February 13, 2018 Newsletter

Dear Friends,

Tangents: Happy Mardi Gras!
On this day in 1633, Galileo Galilei arrived in Rome to face heresy charges related to his advocacy for the Copernican theory, which said that the Earth revolves around the sun. The Italian philosopher, astronomer and mathematician pled guilty and was placed under indefinite house arrest.

February 13^th, 1840, Queen Victoria wrote in her Journal, the third day of her marriage:
My dearest Albert put on my stockings for me.  I went and saw him shave, a great delight for me.
PHOTOS OF THE DAY

Snowy mountains reflected in Buttermere Lake in the Lake District, Cumbria.
CREDIT: OWEN HUMPHRYS/PA WIRE

Nika Kriznar of Slovenia soars through the air during the women’s normal hill individual ski jumping competition at the 2018 Winter Olympics in Pyeongchang.
CREDIT: MATTHIAS SCHRADER/AP

People wearing protection helmets and costumes pelt each other with oranges as part of Carnival celebrations in the northern Italian Piedmont town of Ivrea.
CREDIT: ANTONIO CALANNI/AP
Market Closes for February 13^th, 2018

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Number of the Day
$984 Billion
The budget request sent by President Donald Trump on Monday would widen the federal budget deficit to $984 billion in the next fiscal year, nearly double what last year’s budget estimated for 2019.
Canada
By Kristine Owram
     (Bloomberg) — Canadian stocks were unable to hang onto early gains, losing ground for the 10th of 12 trading days as most sectors fell.
     The S&P/TSX Composite Index lost 25 points or 0.2 percent to 15,216.47. Rate-sensitive telecom and utility shares lost 0.8 percent ahead of Wednesday’s January U.S. inflation report.
     The consumer discretionary index also lost 0.8 percent as Restaurant Brands International Inc. fell 3.5 percent, giving up some of Monday’s 6.2 percent gain.
     In other moves:
                         Stocks
* TMX Group Ltd. rose 1 percent after the exchange operator’s fourth-quarter earnings beat analyst estimates
* Emera Inc. fell 3.9 percent to the lowest since 2015. Analysts at RBC Capital Markets said the weakness reflects funding uncertainty
* NuVista Energy Ltd. rose 3 percent after the company’s preliminary fourth-quarter cash flow beat analyst estimates
                         Commodities
* Western Canada Select crude oil traded at a $20.90 discount to WTI, the narrowest gap in more than two months
* Gold rose 0.3 percent to $1,328.10 an ounce
                         FX/Bonds
* The Canadian dollar weakened 0.1 percent to $1.2593 per U.S. dollar
* The Canada 10-year government bond yield fell two basis points to 2.32 percent
US
By Kailey Leinz
     (Bloomberg) — U.S. stocks advanced while the dollar fell and Treasuries rose as financial markets looked ahead to Wednesday’s inflation report. 
     The S&P 500 Index climbed for a third day, it’s longest winning streak since mid-January, amid a rally in financial shares and food retailers. Assets seen as safe havens gained as last week’s surge in volatility continued to weigh on traders, with the yen set for the strongest close since November 2016 and the Swiss franc up with gold. The dollar’s three-day loss left it at the lowest in more than a week.
     Volatility levels remained elevated even after stocks’ modest recovery of the past few days, showing continued unease after the rout that wiped $2 trillion from U.S. shares last week. Consumer-price data due Wednesday could give some clues on where markets are heading, given that pressure on equities has been emanating from the outlook for inflation.
     “As we move through the rest of this economic cycle and market cycle, higher volatility is going to be normal,” said Jeffrey Schulze, the chief investment strategist at Clearbridge Investments. “And a lot of that has to do with the normalization of interest rates.”
     Hedge funds and other large speculators have boosted bets on Treasury futures to a record, indicating they expect the 2018 bond-market rout will resume in the days ahead. An investor at Goldman Sachs Asset Management warned 10-year yields could rise to as high as 3.5 percent in the next six months as the market prices in a steeper pace of Federal Reserve tightening.
     Elsewhere, European shares dropped following a late downswing in Asia. South Africa’s rand fluctuated as President Jacob Zuma refused to obey his ruling African National Congress’s order for him to resign voluntarily.
     Here are some important things to watch out for this week:
* Lunar new year celebrations for the Year of the Dog begin, affecting China, Hong Kong, Taiwan, Singapore, Malaysia and Indonesia. Chinese mainland markets are closed Feb. 15-21. India is out Tuesday for a public holiday.
* The U.S. consumer-price index probably increased at a moderate pace in January, economists project. Retail sales in the U.S., also out Wednesday, probably increased for a fifth straight month.
* Japan is expected to extend the longest stretch of economic growth since the mid-1990s when it reports fourth-quarter gross domestic product on Wednesday.
* Earnings season continues in full swing with reports from Bunge, TripAdvisor, SunPower, Con Edison, Bombardier, MetLife, Cisco, Japan Post Bank, Credit Suisse, Nestle, Airbus, Allianz, Telstra and Coca-Cola.
     These are the main moves in markets:
                           Stocks
* The S&P 500 rose 0.3 percent at the close of trading in New York.
* The Stoxx Europe 600 Index fell 0.6 percent.
* The MSCI All-Country World Index rose 0.3 percent.
* The MSCI Asia Pacific Index added 0.6 percent.
                           Currencies
* The Bloomberg Dollar Spot Index sank 0.4 percent to the lowest in more than a week.
* The euro climbed 0.5 percent to $1.2358.
* The Japanese yen gained 0.8 percent to 107.8 per dollar.
* South Africa’s rand weakened 0.1 percent to 11.9442 per dollar.
                           Bonds
* The yield on 10-year Treasuries fell three basis points to 2.83 percent.
* Germany’s 10-year yield fell one basis point to 0.74 percent.
* Britain’s 10-year yield rose one basis point to 1.61 percent.
                          Commodities
* West Texas Intermediate crude slipped 0.2 percent to $59.20 a barrel.
* Gold rose 0.5 percent to $1,329.64 an ounce.
* Copper futures gained 2.5 percent.
 

Have a wonderful evening everyone.

Be magnificent!

As ever,

Carolann

We are so made, that we can only derive intense enjoyment
from a contrast, and only very little from a state of things.
                                       -Sigmund Freud, 1856-1939

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM
Portfolio Manager &
Senior Vice-President

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