January 8, 2019 Newsletter

Dear Friends,

Tangents:
January 8, 1987:  The Dow Jones industrial average closed above 2,000 for the first time, ending the day at 2,002.25. Go to article »
The Dow Jones closed today at 23,787.45, an increase of +1088%  since that 1987 milestone.

1851: Earth’s rotation proved.
1935: Elvis Presley born.
1942: Stephen Hawking , physicist, born.
1947: David Bowie, musician, born.
PHOTOS OF THE DAY

Geese are seen on frozen Lake Buldan Yayla, in Denizli, Turkey. Credit: Sebahatdin Zeyrek/Anadolu Agency/Getty Image

A cheetah chasing a female impala in the Masai Mara National Reserve in Kenya. Credit: Reinhard and Gabi Radke/Caters

The moon is seen in the distance past a paraglider near Ma On Shan peak in Hong Kong. With most young Hong Kongers priced our of the city’s eye-watering property market – often living with parents in cramped flats well into their thirties – paragliding is one of a number of outdoor sports that offers release from the stress of the concrete jungle below. Credit: Anthony Wallace/AFP/Getty Images
Market Closes for January 8^th, 2019

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Canada
By Carolina Wilson
     (Bloomberg) — Canadian stocks gained with the S&P/TSX Composite Index up almost 1 percent in early trading. U.S. stock futures and European equities jumped Tuesday as investors awaited developments on trade talks between the world’s largest economies. All sectors were climbing as of 9:42 a.m. in Toronto, with information technology and consumer discretionary shares gaining most.
     Canada’s merchandise trade deficit widened to the largest in six months in November as crude oil prices fell, Statistics Canada reported Tuesday in Ottawa. The nation posted a C$2.1 billion ($1.6 billion) shortfall during the month, more than double the C$851 million trade gap in October. Exports fell 2.9 percent in November, for the biggest one-month decline in over a year, as oil shipments plunged 18 percent.
Stocks
* New Gold Inc. climbed close to 11 percent on Tuesday morning as J.P. Morgan analyst upgraded the recommendation to neutral form underweight; the company’s Rainy River Mine recorded its best ever quarterly gold production in 4Q
* Toromont Industries fell as much as 4.6 percent, the most in more than two years, as a Canaccord Genuity analyst downgraded the stock to hold from buy
* First Quantum Minerals climbed more than 8 percent
Commodities
* Western Canada Select crude oil traded at a $10.15 discount to WTI
* Gold gained 0.6 percent to $1,277.30 an ounce
FX/Bonds
* The Canadian dollar gained less than 0.1 percent to C$1.3296 per U.S. dollar
* The Canada 10-year government bond yield rose to 1.961%
US
By Reade Pickert and Sarah Ponczek
     (Bloomberg) — U.S. stocks rallied Tuesday as the possibility of progress in trade talks with China overwhelmed skepticism about the financial sector. The dollar rose, Treasuries slumped and crude surged toward $50 a barrel on expectations the market will be tightened by OPEC’s output cuts.
     All major indexes were higher, led by the small-cap Russell 2000 Index for a second day. The S&P 500 Index gained 1 percent on strength in transportation companies, carmakers and telephone stocks. Financials were only major industry group in the benchmark that didn’t rise. Boeing Co. helped lift large-caps with a strong fourth-quarter delivery report. PG&E Corp. was the biggest decliner, dropping 9 percent amid reports that the California utility giant is considering bankruptcy.
     “Talks with China are going very well!” Trump tweeted on Tuesday morning as the countries wrapped up the meetings. However, other reports indicated that the two weren’t closing in on a trade deal. “Any incremental headlines that we receive that imply U.S.- China trade relationships are going better is going to substantially help current sentiment,” said Frances Donald, the head of macro strategy at Manulife Asset Management in Toronto. “From a forward looking perspective, if expectations about US- China trade wars diminish then this will encourage a risk-on environment.”
     In Asia, the MSCI Asia Pacific Index and the MSCI China Index rose slightly. Japanese shares and Hong Kong stocks gained, though equities slid in South Korea. Meanwhile, European shares shrugged off unexpectedly weak German industrial production numbers and worsening euro-area consumer confidence to climb on strength among retailers and carmakers. The common currency remained lower after the data.
     While 2019 is off to an optimistic start, risks remain. The outcome of U.S.-China trade relations still hangs in the balance. Meanwhile, parts of the American government are shut down with lawmakers unable to agree on a budget proposal that President Donald Trump will sign. Trump will deliver a prime- time televised address on Tuesday evening about his demand for a wall along the Mexican border, which is at the heart of the dispute. And in Europe, machinations over Brexit continue.
     “Investors are happy to go with the positive trend in the current environment but remain wary of sharp downside reactions given the moves we’ve seen over the last few weeks and months,” Nick Twidale, chief operating officer at Rakuten Securities Australia, wrote in a note. “Traders are still very much aware that the various geopolitical factors that have been so prevalent in influencing market moves over the last 12 months are still relevant.”
Here are some events investors may focus on this week:
* North Korea’s Kim Jong Un is visiting China ahead of a potential summit with President Trump.
* Wednesday sees the release of minutes from the Federal Reserve’s Dec. 18-19 policy meeting. Chairman Jerome Powell will speak to the Economic Club of Washington D.C. on Thursday.
* Britain’s Parliament resumes a debate on the Brexit withdrawal bill, with Prime Minister Theresa May seeking to avoid defeat in a vote set for the week of Jan. 14.
These are the main moves in markets:
Stocks
* The S&P 500 Index rose 1 percent to 2,574.41, while the Russell 2000 Index gained 1.5 percent.
* The Stoxx Europe 600 Index advanced 0.9 percent to the highest in three weeks.
* The MSCI All-Country World Index climbed 0.7 percent to the highest in more than three weeks.
* The MSCI Emerging Market Index dipped 0.2 percent.
Currencies
* The Bloomberg Dollar Spot Index gained 0.2 percent.
* The euro fell 0.3 percent to $1.1441.
* The Japanese yen was little changed at 108.74 per dollar.
* The British pound declined 0.5 percent to $1.2717.
* The MSCI Emerging Markets Currency Index fell 0.2 percent.
Bonds
* The yield on 10-year Treasuries advanced three basis points to 2.7244 percent.
* Germany’s 10-year yield rose one basis point to 0.226 percent.
* Britain’s 10-year yield added two basis points to 1.274 percent.
Commodities
* The Bloomberg Commodity Index gained 0.5 percent to the highest in almost three weeks on its fifth
straight advance.
* West Texas Intermediate crude advanced 2.4 percent to $49.70 a barrel, the highest in three weeks with its seventh consecutive advance.
* Gold dipped 0.3 percent to $1,285.45 an ounce.
–With assistance from Cormac Mullen, Andreea Papuc and Eddie van der Walt.

Have a great night.

Be magnificent!

As ever,

Carolann

Hope is being able to see that there is light despite all of the darkness.
                                             -Archbishop Desmond Tutu, b. 1931

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