August 30, 2018 Newsletter

Dear Friends,

Tangents:

On this day in 1930, Warren Edward Buffett was born in Omaha, Neb., to stockbroker Howard Buffett and homemaker Leila Stahl Buffett.  He spent part of his 88^th birthday in an interview with Becky Quick on CNBC, which I listened to earlier today, and he appears to have as sharp a with as ever.

Mary Wollstonecraft Godwin Shelley, the writer, was born on August 30, 1797:  she wrote Frankenstein at the age of 18, was the love child of two great English thinkers – William Godwin, a political philosopher, and Mary Wollstonecraft, author of the first feminist treatise, The Vindication of the Rights of Women.  Both decried the confinement of marriage, but married when Wollstonecraft became pregnant.  Eleven days after Mary’s birth, her mother died.  Her father raised her among the intellectual elite and she and her half sister Fanny once hid under a table to listen to Samuel Coleridge recite The Rime of the Ancient Mariner.

At 16, she met Percy Bysshe Shelley.  They declared their love, ran away to France and later married.  Of her many pregnancies, only one child survived.  She was widowed, at 24, when Percy drowned while sailing.  Although her husband had been an outspoken advocate of free love, it appears that Mary was devoted exclusively to him.  She never remarried nor formed any lasting liaisons.  For the remainder of her life, she cared for her father and her son, wrote six more novels, and a body of criticism of Percy’s work.  Mary had her husband’s heart removed before his body was cremated on the shores of Italy and she kept it with her until her death on February 1, 1851, at the age of 54.

The introduction to Frankenstein, 3^rd ed, 1831: “We will each write a ghost story,” said Lord Byron; and his proposition was acceded to.  There were four of us…Have you thought of a story?  I was asked each morning, and each morning I was forced to reply with a mortifying negative…On the morrow I announced that I had thought of a story…At first I though but of a few pages – of a short tale; but  [Percy Bysshe] Shelley urged me to develop the ideas at greater length.

On Aug. 30, 2005, Hurricane Katrina struck the Gulf Coast with devastating force, killing more than 1,700 people and flooding New Orleans after the city’s levees failed.
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PHOTOS OF THE DAY

National Portrait Gallery of Portrait ‘Strong’ Joe Smart from the series Tombo?s Wound by Joey Lawrence, which has been shortlisted for the annual Taylor Wessing Photographic Portrait Prize. The portraits were selected from 4,462 submissions for the annual Taylor Wessing Photographic Portrait Prize. The portraits were selected from 4,462 submissions from 70 countries and more than 50 portraits will go on display. The winner will be announced on October 16. Credit: Joey Lawrence

A Falangcai Poppy Bowl is displayed during a media preview for the Sotheby’s Chinese Works of Art Autumn Sales in Hong Kong. The bowl is expected to fetch in excess of HK $200 million ($25.6 million USD). Credit: Philip Fong/AFP

This picture shows the moon shining over the financial district of Pudong in Shanghai. Credit: Johannes Eisele/AFP
Market Closes for August 30^th, 2018

