July 16, 2020 Newsletter

Dear Friends,

Tangents:
On July 16, 1918, Russia’s Czar Nicholas II, his wife and their five children were executed by the Bolsheviks. Go to article »
July 16, 1940-Adolf Hitler orders preparations for the invasion of Britain (Operation Sealion).

Scientists accidentally create nightmare-fuel fish. (h/t Alistair Lowe)-Bloomberg.

Everything you ever wanted to know about the “Wedding Crashers” football scene.-Bloomberg.

The future of meat is chicken. -Bloomberg.

BTW: The Eiffel Tower reopened its top floor with a message of hope to the world: “We still have places where people can have a good time.” Watch. –Bloomberg Quick Takes.

PHOTOS OF THE DAY

Jacobite Steam Train goes over the Glenfinnan viaduct. The first voyage for the Harry Potter train since Coronavirus lockdown has been eased in Scotland. This 84-mile round trip is described as one of the greatest railway journeys in the world.
CREDIT: CHARLOTTE GRAHAM FOR THE TELEGRAPH

A child runs away from a wave breaking on the seafront in Sevastopol, Crimea
CREDIT: REUTERS/ALEXEY PAVLISHAK

Local attraction names Sammy the Seal is seen on Preston beach in Weymouth, Britain
CREDIT: FINNBARR WEBSTER/GETTY IMAGES
Market Closes for July 16th , 2020 

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1945, a device innocuously called “Gadget” was tested successfully near Alamogordo, N.M. It was the world’s first atomic bomb, and it detonated at 5:29:45 a.m., releasing 20 kilotons of energy and vaporizing its 100-foot steel support tower. The Nuclear Age had secretly begun.
Canada
By Aoyon Ashraf
(Bloomberg) — Canadian equities fell on Thursday, led by tech stocks. In the U.S., the technology-dominated Nasdaq-100 fell more than the Dow Industrials and the S&P 500.
The S&P/TSX Composite index fell 0.2% in Toronto. Technology’s underperformance was driven mainly by a 3% decline in Shopify Inc. after Citi started research coverage of the e-commerce platform with a neutral rating and said that current valuation leaves “little room for upside.”
Oil snapped its two-day rally amid a weaker demand outlook underscored by OPEC+ producers’ decision to taper production cuts and U.S. economic data that signaled a slowing recovery in the labor market.
Cirque du Soleil Entertainment Group agreed to back a purchase agreement from a group of its secured lenders, setting the minimum acceptable bid in its court-supervised sales process.
Canada’s active fund managers that were once seen as best among their peers have had trouble holding on to that status.
Very few of them have consistently outperformed regardless of their asset class or style focus, according to S&P Dow Jones Indices. For stock pickers who were in the top quartile five years ago, none of them maintained that status annually through 2019, the firm said in its inaugural Canada Persistence Scorecard report.
Commodities
* Western Canada Select crude oil traded at a $6.55 discount to West Texas Intermediate
* Spot gold fell 0.8% to $1,796.40 an ounce
FX/Bonds
* The Canadian dollar fell 0.5% to C$1.3574 per U.S. dollar
* The 10-year government bond yield fell about 3 basis point to 0.505%

