May 1, 2020 Newsletter

Dear Friends,

Tangents: Happy Friday!

May1, 1707~Acts of Union comes into force, uniting England and Scotland to form the United Kingdom of Great Britain.

On May 1, 2011, President Barack Obama announced that Osama Bin Laden, the mastermind of the September 11 attacks, was killed by United States forces in Pakistan. Go to article »

From The New York Times:
Protected between two days free from work, Saturday nights traditionally represent “the fleeting opportunity for pure self-fulfillment,” writes our critic-at-large Amanda Hess. Needless to say, things are a little different these days.
We had 33 photographers show us what the world looks like on the weekend.

PHOTOS OF THE DAY

A female seal Shakitto and the quarium keeper Manami Suka stroll together as a part of their practice for their show at an empty visitors’ area at the Aqua Park Shinagawa which is closed to the public amid the coronavirus disease outbreak in Tokyo, Japan.
CREDIT: REUTERS/ISSEI KATO

Stone stacks built by members of the public whilst out on the daily walks during the COVID-19 pandemic, are pictured on the beach in Whitley Bay, north east England
CREDIT: OLI SCARFF/AFP VIA GETTY IMAGES

Captain Tom Moore waves to a Spitfire and Hurricane from RAF Coningsby in a spectacular flypast from his garden with his daughter Hannah, on his 100^th birthday
CREDIT: TELEGRAPH MAY1, 2020

Aircraft take off from RAF Coningsby, Hurricane LF363 flown by OC BBMF Squadron Leader Mark Discombe and Spitfire Mk356 flown by Flight Lieutenant Andy Preece. For the 100^th birthday of Captain Tom Moore
CREDIT: CHARLOTTE GRAHAM FOR THE TELEGRAPH
Market Closes for May 1^st, 2020 

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1956, seven local investors contributed $105,000 to an investment partnership that a 25-year-old was about to start running from his bedroom in a rented house on Underwood Avenue in Omaha. The name of the “kid” running the fund was Warren Buffett.
Canada
By Divya Balji
(Bloomberg) — It’s a feat even the U.S. market hasn’t achieved. Canadian stocks have risen for six straight weeks — and now equity strategists are calling time.
Some say the S&P/TSX Composite Index’s 36% rally from a March low should be seen as a natural market bounce, after a ferocious drop in reaction to the economic damage of the Covid-19 pandemic.
“The strength of the April rally was a function of how violent the sell-off was in March,” Greg Taylor, chief investment officer at Purpose Investments, said by phone. “So given how much March was a disaster, we had to expect some sort of bounce coming out of it and that’s what April really was.”   Thursday and Friday’s sessions were not pretty. The benchmark posted its biggest two-day slump since the March 23 low. That will stoke the debate on whether investors who’ve pushed up stock prices have appropriately accounted for a financial landscape utterly changed by the pandemic.
A sector rotation may have helped to extend the rally. What started off as a great run for gold miners and tech companies — Shopify Inc. passed C$100 billion in market cap– has now faded with cyclical stocks taking over.
* Canada officially entered a recession in the first quarter of 2020, according to the C.D. Howe Institute. The second quarter is certain to be worse, as millions of people have lost jobs or income due to measures that have closed stores, restaurants and other businesses.
* Most companies that have reported quarterly financials have cautioned that second quarter figures will be worse. Some point to higher costs, other point to dire demand as consumers stay at home.
“Investors may find themselves increasingly vulnerable to disappointment in the near-term — particularly as there’s still plenty of bad news that needs to be absorbed on the economic and corporate earnings front,” said Candice Bangsund, portfolio manager of global asset allocation at Fiera Capital Corp. in Montreal. “As the re-opening of the economy is likely to be both staggered and temperamental, setbacks on the road to recovery are probable and could potentially trigger some period bouts of volatility and risk aversion in the near-term,” Bangsund said. Brian Belski is staying optimistic, adding that the stock market is traditionally six months ahead of the economy.
Investors are too focused on risk and not the reward, the chief investment strategist of BMO Capital Markets said by phone. Tiff Macklem was appointed to succeed Stephen Poloz as head of the Bank of Canada. The government opted for a veteran of the 2008-2009 financial crisis to deal with the economic fallout from the pandemic.
In more economic gloom, the nation’s budget deficit will mushroom to C$252.1 billion ($181 billion) in 2020-21 – the largest on record, according to estimates from the Parliamentary Budget Officer.
Up next week: economists will be watching the April employment survey, which comes on May 8, for a full picture of how hard the labor force has been hit in Canada. Other key economic data due next week include April housing starts.

