January 3, 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

Visitors walk past the art installation Gaia, a seven-metre scale model of Earth created by artist Luke Jerram at the Helix Park in Falkirk. The park will be transformed into an extraordinary spectacle of fire performances, interactive light installations, breath-taking puppetry, enchanting sculptures, and animated projections depicting the zodiac signs. Credit: Andrew Milligan/PA Wire

Walkers in the morning sun at Tynemouth beach on the North East coast. Credit: Owen Humphreys/PA Wire

A snowman on the riverbank of Songhua River in Harbin, capital of northeast China’s Heilongjiang Province. Altogether 2,019 cute snowmen were displayed here to greet the year 2019. Credit:  Wang Jianwei/Barcroft Images
Market Closes for January 3^rd, 2019

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Canada
By Kristine Owram
     (Bloomberg) — Canadian stocks retreated, led by tech stocks after Apple Inc. cut its sales outlook, but avoided the deeper losses experienced south of the border.
     The S&P/TSX Composite Index fell 0.9 percent to 14,212.75, the most since the market’s Christmas Eve selloff, but that paled in comparison to the 2.5 percent drop on the S&P 500.
     Tech stocks were the biggest decliners, losing 4 percent. The sector took a drubbing along with Apple, which fell the most since 2013 after cutting its revenue outlook for the first time in almost two decades. In Canada, Shopify Inc. lost 6.5 percent. Defensive stocks were the only sectors in positive territory, with the communication services sector up 0.2 percent and utilities gaining 0.1 percent.
In other moves:
Stocks
* New Gold Inc. jumped 11 percent, the most since October, as bullion prices posted a sixth straight advance
* EnWave Corp. rose 4.6 percent. The company has signed a pact to sub-license its cannabis dehydration technology to The Green Organic Dutchman Holdings Ltd.
* Charlotte’s Web Holdings Inc. lost 1.2 percent after the hemp- focused company said it plans to hire a new CEO this year
Commodities
* Western Canada Select crude oil traded at a $12.50 discount to WTI
* Aeco natural gas traded at a $1.73 discount to Henry Hub
* Gold rose 0.8 percent to $1,294.80 an ounce, the highest since June
FX/Bonds
* The Canadian dollar strengthened 0.8 percent to C$1.3481 per U.S. dollar as oil prices rose
* The Canada 10-year government bond yield fell 7 basis points to 1.83 percent, the lowest since 2017
US
By Vildana Hajric and Reade Pickert
     (Bloomberg) — U.S. stocks sank after a factory gauge dropped the most in a decade and Apple cut its sales outlook, adding to concern that global growth is slowing. Treasuries rallied and the yen strengthened.
     The S&P 500 Index tumbled 2.5 percent for the steepest sell-off since Christmas Eve, when the gauge fell within a few points of a bear market before embarking on a 6.8 percent rally over the next five sessions. Apple plunged the most since 2013 after citing an unforeseen slowdown in China for its woes. Ten- year Treasury yields sank to an 11-month low after a measure of U.S. manufacturing plunged last month by the most since October 2008. Bristol-Myers Squibb’s bid to buy Celgene and a strong reading on private hiring for December were shrugged off by bearish investors.
     “Corporate America is getting cold feet about the outlook,” said Chris Rupkey, the chief financial economist at MUFG Union Bank in New York. “That’s what the stock market is saying with new selling and new lows after the manufacturing survey’s release.’
Here are the major stocks moves:
* Apple ended the day down 10 percent.
* Twenty-nine of 30 chipmakers in the Philadelphia Semi index fell, with Qorvo, Skyworks and Broadcom each off at least 8 percent.
* 3M, Caterpillar and DowDuPont dropped at least 3 percent.
* Bristol-Myers sank 14 percent, while Celgene jumped to the highest since October.
* Airlines tumbled after Delta cut its revenue forecast. American was off 7.5 percent.
     In currency markets, the yen jumped as algorithmic programs amplified sharp gyrations amid thin liquidity during a Japanese holiday. Bloomberg’s dollar index fell.
     The weak ISM factory reading adds to anxiety spurred by poor data from China and Europe a day earlier, stoking fear that a recession looms larger than previously thought. Apple and Delta join a growing list of companies warning that the trade war and political turmoil may be weighing on corporate profits.
     Dysfunction in Washington continues, meanwhile, with leaders unable to strike a deal to end a partial shutdown of the federal government.
     “Trade disputes are seeping into the real economy globally,” said Brett Ryan, senior U.S. economist for Deutsche Bank Securities. “The policy uncertainty will eventually cause a slowdown, and you’re finally at that point now.”
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:
Stocks
* The S&P 500 fell 2.5 percent at the close of trading in New York.
* The Nasdaq 100 retreated 3.4 percent, while the Dow Jones Industrial Average slid 662 points.
* The Stoxx Europe 600 Index lost 1 percent.
* Germany’s DAX Index sank 1.6 percent on the first retreat in a week.
* The MSCI Emerging Market Index declined 0.6 percent.
* The Nikkei-225 Stock Average fell 0.3 percent.
Currencies
* The Bloomberg Dollar Spot Index dipped 0.5 percent.
* The euro advanced 0.5 percent to $1.1399.
* The British pound rose 0.2 percent to $1.2636.
* The Japanese yen jumped 1.2 percent to 107.57 per dollar, the strongest in more than eight months.
Bonds
* The yield on 10-year Treasuries fell six basis points to 2.56 percent.
* Germany’s 10-year yield fell one basis point to 0.15 percent. 
* Italy’s 10-year yield climbed 17 basis points to 2.86 percent.
Commodities
* West Texas Intermediate crude rose 1.3 percent to $47.16 a
barrel.
* Gold advanced 0.7 percent to $1,293.61 an ounce, reaching the highest in almost seven months on its sixth consecutive advance.

Have a great evening.

Be magnificent!

As ever,

Karen

“With the new day comes new strength and new thoughts.” Eleanor Roosevelt

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