March 13, 2020 Newsletter

Dear Friends, 
 
Tangents: Happy Friday!

It’s Friday the 13th. For all our sakes, let’s hope it’s a lucky one. 
 
Well, it has so far turned out to be a lucky Friday for investors with the markets gaining back  most of yesterday’s declines – +~10%.  The Bank of Canada slashed interest rates another 50 basis points to 0.75% and many people in my world figure they’ll be zero before long.  With most dividend paying blue chip shares yielding 5%/annum or more, many very undervalued on a fundamental basis, it’s a pretty good option compared to negative real yields on fixed income securities.
 
1969 – Apollo 9 returned to Earth after a mission to test the lunar module.. Go to article »
 
3.141592653589793238462643383279502… and counting.
Pi, as we all learned in school (and are reminded every March 14, on Pi Day, which is tomorrow), is defined as the ratio of a circle’s circumference to its diameter. The famous mathematical ratio is estimated to more than 22 trillion digits.
We looked back at some of our past coverage on this auspicious day with an essay by the mathematician Steven Strogatz, who wrote that π is the perfect symbol for our species’ long effort to tame infinity, and another by the columnist Natalie Angier on the multiplicities of infinity in science. -The New York Times.
 
PHOTOS OF THE DAY

A worker makes her way along rows of daffodils, removing any rogue varities, at Taylors Bulbs in Holbeach, Lincolnshire. PA Photo. The fourth generation family company plant over 35 million bulbs every year, and have held the Royal Warrant at Bulb Growers to Her Majesty The Queen since 1985.
CREDIT: JOE GIDDENS/PA WIRE

Dancers from Riverdance at the Queen’s House in Greenwich, London where they have been invited by Tourism Ireland to perform at iconic locations across the capital to celebrate St. Patrick’s Day.
CREDIT: DAVID PARRY/PA WIRE

A woman dressed as a priestess lights the Olympic flame during the Olympic ceremony in ancient Olympia, ahead of Tokyo 2020 Olympic Games.
CREDIT: ARIS MESSINIS/AFP VIA GETTY IMAGES

Members of the International Space Station (ISS) expedition, NASA astronaut Christopher Cassidy (L), Roscosmos cosmonauts Anatoly Ivanishin (C) and Ivan Vagner (R) attend their final exams at the Russian cosmonaut training center in Star City outside Moscow, Russia.
CREDIT: YURI KOCHETKOV/EPA-EFE/SHUTTERSTOCK

Market Closes for March 13^th ,2020 
 

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1986, Microsoft went public at an initial offering price of $21 a share, raising $61 million just one day after Oracle’s own IPO.  Microsoft closed the day at $28.
 
