February 27, 2018 Newsletter

Dear Friends,

Tangents:

Carolann is at a tax seminar today, I will be writing the newsletter on her behalf. 

PHOTOS OF THE DAY

A deer stag stands in heavy snowfall and freezing temperatures in Richmond park, west London, as a cold front sweeps in from the east. Up to 20cm of snow are expected in parts of the UK, with temperatures feeling as low as -15C in some places.
CREDIT: THE TELEGRAPH

Indian students smear coloured powder during an event to celebrate the Hindu festival of Holi in Kolkata. Holi, the popular Hindu spring festival of colours is observed in India at the end of the winter season on the last full moon of the lunar month, and will be celebrated on March 1 this year.
CREDIT: THE TELEGRAPH

Airbus Defence and Space of Cimon, a free-flying ball-shaped robot with a smiling face, who has an appreciation of music and a vocabulary of more than 1,000 sentences, as the white droid is set to join the crew of the International Space Station (ISS) later this year. Short for Crew Interactive Mobile Companion, Cimon is designed to float and fly around the ISS offering technical help, warning of system failures and dangers, and providing a source of entertainment.
CREDIT: THE TELEGRAPH
Market Closes for February 27th, 2018

International Markets

Bonds

Currencies

Commodities

Canada
By Kristine Owram
     (Bloomberg) — Canadian stocks closed lower after oil prices tumbled, while the loonie weakened to the lowest point of
2018 as investors awaited the federal budget.
     The S&P/TSX Composite Index lost 44 points or 0.3 percent to 15,671.15. Materials led to the downside, falling 1.4 percent as gold miners retreated. Detour Gold Corp. lost 5.3 percent and Agnico Eagle Mines Ltd. fell 3.8 percent.
     The energy index retreated 1.2 percent as crude prices weakened to the lowest level in more than two weeks. The International Energy Agency said “explosive” growth in U.S.
shale may extend beyond this year, threatening OPEC’s supply cuts.
     In other moves: 

                             Stocks 
* Bank of Nova Scotia added 1.4 percent, the most since September, after profit topped estimates thanks to record results from its international businesses
* Bank of Montreal fell 1 percent. Several of the bank’s divisions reported lower profits in the first quarter
* Aphria Inc. fell 3.3 percent and Canopy Growth Corp. lost 3 percent. Competitor Cronos Group Inc. because the first Canadian pot stock to list on the Nasdaq Tuesday 
                          Commodities
* Western Canada Select crude oil traded at a $25.40 discount to WTI, the narrowest gap in two weeks
* Gold fell 0.9 percent to $1,318.60 an ounce, the lowest in two and a half weeks
                            FX/Bonds
* The Canadian dollar weakened 0.7 percent to C$1.2775 per U.S. dollar, a 2018 low
* The Canada 10-year government bond yield rose two basis points to 2.28 percent
US
By Sarah Ponczek and Kailey Leinz
     (Bloomberg) — U.S. stocks sold off for the first time in three sessions and Treasuries slumped as investors weighed the potential for added interest rate hikes this year following Federal Reserve Chairman Jerome Powell’s assessment that the economy is strengthening and inflation could be gaining speed.
The dollar advanced.
     All major equity gauges finished lower. Shares of media companies led the way down following Comcast’s $31 billion proposal to buy Sky Plc, which could set off a bidding war with Walt Disney Co. and 21st Century Fox Inc. Automakers and real estate developers also struggled.
     Powell’s testimony raised the possibility that the Fed could rethink its plan for three interest rate hikes this year and potentially add a fourth. The 10-year Treasury yield initially spiked on Powell’s seemingly hawkish tone before drifting back below 2.9 percent.
     “The markets are skittish,” said Barry James, president and portfolio manager at James Investment Research in Xenia, Ohio.
“People are maybe a little bit oversensitive right now.”
     The pace of U.S. monetary policy tightening remains a hot debate on Wall Street, and traders have been betting that Powell won’t seek to shock financial markets by moving toward a more hawkish monetary policy. Fed Governor Randal Quarles made clear on Monday that he thought a sustained period of strong growth might require higher interest rates.
     “At some point rates do start to bite,” said Mona Mahajan, U.S. investment strategist for Allianz Global Investors. “And at some point if inflation does start to emerge more rapidly, which it can toward the end of the Fed cycle, we can start to see either the Fed making a policy mistake or equity markets start to price in a downward movement.”
     Elsewhere, German bunds and U.K. gilts led a retreat in European bonds. Most industry groups in the Euro Stoxx 600 Index declined after Japan led Asian equities higher. The won rose for a third day as the Bank of Korea left its benchmark interest rate unchanged. Oil slipped following a three-day rally as investors awaited U.S. inventory data. South Africa’s rand handed back recent gains amid a cabinet reshuffle.

     Here are some key events scheduled for this week:
* Companies announcing earnings this week include: Vale, Bayer and Lowe’s.
* The European Union will publish a draft Brexit treaty on Wednesday and U.K. Prime Minister Theresa May delivers a speech Friday on Britain’s relationship with the European Union.
* A barrage of data is expected out of Japan including retail sales and industrial production Wednesday, and capital spending Thursday.
* In China, the official and Caixin purchasing managers’ indexes on Wednesday and Thursday respectively may show growth momentum slowed slightly in February, though the signal may be clouded by the holidays. 

     These are the main moves in markets:
                             Stocks
* The S&P 500 Index plunged 1.3 percent to 2,744.27, its biggest decline in more than two weeks.
* The Nasdaq Composite Index dropped 1.2 percent.
* The Stoxx Europe 600 Index slipped 0.2 percent.
* The MSCI All-Country World Index retreated 0.9 percent.
                           Currencies
* The Bloomberg Dollar Spot Index climbed 0.6 percent.
* The euro fell 0.7 percent to $1.223.
* The Japanese yen declined 0.4 percent to 107.37 per dollar.
* South Africa’s rand plunged 1.7 percent to 11.7488 per dollar, the biggest drop in more than three weeks.
* The British pound slid 0.5 percent to $1.3904.
                             Bonds
* The yield on 10-year Treasuries rose three basis points to 2.89 percent.
* Germany’s 10-year yield gained three basis points to 0.68 percent.
* Britain’s 10-year yield added five basis points to 1.56 percent.
                          Commodities
* West Texas Intermediate crude slumped 1.6 percent to $62.89 a barrel, the largest decline in almost three weeks.
* Gold dropped 1.1 percent to $1,318.79 an ounce, the lowest in more than two weeks. 

–With assistance from Richard Richtmyer and Eddie van der Walt.

Have a wonderful evening everyone.

Be magnificent! 

As ever, 

Megan

“The Person Who Says It Cannot Be Done Should Not Interrupt The Person Who Is Doing It.” – Chinese Proverb

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