March 18, 2020 Newsletter

Dear Friends,

Tangents:

First the good news: The futures are pointing to higher stock prices for Thursday morning due to the ECB announcing a massive stimulus package.
Now the reality of today: S&P closed down 5% after yesterday’s 5% gain, Nasdaq closed down 4.7% and the TSX gave up 7.6% today; oil, West Texas Intermediate closed down 25% to $20.37/barrel, and I never thought I’d ever live to tell you this, but the 3-month US Treasury had a negative yield today.  That means a three month Treasury Bill guaranteed the investor a loss at maturity.  T-bills are discount instruments, meaning you buy them at a discount and they mature at par, e.g. $97 investment matures at $100.  Today, the 3-month bill maturing at $100 cost the investor $104.

Sometimes life hits you in the head with a brick.  Don’t lose faith. -Steve Jobs, 1955-2011

What some people are using to stay entertained…
The internet. There are several places that offer free trials to stream movies and shows. The Met is offering free streaming of operas. Museums have virtual tours. And celebrities (like Ben Platt, John Legend, and Keith Urban) hosted virtual dance parties and concerts. Oh, and if you’re still trying to figure out how to best WFH (with or without kids around), we have a guide for that. –The Skimm.

All the virtual concerts, plays, museums and other culture you can enjoy from home 
Ballgown and monocle not required (unless you’re feeling fancy). -CNN.

On March 18, 1965, the first spacewalk took place as Soviet cosmonaut Aleksei Leonov left his Voskhod 2 capsule and remained outside the spacecraft for 20 minutes, secured by a tether. Go to article »

PHOTOS OF THE DAY

Flowers are stored prior to their destruction at the flower auction in Aalsmeer.
CREDIT: LEX VAN LIESHOUT/ AFP

A labourer sprays disinfectant in Jordan’s archaeological city of Petra south of capital Amman.
CREDIT: KHALIL MAZRAAWI/AFP

Fons Americanus, by artist Kara Walker, on show in the near empty Turbine Hall at Tate Modern, all Tate Galleries will be shut until May.
CREDIT: DOMINIC LIPINSKI/PA

A woman sits on the sand at Arpoador beach in Rio de Janeiro, Brazil. Firemen began blaring recordings that urge beachgoers to stay home as a measure to prevent the spread of the new coronavirus , on Monday, one day before Rio’s Gov. Wilson Witzel decreed a state of emergency.
CREDIT: AP PHOTO/SILVIA IZQUIERDO

Market Closes for March 18^th ,2020 

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 2008, the Fed cut its short-term interest-rate target three-quarters of a percentage point to 2.25%, sending the Dow industrials up 420 points, or 3.5%, at 12392.66. Shares of Lehman Brothers Holdings, which had been under sharp pressure, soared more than 46% after it released first-quarter earnings.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell 7.6 percent at 11,721.75 in Toronto. The index dropped to the lowest closing level in at least a year. The move follows the previous session’s increase of 2.6 percent. Today, financials stocks led the market lower, as all sectors lost; 217 of 230 shares fell, while 12 rose. Royal Bank of Canada contributed the most to the index decline, decreasing 10.2 percent. Inter Pipeline Ltd. had the largest drop, falling 29.8 percent.
Insights
* In the past year, the index had a similar or greater loss three times. The next day, it advanced after all three occasions
* This quarter, the index fell 31 percent, heading for the biggest decline in at least 10 years
* The index declined 28 percent in the past 52 weeks. The MSCI AC Americas Index lost 18 percent in the same period
* The S&P/TSX Composite is 34.8 percent below its 52-week high on Feb. 20, 2020 and 3 percent above its low on March 18, 2020
* The S&P/TSX Composite is down 18 percent in the past 5 days and fell 34 percent in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 11.7 on a trailing basis and 11.2 times estimated earnings of its members for the coming year
* The index’s dividend yield is 4.4 percent on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$1.94t
* 30-day price volatility rose to 72.33 percent compared with 69.72 percent in the previous session and the average of 27.76 percent over the past month

