January 16, 2020 Newsletter

Dear Friends,

Tangents:
Robert Service, poet, b. 1874

I Believe
BY ROBERT W. SERVICE
It’s my belief that every man
   Should do his share of work,
And in our economic plan
   No citizen should shirk.
That in return each one should get
   His meed of fold and food,
And feel that all his toil and sweat
   Is for the common good.

It’s my belief that every chap
   Should have an equal start,
And there should be no handicap
   To hinder his depart;
That there be fairness in the fight,
   And justice in the race,
And every lad should have the right
   To win his proper place.

It’s my belief that people should
   Be neither rich nor poor;
That none should suffer servitude,
   And all should be secure.
That wealth is loot, and rank is rot,
   And foul is class and clan;
That to succeed a man may not
   Exploit his brother man.

It’s my belief that heritage
   And usury are wrong;
That each should win a worthy wage
   And sing an honest song ….
Not one like this — for though I rue
   The wrong of life, I flout it.
Alas! I’m not prepared to do
   A goddam thing about it.

PHOTOS OF THE DAY

The first signs of vegetation re-growing in a tree charred by bushfires in Kulnura, New South Wales, Australia.
CREDIT: JOEL CARRETT/EPA-EFE/REX

People dressed in costume cross a bridge during the Malanka winter festival celebration in Krasnoilsk, Ukraine.

Malanka is the old New Year’s Eve in the Julian Calendar. The two day celebration welcomes the beginning of spring.
CREDIT: MARKIYAN LYSEIKO / UKRINFORM/ZUMA WIRE ZUMA/EYEVINE

Sunrise over Russky Bridge across the Eastern Bosphorus Strait off Vladivostok on Russia’s Pacific Coast.
CREDIT: YURI SMITYUK/TASS/GETTY IMAGES

Market Closes for January 16^th, 2020 

International Markets

Bonds

Currencies

Commodities

Market Commentary:
The Swiss franc climbed to a multiyear high after Switzerland was added to the U.S. Treasury’s watch list of currency manipulators earlier this week. The franc gained against the euro Tuesday, reaching its highest closing level since April 2017. The ascent continued Wednesday, with a rise of 0.1% against the euro and 0.2% against the dollar—placing it near its highest closing value against the greenback since September 2018, according to FactSet.
Canada
By Aoyon Ashraf
     (Bloomberg) — Canadian stocks rose for a fourth day, even as Bombardier Inc.’s shares posted their biggest loss ever, after the company said it was reassessing the A220 jet program with Airbus. The S&P/TSX Composite Index rose 0.4% on Thursday to 17,484.77. Consumer discretionary stocks led the market higher, as 10 of 11 sectors rose. Canadian National contributed the most to the index advance, measured in index points, increasing 1.4%. Ballard Power Systems had the largest gain in percentage terms, rising 4.1%. Bombardier was the biggest drag on the index and had the biggest drop, declining 32%. Meanwhile, Lucara Diamond Corp., which found the 1,758- carat Sewelo diamond at its Botswana mine last year, said it’s struck a deal with the luxury brand, Louis Vuitton and Antwerp diamond manufacturer HB Company. It’s unclear how valuable the polished diamonds will be though, as Lucara previously said the Sewelo wasn’t a type of diamond that yields top jewelry standard gems.
Commodities
* Western Canada Select crude oil traded at a $24.65 discount to WTI
* Spot gold fell 0.2% to $1,553.86 an ounce
FX/Bonds
* The Canadian dollar was flat at C$1.3042 per U.S. dollar
* The 10-year government bond yield rose 1.4 basis points to 1.56%
Insights
* So far this week, the index rose 1.5%
* The index advanced 16% in the past 52 weeks. The MSCI AC Americas Index gained 26% in the same period
* The Canada S&P/TSX is 0.03% below its 52-week high on Jan. 16, 2020 and 16% above its low on Jan. 16, 2019
* The Canada S&P/TSX is up 1.5% in the past 5 days and rose 2.5% in the past 30 days
US
By Claire Ballentine and Vildana Hajric
(Bloomberg) — The record-setting rally in U.S. equities accelerated in the wake of Wednesday’s China trade deal and signs consumer demand remains strong. Bond yields rose. All three main U.S. stock benchmarks surged to all-time highs after setting multiple records earlier this week, with technology and financial shares leading the surge. Alphabet Inc.’s market valuation hit $1 trillion for the first time. Banks and chipmakers rallied after solid earnings reports from Taiwan Semiconductor Manufacturing Co. and Morgan Stanley. Treasuries fell after data showed U.S. retail sales strengthened in December, while the dollar gained. “The consumer is really in positive shape,” said Ryan Detrick, senior market strategist at LPL Financial. “Then when you factor in the alleviation of the U.S.-China tensions, the market is in a pretty good spot.” The Senate approved President Donald Trump’s U.S.-Mexico- Canada free trade agreement, handing the president a major political win on the same day senators were sworn in as jurors in his impeachment trial.
The formal signing of a phase one deal between the world’s two biggest economies has put the trade war on hold as far as many investors are concerned. Assuming the detente lasts, traders will be seeking fresh catalysts, most likely in economic data and the ramp-up of earnings season. “The question is if we can keep up the momentum,” said Mike Loewengart, vice president of investment strategy at E*Trade Financial. “Up next, housing, an economic bellwether, which will provide yet another data point of how our economy closed out the year.” West Texas crude fluctuated in a narrow range before pushing higher. Elsewhere, the Stoxx Europe 600 Index closed at a record high after swinging between gains and losses. The euro erased earlier gains, while most European bonds edged up. The ruble slipped in the wake of Russian President Vladimir Putin’s call for sweeping constitutional changes and subsequent replacement of his long-serving prime minister. Meanwhile, soybeans slumped overnight after China signaled purchases would be based on demand, rather than a pre-set amount.

Here are some events to watch for this week:
* China GDP, along with key monthly data for December, come on Friday.
* A final reading on the euro-zone’s December inflation is also due on Friday.

There are some of the main moves in markets:
Stocks
*The S&P 500 Index jumped 0.8% to 3,316.89 as of 4:03 p.m. New York time, the highest on record with the largest climb in two weeks.
*The Dow Jones Industrial Average jumped 0.9% to 29,297.57, the highest on record with the biggest increase in two weeks.
*The Nasdaq Composite Index climbed 1.1% to 9,357.13, the highest on record with the largest surge in two weeks.
*The Stoxx Europe 600 Index climbed 0.2% to 420.54, the highest on record.
Currencies
*The Bloomberg Dollar Spot Index advanced 0.1% to 1,192.28, the largest gain in a week.
*The euro dipped 0.1% to $1.1138, the biggest decrease in more than a week.
*The Japanese yen depreciated 0.2% to 110.15 per dollar, the weakest in eight months.
Bonds
*The yield on two-year Treasuries climbed one basis point to 1.56%.
*The yield on 10-year Treasuries advanced two basis points to 1.80%.
*Britain’s 10-year yield dipped one basis point to 0.643%, reaching the lowest in 11 weeks on its fifth straight decline.
*Germany’s 10-year yield declined two basis points to -0.22%, the lowest in more than a week.
Commodities
*West Texas Intermediate crude climbed 1.2% to $58.53 a barrel, the biggest increase in almost two weeks.
*Gold weakened 0.1% to $1,554.03 an ounce.
–With assistance from Cecile Gutscher.
Have a great night.

Be magnificent!
As ever,

Carolann

It is far better to be alone, than to be in bad company.
                            -George Washington, 1732-1799

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