March 1, 2018 Newsletter

Dear Friends,

Tangents:
On March 1^st…
1872: Yellowstone National Park was established.
1961: Peace Corps was established.
1999: UN Land Mine Ban.
2010: Vancouver Olympics end with Canada winning 14 gold medals, the most for any country (host or otherwise) in any Winter Olympics.
2018: Scientists say they’ve found traces of the first bits of light ever seen in the universe, thought to emit from the first stars formed after the Big Bang. -from CNN.
PHOTOS OF THE DAY

The crew on board the Royal Navy’s RFA Tidespring tweeted this photo taken from the bridge of the brand-new tanker battling the Beast From The East.
CREDIT: THE TELEGRAPH

Members of the Household Cavalry return to their barracks as snow falls in London.
CREDIT: THE TELEGRAPH

Little Lola Sunshine wears a fur scarf and Miu Miu sunglasses in Paris during Paris Fashion Week.
CREDIT: THE TELEGRAPH

A frost-covered window of a building at the summit of the highest German mountain, the Zugspitze, in Garmisch-Partenkirchen, Germany.
CREDIT: THE TELEGRAPH
Market Closes for March 1st, 2018

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1935, the first U.S. savings bond was issued after Secretary of the Treasury Henry Morgenthau observed that the U.S. lacked a government-sponsored savings plan like those of France and Great Britain.
Number of the Day
€1.24 billion
The 2017 loss posted by Spotify Technology SA, which released financials as part of its Wednesday filing for an unusual public offering. The music-streaming company’s revenue is growing sharply but its losses are ballooning, disclosures show.
Canada
By Kristine Owram
     (Bloomberg) — Canadian stocks fell further after posting their worst month since December 2015, with consumer discretionary and industrials losing the most ground.
     The S&P/TSX Composite Index fell 49 points or 0.3 percent to 15,393.95, the lowest close in more than two weeks. Consumer discretionary stocks led the decline, losing 1 percent with Magna International Inc. down 2.7 percent.
     Industrials fell 1 percent, led by a 5.3 percent decline at Westshore Terminals Investment Corp. Trade fears heated up again Thursday after U.S. President Donald Trump said he’d impose steep tariffs on steel and aluminum imports.
     In other moves:
                             Stocks
* Cascades Inc. tumbled 14 percent, the most since 2009.
Adjusted earnings per share missed the lowest estimate
* Canopy Growth Corp. jumped 9.5 percent to the highest in a month after the cannabis producer’s CEO said he’s planning a Nasdaq listing
* Crescent Point Energy Corp. lost 8.3 percent, the most since 2016, after posting an unchanged 2018 capex forecast
* Stelco Holdings Inc. lost 5.1 percent, the most since its November IPO, after Trump said he’d impose steep steel tariffs
                          Commodities
* Western Canada Select crude oil traded at a $24.70 discount to WTI, the narrowest gap in two and a half weeks
* Gold fell 1 percent to $1,305.20 an ounce, the lowest since December
                            FX/Bonds
* The Canadian dollar was little changed at C$1.2828 per U.S.dollar
* The Canada 10-year government bond yield fell six basis points to 2.18 percent, the lowest since mid-January
US
By Sarah Ponczek and Kailey Leinz
     (Bloomberg) — U.S. stocks plunged and Treasuries climbed Thursday after U.S. President Donald Trump promised to impose substantial tariffs on foreign metals, drawing a rebuke from a manufacturing industry group and the European Commission.
     The S&P 500 Index briefly fell below its 100-day moving average while the Dow Jones Industrial Average dropped more than
400 points as Trump added to earlier confusion on the fate of proposed tariffs by announcing the levies in a meeting with industry executives. The Institute for Supply Management called the proposal a “big mistake.” European Commission President Jean-Claude Juncker said Europe will respond “firmly” to any new tariffs. And Federal Reserve Chairman Jerome Powell earlier praised the benefits of trade.
     “Trump made the announcement about tariffs and it dropped,” said Donald Selkin, New York-based chief market strategist at Newbridge Securities Corp. “It would raise the price of autos, look at the auto stocks. It would raise the price for items that use steel and aluminum.”
     The market reaction was uneven. While industrial companies in the S&P 500 tumbled, U.S. Steel Corp. advanced 5.7 percent and steel-products company Nucor Corp. gained 3.5 percent.
Automakers led decliners as Ford Motor Co. and General Motors Co. added to losses already sparked by weak sales numbers. The Russell 2000 Index posted the smallest loss among major indexes as the bulk of its members derive most of their sales in the U.S.
     “You could see earlier in the day when investors thought the president was going to have a listening session regarding tariffs the market went positive,” said Quincy Krosby, chief market strategist at Prudential Financial Inc. “All of those stocks that have steel or metal, they slid up. Then of course when he announced tariffs you saw the market pull back.”
     The news sparked a bout of volatility, with the Cboe’s VIX measure climbing past 23 from less than 20 earlier. The euro, British pound and yen all rose versus the greenback, which pared earlier gains. Mexico’s peso fell. And Treasuries surged, with yields on the 10-year note sliding to 2.8 percent.
     “Bonds are providing a nice shock absorber here,” said Gene Tannuzzo, a portfolio manager at Columbia Threadneedle Investments. “In late January, stocks and bonds were declining together as fears of higher interest rates impacted risk appetite. Now, however, it appears that bond yields have risen sufficiently high to allow them to provide a buffer on bad days for stocks.”
     Investors also digested Senate testimony by the Fed’s Powell, who called for gradual interest rate hikes and said the economy wasn’t overheating. Traders were on edge during Powell’s second day of Congressional testimony after his comments on Tuesday about the strength of the U.S. economy opened the door to speculation that the central bank plans to quicken the pace of monetary tightening, a move investors worry could derail growth.
     “In many ways, the Fed is going to be considering things against a backdrop of an economy that’s expanding above trend with excess demand and no spare capacity, and against a backdrop of pretty strong fiscal stimulus,” said David Page, senior economist at AXA Investment Managers. “The Fed is actually going to be wondering whether or not four rate hikes are going to be enough this year.”
     Elsewhere, the Stoxx 600 Index fell as some companies missed their earnings estimates and manufacturing data showed that growth may have peaked. The U.K. pound was flat after the European Union published a draft Brexit treaty, squaring off with British Prime Minister Theresa May. The Australian dollar dropped after business investment unexpectedly fell in the final three months of last year.
     Here are some key events scheduled for this week:
* Federal Reserve Bank of New York President Bill Dudley speaks this week.
* U.K. Prime Minister Theresa May delivers a speech Friday on Britain’s relationship with the European Union. 

