April 11, 2018 Newsletter

Dear Friends,

Tangents:

On this day in 1970, Apollo 13, the third lunar landing mission, was successfully launched from Cape Canaveral, Florida. After an oxygen tank exploded two days later, the new mission objective became to get the Apollo 13 crew home alive.

1945: Liberation of Buchenwald.

PHOTOS OF THE DAY

Competitors take part in Stage 3 of the 33^rd edition of the 250 kilometre Marathon des Sables between Rich Mbirika and Nord El Maharch in the southern Moroccan Sahara. 
Credit: Jean Phillipe Ksiazek/AFP/Getty Images

Prime Minister of Australia Malcolm Turnbull takes shelter from the rain during the swimming on day six of the Gold Coast 2018 Commonwealth Games at Optus Aquatic Centre on the Gold Coast, Australia. Credit: Quinn Rooney/Getty Images

The asparagus harvest begins in the southern German town of Suenching. 
Credit: Armin Weigel/DPA/Getty Images

Tony Blair and Bill Clinton hold hands at an event to celebrate the 20^th anniversary of the Good Friday Agreement in Belfast, Northern Ireland. 
Credit: Clodagh Kilcoyne/Reuters
Market Closes for April 11^th, 2018

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Canada
By Kristine Owram
     (Bloomberg) — Canadian stocks slipped after spending most of the day in positive territory, as declines in financials offset gains in commodity producers.
     The S&P/TSX Composite Index fell less than 0.1 percent to 15,257.90, its first decline of the week. Financials fell 0.8 percent, tracking sector losses in the U.S., amid growing tensions in the Middle East. Bank of Montreal slid 1.4 percent and Royal Bank of Canada lost 1 percent.
     The energy index was the biggest gainer, rising 0.9 percent as crude prices hit levels last seen in 2014. Materials rose 0.8 percent amid gains in gold miners, with Barrick Gold Corp. adding 2.2 percent and Goldcorp Inc. up 2.1 percent.
     In other moves:
                          Stocks
* Torex Gold Resources Inc. jumped 20 percent after a union withdrew its application to represent workers at the ELG Mine
* Pretium Resources Inc. rose 19 percent to the highest in six months. First-quarter gold production at its Brucejack Mine showed better grade control and output than analysts were expecting
* Hydropothecary Corp. gained 13 percent on a deal to supply 200 metric tons of cannabis to Quebec
                          Commodities
* Western Canada Select crude oil traded at a $15.00 discount to WTI, the narrowest gap since mid-November
* Gold rose 1.1 percent to $1,356.50 an ounce, the highest since January
                           FX/Bonds
* The Canadian dollar strengthened 0.2 percent to C$1.2575 per U.S. dollar, the strongest in nearly two months
* The Canada 10-year government bond yield rose two basis points to 2.20 percent
US
By Sarah Ponczek and Eric J. Weiner
     (Bloomberg) — U.S. stocks turned mostly lower and Treasuries rose after minutes from the most recent Federal Reserve meeting showed that officials are leaning toward a slightly faster pace of tightening. Oil rose to the highest level since 2014 amid escalating tensions in the Middle East and political dissonance in Washington.
     The S&P 500 Index retreated from earlier gains as investors digested the minutes from the Fed’s most recent meeting and grappled with President Donald Trump’s provocative comments about Russia and his warning that America’s preparing to attack Syria. The small-cap Russell 2000 Index rose, as those companies tend to have less international exposure than larger businesses. Gold futures climbed for a fourth straight day.
     “It’s shock and awe — tweets will continue, headlines will continue,” Yana Barton, equity portfolio manager at Eaton Vance, said in an interview at Bloomberg’s New York headquarters. “Yesterday we were up, today we’re down. Guess what? Volatility is the new norm.”
     The S&P 500 gained a combined 2 percent on Monday and Tuesday as trade tensions between the U.S. and China appeared to ease. The flight to higher- quality assets on Wednesday sent the 10-year Treasury yield down toward 2.78 percent. Aluminum headed for its biggest winning streak since 1988.
     “Another sharp two-day rally in the stock market…followed by another tweet from the President…followed by another reversal of the rally,” Matt Maley, an equity strategist at Miller Tabak, wrote in an email to clients . “It’s becoming a broken record. The White House can say that the blame really goes to China and Russia…and maybe they’re correct…but there is no doubt that the President’s comments/tweets have been THE catalyst to stop the sharp short-term bounces we have seen in recent weeks.”
     Geopolitics and the Fed minutes overshadowed the latest reading on U.S. consumer prices. The key inflation measure accelerated to the highest in a year as a drag from mobile-phone costs faded, bearing out the central bank’s forecast for a pickup in prices.
     “We have to keep in mind that the Fed doesn’t target this gauge of inflation, lessening its importance for what interest rates might do,” James McCann, senior global economist at Standard Life Investments in Boston, wrote in an email. “Inflation does seem to be building slowly and it looks like the Phillips Curve isn’t dead after all, but we need to be very careful seeing today as a signal of strong domestic inflation.”
     Earlier in Asia stocks were mixed, with indexes in China and Hong Kong posting the biggest gains as People’s Bank of China Governor Yi Gang offered more details on pledges to open the world’s second-largest economy. The announcement was seen as further alleviating trade tensions with the U.S.
     Russia’s currency slumped to a 16-month low and yields on local debt jumped to the highest level since November. The cost of insuring Russian dollar debt against default jumped to the highest since August.
     Here are the main moves in markets:
                          Stocks
* The S&P 500 fell 0.6 percent and the Dow Jones Industrial Average dropped 0.9 percent, while the Russell 2000 gained 0.2 percent.
* The Stoxx Europe 600 Index lost 0.6 percent.
* The MSCI All-Country World Index declined 0.4 percent.
* The MSCI Emerging Market Index added 0.1 percent.
* The MSCI Asia Pacific Index was little changed.
                          Currencies
* The Bloomberg Dollar Spot Index fell 0.1 percent to the lowest in more than two weeks.
* The euro gained less than 0.1 percent to $1.2362.
* The British pound was little changed at $1.4177.
* The Japanese yen increased 0.3 percent to 106.86 per dollar.
                           Bonds
* The yield on 10-year Treasuries dipped two basis points to 2.7808 percent.
* Germany’s 10-year yield decreased two basis points to 0.499 percent.
* Britain’s 10-year yield fell two basis points to 1.389 percent.
                           Commodities
* West Texas Intermediate crude surged 1.9 percent to $66.78 a barrel, the highest since December 2014.
* Copper fell 0.8 percent to $3.11 a pound.
* Gold rose 0.9 percent to $1,351.10 an ounce.
–With assistance from Adam Haigh and Samuel Potter.

Have a great night.

Be magnificent!

As ever,

Carolann

Man goes into the noisy crowd to drown his own clamour of silence.
                                            –Rabindranth Tagore. 1861-1941

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
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www.carolannsteinhoff.com