July 8, 2019 Newsletter

Dear Friends,

Tangents:
July 8, 1857 – Finance – The Bank of Toronto founded by distiller George Gooderham, with a branch at 78 Church Street and a staff of three; its first president is James Grant Chewett; in 1860, it opens its first branch outside of Ontario in Montreal; will merge with The Dominion Bank on February 1, 1955 to form the Toronto-Dominion Bank. Toronto, Ontario

The Poem:
Basho

An old silent pond…
A frog jumps into the pond,
Splash! Silence again.

Basho

Farewell!  Like a bee
reluctant to leave the deeps
of a peony.

WIMBLEDON:

 PHOTOS OF THE DAY

A woman in Vietnamese traditional costume walks among lotus flowers adjacent to the West Lake in Hanoi, Vietnam
CREDIT: WANG DI

Aerial photo of tourists and farmers peel lotus seeds together at the opening ceremony of the 4^th China Jianning County, southeast China’s Fujian Province.
CREDIT: SONG WEIWEI

One of the eagles catching a fish. Bald eagles swoop over the surface of an Alaskan lake to pluck from beneath the water. Photographs show the birds gliding just inches above the water before plunging their talons in to grab herring. The bald eagles even try to steal each other’s fish, sometimes leaving their own dinner behind to pursue a rival’s catch instead if it’s bigger than theirs. Professional bird photographer Alan Murphy photographed the impressive hunters in Kachemak Bay in Alaska, USA.
CREDIT: ALAN MURPHY/BIA/SOLENT NEWS
Market Closes for July 8^th, 2019

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1932, In the icy grip of the Great Depression, the Dow closed at 41.22—its lowest level since June 1897. Since its peak in September 1929, the Dow had lost 89% of its value. The average stock traded at 0.49 times book value and 9.7 times reported earnings; the average dividend yield, among stocks that could afford to pay one, was 12.5%.
Canada
By Kristine Owram
(Bloomberg) — Canadian equities fell for a second session as a regulatory blunder weighed on pot stocks and investors continued to assess the likelihood of central-bank rate cuts.
The S&P/TSX Composite Index lost 0.5% to 16,462.95. Health- care stocks led the decline, falling 1.8% as CannTrust Holdings Inc. tumbled 23%, the most on record. Canadian regulators found the cannabis company grew pot in unlicensed parts of its greenhouse, resulting in a hold on inventory that one analyst said could pressure sales into 2020.
Technology was one of the bright spots in Monday’s session as Shopify Inc. added 2.7%. The e-commerce platform could be a viable competitor to Amazon.com Inc., according to analysts at KeyBanc Capital Markets.
In other moves:
Stocks
* SNC-Lavalin Group Inc. lost 6.3%, the most in more than two months, after BMO Capital Markets cut its price target on the stock amid expectations for a weak second quarter
* Bombardier Inc. fell 3.1%. Brazil’s antitrust regulator fined the company for taking part in an alleged cartel related to subway works
* Rogers Communications Inc. slid 0.7% and BCE Inc. lost 0.9%. Both stocks were downgraded at JPMorgan
Commodities
* Western Canada Select crude oil traded at a $12.15 discount to WTI, the narrowest gap in more than three weeks
* Gold was little changed at $1,400 an ounce
FX/Bonds
* The Canadian dollar weakened 0.1% to C$1.3096 per U.S. dollar
* The Canada 10-year government bond yield rose 1 basis point to 1.58%
US
By Laura Curtis and Olivia Rinaldi
(Bloomberg) — U.S. equities fell as investors took a cautious approach to a week full of central bank activity. Treasuries edged lower and gold retreated.
The S&P 500 slipped for a second day after Friday’s blow- out jobs report altered market calculus for Federal Reserve rate cuts. Tech and health-care shares led decliners, with Apple Inc. falling 2.1% after a downgrade. U.S.-listed shares of BASF SE tumbled more than 5% after the German company cut its forecast. Shorter-term Treasuries fell and gold slipped fell for a third day, while the dollar edged higher versus major peers. The main focus for markets this week looks to be Fed Chairman Jerome Powell, who will testify in Congress just days
after the latest payroll report signaled that the American economy remains on track.
U.S. stocks hit a record last week and a bond rally took yields to multiyear lows amid expectations the Fed will lower interest rates by at least a quarter of a percentage point at its July meeting. Joe “JJ” Kinahan, the chief market strategist at TD Ameritrade, sees a high likelihood of a July cut.
“If they don’t do something, it’s going to be mightily
disappointing,” he said. “I think, September, you have high probabilities also — but there may be a little bit of waiting to see what the data says going into September.”
The Stoxx Europe 600 Index slipped, with Deutsche Bank AG surrendering earlier gains as traders weighed a plan to cut its workforce by one-fifth. The euro fell after German industrial- production data saw a slight pick-up in May. Greek bonds rose amid hope a new government elected over the weekend will prove to be market-friendly.
Elsewhere, oil gained amid heightened geopolitical risks in the Middle East. Emerging-market shares were dragged down by the Asia sell-off. Turkey’s lira fell after President Recep Tayyip Erdogan’s shock decision to replace the country’s central bank governor, which has fueled concern the regulator could lower borrowing costs more than expected.
Here are some key events coming up:
* U.K. Conservative Party members start voting Monday to chooseTheresa May’s successor. Front-runner Boris Johnson and Jeremy Hunt will appear at events through the week, including a televised debate on July 9.
* Federal Reserve Chairman Jerome Powell testifies before
Congress on monetary policy and the state of the U.S. economy on Wednesday (the House of Representatives) and Thursday (the Senate).
* Fed minutes are due on Wednesday, ECB minutes on Thursday.
* A key measure of U.S. inflation — the core consumer price index, due Thursday — is expected to have increased 0.2% in June from the prior month, while the broader CPI is forecast to remain unchanged.
* U.S. producer prices are due on Friday.
Here are the main moves in markets:
Stocks
* The S&P 500 Index decreased 0.5% as of 4 p.m. New York time.
* The Nasdaq 100 lost 0.7% and the Dow Jones Industrial Average fell 0.4%.
* The Stoxx Europe 600 Index declined 0.1%.
* Germany’s DAX Index dipped 0.2%.
* The MSCI Emerging Market Index fell 1.3%, the biggest fall in more than six weeks.
Currencies
* The Bloomberg Dollar Spot Index gained 0.1%.
* The euro fell 0.1% to $1.1218, the weakest in almost three weeks.
* The Japanese yen decreased 0.2% to 108.672 per dollar, the weakest in more than five weeks.
* The Turkish lira declined 1.9% to 5.7392 per dollar, the biggest decrease in two months.
Bonds
* The yield on 10-year Treasuries rose more than one basis point to 2.05%.
* The two-year rate rose three basis points to 1.89%, while 30- year yields fell two basis points to 2.53%.
* Germany’s 10-year yield was flat at -0.366%.
Commodities
* West Texas Intermediate crude was flat near $57.50 a barrel.
* Gold futures slipped 0.4% to $1,394.80 an ounce.
–With assistance from Emily Barrett.
Have a great night.

Be magnificent!
As ever,

Carolann

Great things are done by a series of small things brought together.
                                               -Vincent Van Gogh, 1853-1890

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