May 18, 2021 Newsletter

Dear Friends,

Tangents:
On May 18, 1980, the Mount St. Helens volcano in Washington state exploded, leaving 57 people dead or missing. Go to article »

Much of today’s world was predicted by science fiction. — Tyler Cowen 

Lost village found in Italian lake.

On this day in 1804, Napoleon was proclaimed Emperor of France. He died in 1821 after being exiled Saint Helena in the South Atlantic.

PHOTOS OF THE DAY

The  International Space Station passing in front of the sun
CREDIT: COSMIC_BACKGROUND / SWNS.COM

The ISS passes in front of the moon
CREDIT: COSMIC_BACKGROUND / SWNS.COM

The Art of Banksy, the world’s largest touring exhibition of artworks created by Banksy, opens on Thursday May 20, at 50 Earlham Street in London, including this piece, ‘Brace Yourself’
CREDIT: AARON CHOWN/PA

Market Closes for May 18^th, 2021

International Markets

Bonds

Currencies

Commodities

Market Commentary:
     On this day in 1553, one of the earliest business ventures financed by selling stock to the public was launched, as three ships set out from Gravesend in England seeking “discoverie of new trades northe warde” in Russia. But the company earned no money for at least three decades, and many of its investors died without ever receiving a dividend.
Canada
By Aoyon Ashraf
(Bloomberg) — Canadian shares rose for second day this week, after tech and health-care stocks outperformed. The S&P/TSX Composite index rose 0.2% in Toronto, after rebounding from earlier loss of as much as 0.3%. Tech stocks were the best performers, led by Shopify after Google announced e-commerce shopping partnership with the company. On the M&A front, Canadian National Railway’s sixth largest holder TCI Fund Management said the company should drop its Kansas City Southern bid, according to a letter seen by Bloomberg.
Commodities
* Western Canadian Select crude oil traded at about a $12.85 discount to West Texas Intermediate
* Spot gold rose 0.1% to $1,869.11 an ounce
FX/Bonds
* The Canadian dollar was flat around C$1.2059 per U.S. dollar
* The 10-year Canada government bond yield fell slightly to 1.565%
By Bloomberg Automation:
     (Bloomberg) — The S&P/TSX Composite rose for the fourth day, climbing 0.2 percent, or 32.4 to 19,507.05 in Toronto. Today, information technology stocks led the market higher, as 7 of 11 sectors gained; 121 of 229 shares rose, while 102 fell. Shopify Inc. contributed the most to the index gain, increasing 3.3 percent.  Centerra Gold Inc. had the largest increase, rising 8.1 percent.
Insights
* The index advanced 33 percent in the past 52 weeks. The MSCI AC Americas Index gained 42 percent in the same period
* The S&P/TSX Composite is 0.3 percent below its 52-week high on May 18, 2021 and 35 percent above its low on May 15, 2020
* The S&P/TSX Composite is up 1.2 percent in the past 5 days and rose 0.8 percent in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 24.2 on a trailing basis and 17.1 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.6 percent on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.05t
* 30-day price volatility little changed to 9.38 percent compared with 9.38 percent in the previous session and the average of 8.85 percent over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
* Information Technology | 36.9706| 2.1| 9/1
* Utilities | 9.1672| 1.0| 16/0
* Health Care | 4.8473| 2.0| 9/1
* Financials | 4.6433| 0.1| 14/13
* Real Estate | 3.6765| 0.6| 19/6
* Consumer Staples | 2.3120| 0.3| 10/3
* Communication Services | 1.9466| 0.2| 4/4
* Consumer Discretionary | -1.6780| -0.2| 5/7
* Industrials | -5.5646| -0.2| 13/17
* Materials | -9.5240| -0.4| 19/31
* Energy | -14.3976| -0.6| 3/19

