March 27, 2020 Newsletter

Dear Friends,

Tangents: Happy Friday!
2009 – President Barack Obama launched a fresh effort to defeat al-Qaida terrorists in both Pakistan and Afghanistan, ordering in 4,000 more troops. Go to article »

From The Financial Times:
Top 10 operas to watch from your sofa — for free
From the Royal Opera to the Vienna State Opera, companies have dug into their archives to make legendary performances available online

-from CNN today:
Doughnuts featuring pictures of immunologist Dr. Anthony Fauci are becoming a hit
You know you’ve really made it as the voice of reason during a pandemic when people start putting your face on pastries.
If you wear contact lenses, you should probably switch to glasses to reduce virus transmission risk
You know how you’re not supposed to be touching your face right now? That includes your eyeballs.

We choose our joys and sorrows long before we experience them.  -Kahil Gibran, 1883-1931
PHOTOS OF THE DAY

Lincoln Cathedral lit up in blue in a gesture of thanks to the hardworking NHS staff who are trying to battle coronavirus
CREDIT: LINCOLN CATHEDRAL/PA

Apricot trees in blossom are covered with ice in the middle of the Swiss Alps mountains, in Saillon, Canton of Valais, Switzerland. Fruit trees are sprayed with water to protect them from freezing, when the temperature drops bellow zero on cold spring nights.
CREDIT: LAURENT GILLIERON/EPA-EFE/SHUTTERSTOCK

Two huge circles carved out of heather which have mysteriously appeared on moorland at Keighley Gate, West Yorkshire. The circles were spotted by photographer Mark Pearson as he viewed footage from a drone he was flying to capture heather burning.
CREDIT: MARK PEARSON/GUZELIAN

Remarkable images that show lightning strikes raining down on Dubai have been caught on camera by a photographer. Intense thunderstorms saw lighting crashing to the ground and into buildings in the United Arab Emirates City. Atlantis, The Palm hotel, appeared to only narrowly avoid being struck.
CREDIT: ASIF ALI YOUSAFZAI/SWNS.COM
Market Closes for March 27^th ,2020 

