February 25, 2020 Newsletter

Dear Friends,

Tangents:

One of my favorite sections in the Sunday edition of The New York Times is called METROPOLITAN DIARY, wherein people send in letters to “Dear Diary” about things that have happened to them in the city – their  indelible New York minutes.  The following are three that I really enjoyed from this past Sunday’s edition:

Dear Diary:
On a Saturday afternoon in 1994, my father took me, my brothers and a few of our cousins to McSorley’s, which, of course, claims to be the oldest continuously operating tavern in the New York.
It was 100 years to the day, my father said, that his father, my grandfather, had been born in the apartment upstairs.
After we’d had a round or two, my father raised his glass.
“Bartender” he said, “a round for the house on the 100th anniversary of the birth of my father.”
“This is New York pal,” the bartender said. “Let me see some money. We had Columbus’s cousin in here last week.”
— Edward Wiessner

Dear Diary:
Early one night several summers ago, my roommate and I were sitting and chatting in our second-floor apartment in Washington Heights. The windows were wide open.
Our conversation turned to our favorite musicals.
“‘Evita,’” my roommate said. “I love that one!”
She started to belt out “Don’t Cry for Me Argentina,” but she stopped when I reminded her that the entire neighborhood could hear her.
Within seconds, we heard a knock on the door. My roommate opened it to find one of our neighbors standing there as if he had been waiting for just this moment to arrive.
“The truth is I never left you!” he sang.
We erupted in laughter, and my roommate accidentally slammed the door on his face.
No matter. He kept on, and we could hear the familiar lyrics echoing through the hallways: “All through my wild days, my mad existence, I kept my promise, don’t keep your distance”
— Keren Golan

Dear Diary:
I was at the dry cleaner, clutching my treasured aqua Algerian gauze dress. It had a large rust-colored water stain on the front.
Assessing the damage, the man behind the counter frowned and said there was nothing that could be done.
I asked about the possibility of dying the dress. He said that wouldn’t work because the stain would show through the dye.
I was dismayed.
“What can I do with this?” I asked.
“Wear it when you vacuum?” he replied.
— Karen Aberle

PHOTOS OF THE DAY

Brooklyn Bridge seen during sunset from Brooklyn side in New York, United States.
CREDIT: LOKMAN VURAL ELIBOL/ANADOLU AGENCY VIA GETTY IMAGES

In the background of this digital recreation, ancient microscopic green seaweed is seen living in the ocean 1 billion years ago. In the foreground is the same seaweed in the process of being fossilized for later. Image by Dinghua Yang.
CREDIT: DINGHUA YANG/SWNS.COM

These brilliant pictures show a mistle thrush bird’s nest-which has been built INSIDE a set of traffic lights.
CREDIT: DAN ROWLANDS/SWNS

Market Closes for February 25^th, 2020 

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1862, President Abraham Lincoln signed the Legal Tender Act, putting the U.S. government in the business of printing paper money. Previously, most money had been printed privately by local banks. The Act also authorized the Treasury to sell 6% bonds callable in five years, maturing in 20, which were quickly nicknamed “5-20s.” Philadelphia broker Jay Cooke invented what he called the “democratic distribution” of investments, slicing the 5-20s into denominations as small as $50, advertising them heavily in local newspapers, and hiring his own army of 2,500 “traveling agents” to sell them in towns throughout the Union. He raised $361 million in less than two years—and introduced tens of thousands of Americans to investing for the first time.

Canada
By Kristine Owram
(Bloomberg) — Canadian stocks posted their biggest two-day drop since 2016 after the U.S. Centers for Disease Control and Prevention warned Americans to prepare for a coronavirus outbreak at home. The S&P/TSX Composite Index lost 2.2% to 17,177.37, the lowest since early January. That followed Monday’s 1.6% drop amid a rapid spread in virus cases outside of China. The Canadian benchmark is outperforming its U.S. peer, with the S&P 500 down 6.3% over the past two days. Every sector fell by more than 1% as even safe havens like gold retreated; 222 of 231 shares fell, while 8 rose.
Commodities
* Western Canada Select crude oil traded at a $15.50 discount to West Texas Intermediate, the narrowest gap since October
* Spot gold tumbled 2.4% to $1,637.10 an ounce
FX/Bonds
* The Canadian dollar was little changed at C$1.3290 per U.S. dollar
* The 10-year government bond yield was little changed at 1.20%

================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | -104.6834| -1.9| 1/25
Energy | -61.3154| -2.2| 0/30
Materials | -57.3651| -2.9| 3/44
Industrials | -46.3135| -2.4| 2/29
Information Technology| -39.7211| -3.7| 0/10
Consumer Discretionary| -22.9272| -3.3| 0/16
Communication Services| -14.1230| -1.5| 0/8
Utilities | -13.5046| -1.5| 1/15
Consumer Staples | -10.4514| -1.5| 0/11
Real Estate | -7.7635| -1.2| 1/24
Health Care | -7.1902| -3.6| 0/10

