June 26, 2020 Newsletter

Dear Friends,

Tangents: Happy Friday!

Take a virtual walk through the Dolomites, a spectacular Italian mountain range. – The NY Times.

Abner Doubleday, invented baseball, b. 1819
Pearl S. Buck, writer, b. 1892.

June 26, 1948 – The Berlin Airlift began in earnest as the United States, Britain and France began ferrying supplies to the isolated western sector of Berlin after the Soviet Union cut off
land and water routes. Go to article »

For humans, a backyard garden is often a place of tranquillity. But if you’re a bee, it’s a minefield: Airborne seeds, shifting leaves and lurching flowers are basically projectiles and trap doors.

Researchers have looked into how bees navigate on blustery days or through tight spaces, but a new study pieced together how they move through obstacles in wind (a bee obstacle course built for the study can be seen above). Honeybees, for example, appear to high-tail it and hope for the best.  -The New York Times.

PHOTOS OF THE DAY

A girl watches fireworks exploding behind the Moscow State University in Moscow during celebrations marking the 75^th anniversary of the Soviet victory over Nazi Germany in World War Two.
CREDIT: ALEXANDER NEMENOV/AFP

A couple enjoy the hot weather on their canal boat on Bridgewater Canal in Walton Hall, Cheshire as Thursday could be the UK’s hottest day of the year with scorching temperatures forecast to rise even further.
CREDIT: PETER BYRNE/PA WIRE

A golden sunrise behind boats moored on the River Medway in Kent, UK. Britain basked in the hottest day of 2020 ahead of possible storms later in the week.
CREDIT: GARRETH PACKHAM/BOATPICS/TNG

Original description: Embargoed to 1900 Thursday June 25 Undated handout artist’s impression issued by Mark Garlick of two “super-earths” that have been discovered orbiting one of the brightest red dwarf stars in the sky.
CREDIT: MARK GARLICK/ PA WIRE

A picture shows an artpiece “Breathing Flower” by South Korean Choi Jeong Hwa displayed in the Gardens of La Seine Musicale as part of the third edition of the exhibition “Les Extatiques” in Boulogned -Billancourt, outside Paris. The 2020 edition of contemporary art exhibition “Les Extatiques” is held from June 26 to October 4, 2020, of the esplanade of La Defense and the gardens of La Seine Musicale.
CREDIT: FRANCOIS GUILLOT/AFP VIA GETTY IMAGES
Market Closes for June 26^th, 2020 

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1981, Gail M. Pankey became the first African-American female member of the New York Stock Exchange.
Canada
By Divya Balji and Sandra Mergulhao
(Bloomberg) — The wild ride of Canada’s stock market in 2020 shows no signs of abating soon.
That’s the message from strategists who are expecting choppy months ahead as investors worry about a second coronavirus wave and plunging corporate profits amid a global recession, trade tensions and U.S. elections.
“Now that we’re coming into the summer, it’s going to be more of a second guess of really what’s going on because we’ve still got a ton of volatility ahead of us,” said Greg Taylor, chief investment officer at Purpose Investments. “We’re not out of the woods of volatility. It’s already been a volatile year for markets, but I don’t think it’s going to end anytime soon.”
As quickly as the Canadian market plunged into bear-market territory in March, it surged even more rapidly into a bull zone. Since the March 23 bottom, the S&P/TSX Composite Index has climbed 35% — with plenty of bumps along the way. It’s still down 11% for the year.
Market swings paint a picture of a volatile first half. The TSX has moved 1% or more in either direction 54 days so far in 2020, the most since 2011, according to data compiled by Bloomberg. There have been eight such days in June, though the gains and losses have mostly canceled each other out: the index is flat this month.
That doesn’t mean that shares won’t go higher.
“While the largest laggards during the bear market have been among the best performing names since the trough, only 20% have seen a percentage recovery greater than the overall market, suggesting to us that these names still likely have plenty of room for recovery,” Brian Belski, chief market strategist at BMO Capital Markets, said in a report.
He noted that some of the sectors with the biggest influence on the benchmark, such as energy and financials, haven’t recovered even half of their bear-market declines. Investors are reluctant to price in a recovery in the price of crude, and they might still be waiting for the “mortgage deferral cliff.”
“We believe that as investors gain clarity and facts, these sectors stand a very good chance to be key drivers of TSX performance over the next few quarters,” he said.    There might also be more room for gold miners to rise as investors continue to seek haven assets, with the price of the precious metal rallying more than 16% this year.
Here’s what happened in Canada this week:
Markets — Just the Numbers
*The S&P/TSX Composite fell 1.8% this week as concerns around a second coronavirus wave hurt sentiment.
*The Canadian 10-year bond yield slipped to 0.51%, while two-year bond yield dropped to 0.29%.
*The Canadian dollar was among the worst performing currencies in the Group of 10 this week, weakening 0.4% against the greenback.
Economy
*Canada’s strong credit rating took a blow as Fitch Ratings stripped the nation of its AAA status amid a spike in emergency spending for Covid-19, making it the first top-rated country to be downgraded by the ratings company during the pandemic.
*S&P Global Ratings still kept its rating at AAA, making Canada only one of two countries left in the Group of Seven to hold that status; Germany is the other. Moody’s Investors
*Service also gives Canada its highest rating.
*In Tiff Macklem’s first speech as Bank of Canada governor, he said Canada’s economy will take a long time to fully recover from the coronavirus lockdowns, requiring the central bank to continue purchases of government bonds to keep interest rates at historical lows indefinitely.
*Next week, economists and market watchers will get a gauge of how deep the recession has gone: April gross domestic product numbers will look grim as a nationwide lockdown sent the economy spiraling.

