January 31, 2018 Newsletter

Dear Friends,

Tangents:  Super Blue Moon tonight!

A super blood blue moon rises behind a temple in Bangkok, Thailand, Jan. 31. A NASA briefing describes the confluence of factors behind the phenomenon: ‘It is the third in a series of “supermoons,” when the Moon is closer to Earth in its orbit – known as perigee – and about 14 percent brighter than usual. It’s also the second full moon of the month, commonly known as a “blue moon.” The super blue moon will pass through Earth’s shadow to give viewers in the right location a total lunar eclipse. While the Moon is in the Earth’s shadow it will take on a reddish tint, known as a “blood moon.” ‘ Athit Perawongmetha/Reuters
(The illustrations in today’s Monitor Daily are by Jacob Turcotte and Karen Norris.)

PHOTOS OF THE DAY

The sun rises over East Sussex after a cold night.
CREDIT: PETER CRIPPS/ALAMY LIVE NEWS

Trees reflected in the water along the flooded banks of the Saone River between Tournus and Macon, eastern France.
CERDIT: PHILIPPE DESMZES/AFP/GETTY IMAGES

Gathering spaces and a plant-filled wall are shown before a grand opening ceremony for the Amazon Spheres in Seattle, US. The plant-filled geodesic domes will serve as a work-and gathering space for Amazon.com employees.
CREDIT: TED S. WARREN/AP
Market Closes for January 31^st, 2018

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1990, McDonald’s opens its first restaurant in Russia. It has to import cheese from Poland, chickens from France, and potatoes from Holland, but the outlet on Moscow’s Pushkin Square is a huge success.
Number of the Day
3.44%
The average yield-to-maturity on U.S. investment-grade corporate bonds this week, up from from 3.05% in early September. 
Canada
By Kristine Owram
     (Bloomberg) — Canadian stocks were little changed Wednesday, wrapping up their worst January since 2010.
     The S&P/TSX Composite Index slipped 4 points or less than 0.1 percent to 15,951.67, its lowest close since early December, as declines in energy and financials offset gains in most other sectors. The benchmark fell 1.6 percent on the month.
     Financials lost 0.3 percent and energy slipped 0.2 percent as the differential between Canadian crude prices and West Texas Intermediate hit the widest since 2013.
     Technology shares were the biggest gainers, adding 1 percent as Shopify Inc. rose 2.6 percent. Utilities gained 0.9 percent and telecom stocks rose 0.6 percent.
     In other moves:
                          Stocks
* Thomson Reuters Corp. fell 7.3 percent, giving up all of Tuesday’s gain. Analysts at National Bank Financial downgraded the stock, citing several “pressure points” in the Blackstone Group LP deal
* Imperial Oil Ltd. rose 1.9 percent, making it one of the top performers in the Canadian energy index, after RBC Capital Markets upgraded the stock
* Hudson’s Bay Co. rose 2.3 percent. Activist investor Land & Buildings Investment Management said a go-private transaction could be viable again
                          Commodities
* Western Canada Select crude oil traded at a $29 discount to WTI, the widest gap since 2013
* Gold rose 0.3 percent to $1,339.00 an ounce
                          FX/Bonds
* The Canadian dollar strengthened 0.3 percent to $1.2301 per U.S. dollar, the highest since September
* The Canada 10-year government bond yield was little changed at 2.29 percent
US
By Kailey Leinz and Sarah Ponczek
     (Bloomberg) — Treasury yields touched almost four-year highs and U.S. stocks managed to hold onto late gains after Federal Reserve officials set the stage for an rate increase in March by adding emphasis to their plan for more hikes while leaving borrowing costs unchanged.
     After being whipsawed by the Fed announcement, the S&P 500 Index closed higher for the first time in three days, rounding out the best start to the year for the U.S. benchmark since 1997. European and Asian equities continued to experience the pullback seen since the start of the week, with the Stoxx Europe 600 Index and the MSCI Asia Pacific Index both declining for a third day.
     The changes to the Fed statement, collectively acknowledging stronger growth and more confidence that inflation will rise to the 2 percent target. Officials also said inflation “is expected to move up this year and to stabilize” around the goal, in phrasing that marked an upgrade from December.
     “Some people who were not as hawkish before are probably a bit more hawkish now,” said John Vail, chief global strategist at Nikko Asset Management. “So let’s say probably due to economic developments, including the tax cut, the board and all the Fed members are moderately more hawkish than they were at the last meeting.”
     The yield on the 10-year U.S. note rose to as much as 2.75 percent, the highest since April 2014. It has climbed higher earlier the Treasury raised the amount of long-term bonds it will sell this quarter with the budget deficit worsening. The dollar briefly rallied before retracing losses.
     While U.S. bonds are off to their worst start to a year since 2009, it’s been a big month for stock markets, with stellar gains across most major gauges that were followed this week by the MSCI All-Country World Index’s biggest two-day slide since September 2016.
     
     Here are some important things to watch out for this week:
* U.S. employers probably added more jobs in January than a month earlier, economists forecast before the Friday report.

     And these are the main moves in markets:
                           Stocks
* The S&P 500 Index rose 0.1 percent, the Dow Jones Industrial Average gained 0.3 percent and the Nasdaq Composite Index increased 0.1 percent as of 4:09 p.m. New York time.
* The Stoxx Europe 600 Index dipped 0.2 percent.
* The MSCI Asia Pacific Index decreased 0.4 percent.
* The U.K.’s FTSE 100 Index dipped 0.7 percent.
                           Currencies
* The Bloomberg Dollar Spot Index declined 0.2 percent.
* The euro rose 0.1 percent to $1.2414.
* The British pound increased 0.3 percent to $1.4191.
* The Japanese yen weakened 0.4 percent to 109.17 per dollar.
                            Bonds
* The yield on 10-year Treasuries was little changed at 2.72 percent.
* Germany’s 10-year yield rose two basis points to 0.69 percent.
* Britain’s 10-year yield rose five basis points to 1.51 percent.
                           Commodities
* West Texas Intermediate crude gained 0.6 percent to $64.86 a barrel.
* Gold rose 0.5 percent to $1,345.76 an ounce.
–With assistance from Lu Wang.

Have a wonderful evening everyone.

Be magnificent!

As ever,

Carolann

Rarely do great beauty and great virtue dwell together.
                            -Francesco Petrarch, 1304-1374

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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