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Canada
By Carolina Wilson
     (Bloomberg) — Canadian stocks followed U.S. stocks lower as President Trump was said to move forward with the plan to impose new tariffs on China. U.S. equities extended losses with industrial stocks among the worst performers.
     The S&P/TSX Composite Index slid 0.1 percent to 16,371.55 in Toronto Thursday, with health-care companies declining most. Pot stocks pared gains after climbing on Wednesday after Tilray’s second-quarter report, which showed that revenue beat even the highest analyst estimate. Technology companies gained most, up less than 1 percent.
     In other moves:
                            Stocks
* Canopy Growth Corp., Aphria Inc. and Aurora Cannabis Inc. fell after surging the previous day on Tilray’s earnings beat
* BRP Inc. surged as much as 14.8 percent, the most intraday since June 2017, after a full-year normalized EPS forecast that beat the average analyst estimate
* Ivanhoe Mines declined 6.6 percent, following other materials companies lower; First Quantum Minerals fell 3.7 percent amid continuing trade war rhetoric
* Canada Western Bank fell 5.3 percent after reporting adjusted cash earnings per share for the third quarter that missed the average analyst estimate
                            Commodities
* Western Canada Select crude oil traded at a $27.25 discount to WTI
* Gold fell 0.4 percent to $1,206.30 an ounce
                            FX/Bonds
* The Canadian dollar fell 0.5 percent to C$1.2977 per U.S. dollar
* The Canada 10-year government bond yield fell to 2.277 percent after rising for three straight days
US
By Brendan Walsh and Sarah Ponczek
     (Bloomberg) — U.S. equities slumped as President Donald Trump was said to move ahead with a plan to impose new tariffs on China as soon as next week. Emerging-market assets tumbled and the dollar rallied as traders sold riskier assets amid turmoil in Argentina and Turkey.
     The S&P 500 Index extended losses after the report on Trump’s trade plan, with industrial stocks among the worst performers. Apple Inc. held on to an advance as Warren Buffett said he likes the iPhone maker. Argentina failed to stem a rout in the peso as the central bank jacked up its benchmark interest rate, already the highest in the world, to 60 percent.
     Treasuries edged higher with core European bonds, while Italian and Greek notes slumped. The euro fell after the EU’s chief negotiator warned the bloc must be prepared for a disorderly Brexit. Canada’s dollar weakened after second-quarter growth missed estimates.
     Investors showed caution Thursday amid a slew of risks to the global outlook, not least U.S. trade and foreign policy, and amid speculation the recent run-up in equity prices may have gone too far. After Trump on Wednesday accused China of undermining efforts to pressure North Korea into giving up its nuclear weapons, people familiar with the matter said the U.S. president wants to move ahead with a plan to impose tariffs on $200 billion in Chinese imports as soon as a public-comment period concludes next week.
     While tariffs didn’t seem to have much of an impact on corporate earnings in the second quarter, increasing trade barriers will weigh on sentiment, according to Kim Forrest, a senior portfolio manager at Fort Pitt Capital Group in Pittsburgh.
     Investors are worried that “maybe we’re actually going to see this tariff activity show up in the second half of the year,” she said.
     Telecom shares led the Stoxx Europe 600 Index lower. In Asia, Japanese equities pared earlier gains to finish slightly higher and stocks fell in Hong Kong and China. The Australian dollar declined after second-quarter business investment was worse than expected, while New Zealand’s currency slumped as business confidence hit a 10-year low.
     Elsewhere, crude broke through $70 a barrel for the first time in a month as shrinking stockpile levels in the U.S. pointed to supply constraints. Emerging-market stocks fell the most in two weeks and currencies declined, with the lira tumbling on a Turkish holiday amid reports the central bank’s deputy governor is set to resign.
     Here are some key events scheduled for the remainder of this week:
* China’s official factory PMI are due Friday.
* The Bank of Korea sets policy on Friday. Weak jobs growth has cooled speculation of an interest-rate increase.
     These are the main moves in markets:
                            Stocks
* The S&P 500 Index fell 0.4 percent at the close of trading in New York. The Nasdaq Composite fell 0.3 percent, while the Dow Jones Industrial Average slipped 0.5 percent.
* The Stoxx Europe 600 Index sank 0.3 percent, the biggest dip in more than two weeks.
* The U.K.’s FTSE 100 Index dipped 0.6 percent to the lowest in more than two weeks.
* The MSCI Emerging Market Index sank 1.2 percent, the biggest dip in more than two weeks.
                            Currencies
* The Bloomberg Dollar Spot Index climbed 0.2 percent.
* The euro dipped 0.3 percent to $1.1674, the first retreat in a week.
* Canada’s dollar fell 0.5 percent to C$1.2977 per U.S. dollar
* The Japanese yen increased 0.6 percent to 111 per dollar, the biggest climb in more than a week.
                            Bonds
* The yield on 10-year Treasuries dipped three basis points to 2.86 percent.
* Germany’s 10-year yield decreased six basis points to 0.34 percent, the first retreat in a week.
* Britain’s 10-year yield declined three basis points to 1.45 percent.
                            Commodities
* West Texas Intermediate crude climbed 0.9 percent to $70.14 a barrel, a one-month high.
* Gold fell 0.5 percent to $1,200.49 an ounce.
–With assistance from Andreea Papuc, Cormac Mullen, Adam Haigh, Christopher Anstey, Samuel Potter and Robert Brand. 

Have a great night.

Be magnificent!

As ever,

Carolann

Everybody likes a kidder, but nobody lends him money.
                                   -Arthur Miller, 1915-2005

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