By Bloomberg Automation:
(Bloomberg) — The S&P/TSX Composite fell 1.7 percent at 15,188.98 in Toronto. The index dropped to the lowest closing
level since June 11 after the previous session’s increase of 1 percent.
Royal Bank of Canada contributed the most to the index decline, decreasing 2.1 percent. Corus Entertainment Inc. had the largest drop, falling 16.6 percent.
Today, 182 of 222 shares fell, while 39 rose; 10 of 11 sectors were lower, led by financials stocks.
Insights
* In the past year, the index had a similar or greater loss 20 times. The next day, it advanced 12 times for an average 3.5 percent and declined eight times for an average 4.1 percent
* So far this week, the index fell 1.8 percent
* This quarter, the index rose 14 percent, heading for the biggest advance in at least 10 years
* This month, the index was little changed
* The index declined 6.9 percent in the past 52 weeks. The MSCI AC Americas Index gained 2.4 percent in the same period
* The S&P/TSX Composite is 15.5 percent below its 52-week high on Feb. 20, 2020 and 35.9 percent above its low on March 23, 2020
* S&P/TSX Composite is trading at a price-to-earnings ratio of 19 on a trailing basis and 24.3 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.4 percent on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$2.35t
* 30-day price volatility rose to 20.08 percent compared with 19.40 percent in the previous session and the average of 21.04 percent over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | -119.0899| -2.6| 0/25
Energy | -45.3241| -2.4| 0/24
Utilities | -21.6534| -2.8| 0/16
Communication Services| -19.5539| -2.3| 0/8
Information Technology| -12.4084| -0.8| 0/10
Consumer Staples | -11.3341| -1.7| 1/10
Industrials | -11.1601| -0.6| 3/25
Consumer Discretionary| -10.8580| -2.1| 0/13
Real Estate | -7.3284| -1.5| 2/25
Health Care | -6.5494| -3.9| 0/9
Materials | 8.1035| 0.4| 33/17
US
By Claire Ballentine
(Bloomberg) — U.S. stocks fell to the lowest level in more than two weeks and Treasuries rose as a resurgence in new virus infections began halting progress on reopening the American economy. Advertiser defections sent Facebook Inc. to its biggest drop since March, worsening the market’s decline.
The S&P 500 dropped 2.4% as Texas and Florida halted drinking at bars and Arizona reported a surge in infections. Data showed consumer spending surged by a record in May as Americans spent relief payments, though incomes slumped. Big banks slid after the Federal Reserve capped dividends and banned buybacks through September.
“People should be somewhat concerned about what is going on in the Sun Belt and the dramatic increase in cases we’ve seen,” said Yousef Abbasi, Global market strategist at StoneX.
Elsewhere, copper posted its sixth consecutive weekly advance, with prices briefly topping $6,000 a ton. The dollar strengthened for a third day. The 10-year Treasury yield fell as low as to 0.63% U.S. markets had largely shrugged off concerns that a second wave of the pandemic could force policymakers to reverse plans to re-open, though signs are mounting that states in the South and Southwest may not be able to avoid rolling back some economic activity. Investors remain convinced that the Fed is
ready to amp up its assistance should the economy start to sputter anew.
Record Virus Cases in U.S. Defy States’ Efforts at Control The Fed “is going to support this market one way or the other,” Sandy Villere, portfolio manager at Villere & Co., said on Bloomberg TV. “There are going to be a few more dips to come.
It’s amazing, the market doesn’t care about fundamentals or earnings at this point, they care about the pandemic and the pandemic only.”
In remarks on Friday, European Central Bank President Christine Lagarde said the recovery from the coronavirus pandemic will be “restrained” and will change parts of the economy permanently. While the worst of the crisis might be over, it’ll take time for the “phenomenal” jump in savings to trickle into higher investment and spending, she said.
Oil traded below $39 a barrel in New York as Russia slashed exports of its flagship crude Urals to the lowest in at least 10 years. Gold registered a third weekly advance, the longest winning run since January.
These are some of the main moves in markets:
Stocks
*The S&P 500 Index declined 2.4% to 3,009.02 as of 4:02 p.m. New York time, the lowest in more than two weeks.
*The Dow Jones Industrial Average fell 2.8% to 25,015.48, the lowest in a month on the biggest fall in more than two weeks.
*The Nasdaq Composite Index declined 2.6% to 9,757.22, the lowest in more than a week on the largest fall in more than two weeks.
Currencies
*The Bloomberg Dollar Spot Index climbed 0.3% to 1,222.10, the highest in four weeks.
*The euro advanced 0.1% to $1.1228.
*The Japanese yen was little changed at 107.21 per dollar, the weakest in more than a week.
Bonds
*The yield on two-year Treasuries decreased two basis points to 0.17%, the lowest in more than two weeks on the largest dip in more than two weeks.
*The yield on 10-year Treasuries fell five basis points to 0.64%, the lowest in six weeks on the biggest fall in more than two weeks.
*Germany’s 10-year yield declined one basis point to -0.48%, the lowest in more than a month.
Commodities
*West Texas Intermediate crude fell 1.4% to $38.17 a barrel.
*Gold strengthened 0.4% to $1,770.76 an ounce, the highest in almost eight years.
Have a wonderful weekend everyone.

Be magnificent!
As ever,

Carolann

To understand the heart and mind of a person, look not at
what he has already achieved, but at what he aspires to.
                                          -Kahlil Gibran, 1883-1931

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