June 11, 2020 Newsletter

Dear Friends,

Tangents:
Richard Strauss, composer, b. 1864
Jacques Cousteau, undersea explorer, b. 1910

Fine dining will never disappear, as long as there are foodies. — Bobby Ghosh, Bloomberg.

Archaeologists find London’s oldest theater.-Bloomberg.

On June 11, 1942, the United States and the Soviet Union signed a lend lease agreement to aid the Soviet war effort in World War II. Go to article »

PHOTOS OF THE DAY

A general view of an interactive Rain Vortex at the closed attraction in Jewel Changi Airport, in Singapore.
CREDIT: SUHAIMI ABDULLAH/GETTY IMAGES

A statue of two-time British prime minister Sir Robert Peel in Piccadilly Gardens, Manchester, as a petition has been launched calling for its removal by Manchester City Council in the wake of the Blake Lives Matter protests.
CREDIT: PETER BYRNE/PA

View of a coronavirus-related mural at the San Miguel Chapultepec neighborhood in Mexico City.
CREDIT: ALFREDO ESTRELLA/AFP

Market Closes for June 11th, 2020 

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Federal Reserve officials on Wednesday projected no plans to raise interest rates through 2022 and said they were committed to providing more support to the economy following shutdowns to contain the virus.
Canada
By Aoyon Ashraf, Michael Bellusci and Divya Balji
(Bloomberg) — Canadian stocks tumbled the most since March 27, slumping with global markets on concerns a second-wave of the coronavirus will stir up new economic challenges. The S&P/TSX Composite index fell 4.1% in the third day of losses, its longest losing streak since March 9. All sectors declined, with health care and energy especially weak. The market is still up 34% from this year’s low on March 23. “It’s been a pretty breathless and relentless rally so we wouldn’t be terribly surprised to see a pause or a bit of a pullback,” Brian Madden, portfolio manager at Goodreid Investment said on BNN Bloomberg. “But that’s not to be misunderstood that we’re going back to the depths of the March lows.” “If we’ve learned one thing amidst the pandemic, and policy makers’ response, it’s that they’ve adopted the ‘whatever it takes’ mantra and that ranges from unprecedented fiscal stimulus from the federal government,” Madden said. Crude futures plunged by the most since late April, falling 9.1%. Meanwhile, Air Canada’s Chief Executive Officer Calin Rovinescu said the Canadian government’s rules on travelers are now “disproportionate” as the Covid-19 pandemic eases in many regions. Shares of the airline fell 8.5% Thursday.
Commodities
* Western Canada Select crude oil traded at an $8.50 discount to West Texas Intermediate
* Spot gold fell 0.6% to $1,728.60 an ounce
FX/Bonds
* The Canadian dollar dropped 1.6% to C$1.3620 per U.S. dollar
* The 10-year government bond yield fell 4.8 basis points to 0.52%

