December 20, 2018 Newsletter

Dear Friends,

Tangents: Full moon for the weekend! 🙂 

1879 Thomas Edison privately demonstrated his incandescent light at Menlo Park, N.J.  Go to article >>

ICYMI

When Christmas went electric:

It was in 1882, just three years after Thomas Edison filed a patent for his light bulb. The tree became a fixture in the experiment-filled home of an executive at his company.

The tree in Rockefeller Center sparkled after its 7,500 bulbs were lit for the first time in 1949.  Tom Fitzsimmons/Associated Press

Eighty walnut-size red, white and blue bulbs covered the tree, which sat on a revolving box. A newspaper article described it: “As the tree turned, the colors alternated, all the lamps going out and being relit at every revolution. The result was a continuous twinkling of dancing colors, red, white, blue, white, red, blue, all evening.”

President Grover Cleveland popularized electric Christmas lights in the 1890s by installing them on the White House tree.

But it wasn’t until (relatively) inexpensive strings of Christmas lights became available a few years later that the tradition really caught on. -from the New York Times, December 20, 2018

PHOTOS OF THE DAY

The Indian military communication satellite GSAT-7A is pictured next to the moon as it is launched into orbit on the Indian Space Research Organization (ISRO)’s Geosynchronous Satellite Launch Vehicle (GSLV) in Sriharikota in the state of Andhra Pradesh. Credit: Arun Sankar/AFP/Getty Images

People ice skate on the rink at the glass-roofed central hall of the Grand Palais in Paris. Credit: Geoffroy Van Der Hasselt/AFP

A modified Tesla Model X electric vehicle carrying Elon Musk, co-founder executive officer of Tesla Inc. drives though the tunnel as it arrives for an unveiling event for the Boring Co. Hawthorne test tunnel in Hawthorne, California, U.S. Credit: Robyn Beck/Pool via Bloomberg
Market Closes for December 20^th, 2018

