January 24, 2018 Newsletter

Dear Friends,

Tangents:
On this day in 1848, workers dredging a stream for a sawmill near Sacramento, Calif. strike a bed of soft yellow rock. It takes months for the news to spread widely, but when it does, the California gold rush is on.
1672 – Hudson’s Bay Company holds first fur auction at Garraway’s Coffee House, London.
1935 – First canned beer.
PHOTOS OF THE DAY

River fog appears along the Tamagawa River in Tokyo, Japan, as a snowstorm affected traffic and public transport in the city and surrounding areas.
CREDIT: THE TELEGRAPH

Two polar bear cubs use their mother as a climbing frame at Wapusk National Park, in Canada.
CREDIT: NADEEM SUFI/SOLENT NEWS

An aerial view of the cave dwelling complex at Shanzhou District in Sanmenxia, Henan Province of China. The square or rectangular dwellings are sunk into the ground, temperature inside of which is over 10 degrees Celsius in winter and 20 degrees Celsius in summer. Statistics show that there are still over three thousand people living in cave dwellings while others have moved to storied houses.
CREDIT: THE TELEGRAPH
Market Closes for January 24^th, 2018

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Canada
By Kristine Owram
     (Bloomberg) — Canadian stocks fell to the lowest in two weeks amid a widespread decline triggered by more protectionist rhetoric from the Trump administration, while the loonie rose to its highest level since September.
     The S&P/TSX Composite Index lost 73 points or 0.5 percent to 16,284.21. Industrial shares fell 1 percent, with Canadian National Railway Co. down 2.1 percent after 2018 earnings guidance missed expectations.
     Financials lost 0.6 percent as all the major banks declined. Toronto-Dominion Bank and Bank of Montreal each fell almost 0.6 percent.
     In other moves:
                           Stocks
* Valeant Pharmaceuticals International Inc. lost 12 percent, the most in 11 months. The stock was initiated at Goldman Sachs with a sell rating on high leverage and legal risks
* Aurora Cannabis Inc. fell 5.5 percent and CanniMed Therapeutics Inc. jumped 12 percent after the companies agreed to a C$1.23-billion merger. Newstrike Resources Ltd., an earlier target of CanniMed’s, fell 19 percent
* DHX Media Ltd. rose 2.4 percent to the highest since October. Analysts said its plan to hold an annual general meeting indicates it’s still working toward “some kind of objective” through its strategic review process
                           Commodities
* Western Canada Select crude oil traded at a $28 discount to WTI, the biggest gap since late 2013
* Gold rose 1.5 percent to $1,356.30 an ounce, the highest since 2016
                            FX/Bonds
* The Canadian dollar strengthened 0.7 percent to $1.2332 per U.S. dollar
* The Canada 10-year government bond yield rose three basis points to 2.26 percent, the highest since 2014
US
By Randall Jensen and Kailey Leinz
     (Bloomberg) — Trump administration protectionist rhetoric roiled financial markets, sending the dollar to its lowest level in three years and whipsawing stocks that had been buoyed by strong earnings.
     Comments from Commerce Secretary Wilbur Ross and Treasury Secretary Steven Mnuchin set the tone, with the officials blaring the Trump team’s “America First” message before the president arrives in Davos, Switzerland. White House Press Secretary Sarah Sanders appeared to soften Mnuchin’s comments later, praising a “stable” U.S. currency. 
     For more on the day’s market news: White House Provides More Ammunition for Dollar Bears at Davos Mnuchin, Dalio Raise the Stakes for Treasuries Before ECB Meets Dollar Extends Decline Past 1% Despite Efforts at Damage Control Chip Selloff Goes Global as Analysts Debate ‘Cycle Peak’ Treasuries Set to Benefit From Month-End Asset Allocation
     The officials’ comments added to President Donald Trump’s protectionist push days after his administration slapped tariffs on solar panels and washing machines. Ross’s suggestion that the U.S. could enact more levies touched off concerns of a trade war that could hamper the synchronized global growth that’s sent equities around the world to all-time highs.
     “To the extent that trade is disrupted, it’s probably not good for economies, for U.S. companies and corporations, and would probably put pressure on the rising stock market,” Michael Cuggino, president and portfolio manager at the Permanent Portfolio Family of Funds in San Francisco, said by phone. “I don’t think it’s a surprise that you have negative news that might be impacting the continuing march up as people take a pause.”
     The S&P 500 closed lower for the first time in four days after swinging between gains and losses. It opened higher as results from General Electric and United Technology added to euphoria over the Republican tax reform. The threat of tit-for- tat tariffs weighed on technology stocks that were already under pressure after poor results from Texas Instruments. Tech-heavy Nasdaq indexes had the biggest declines among major U.S. averages, with chipmakers sliding the most since November. United Continental Holdings Inc.’s results hit industrial shares, while banks rose as Treasury yields pushed to 2.65 percent.
     Mnuchin’s comments added to pressure on a greenback that’s been in decline for a year, with the effects rippling across markets as growth in European and emerging-nation economies continues to accelerate past America. The yen pushed through 110 per dollar for the first time since September, and South Africa’s rand traded at the highest in more than 2 1/2 years. Emerging-market stocks rose for a ninth day in the longest streak since April 2015.
     Elsewhere, the Brazilian real strengthened the most in eight months and the Ibovespa stock exchange rose to a record after a panel of judges upheld the conviction of former President Luiz Inacio Lula da Silva on graft, a ruling that would prevent him from running in the general election.
     Here’s what to watch out for this week:
* Earnings season is in full swing: Intel, LVMH Moet Hennessy Louis Vuitton, Starbucks and Hyundai Motor all come this week.
* Barring any last minute changes in Washington, Trump will join world leaders and senior executives in Davos for the annual World Economic Forum.
* The European Central Bank announces its rate decision on Thursday
* The U.K. House of Lords is considering Prime Minister Theresa May’s Brexit bill this week.
     These are the main moves in markets:
                         Stocks
* The S&P 500 Index fell less than 0.1 percent to 2,837.81 as of 4 p.m. New York time.
* The Dow Jones Industrial Average rose 52 points to 26,263.62.
* The Nasdaq Composite Index declined 0.6 percent.
* The Stoxx Europe 600 Index fell 0.5 percent, halting a four- day run.
* The MSCI All-Country World Index increased 0.3 percent to the highest on record.
* The MSCI Emerging Market Index rose 0.8 percent with its ninth consecutive advance.
                        Currencies
* The Bloomberg Dollar Spot Index sank 1.0 percent to the lowest in more than three years on the largest decrease since March.
* The euro jumped 0.8 percent to $1.2401, the strongest in more than three years on the.
* The British pound jumped 1.5 percent to $1.4208, the strongest in 19 months.
* The Japanese yen surged 1.1 percent to 109.13 per dollar, the strongest in more than 19 weeks.
                         Bonds
* The yield on 10-year Treasuries advanced three basis points to 2.65 percent.
* Germany’s 10-year yield climbed three basis points to 0.59 percent, the highest in more than six months.
* Britain’s 10-year yield jumped five basis points to 1.407 percent.
                         Commodities
* Gold jumped 1.2 percent to $1,357.85 an ounce, the highest in almost 18 months.
* West Texas Intermediate crude advanced 2.4 percent to $65.99 a barrel, the highest in more than two years.

Have a wonderful evening everyone.

Be magnificent!

As ever,

Carolann

Wealth consists not in having great possessions, but in having few wants.
                                                                       -Epicetus, 55-135 AD

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
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