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1980, Texas oil barons Nelson Bunker Hunt and W. Herbert Hunt failed spectacularly to corner the market in silver. After the brothers drove the price up, new supplies came flooding into the market, catching the Hunts by surprise. In a single day, silver plunged from $21.62 to $10.80 an ounce, and Bache Halsey Stuart Shields, the stock brokerage firm affiliated with the Hunts, nearly went under.
Canada
By Divya Balji, Sandra Mergulhao and Paula Sambo
(Bloomberg) — To say it’s been a volatile week doesn’t quite describe it. For traders, it was mayhem.
For a brief 24 hours this week, it looked like Canada’s stocks would technically crawl out of a bear market. Those hopes came crashing down Friday as rapidly deteriorating economic conditions gripped markets even as central banks and governments rushed to announce more stimulus measures.
The week started with the S&P/TSX Composite Index plunging to its lowest in almost nine years after Ontario and Quebec — the nation’s economic heavyweights — ordered the shutdown of non-essential businesses. That was followed by a 12% rebound on Tuesday, the biggest jump since at least 1977, as stimulus packages eased concerns about a global economy in freefall. After another big rally Wednesday, the Canadian benchmark was a mere 335 points away from a 20% rise — the standard measure for a bull market.
For a couple of hours on Thursday, the TSX actually crossed that level, but backed away from it at the close. Then the kicker on Friday — the index slumped as recession fears escalated. “We believe the moves higher that we have seen over the past couple of days would fall in the camp of ‘bear-market rally’,” said Philip Petursson, chief investment strategist at Manulife Investment Management. “The overall move by the market is very typical of what we see in advance of a recession.”
The three-day surge earlier in the week was “just a recovery from oversold panic drop. A bull market is real when the virus recedes and we can go back to work,” said Barry Schwartz, chief investment officer at Baskin Wealth Management. Governments are spending unprecedented amounts of money to stem a downward spiral that is showing up in some shocking weekly unemployment claims — 3.28 million in the U.S. and almost 1 million in Canada. Trudeau’s government added tens of billions Friday to a stimulus package that had already topped C$100 billion. In the U.S., a $2 trillion package passed the House and is on its way for Donald Trump’s signature. Trillions more will be spent in the rest of the world.
Central banks are also in shock-and-awe mode: the Bank of Canada announced a large scale asset purchase program and cut
its benchmark rate to a record low. Coronavirus cases in Canada have quadrupled this week with about 40 deaths announced so far. About 80% of Canadians believe it will be at least three months, if not much longer, before their lives go back to normal, according to an Angus Reid Institute survey released Thursday.
Even after a week in which it rose about 7%, the Canadian benchmark is still down about almost 30% from its Feb. 20 record high. Breadth is abysmal with only three and seven members of the index trading above their 50 and 200-daily moving averages respectively. And there’s limited evidence fundamentals are improving as more  companies announce the temporary suspension of operations, pulling their first quarter and annual forecasts.
“Who would dare to issue a forecast at all?” David Rosenberg, founder and chief economist of Rosenberg Research and Associates, said in an interview on BNN Bloomberg television. It’s too soon to rule out another setback, said Kurt Reiman, who sets strategy for the Canadian arm of BlackRock Inc. “Elevated levels of implied volatility suggest we should be prepared for large market moves, both up and down.” Stick with strong and high quality companies that are sheltered from big volatile market moves, Reiman added. Petursson is applying a similar strategy. “While we believe the markets can potentially see further downside, we believe it is less than what we have already experienced and at these levels we are starting to view equities with more optimism. There are some great bargains to be had.” “We suggest dipping a toe in rather than jumping in waist deep as the market may be prone to further downside,” Petursson said. But “for those clients that have been looking to increase their equity weight, we believe the markets are presenting those opportunities now.”
“Investor sentiment is almost certain to remain extremely fragile in the near-term as investors weigh the latest developments on the Covid-front,” said Candice Bangsund,
portfolio manager at Fiera Capital Corp. While concrete and sizable stimulus measures should help revive investor sentiment, it’s too soon to call a bottom, Bangsund said. “With little visibility on the depth and duration of the economic fallout as the virus continues to spread across Europe and the U.S., investors will be beholden to virus-related headlines that are likely to inflict more periodic episodes of volatility and the erratic market gyrations that come with it.”
By Bloomberg Automation:
(Bloomberg) — The S&P/TSX Composite fell 5.1 percent at 12,687.74 in Toronto. The move follows the previous session’s increase of 1.8 percent.
Toronto-Dominion Bank contributed the most to the index decline, decreasing 5.8 percent. Pembina Pipeline Corp. had the largest drop, falling 17.9 percent. Today, 203 of 230 shares fell, while 27 rose; 10 of 11 sectors were lower, led by financials stocks.
Insights
