February 23, 2018 Newsletter

Dear Friends,

Tangents: Happy Friday!

On Feb. 23, 1909, engineer J.A.D. McCurdy piloted the first powered airplane flight by a British subject in the British Empire – and made Canadian history. The plane was called the Silver Dart, and had been built by the Aerial Experiment Association, a group of like-minded aviation enthusiasts dedicated to creating a “practical aerodrome.” In this CBC radio clip, McCurdy – by then Lieutenant-Governor of Nova Scotia – looks back at the event on its 40th anniversary. The flight took place on the frozen Bras d’Or Lake at Baddeck on Cape Breton Island in Nova Scotia, near the home of AEA member Alexander Graham Bell. Before a crowd of astonished onlookers, McCurdy took off and piloted the plane for about half a kilometre along the shoreline before making a smooth landing.

Also on Feb. 23, 1954, the first mass inoculation of children against polio with the Salk vaccine began in Pittsburgh.

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And on February 23^rd, 1861,  Abraham Lincoln made a covert arrival in Washington, D.C. amid concerns about plots to assassinate the president-elect. The Civil War began just two months later.

PHOTOS OF THE DAY

Swiss mountaineer and Mammut Pro Team athlete Dani Arnold opens a new ice-climbing route on the world-famous Helmcken Falls in British Columbia, Canada.
CREDIT: THOMAS SENF/PPR FOR MAMMUT/AP IMAGES

Artist Arabella Dorman puts the final touches to her piece called Suspended, which is displayed in the Nave of Canterbury Cathedral in Kent, and is made up of hundred of items of refugee clothing found largely on the beaches of the Greek island Lesbos.
CREDIT: GARETH FULLER/ PA WIRE

A woman walks in a forest covered by snow with a colourful umbrella near Ghisoni on the French Mediterranean island of Corsica.
CREDIT: PASCAL POCHARD-CASABIANCA/AFP/GETTY IMAGES

Masses of vehicles move slowly to leave the Haikou Xiuying Port in a traffic jam due to a heavy fog during the Chinese Lunar New Year in Haikou city, south China’s Hainan province.
CREDIT: IMAGINECHINA/REX/SHUTTERSTOCK
Market Closes for February 23^rd, 2018

