest in more than 10 weeks on the largest surge in more than two weeks.
The yield on 30-year Treasuries climbed nine basis points to 1.50%, the highest in 10 weeks on the biggest surge in 12 weeks.
Germany’s 10-year yield gained one basis point to -0.41%, the highest in eight weeks.
Commodities
West Texas Intermediate crude fell 0.9% to $42.99 a barrel.
Gold weakened 1.2% to $1,930.53 an ounce, the largest drop in more than a week.
Copper increased 0.6% to $3 a pound, the highest in more than a week.
–With assistance from Claire Ballentine.

Have a great night.

Be magnificent!
As ever,

Carolann

The human being is born with an incurable capacity for making the best of things.
                                                                             -Helen Keller, 1880-1968

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