Note: I just calculated that  a $1000 investment in Microsoft at the IPO price in 1986 is worth $2.43 million US today!   That’s a fairly strong endorsement of the merits of investing for the long term! -Carolann.
The computer can’t tell you the emotional story.  It can give you the exact mathematical design, but what’s missing is the eyebrows. -Frank Zappa, 1940-1993
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 9.5 percent at 13,702.88 in Toronto. The move was the biggest since rising 9.8 percent on Oct. 14, 2008 and follows the previous session’s decrease of 12.3 percent. Today, financials stocks led the market higher, as 10 of 11 sectors gained; 194 of 230 shares rose, while 36 fell. Toronto-Dominion Bank contributed the most to the index gain, increasing 17.9 percent. Frontera Energy Corp. had the largest increase, rising 24.4 percent.
Insights
* So far this week, the index fell 15 percent, heading for the biggest decline in at least 10 years
* This quarter, the index fell 20 percent, heading for the biggest decline in at least 10 years
* The index declined 15 percent in the past 52 weeks. The MSCI AC Americas Index lost 5.4 percent in the same period
* The S&P/TSX Composite is 23.7 percent below its 52-week high on Feb. 20, 2020 and 10.1 percent above its low on March 12, 2020
* S&P/TSX Composite is trading at a price-to-earnings ratio of 13.6 on a trailing basis and 12.6 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.8 percent on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$1.91t
* 30-day price volatility rose to 62.91 percent compared with 54.70 percent in the previous session and the average of 19.65 percent over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 586.0638| 14.9| 26/0
Energy | 248.5573| 15.6| 29/1
Industrials | 118.6833| 7.7| 30/1
Communication Services | 82.7408| 10.7| 7/1
Utilities | 64.9010| 9.5| 16/0
Consumer Staples | 58.5818| 10.4| 11/0
Information Technology | 38.6161| 4.4| 10/0
Consumer Discretionary | 27.2557| 5.6| 12/4
Real Estate | 23.7070| 4.7| 25/0
Health Care | 11.0142| 8.7| 8/2
Materials | -52.2308| -3.6| 20/27
US
By Sarah Ponczek and Katherine Greifeld
(Bloomberg) — U.S. stocks jumped the most since 2008 as President Donald Trump joined other world leaders in seeking to reassure investors that they’ll step up efforts to protect the economy from the coronavirus fallout. The S&P 500 rose more than 9%, providing some respite after stocks’ worst day since 1987, as Trump declared a national emergency to help combat the virus, moved to prop up energy prices, declared a moratorium of federal student-loan interest and said the private sector will help with efforts to expand testing. That added to optimism about a robust public policy response after the Federal Reserve said it was buying $37 billion of bonds across maturities. Oil soared as Trump said the U.S. will step up purchases for strategic reserves. The dollar surged along with Treasury yields and stress in the credit markets showed signs of easing. Precious metals fell, with silver down almost 9% and palladium posting its worst week on record. After days of no or inadequate action, policy prescriptions came fast Friday. As Trump announced his plans, Congress was also working on a relief bill. The European Union prepared to suspend government spending rules, and regulators in Italy and Spain banned short-selling on some stocks. China’s central bank said it would pump in $79 billion to bolster the economy.
     The latest on the policy efforts and other virus updates. Other markets remained exceptionally volatile. The yen tumbled. Ten-year Treasuries swung from gains to losses. Sovereign bonds sank across most of Europe for a second day amid criticism of European Central Bank measures to address the pandemic. The dollar headed for its best week since 2016. “It’s possible we’re just recovering a portion of yesterday’s losses on the idea that there were no terrible headlines this morning,” said Christopher Jacobsen, a strategist at Susquehanna Financial Group. “The market had priced in the extreme dour outcome and the lack of news flow this morning to confirm that worst-case scenario resulted in just a bit of a relief rally.” Even with Friday’s gains, global equities posted their worst week since 2008 as investors price in a severely weaker economic outlook. Cases are continuing to grow across the world and restrictions on people and businesses are weighing on sentiment. The Bank of Japan on Friday followed an earlier move from the Federal Reserve to inject liquidity. “It seems that the more severe things become in the short term, the more extreme will be the fiscal and monetary policy response,” Mark Dowding, chief investment officer at BlueBay Asset Management, wrote to investors. “It is very conceivable that the full boost from such measures will only really kick in just as activity rebounds, with pent up demand leading to a turbo-charged recovery in the second half of the year in the wake of an economic contraction in the context of the first half.”
These are the main moves in markets:
Stocks
* The S&P 500 Index climbed 9.2% at the close of trading in New York.
* The Stoxx Europe 600 Index added 1.4%.
* The MSCI Asia Pacific Index dipped 2.5%.
* The MSCI All-Country World Index rose 5.3%.
Currencies
* The Bloomberg Dollar Spot Index increased 1%.
* The euro decreased 0.8% to $1.1097.
* The Japanese yen weakened 3.4% to 108.33 per dollar.
Bonds
* The yield on 10-year Treasuries rose 18 basis points to 0.98%.
* Germany’s 10-year yield jumped 20 basis points to -0.55%.
Commodities
* West Texas Intermediate crude rose 5.6% to $33.31 a barrel.
* Gold fell 3.3% to $1,524.49 an ounce.
–With assistance from Gregor Stuart Hunter, Cormac Mullen, Adam Haigh and Todd White.
Have a wonderful weekend everyone.
 
Be magnificent!
As ever,
 
Remember that everyone you meet is afraid of something, loves something and has lost something.
                                                                                   -H. Jackson Brown Jr., b. 1941
 

Carolann
 
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