By Bloomberg Automation:
(Bloomberg) — The S&P/TSX Composite fell for the second day, dropping 1.1 percent, or 160.4 to 14,620.34 in Toronto.
Toronto-Dominion Bank contributed the most to the index decline, decreasing 1.9 percent. Ag Growth International Inc. had the largest drop, falling 8.9 percent.
Today, 185 of 230 shares fell, while 43 rose; 9 of 11 sectors were lower, led by financials stocks.
Insights
* So far this week, the index rose 1.4 percent
* The index declined 11 percent in the past 52 weeks. The MSCI AC Americas Index lost 4.6 percent in the same period
* The S&P/TSX Composite is 18.6 percent below its 52-week high on Feb. 20, 2020 and 30.9 percent above its low on March 23, 2020
* S&P/TSX Composite is trading at a price-to-earnings ratio of 14.9 on a trailing basis and 18.9 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.6 percent on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$2.25t
* 30-day price volatility fell to 54.00 percent compared with 54.68 percent in the previous session and the average of 80.00 percent over the past month
==============================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
==============================================
Financials | -91.7671| -2.1| 0/25
Energy | -52.5083| -2.6| 2/28
Industrials | -32.7510| -1.9| 0/31
Utilities | -15.9825| -2.0| 0/15
Real Estate | -13.2282| -2.9| 1/25
Information Technology | -12.9423| -1.1| 4/6
Communication Services | -8.8171| -1.0| 1/7
Consumer Discretionary | -6.8395| -1.2| 2/13
Health Care | -5.2004| -3.5| 1/9
Consumer Staples | 1.6660| 0.3| 3/8
Materials | 77.9786| 3.7| 29/18
US
By Claire Ballentine and Vildana Hajric
(Bloomberg) — U.S. stocks dropped as investors began May pondering profit warnings tied to the coronavirus and a ratcheting up of tension with China.     The dollar rose as a risk-off mood prevailed.
The S&P 500 Index fell almost 3%, leaving it a tad lower for the week, after sobering comments from Amazon.com Inc. and Apple Inc. about the pandemic’s impact. Exxon Mobil Corp. slumped after posting its first quarterly loss in at least 32 years. The dollar posted its first increase since last week.
Equities also retreated in the U.K., one of the few open markets in Europe as other countries celebrated May Day, and the pound gave back some of this week’s gains as Prime Minister Boris Johnson pledged a “comprehensive plan” to lift the country’s lockdown, with details due next week.
While the S&P 500 posted its best month since 1987 in April — spurred by a slowdown in coronavirus infections and $8 trillion in promised stimulus initiatives globally – earnings reports and economic data are serving a reminder of lasting pain. Amazon warned of a possible second-quarter loss, while
Apple omitted an earnings forecast for the first time in more than a decade. Federal Reserve Bank of Dallas President Robert Kaplan warned of a “severe” contraction from the effects of coronavirus. “Earnings continued to be a minefield,” said Bryce Doty, portfolio manager at Sit Investment Associates Inc. “You don’t really know what is going to happen because there is so little clarity.”
The advance in the dollar followed U.S. President Donald Trump reviving an attack on China, speculating it could have spread the coronavirus and threatening trade tariffs. Trump is exploring blocking a government retirement fund from investing in Chinese equities considered a national security risk, a person familiar with the internal deliberations said.
Elsewhere, West Texas oil posted its first weekly gain in about a month as global production cuts began to take effect. Stocks slumped in Tokyo and Sydney. Most Asian markets didn’t trade.
These are the main moves in markets:
Stocks
* The S&P 500 Index fell 2.8% at the close of trade in New York.
* The Nasdaq Composite Index declined 3.2%.
* The U.K.’s FTSE 100 Index dropped 2.3%.
* The MSCI All-Country World Index fell 2.4%.
Currencies
* The Bloomberg Dollar Spot Index rose 0.4%.
* The euro gained 0.2% to $1.0979.
* The British pound declined 0.7% to $1.2505.
* The Japanese yen strengthened 0.3% to 106.82 per dollar.
Bonds
* The yield on 10-year Treasuries slipped one basis point to 0.63%.
* Britain’s 10-year yield rose two basis points to 0.24%.
Commodities
* West Texas Intermediate crude climbed 4.9% to $19.77 a barrel.
* Gold rose 0.8% to $1,699.98 an ounce.
–With assistance from Christopher Anstey and Cormac Mullen.
Have a wonderful weekend everyone.

Be magnificent!
As ever,

Carolann

Only the mediocre are always at their best.
                   -Jean Giraudoux, 1882-1944

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