January 4, 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

Lookout Studio in Grand Canyon Village on the South Rim of Grand Canyon National Park, in Arizona. A winter storm has covered cactus with snow in parts of the American Southwest as temperatures in the desert fall below those of Anchorage, Alaska. Credit: AP Photo/Anna Johnson

Boats are pictured in Dal lake during sunset in Srinagar, India. Credit: Tauseef Mustafa/AFP/Getty Images

At dawn on a very cold morning in January, the cloud slowly gathers over the River Torridge estuary at Appledore, as sunny intervals and a gentle breeze are forecast for North Devon, UK. Credit: Terry Matthews/Alamy Live News
Market Closes for January 4^th, 2019

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Canada
By Kristine Owram
     (Bloomberg) — Canadian stocks closed at their highest level in three weeks, buoyed by strength south of the border, while the loonie and bond yields jumped despite a slowdown in hiring.
     The S&P/TSX Composite Index rose 1.5 percent to 14,426.62 Friday amid strong jobs growth in the U.S., bringing its gain for the holiday-shortened week to 1.4 percent. Technology stocks led the way, rising 2.7 percent after losing 5.1 percent in the previous two sessions. Shopify Inc. added 5.8 percent.
     The energy sector jumped 2.5 percent as crude prices closed out their best week since June. Torc Oil & Gas Ltd. posted the biggest gain, adding 7.4 percent.
In other moves:
Stocks
* Hudson’s Bay Co. jumped 16 percent, the most since early 2015. Chairman Richard Baker bought a 9.8 percent stake in the retailer from a Canadian pension fund at a 29 percent premium from Thursday’s close
* Lundin Mining Corp. added 8.4 percent as a trifecta of good news on the economy, interest rates and trade tensions boosted investor confidence in industrial metals
* Quarterhill Inc. rose 8.9 percent. A U.S. federal judge declined to overturn a jury verdict that Apple infringed two patents, but lowered the damages
Commodities
* Western Canada Select crude oil traded at a $12.60 discount to WTI
* Gold fell 0.7 percent to $1,285.80 an ounce FX/Bonds
* The Canadian dollar strengthened 0.7 percent to C$1.3394 per U.S. dollar
* The Canada 10-year government bond yield rose 10 basis points to 1.93 percent, the biggest gain since mid-2017
US
By Jeremy Herron and Vildana Hajric
(Bloomberg) — U.S. stocks surged the most in a week and the dollar erased gains after Jerome Powell signaled the latest market turbulence will keep the Federal Reserve in a dovish stance.
The S&P 500 jumped to a three-week high after the central bank chairman said Fed policy is flexible and officials are “listening carefully” to the financial markets. Equities started the day in rally mode after data showed a spike in hiring last month that was accompanied by faster wage growth and an increase in participation. A reading on the services sectors topped estimates, adding to optimism a day after stocks plunged on concern growth was slowing.
The 10-year Treasury yield rose back above 2.6 percent. The dollar gave back gains sparked by jobs data. Gold fell and oil rose.
Powell’s remarks added to the debate over whether the Fed should adopt a full-on dovish stance just a day after factory data weakened by the most since the recession — fueling speculation the central bank might actually cut rates this year.
While the jobs report may ease immediate concern that the world’s biggest economy is careening toward a recession, investors are also keeping an eye on a host of other risks.
Trade remains in focus, with mid-level officials from the U.S traveling to China for talks next week just as tariff effects have started to show up in corporate profit warnings. China moved to secure liquidity for its slowing economy, and political drama in Washington persists, with the shutdown
showing no signs of resolution.
“The strong December jobs report is a net positive for stocks because investors’ biggest concern has been slowing growth,” said Alec Young, managing director of global markets research at FTSE Russell. “December’s strong job gains help ease that concern. It’s hard to square recession worries with the
strongest job growth we’ve seen in years.”
Friday’s optimism over the economy and trade did little to dent the rout that’s hit global equities in the past month, with major averages off well over 10 percent from previous highs.
Treasury yields that topped 3.2 percent in November now sit 60 basis points lower as investors reassess the prospects for growth in 2019. Gold has surged to multimonth highs and crude has plunged, adding to angst that demand is flagging.
Here are some events investors may focus on in coming days:
* 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 Index climbed 2.7 percent as of 10:38 a.m. New York time.
* The Dow Jones Industrial Average advanced 600 points, and the Nasdaq 100 added 3.4 percent.
* The Stoxx Europe 600 Index rose 2 percent to the highest in more than two weeks on the biggest advance in a week.
* Germany’s DAX Index surged 1.8 percent to the highest in two weeks on the biggest jump in more than a month.
* The MSCI Asia Pacific Index fell 0.2 percent.
* The MSCI Emerging Market Index rose 0.9 percent, the biggest advance in a week.
Currencies
* The Bloomberg Dollar Spot Index rose 0.3 percent.
* The euro fell 0.4 percent to $1.1353.
* The British pound was flat at $1.2626.
* The Japanese yen decreased 0.8 percent to 108.483 per dollar.
Bonds
* The yield on 10-year Treasuries climbed eight basis points to 2.64 percent, the largest increase in more than a week.
* The two-year rate jumped nine basis points to 2.47 percent.
* Germany’s 10-year yield climbed four basis points to 0.196
percent.
* The spread of Italy’s 10-year bonds over Germany’s fell two
basis points to 2.683 percentage points.
Commodities
* West Texas Intermediate crude climbed 2.3 percent to $48.16 a barrel, hitting the highest in more than two weeks with its fifth consecutive advance.
* Gold futures plunged 0.8 percent to $1,284.60 an ounce, the first retreat in more than a week and the biggest dip in two weeks.

Have a great evening.

Be magnificent!

As ever,

Karen

“Peace is when times doesn’t matter as it passes by”. Maria Margarethe Anna Schell

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