By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the third day, dropping 4.1 percent, or 650.41 to 15,050.92 in Toronto. The move was the biggest since falling 5.1 percent on March 27. Today, financials stocks led the market lower, as all sectors lost; 224 of 229 shares fell, while 5 rose. Brookfield Asset Management Inc. contributed the most to the index decline, decreasing 7.5 percent. ShawCor Ltd. had the largest drop, falling 31.9 percent.
Insights
* In the past year, the index had a similar or greater loss seven times. The next day, it advanced six times for an average 5.6 percent and declined 12.3 percent once
* So far this week, the index fell 5.1 percent, heading for the biggest decline since the week ended March 20
* This quarter, the index rose 12 percent, heading for the biggest advance in at least 10 years
* The index declined 7.4 percent in the past 52 weeks. The MSCI AC Americas Index gained 3 percent in the same period
* The S&P/TSX Composite is 16.2 percent below its 52-week high on Feb. 20, 2020 and 34.7 percent above its low on March 23, 2020
* The S&P/TSX Composite is down 3.1 percent in the past 5 days and fell 0.3 percent in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 18.8 on a trailing basis and 25 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.5 percent on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$2.38t
* 30-day price volatility rose to 20.75 percent compared with 18.57 percent in the previous session and the average of 24.61 percent over the past month
================================================================
| Index Points | | Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | -208.5265| -4.4| 1/25
Energy | -135.7419| -6.5| 0/30
Materials | -82.6649| -3.9| 0/47
Industrials | -71.4914| -3.9| 1/30
Utilities | -35.5952| -4.5| 0/16
Communication Services| -26.1342| -2.9| 0/8
Information Technology| -24.3142| -1.8| 0/10
Real Estate | -21.0812| -4.3| 0/26
Consumer Discretionary| -20.9824| -3.7| 0/14
Health Care | -13.9423| -8.5| 0/10
Consumer Staples | -9.9470| -1.5| 3/8
US
By Rita Nazareth, Claire Ballentine and Vildana Hajric
(Bloomberg) — U.S. stocks tumbled the most in 12 weeks as the torrid surge in equities came to a screeching halt amid economic jitters. Treasuries surged with the dollar. The S&P 500 sank almost 6%, approaching the 7% threshold that would trigger an exchange-mandated trading pause. Only one company in the index — supermarket operator Kroger Co. — finished higher. Losses in the Dow Jones Industrial Average were even deeper, with the blue-chip gauge plunging as much as 7.1%. Airlines, cruise and travel shares that soared in recent weeks bore the brunt of the selling. The KBW Bank Index of financial heavyweights slid 9%, and energy producers joined a rout in oil. While much of the equity selling owed to the frantic pace of the recent rally, sentiment did sour as signs mounted that a possible second wave of the pandemic could be taking hold in some states. U.S. jobless claims remained high, underscoring the longer-term challenges caused by the pandemic. The report came out a day after the Federal Reserve provided a dour economic outlook. Treasury Secretary Steven Mnuchin said the U.S. shouldn’t shut down the economy again even if there is another surge in coronavirus cases.
“The move from the bottom in terms of the rally has been so mind boggling. Over the new few weeks, we could see some pullback,” said Solita Marcelli, deputy Americas chief investment officer at UBS Global Wealth Management. “That’s mostly the fears of second wave concerns going higher, also we had the Fed yesterday. Their assessment of the economy was a little bit weaker than what the market expected.” As restrictions are lifted across the country, signs of a second wave of cases have been raising alarms. More than 2 million people in the U.S. have been infected so far. The localized surges have raised concerns among experts even as the nation’s overall case count early this week rose just under 1%, the smallest increase since March. “Sentiment has become much more cautious,” said Shawn Cruz, senior manager of trader strategy at TD Ameritrade. “We actually started to get data that indicated reopenings are going extremely well, and now we’re starting to get some of the headlines that maybe the reopenings are going to at least pause.”
These are some of the main moves in markets:
Stocks
* The S&P 500 sank 5.9% as of 4 p.m. New York time.
* The Stoxx Europe 600 Index slumped 4.1%.
* The MSCI Asia Pacific Index fell 2.1%.
Currencies
* The Bloomberg Dollar Spot Index surged 1.2%.
* The euro decreased 0.7% to $1.1293.
* The Japanese yen appreciated 0.2% to 106.88 per dollar.
Bonds
* The yield on 10-year Treasuries decreased six basis points to 0.67%.
* Germany’s 10-year yield dipped eight basis points to -0.41%.
* Britain’s 10-year yield sank seven basis points to 0.198%.
Commodities
* The Bloomberg Commodity Index fell 1.4%.
* West Texas Intermediate crude decreased 8.7% to $36.17 a barrel.

–With assistance from Adam Haigh, Yakob Peterseil, Todd White, Nancy Moran and Sophie Caronello.

Have a great night.

Be magnificent!
As ever,

Carolann

Without the Fall, there would have been no human drama,
and so no literature, no art, no suffering, no religion,
no laughter, no joy, no sin and no redemption.
                                -Malcolm Muggeridge, 1903-1990

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