* In the past year, the index had a similar or greater loss five times. The next day, it advanced after all five occasions
* So far this week, the index rose 7.1 percent, heading for the biggest advance in at least 10 years
* This quarter, the index fell 26 percent, heading for the biggest decline in at least 10 years
* This month, the index fell 22 percent, heading for the biggest decline in at least 10 years
* The index declined 21 percent in the past 52 weeks. The MSCI AC Americas Index lost 11 percent in the same period
* The S&P/TSX Composite is 29.4 percent below its 52-week high on Feb. 20, 2020 and 13.6 percent above its low on March 23, 2020
* S&P/TSX Composite is trading at a price-to-earnings ratio of 12.6 on a trailing basis and 13 times estimated earnings of its members for the coming year
* The index’s dividend yield is 4.1 percent on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$2.04t
* 30-day price volatility rose to 86.62 percent compared with 85.77 percent in the previous session and the average of 50.81 percent over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | -219.0133| -5.1| 0/26
Energy | -135.8359| -8.0| 1/29
Materials | -100.5854| -6.0| 1/46
Industrials | -71.7065| -4.5| 2/29
Information Technology| -54.3845| -5.7| 1/9
Utilities | -30.1698| -4.1| 0/16
Consumer Discretionary| -24.3345| -5.0| 0/16
Consumer Staples | -22.7187| -3.8| 2/9
Communication Services| -22.2703| -2.7| 2/6
Health Care | -3.1998| -2.3| 5/5
Real Estate | 0.7890| 0.2| 13/12
US
By Claire Ballentine and Vildana Hajric
(Bloomberg) — U.S. stocks weathered a late-Friday plunge to post their best week in over 10 years, buoyed by an unprecedented stimulus package meant to blunt the economic impact of the coronavirus pandemic. Treasuries gained and oil slipped.
The S&P 500 Index climbed 10% this week, its biggest gain since March 2009, on the strength of a record three-day rally. But that rally sputtered Friday, and the benchmark plunged just minutes before the close, illustrating how tenuous any gains can be, even with a $2 trillion spending deal heading to the president’s desk for his signature. The S&P remains 25% below its February record, and the Cboe Volatility Index is on track for a 10th straight close above 60. It averaged 18.7 in the past year.       The Dow Jones Industrial Average had its best week since 1938, even as all but two of its 30 members declined Friday.
Treasuries gained after the Federal Reserve said it would reduce the pace of its purchases next week. That announcement may have contributed to the stock market’s late-day swoon. “When some of the short-term traders saw that, they decided to take some chips off the table in front of the weekend,” said
Matt Maley, strategist at Miller Tabak & Co. “They probably decided it was a good idea to pare back some of their long
positions in front of the weekend.”
Investors had piled back into the battered U.S. equity market this week on speculation that the massive relief bill would offset some of the pandemic’s impact on businesses and households. A debate has ensued over whether that furious rally represented unwarranted optimism or the start of a long-term upswing.
What remains clear is that the virus has ground the American economy to a near total halt, with new jobless claims spiking above 3 million as large areas of the country remain virtually locked down to slow the spread of the infection. A measure of U.S. consumer confidence fell the most since 2008. West Texas crude declined, setting up a fifth straight week of losses. The dollar had its worst five-day skid since 2009.
The Stoxx Europe 600 Index was led lower by banks and real estate shares after the region’s leaders struggled to agree on a concrete strategy to contain the fallout of the pandemic. Asian equities mostly rose, though shares in Australia slumped. The pound gained even as U.K. Prime Minister Boris Johnson said he had tested positive for coronavirus.
The recent revival of risk appetite looks sure to be tested by the continuing spread of the infection and the crippling effect of business closures. Tokyo is now seeing a surge in cases, while global deaths from the pandemic surpassed 24,000.
The Reserve Bank of India on Friday became the latest central bank to step up emergency action to cushion the economic impact. “It is by no means a given that volatility has ceased to be a feature of global equity markets,” said Paul Markham, global equities portfolio manager at Newton Investment Management. “Markets will oscillate between the reassurance that governments and central banks will be standing by to support them and the uncertainty of both the duration and depth of what will undoubtedly be a significant economic impact.”
These are the main moves in markets:
Stocks
* The S&P 500 Index decreased 3.4% as of 4 p.m. New York time.
* The Stoxx Europe 600 Index dropped 3.3%.
* The MSCI Asia Pacific Index rose 1.9%.
Currencies
* The Bloomberg Dollar Spot Index fell 0.6%.
* The euro gained 0.9% to $1.1127.
* The British pound increased 2.1% to $1.2461.
* The Japanese yen gained 1.6% to 107.87 per dollar.
Bonds
* The yield on 10-year Treasuries declined 17 basis points to 0.67%.
* Germany’s 10-year yield dipped 11 basis points to -0.474%.
* Britain’s 10-year yield fell three basis points to 0.367%.
Commodities
* Gold decreased 0.6% to $1,622.33 an ounce.
* West Texas Intermediate crude decreased 4.4% to $21.59 a barrel.
–With assistance from Yakob Peterseil and Adam Haigh.
Have  wonderful weekend everyone.

Be magnificent!
As ever,

Carolann
For time is the longest distance between two places.
 -Tennessee Williams, 1911-1983

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