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1994, Mexico devalued its currency and announced that the peso would be allowed to float freely in value. Stock and bond markets in emerging economies around the world collapsed, and U.S. bank stocks dropped 2% on fears that defaulting loans would decimate their profits. Over the next six weeks, the Mexican peso would lose 40% of its value—choking the Mexican economy in the short run, but in the long run setting it free.
Canada
By Kristine Owram
     (Bloomberg) — Canadian stocks fell sharply on another volatile trading day, buffeted by headwinds from the United States.
     The S&P/TSX Composite Index lost 0.9 percent to 14,141.77 as investors continued to fret over whether the U.S. Federal Reserve is on the right track and as the U.S. government looked increasingly likely to shut down.
     Only the materials sector was positive, gaining 2.1 percent, as gold stocks rose after the metal’s spot price broke above its 200-day moving average. Guyana Goldfields Inc. jumped 18 percent, the most since 2009.
     Energy stocks fell 2 percent as crude oil prices headed for their worst quarterly loss in four years. Nuvista Energy Ltd. lost 5.9 percent and Baytex Energy Corp. slid 5.1 percent.
In other moves:
Stocks
* BlackBerry Ltd. rose 2.9 percent after quarterly sales beat analyst forecasts, extending a run of positive surprises
* ATS Automation Tooling Systems Inc. slid 11 percent to the lowest since October 2017. The stock was cut to sector perform by National Bank Financial on the “vast” differential between its multiple and what it paid to acquire Comecer
* Bombardier Inc. gained 7 percent. The company announced two train orders and said it hired Accenture to help it streamline its procurement process
Commodities
* Western Canada Select crude oil traded at a $15.75 discount to WTI
* Aeco natural gas traded at a $1.55 discount to Henry Hub
* Gold rose 0.9 percent to $1,263.60 an ounce, the highest since June
FX/Bonds
* The Canadian dollar weakened 0.1 percent to C$1.3488 per U.S. dollar
* The Canada 10-year government bond yield rose 4 basis points to 2.00 percent, the first gain this week
US
By Vildana Hajric and Jeremy Herron
(Bloomberg) — Volatility gripped financial markets a day after the Federal Reserve sent shock waves across assets, with the rising threat of a government shutdown adding to a litany of concerns buffeting equities. The dollar sank with crude oil.
     The S&P 500 Index whipsawed throughout the day in heavy trading before closing at a 15-month low as investors debated whether the Fed set up the central bank for a policy error. 
     Shares turned sharply lower after President Donald Trump hardened his demands in the showdown with Congress over funding the government. “I’ve made my position very clear — any measure that funds the government must include border security,” the president said at White House event.
     The Nasdaq Composite index slumped to the brink of a bear market, finishing almost 20 percent off its August record. The S&P 500 is down more than 10 percent in December, on track for its worst month of the record bull run.
Among the major stock moves:
* The broader FAANG cohort of shares plunged more than 3 percent
and the group is now 25 percent below its record. Twitter tumbled 11 percent in the biggest rout since July.
* Tech high fliers GoPro and Snap skidded to all-time lows, each down at least 5 percent. 
* Walgreens Boots Alliance lost as much as 6.6 percent to lead all but one of 30 Dow components lower.
* The S&P 500 has lost about 15 percent this quarter, the most during the record bull run. 
     Currency traders took the Fed’s lowering of expectations for future hikes as a somewhat dovish turn. The weak greenback spurred a rally in developing-nation assets, sending an ETF that tracks the emerging equities to its best gain in a week. Treasury investors remained on edge after the Fed said quantitative easing was on “autopilot.” The front end of the yield curve rose, while longer-dated bonds saw rates holding steady near multi-month lows.
     Crude added to anxiety on financial markets, with the American benchmark sinking below $47 a barrel. And a renewed U.S. push against alleged intellectual property theft by Chinese nationals is contributing to uncertainty over the direction of the simmering trade conflict.
     The Stoxx Europe 600 recovered some losses but closed broadly lower, while Japanese shares slid into a bear market. The pound trimmed a gain after Britain’s central bank said it now sees inflation slowing to below the 2 percent target as soon as January. Benchmark 10-year Treasuries retreated after steep gains on Wednesday. The greenback slid against almost every major counterpart, helping the yen score its biggest gain since November 2017.
     In Japan, 10-year bond yields fell to within three basis points of zero percent. Bank of Japan Governor Haruhiko Kuroda said in a press conference Thursday that there was no problem if yields fell into negative territory, suggesting he has no plan to intensify the central bank’s tapering of asset purchases.
Here are some events investors will focus on in the comingdays:
* U.S. personal income and spending data are due Friday, along with a gauge of inflation.
And these are the main moves in markets:
Stocks
* The S&P 500 Index fell 1.6 percent as of 4:03 p.m. New York time.
* The Nasdaq Composite lost 1.6 percent, a 15-month low.
* The Stoxx Europe 600 Index declined 1.5 percent to the lowest in more than two years.
* MSCI’s emerging market index slid 0.8 percent.
Currencies
* The Bloomberg Dollar Spot Index sank 0.7 percent to the lowest in six weeks.
* The euro climbed 0.7 percent to $1.1458, the strongest in almost two months.
* The British pound advanced 0.4 percent to $1.2662, the strongest in almost two weeks.
* The Japanese yen jumped 1.1 percent to 111.26 per dollar, its biggest jump in 13 months.
Bonds
* The yield on 10-year Treasuries gained four basis points to 2.80 percent.
* Germany’s 10-year yield fell one basis point to 0.23 percent.
* Britain’s 10-year yield dropped one basis point to 1.266 percent.
Commodities
* West Texas Intermediate crude decreased 4.2 percent to $46.14 a barrel.
* Gold jumped 1.4 percent to $1,260.24 an ounce, the highest in six months.
–With assistance from Adam Haigh, Andreea Papuc and Todd White.

Have a great night.

Be magnificent!

As ever,

Carolann

The best time to make friends is before you need them.
                                  -Ethel Barrymore, 1879-1959

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
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www.carolannsteinhoff.com