     These are the main moves in markets:
                             Stocks
* The S&P 500 fell 1.4 percent to 2,677.28.
* The Dow Jones Industrial Average dropped 1.7 percent, or 427 points, to 24,597.83.
* The Stoxx Europe 600 slid 1.3 percent.
* The MSCI All-Country World Index declined 1 percent.
                           Currencies
* The Bloomberg Dollar Spot Index slipped 0.3 percent.
* The euro added 0.6 percent to $1.2264.
* The British pound gained 0.1 percent to $1.3773.
                             Bonds
* The yield on 10-year Treasuries declined five basis points to 2.81 percent.
* Germany’s 10-year yield retreated one basis point to 0.64 percent, the lowest in five weeks.
* Britain’s 10-year yield lost three basis points to 1.47 percent, the lowest in a month.
                          Commodities
* West Texas Intermediate crude decreased 0.4 percent to $61.38 a barrel.
* Gold declined 0.2 percent to $1,315.57 an ounce, the lowest in seven weeks.
–With assistance from Joanna Ossinger, Randall Jensen, Jeremy Herron and Andrew Dunn.

Have a wonderful evening everyone.

Be magnificent!

As ever, 

Carolann

Adversity does teach you who your real friends are.
                          -Lois McMaster Bujold, b. 1949 

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM
Portfolio Manager &
Senior Vice-President 

Queensbury Securities Inc.,
St. Andrew’s Square,
Suite 340A, 730 View St.,
Victoria, B.C. V8W 3Y7 

Tel: 778.430.5808
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