January 2, 2019 Newsletter

Dear Friends,

Tangents:

Carolann is out of the office today, I will be writing the newsletter on her behalf.

PHOTOS OF THE DAY

A man watches the fireworks exploding over Copacabana Beach during the New Year’s celebrations in Rio de Janeiro, Brazil. Credit: AP Photo/Leo Correa

A woman flies a kite on the beach on New Year’s Day morning in Saltburn By the Sea, England. Credit: Ian Forsyth/Getty Images

Revellers brave stormy conditions as they participate in the annual New Year’s polar bear dip in Charlottetown harbour, Canada. Credit: Andrew Vaughan/The Canadian Press/AP
Market Closes for January 2^nd, 2019

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Canada
By Janine Wolf
     (Bloomberg) — Canadian stocks tumbled into the new year, with the S&P/TSX Composite Index dropping as much as 1.5 percent before paring losses. Industrials and consumer discretionary stocks led the fall, with health-care stocks being the only sector rising.
     The Canadian dollar extended last year’s losses to start the new year, slumping amid broad strength in the greenback and falling oil prices as weak Chinese manufacturing data boosted worries over slowing demand. The loonie pared some of its losses as oil prices spiked around 10:00 a.m. in New York.
     A group of Guyana Goldfields investors is seeking a complete overhaul of the company’s board. The miner’s former chief executive officer, Northfield Capital and other investors, who together own more than 5 percent of the miner, plan to seek a mandate from shareholders to replace the gold producer’s directors.
Stocks
* Norbord Inc. (OSB CT) fell 6 percent after Bank of America Merrill Lynch said the first three months may prove pivotal for forest products equities 
* Maxar Technologies Inc. (MAXR CT) dropped 5 percent after announcing completion of U.S. domestication
* Bausch Health Cos. Inc. (BHC CT) gained 5 percent as the company is scheduled to present at 37th annual J.P. Morgan Healthcare conference
* Turquoise Hill Resources (TRQ CT) dropped 4 percent
Commodities
* Western Canada Select crude oil traded at a $15.75 discount to WTI
* Gold gained 0.4 percent to $1,285.90 an ounce
FX/Bonds
* The Canadian dollar reversed earlier weakness, trading around C$1.36 per U.S. dollar
* The Canada 10-year government bond yield dropped 4.5 basis points to 1.92 percent
US
By Jeremy Herron and Sarah Ponczek
     (Bloomberg) — U.S. stocks started the new year with a modest rebound from the worst December rout since the Depression. Oil rallied as Saudi Arabia cut exports.
     The S&P 500 Index ended an up-and-down session higher by three points, while the Dow Jones Industrial Average eked out a gain and the Nasdaq indexes climbed. Banks rallied, and energy producers surged after a report that Saudi Arabia lowered oil exports fueled a surge in the price of crude. Stocks with high dividend yields fell the most as the 10-year Treasury yield tumbled. Equities started the day lower on poor sentiment sparked by a weak reading on Chinese manufacturing, which added to concern that global growth is slowing.
     “The overall theme that’s been driving the market down is concerns about future economic growth and future earnings growth,” Peter Jankovskis, co-chief investment officer at Oakbrook Investments, said by phone. “The concern is that the tariff action, while it hasn’t had a significant impact to date here in the U.S., is going to start weighing on things. And when we get these economic reports from overseas, principally from China, that provides some evidence that, yeah, it is starting to bite, and that makes people nervous.”
     The risk-off tone that gripped markets in December eased a bit at the start 2019, with the threat of rising rates, an escalating trade war and slowing growth still looming. While President Donald Trump made positive noises about reaching a trade deal with his counterpart Xi Jinping over the weekend, the Chinese data are a stark example to investors that the protectionist showdown is starting to have an impact on economic activity.
Here’s (Almost) Everything Wall Street Is Expecting in 2019
     “The trend remains lower for now,” Kyle Rodda, an analyst at IG Group Holdings Plc, told Bloomberg Television. “We’ve had rate hikes from the Fed effectively priced out, so we are looking at a situation when markets are thinking that we are entering a period of slower growth.”
     Elsewhere, the dollar rose as the euro and pound slid — the latter falling even as U.K. manufacturing growth unexpectedly improved. Emerging-market equities slumped.
Here are some events investors may focus on in coming days:
* The U.S. December jobs report is due Friday.
* Fed Chair Powell is interviewed with predecessors Janet Yellen and Ben Bernanke at the annual meeting of the American Economic Association Friday. Atlanta Fed President Raphael Bostic joins a panel on long-run macroeconomic performance.
And these are the main moves in markets Wednesday:
Stocks
* The S&P 500 rose 0.1 percent as of 4 p.m. in New York.
* The Stoxx Europe 600 Index decreased 0.1 percent.
* The MSCI Asia Pacific Index declined 1 percent, hitting the lowest in a week with the first retreat in more than a week.
* The MSCI Emerging Market Index sank 1 percent, reaching the lowest in two months.
Currencies
* The Bloomberg Dollar Spot Index climbed 0.4 percent, the first advance in a week and the largest increase in more than a week.
* The euro sank 1.1 percent to $1.1343.
* The British pound sank 1 percent to $1.2611, the weakest in two weeks on the largest decrease in more than three weeks.
* The Japanese yen gained 0.6 percent to 109.123 per dollar, the strongest in seven months on the biggest rise in more than a week.
Bonds
* The yield on 10-year Treasuries fell three basis points to 2.66 percent, its fifth straight decline.
* The two-year yield rose one basis point to 2.50 percent
* Germany’s 10-year yield sank nine basis points to 0.15 percent, the lowest in more than two years on the biggest tumble in more than two years.
Commodities
* West Texas Intermediate crude rose 2.5 percent to $46.55 a barrel.
* Gold futures rose 0.2 percent to $1,283.50 an ounce, reaching the highest in almost seven months on its fifth consecutive advance.

Have a great evening.

Be magnificent!

As ever,

Karen

“Inspiration comes very slowly and quietly”. Brenda Ueland

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
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Fax: 778.430.5828
www.carolannsteinhoff.com