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Number of the Day
$21 trillion
Assets under management across the private equity, hedge fund and alternatives industries are expected to more than double to $21 trillion by 2025, according to consultants PwC.  Private-equity firms have been on a fund-raising frenzy as insurers and pension funds hunt for yield.
Canada
By Kristine Owram
     (Bloomberg) — Canadian stocks rose above their 200-day moving average for the first time since the market rout on Feb.2, led by commodity producers.
     The S&P/TSX Composite Index added 130 points or 0.8 percent to 15,638.45 Friday and gained 1.2 percent on the week. Energy stocks rose 1.5 percent, outpacing gains in the price of crude.
Enerplus Corp. jumped 8.8 percent to the highest since 2015 after reporting strong earnings.
     The materials index added 1.4 percent despite declines in gold and copper prices. Winpak Ltd. rose 12 percent, the most since 2008, after fourth-quarter earnings beat the highest analyst estimate.
     In other moves:
                             Stocks
* Maxar Technologies Ltd. tumbled 13 percent, the most since 2008. The company expects revenue to decline 2-4 percent this year
* Toromont Industries Ltd. closed up 7 percent after briefly hitting a record high earlier in the day. Fourth-quarter earnings beat the highest analyst estimate
* Royal Bank of Canada rose 0.4 percent to the highest in three weeks after first-quarter profit beat estimates
                          Commodities
* Western Canada Select crude oil traded at a $27.50 discount to WTI, the narrowest gap in a week
* Gold fell 0.2 percent to $1,328.20 an ounce
                            FX/Bonds
* The Canadian dollar strengthened 0.5 percent to C$1.2639 per U.S. dollar, the first gain of the week, after January inflation was stronger than expected
* The Canada 10-year government bond yield fell five basis points to 2.25 percent, the lowest in a month
US
By Jeremy Herron
     (Bloomberg) — U.S. stocks rallied, Treasuries advanced and the dollar slipped as investors grew confident that the Jerome Powell-led Federal Reserve won’t rush to raise interest rates as the economy picks up steam.
     The S&P 500 Index pushed past its average price for the past 50 days and erased losses for the week with its biggest gain in almost three weeks. The gauge extended gains in afternoon trading, reversing a four-day pattern had seen it swoon. The 10-year Treasury yield slipped to 2.87 percent, roughly where it started the week, as investors dissect the Fed’s semiannual monetary policy report to Congress. The dollar was flat versus major peers.
     The report indicated that the central bank sees the labor market at or beyond full employment, while some pockets of finance are showing signs of rising leverage and high valuation.
Concern that the Fed would step up the pace of rate hikes rattled markets earlier in the week.
     “Concerns about interest raters are overblown,” Don Townswick, the director of equities at Hartford, Connecticut- based Conning Inc, said by phone. “The markets will tend to remain strong. Historically markets have been strong during the first 18 to 24 months of rising interest rates as long as inflation is under control.”
     The Stoxx Europe 600 Index rose as gains in telecom shares offset declines in retailers. The MSCI Asia Pacific Index rose earlier, underpinned by gains from Sydney to Shanghai. Yields on 10-year German bunds dropped to the lowest since January. The common currency slipped.
     Traders seem unconvinced by the Federal Reserve’s hawkish tilt, with the market still pricing in less than the three quarter-point rate hikes that officials have signaled as likely this year. Minutes of the Fed’s January meeting indicated confidence the economy is strengthening amid signs inflation is rising. Meanwhile, bond investors took heart from an account of the European Central Bank’s most recent meeting, which showed policy makers aren’t yet ready to remove a pledge to expand its asset-buying program if needed.
Elsewhere, the pound gained after U.K. Prime Minister Theresa May won the backing of her divided cabinet to seek a trade deal with the European Union. WTI crude oil retreated, but remained on track for a second weekly increase that was supported by a surprise pullback in U.S. inventories.
     In China, the government seized temporary control of high- profile conglomerate Anbang Insurance Group Co. Markets took the news in stride, however, and the Shanghai Composite Index rose 0.6 percent.
          Here are some key events scheduled for the remainder of the week:
* Chairman Jerome Powell testifies before House and Senate committees next week 

     These are the main moves in markets:
                             Stocks
* The S&P 500 rose 1.6 percent at 4 p.m. in New York. It rose 0.6 percent on the week.
* The Nasdaq Composite climbed for the first time in five days.
It added 1.3 percent in the four days.
* The Stoxx Europe 600 Index increased 0.2 percent to finish the week higher.
* The MSCI Asia Pacific Index advanced 0.9 percent.
* Japan’s Topix index rose 0.8 percent, Hong Kong’s Hang Seng Index climbed 1 percent, and South Korea’s Kospi was up 1.5 percent.
* Australia’s S&P/ASX 200 Index gained 0.8 percent.
                           Currencies
* The Bloomberg Dollar Spot Index fell less than 0.1 percent.
* The euro decreased 0.2 percent to $1.2301.
* The British pound advanced 0.1 percent to $1.3971.
* The Japanese yen fell 0.1 percent to 106.826 per dollar.
                             Bonds
* The yield on 10-year Treasuries fell five basis points to 2.87 percent. It rose as high as 2.95 percent on Wednesday.
* The two-year yield was flat at 2.24 percent.
* Germany’s 10-year yield fell five basis points to 0.653 percent, the lowest in four weeks.
* Japan’s 10-year yield dipped less than one basis point to 0.05 percent.
                          Commodities
* West Texas Intermediate crude advanced 1.2 percent to $63.56 a barrel, capping a second weekly gain.
* Gold futures declined 0.1 percent to $1,331.30 an ounce.
–With assistance from Cormac Mullen, Vassilis Karamanis and Robert Brand.

Have a terrific weekend!

Be magnificent!

As ever,

Carolann

Your world is as big as you make it.
          -Georgia Douglas Johnson 

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
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