February 8, 2017 Newsletter

Dear Friends,

Tangents:
On this day in 1971, Nasdaq, the world’s first electronic stock market, begins trading.

POINTS OF PROGRESS:
FRANCE:
Workers can relax a little more fully as they begin the new year with a new right: the ability to ignore their bosses’ weekend emails.  As o January1, France has enacted a law that gives its workers a legal right to ignore digital correspondence from co-workers and bosses when out of the office.  Dubbed “the right to disconnect,” the new law mandates that companies must negotiate with their employees to agree on terms of communication, a move that officials hope will redefine the blurring line between work and leisure.

SAN DIEGO:
Smartphones could assist criminal investigations – in an unexpected way.  A new tool developed by University of California, San Diego scientists analyzes trace chemicals left behind by the user on a device’s screen, providing insights into factors such as diet, hygiene products, and locations visited.  Senior author Pieter Dorrestein envisaged a scenario in which such an object was found at a crime scene but revealed no useful fingerprint or DNA.  His team’s new method would allow investigators to build a lifestyle picture of the person in question.

INDIA:
The world’s biggest solar power plant in a single location was recently unveiled.  The facility, based in the country’s southern state of Tamil Nadu, covers an area of almost four square miles and has a capacity of 648 megawatts, compared with the previous title holder, Topaz Solar Farm in California, which boasts a capacity of 550 MW.  The Indian plant will be able to produce enough electricity to power about 150,000 homes.

UNITED STATES:
Energy-related carbon dioxide emissions were the lowest since 1991 in the first half of 2016, and the US Energy Information Administration expects the year as a whole to exhibit the lowest figures since 1992, once all data are available.  The agency attributes the numbers to various factors, including the mildest weather since at least 1949, a drop in coal consumption of 18 percent compared with the same period in 2015, and an increase of 9 percent in the use of renewable energy sources.
PHOTOS OF THE DAY

People walk next to the art installation ‘Monument,’ made from three passenger busses, by Syrian artist Manaf Halbouni in Dresden, Germany, on Wednesday. Matthias Schumann/Reuters
Vintage and classic cars are displayed by Bonhams auction house at the Grand Palais exhibition hall during Retromobile week in Paris on Wednesday. Benoit Tessier/Reuters
A devotee sits in the woods of Changu Narayan during the Swasthani Bratakatha festival in Bhaktapur, Nepal, on Wednesday. Navesh Chitrakar/Reuters
Market Closes for February 8^th, 2017

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Canada
By Lu Wang
     (Bloomberg) — Canadian stocks rose, reversing earlier losses, as energy producers turned higher with oil prices. New Gold Inc. and Genworth MI Canada Inc. paced gains among raw- materials and real estate companies.
     The S&P/TSX Composite Index added 0.4 percent to 15,554.04 at 4 p.m. in Toronto, after sliding as much as 0.5 percent. Energy shares reversed a decline exceeding 1 percent as oil rebounded following a report showing U.S. gasoline inventories fell for first time since December. Materials and real estate shares climbed at least 0.9 percent.
     New Gold jumped 6.7 percent, the most in the benchmark index, as the company sold the El Morro gold stream to Goldcorp Inc. for $65 million in cash. The agreement strengthens New Gold’s balance sheet and the company now needs less than $100 million to fund the completion and ramp-up of Rainy River, Desjardins analyst Michael Parkin wrote in a note.
     Genworth MI rallied 6.7 percent to the highest level in three years after the residential mortgage insurance company reported earnings that beat analyst estimates.
US
By Jeremy Herron
     (Bloomberg) — Treasuries rose for a fourth day and gold reached a three-month high as demand for haven assets persisted with investors assessing political risks in Europe and the U.S. American equities erased losses after crude rebounded above $52 a barrel
     The S&P 500 Index was little changed as energy producers turned higher after an unexpected slide in U.S. gasoline supplies boosted the price of crude. Bank shares slipped as yields on 10-year Treasury notes fell to 2.33 percent. Bond auctions in Europe lifted debt in Germany and Portugal. Gold topped $1,240 an ounce. Bloomberg’s dollar index fell for the first time in three days.
     Trades sparked by Donald Trump’s election continued to falter as long-awaited details on pro-growth policies remain undelivered. Even one of the best corporate earnings season since the financial crisis hasn’t been able to jolt equities higher, as macroeconomic uncertainty has driven demand for safety. The calendar for data is light in the week.
     “There is less macro and more micro driving the market because we are in the earnings season,” Lucy MacDonald, chief investment officer for global equities at Allianz Global Investors, said on Bloomberg Television. “But we haven’t had an election for a while and we know we have plenty coming up. The negative outcomes aren’t really priced in.”
     What’s coming up in the markets:
* A U.S. court of appeals is reviewing arguments on whether to reinstate the Trump administration’s temporary ban on immigration, with the outcome likely to be appealed to the Supreme Court. A decision is not due on Wednesday.
* A strike looms at BHP’s Escondida mine. Workers at the world’s largest copper operation vowed to down tools indefinitely after wage negotiations with the company failed. The walkout will halt all production at the site.
     Stocks
* The S&P 500 Index rose 0.1 percent to 2,294.65 at 4 p.m. in New York, 0.2 percent below an all-time high.
* Financial shares lost 0.8 percent as the rally in bonds threatened interest income.
* High-dividend yielding industries surged, with utilities and real-estate stocks jumping at least 0.6 percent.
* The Dow Jones Industrial Average fell 0.2 percent as banks and industrial shares slipped.
* The Stoxx Europe 600 Index advanced 0.3 percent.
* Emerging market stocks added 0.3 percent.
     Currencies
* The Bloomberg Dollar Spot Index fell 0.1 percent, paring losses that reached 0.3 percent.
* The reversal came after a 10-year Treasury auction was poorly received, with traders still apprehensive about the Trump administration’s currency and trade policies.
* The euro was little changed at $1.0683 and the British pound strengthened to $1.25188.
     Commodities
* Oil erased a loss of 1 percent to climb 0.5 percent to $52.42 a barrel in New York, looking to end a two-day slide.
* Oil has fluctuated above $50 a barrel since a deal to trim output between the Organization of Petroleum Exporting Countries and 11 other nations took effect on Jan. 1.
* Copper three-month forwards jumped 1.8 percent after workers at the biggest mine in Chile vowed to strike. Goldman Sachs Group Inc. forecast what would be the first deficit of the metal since 2011.
* Gold climbed to the highest in almost three months as investors purchased metal through the biggest exchange-traded fund for a fifth day, the longest buying spree since June. Futures rose 0.5 percent to settle at $1,239.24 an ounce.
     Bonds
* Yields on 10-year Treasuries dropped four basis points to the lowest in three weeks, as bonds extending the longest rally since June.
* Wednesday’s $23 billion 10-year U.S. note sale drew a yield of 2.33 percent, with a bid-to-cover ratio of 2.29, compared with an average of 2.5 in the previous 10 auctions.
* Strong demand for government bond sales by Germany, Portugal and Finland drove gains for European debt ahead of Treasury’s 10-year note auction this afternoon.
* Portugal’s 10-year debt yield fell 13 basis points while German benchmark yields dropped five basis points to 0.30 percent.

Have a wonderful evening everyone.

Be magnificent!

Truth has no path, and that is the beauty of truth, it is living.
Krishnamurti

As ever,
 

Carolann

Education is not the filling of a pail, but the lighting of a fire.
                                   -William Butler Yeats, 1865-1939

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

 
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