================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | -317.5019| -7.7| 0/26
Energy | -191.0483| -12.5| 4/26
Materials | -142.8154| -9.1| 1/45
Real Estate | -65.7796| -14.3| 0/25
Industrials | -58.6946| -3.9| 3/28
Utilities | -56.0494| -7.9| 0/16
Consumer Discretionary| -51.1344| -12.1| 0/16
Communication Services| -38.9377| -4.8| 0/8
Information Technology| -25.2771| -3.0| 1/9
Health Care | -10.9771| -9.1| 0/10
Consumer Staples | -5.5805| -1.0| 3/8
US
By Jeremy Herron
(Bloomberg) — Financial markets spasmed, sending U.S. stocks down more than 5% and Bloomberg’s dollar index up to a record, as the economic fallout from the pandemic outpaced the massive response from governments and central banks. The S&P 500 fell as much as 9.8%, before a late-session bounce trimmed the decline, with investors craving more government spending to offset the impact from the virus. After markets closed, the Senate cleared the second major bill responding to the coronavirus pandemic and White House economic adviser Larry Kudlow said the government might take an equity position as part of an aid package. Futures on the S&P500 that trade till 4:15 p.m. in New York trimmed declines. Sovereign debt tumbled around the world and municipal bonds extended the deepest rout since 1987 as markets braced for the potential flood of spending. Oil sank 24% to an 18-year low. The dollar strengthened a seventh straight day. The pound hit its lowest level against the greenback since 1985. Dollar-funding markets remained strained, although improved from extreme levels in recent days. Stocks fell to session lows after Trump offered few details at a press briefing on the specifics his Treasury secretary is discussing with Congress. The Federal Reserve dusted off crisis- era programs to stabilize financial markets.
Governments have pledged or are considering massive fiscal support to offset the economic shock from the pandemic, with the Trump administration moving toward a big package, but the virus continues to spread at a pace that is forcing massive shutdowns across the globe. “The missing fundamental ingredient for a sustainable recovery in risk appetite is some evidence that the growth of global Covid-19 infection rates is peaking,” said Paul O’Connor, head of multi-asset at Janus Henderson Investors. “Clearly, we are not there yet.” The planned U.S. stimulus could amount to $1.2 trillion, aiming to stave off the worst impact of a crisis that already looks set to plunge many of the world’s economies into recession. Meantime, the Federal Reserve reintroduced additional crisis-era tools to stabilize financial markets. Those responses came after stresses appeared in the short-term funding markets. “I don’t think we’re out of the woods yet in terms of liquidity,” Mark Konyn, chief investment officer at AIA Group in Hong Kong, told Bloomberg TV. “It’s a question of when the fiscal measures will have the most efficacy.”

These are the main moves in markets:
Stocks
*The S&P 500 Index fell 5.2% to 2,398 as of 4 p.m. New York time.
*The Dow Jones Industrial Average decreased 6.3% to the lowest in more than three years.
*The Nasdaq Composite Index dipped 4.7%.
*The MSCI All-Country World Index declined 7% to the lowest in more than three years.
Currencies
*The Bloomberg Dollar Spot Index gained 2.1%, hitting the highest in more than three years with its seventh straight advance and the largest rise in almost four years.
*The Japanese yen depreciated 0.7% to 108.43 per dollar, the weakest in more than two weeks.
*The euro declined 1.5% to $1.0836, the weakest in more than three weeks.
*The British pound decreased 4.1% to $1.1561, reaching the weakest on record with its seventh consecutive decline.
Bonds
*The yield on 10-year Treasuries rose 14 basis points to 1.21%.
*Britain’s 10-year yield increased 20 basis points to 0.756%, the highest in almost 10 weeks on the biggest climb in more than six years.
*Germany’s 10-year yield advanced 16 basis points to -0.27%, hitting the highest in eight weeks with its seventh straight advance.
*Ireland’s 10-year yield gained 15 basis points to 0.499%, reaching the highest in about 10 months on its fifth consecutive advance.
Commodities
*West Texas Intermediate crude fell 17% to $22.52 a barrel.
*Gold depreciated 2.2% to $1,494 an ounce, the weakest in 12 weeks.
–With assistance from Robert Brand and Vildana Hajric.
Have a great night.

Be magnificent!
As ever,

Carolann

The soul is dyed the  color of its thoughts.  Think only on those things that are in line with your principles and can bear the light of day.  The content of your character is your choice.  Day by day, what you do is who you become. -Heraclitus, c. 540 BCE-c. 480 BCE.

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