US
By Vildana Hajric and Claire Ballentine
(Bloomberg) — U.S. stocks tumbled to an almost 12-week low and bond yields plunged to records on rising concern the coronavirus will upend global supply chains critical to economic growth. The S&P 500’s four-day rout reached 7.6%, with losses accelerating Tuesday after the U.S. Centers for Disease Control and Prevention warned Americans to prepare for a coronavirus outbreak at home. That follows a rapid increase in cases from Italy to Iran and Japan, with a growing list of companies warning that profits will suffer as economies around the world suffer. The S&P, Dow Jones Industrial Average and Nasdaq Composite indexes all set record highs this month. The 10-year U.S. Treasury yield fell to a record low of 1.3055% as investors sought shelter from the virus’s impact on the outlook for growth. All 11 sectors in the S&P 500 fell with energy, material and financial shares leading the declines. Volatility spiked, sending the Cboe’s measure of equity gyrations surging past 30 for the first time since 2018. “The market is pricing in a significant slowdown in GDP and a 10% impact on earnings,” said Zhiwei Ren, portfolio manager at Penn Mutual Asset Management. “And since no one knows how bad the infection will be, it is hard to make a bet on economy.” U.S. central bankers are closely monitoring the spreading coronavirus, but it is “still too soon” to say whether it will result a material change to the outlook, Federal Reserve Vice Chairman Richard Clarida said.
Elsewhere, European stocks closed in the red, while bonds from the region were mixed. Crude oil slumped again after Monday’s slide of nearly 4%. Japanese shares tumbled more than 3% as traders returned after a holiday. Stocks fell in China and Australia and pushed higher in South Korea and Hong Kong. The yen strengthened against the dollar for a third day. Erratic market moves suggest investors remain on edge over the economic impact of the virus. The World Health Organization has held off from declaring a global pandemic even as cases surged in South Korea, Italy and Japan. “We know there will be supply disruptions, the question now is to what extent will it affect economic growth and more importantly for the stock market earnings growth,” said Sandip Bhagat, Whittier Trust Co.’s chief investment officer “The market is repricing to that new reality.” Analysts at Oxford Economics Ltd. said the epidemic could wipe more than $1 trillion from global domestic product, while the International Monetary Fund lowered its growth forecasts for the world economy.
These are some key events coming up:
* Earnings keep rolling in from companies including: Peugeot SA on Wednesday; Baidu Inc., Best Buy Co. Inc., Occidental Petroleum Corp. and Dell Technologies Inc. on Thursday; and London Stock Exchange Group Plc on Friday.
* The Democratic presidential debate in South Carolina is on Tuesday.
* The Bank of Korea announces its policy decision on Thursday, with rising risks of an interest-rate cut.
* U.S. jobless claims, GDP and durable goods data are out Thursday.
* Japan industrial production, jobs, and retail sales figures are due on Friday.

These are the main moves in markets:
Stocks
*The S&P 500 Index decreased 3.2% to 3,128.43 as of 4:01 p.m. New York time, the lowest in more than 11 weeks on the largest dip in almost 15 months.
*The Dow Jones Industrial Average sank 3.3% to 27,081.50, the lowest in four months.
*The Nasdaq Composite Index fell 2.9% to 8,965.61, the lowest in eight weeks on the largest drop in six months.
*The MSCI All-Country World Index dipped 2.4% to 542.98, the lowest in almost 12 weeks on the biggest decrease in almost seven months.
*The Stoxx Europe 600 Index fell 1.8% to 404.60, the lowest in more than 11 weeks.
Currencies
*The Bloomberg Dollar Spot Index decreased 0.2% to 1,212.91.
*The euro rose 0.2% to $1.0885, the strongest in almost two weeks.
*The Japanese yen strengthened 0.6% to 110.10 per dollar.
*The British pound gained 0.6% to $1.3003, the strongest in a week.
Bonds
*The yield on 10-year Treasuries sank five basis points to 1.33%, the lowest on record.
*The yield on 30-year Treasuries dipped four basis points to 1.80%, the lowest on record.
*Germany’s 10-year yield decreased three basis points to -0.51%, the lowest in almost 20 weeks.
*Britain’s 10-year yield fell two basis points to 0.519%, hitting the lowest in three weeks with its sixth straight decline.
Commodities
*Gold weakened 0.6% to $1,632.93 an ounce, the first retreat in more than a week and the biggest fall in almost three weeks.
*Copper decreased 0.8% to $2.56 a pound, the lowest in two weeks.
*West Texas Intermediate crude dipped 3.1% to $49.79 a barrel, the lowest in two weeks.
–With assistance from Nancy Moran and Sarah Ponczek.
Have  a great night.

Be magnificent!
As ever,

Carolann

If you look at what you have in life, you’ll always have more. 
If you look at what you don’t have in life, you’ll never have enough.
                                                                               –Oprah Winfrey, b. 1954

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