US
By Claire Ballentine and Vildana Hajric
(Bloomberg) — U.S. stocks declined for a second day with losses steepening in the final 15 minutes of trading as investors weighed the rush to reopen the economy against inflationary pressure from a rise in commodity prices. All three of the main U.S. equity benchmarks closed lower after megacap technology stocks including Amazon.com Inc., Microsoft Corp. and Alphabet Inc. erased earlier gains. Nine of the main 11 S&P 500 industry groups declined, with energy stocks leading losses as oil prices dropped amid a report that significant progress has been made to revive the U.S.-Iran nuclear deal.  AT&T Inc. plunged the most in the benchmark gauge after the company said it plans to spin off its media operations. Walmart Inc. rallied the most in six weeks after boosting its profit outlook. Stocks have been volatile after touching a record in early May as investors assessed economic growth prospects against a Covid-19 resurgence in countries including India. Minutes from the latest Federal Reserve meeting, due Wednesday, may offer clues on inflation pressure and hints of a timeline for tapering stimulus. Fed Vice Chair Richard Clarida said Monday that the weak U.S. jobs report showed the economy had not yet reached the threshold to warrant scaling back asset purchases.
Inflation concerns intensified last week when the government reported the fastest increase in consumer prices since 2008 and commodities from iron ore to Brent crude rose to multiyear highs. “The market has been trying to process a very unusual economic environment and a confluence of factors that it has not faced for a long time,” said David Donabedian, chief investment officer of CIBC Private Wealth Management. “It’s a new set of circumstances for markets, so we’ve had more churn over the last couple of weeks. I personally would say that the stock market has absorbed it all extremely well because there’s still a high conviction view on earnings being strong.” Global investor sentiment is “unambiguously bullish,” Bank of America Corp. strategists led by Michael Hartnett said, citing the firm’s latest fund manager survey. Inflation topped the list of the biggest tail risks, followed by a bond market taper tantrum and asset bubbles, while Covid-19 was only in fourth place. “The fact that inflation and interest rates are on the way up, I think we have to recognize that returns overall in the U.S. equity market from this point will be very modest and perhaps volatile compared to what we have enjoyed especially over the last 12 to 15 months,” Abby Joseph Cohen, senior investment strategist at Goldman Sachs Group Inc., said in an interview on Bloomberg TV. “What appeals to me is that investors are acting like investors again. There is less emphasis on momentum and there’s more emphasis on relative valuation and which of the companies that have the strongest cash flow growth and are investing that cash flow growth.”
West Texas Intermediate crude extended declines after the BBC Persian news channel, citing Russian diplomat Mikhail Ulyanov, reported that a major announcement may be made on Wednesday regarding talks to broker an agreement between Iran and the U.S. and revive the 2015 nuclear deal. A return to the accord could allow for the removal of U.S. sanctions on Iran’s crude exports and bring more supply to the market. Elsewhere, Bitcoin fell to the lowest since February after the People’s Bank of China reiterated that the digital tokens cannot be used as a form of payment. Coinbase Global Inc. fell after Monday’s drop below the reference price used in its April direct listing.

Here are some key events this week:
* The Fed publishes minutes from its April meeting Wednesday, which may provide clues to officials’ views on the recovery and how they define “transitory” when it comes to inflation
* EIA crude oil inventory report Wednesday
* St. Louis Fed President James Bullard and Atlanta Fed President Raphael Bostic to speak at separate events Wednesday
* IMF Managing Director Kristalina Georgieva and ECB President Christine Lagarde speak at the Vienna Economic Dialogue Thursday
* Australia unemployment rate Thursday
* Euro-area finance ministers and central bank chiefs hold an informal meeting. A larger group of EU finance ministers and central bank chiefs will meet May 22

These are some of the main moves in markets:
Stocks
* The S&P 500 fell 0.9% as of 4:07 p.m. New York time
* The Nasdaq 100 fell 0.7%
* The Dow Jones Industrial Average fell 0.8%
* The MSCI World index was little changed
Currencies
* The Bloomberg Dollar Spot Index fell 0.3%
* The euro rose 0.6% to $1.2226
* The British pound rose 0.4% to $1.4187
* The Japanese yen rose 0.3% to 108.92 per dollar
Bonds
* The yield on 10-year Treasuries was little changed at 1.64%
* Germany’s 10-year yield advanced one basis point to -0.10%
* Britain’s 10-year yield was little changed at 0.87%
Commodities
* West Texas Intermediate crude fell 1.2% to $65 a barrel
* Gold futures rose 0.1% to $1,870 an ounce
–With assistance from Andreea Papuc.
Have a great night.

Be magnificent!

As ever,

Carolann

Be your own torch and your own refuge. 
Seek refuge in no others but only in yourself.
       The Mahaparinibbana Sutta

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