By Bloomberg Automation:
(Bloomberg) — The S&P/TSX Composite fell 0.2 percent at 16,024.50 in Toronto. The move follows the previous session’s increase of 1 percent.
Shopify Inc. contributed the most to the index decline, decreasing 3.1 percent. Ballard Power Systems Inc. had the largest drop, falling 6.3 percent.
Today, 146 of 221 shares fell, while 70 rose; 5 of 11 sectors were lower, led by information technology stocks.
Insights
* So far this week, the index rose 2 percent
* The index declined 2.9 percent in the past 52 weeks. The MSCI AC Americas Index gained 6.3 percent in the same period
* The S&P/TSX Composite is 10.8 percent below its 52-week high on Feb. 20, 2020 and 43.4 percent above its low on March 23, 2020
* The S&P/TSX Composite is up 2.9 percent in the past 5 days and rose 3.3 percent in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 20.1 on a trailing basis and 24.8 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.3 percent on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$2.44t
* 30-day price volatility little changed to 20.04 percent compared with 20.05 percent in the previous session and the average of 20.03 percent over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Information Technology | -37.1102| -2.3| 1/9
Materials | -23.2621| -1.0| 10/40
Energy | -6.3865| -0.3| 4/19
Real Estate | -3.9764| -0.8| 4/22
Health Care | -1.7160| -1.0| 3/5
Consumer Staples | 1.4057| 0.2| 6/4
Consumer Discretionary | 1.7852| 0.3| 5/8
Financials | 3.6290| 0.1| 9/15
Utilities | 3.8493| 0.5| 10/6
Communication Services | 11.1257| 1.3| 6/2
Industrials | 11.8059| 0.6| 12/16
US
By Vildana Hajric and Katherine Greifeld
(Bloomberg) — Technology shares pushed U.S. stocks lower for the first time in three days after investors rotated out of this year’s top performers. Treasuries gained with American initial jobless claims posting their smallest weekly decline since March.
The tech-heavy Nasdaq 100’s 0.7% decline was among the largest of major U.S. benchmarks, with Microsoft Corp. and Apple Inc. leading the losses. The information technology was the biggest decliner in the S&P 500, which had gained more than 2% in the past two days. Netflix Inc. slumped in late trading after the streaming service reported fewer subscriber additions than forecast. Futures on the Nasdaq 100 extended losses after the cash market close, with the contracts down 1.4% as of 4:12 p.m. in New York.
“Those valuations have gotten quite a bit ahead of the rest of the market,” said Matt Stucky, portfolio manager at Northwestern Mutual Wealth Management. “With earnings season, that could be the catalyst for a little bit of a pullback in tech. Expectations are moving higher and the companies need to deliver against those expectations.”
Trading volume in the S&P was almost 30% below the average of the prior 30 days. Earlier, the Stoxx Europe 600 Index tracked Asian shares lower as Chinese retail sales in June came in softer than expected, even as the economy returned to growth last quarter. The euro was little changed after the European Central Bank kept its emergency monetary stimulus program unchanged.
The economic data from the U.S. and China served as a reminder of the long road ahead to a full global recovery is quashing optimism seen earlier in the week spurred by progress in developing a coronavirus vaccine. While China is experiencing a modest domestic recovery, the world’s second-largest economy remains vulnerable to setbacks as shutdowns continue to hamper activity across the globe.
”There’s definitely a push-pull,” said Chris Gaffney, president of world markets at TIAA Bank. “Certain sectors of the economy are going well and the question now is with this second spike that we’re seeing — and have already seen — and as some states start to tighten back up, while we don’t expect a full lockdown it certainly puts questions on just how quickly this recovery is going to occur.”
Elsewhere, oil retreated from a four-month high after the OPEC+ alliance confirmed it would start tapering output cuts from next month.
These are the main moves in markets:
Stocks
*The S&P 500 Index decreased 0.3% to 3,215.58 as of 4:02 p.m. New York time.
*The Dow Jones Industrial Average dipped 0.4% to 26,734.57, the first retreat in a week.
*The Nasdaq Composite Index declined 0.6% to 10,473.83.
*The MSCI All-Country World Index fell 0.6% to 545.82, the biggest fall in more than a week.
Currencies
*The Bloomberg Dollar Spot Index rose 0.3% to 1,207.48, the largest advance in more than a week.
*The euro decreased 0.3% to $1.1381, the first retreat in a week.
*The Japanese yen depreciated 0.4% to 107.33 per dollar, the weakest in more than a week on the largest dip in three weeks.
Bonds
*The yield on two-year Treasuries declined one basis point to 0.15%, the lowest in two months on the biggest decrease in more than two weeks.
*The yield on 10-year Treasuries dipped one basis point to 0.62%.
*Germany’s 10-year yield declined two basis points to -0.47%, the lowest in more than two weeks.
Commodities
*West Texas Intermediate crude fell 1.1% to $40.73 a barrel.
*Gold depreciated 0.7% to $1,796.11 an ounce, the weakest in more than a week on the biggest dip in almost six weeks.
*Copper climbed 0.5% to $2.90 a pound.
–With assistance from Claire Ballentine and Amena Saad.
Have a great night.

Be magnificent!
As ever,

Carolann

Chance fight ever on the side of the prudent.
                      -Euripides, c.485-406 BCE.

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