May 15, 2020 Newsletter

Dear Friends,

Tangents: Happy Friday.

From the Frick Museum in NYC –Cocktails with a Curator:

Xavier F. Salomon, Peter Jay Sharp Chief Curator, examines the life and work of French painter François Boucher, with a focus on A Lady on Her Day Bed. He has paired the painting with a French 75.
Watch Now

May 15^th, 1940: Richard and Maurice McDonald opened their first McDonald’s restaurant in San Bernardino, California.

On May 15, 1911, the Supreme Court ordered the dissolution of Standard Oil Company, ruling it was in violation of the Sherman Antitrust Act. Go to article »

PHOTOS OF THE DAY

A boat is seen with flying seagulls as the mist blankets the city at Bosphorus during early evening in Istanbul, Turkey.
CREDIT: ERHAN SEVENLER/ANADOLU AGENCY VIA GETTY IMAGES

A heron is reflected in the clear water of a pond as it plunges its head beneath the surface. The bird was hunting for fish in the shallows in the early misty hours of the morning.  It spent around two hours hunting in water near Bourne in Lincolnshire, UK.
CREDIT: ALI ABDULRAHEEM/SOLENT NEWS & PHOTOS AGENCY

CREDIT: BRITTA PEDERDSEN/ DPA/COVER IMAGES
Market Closes for May 15^th, 2020 

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1878, the Tokyo Stock Exchange Co. was established.
Canada
By Divya Balji
(Bloomberg) — After seven dizzying weeks of gains, Canada’s stock market is at an impasse.
Two back-to-back days of heavy losses this week was enough to snap the S&P/TSX Composite Index’s winning streak as health officials warned on premature reopening’s, Wall Street heavyweights called for caution and trade tensions between the
U.S. and China heightened.
Investors wagering on negative interest rates may be getting ahead of themselves as Federal Reserve Chairman Jerome Powell and other central bankers dismissed going below zero.
“We’ve effectively moved from the ‘shock and awe’ phase associated with massive fiscal and monetary stimulus to the ‘aw, shucks’ phase when investors recalibrate to the potential difficulties associated with containing and recovering from the global pandemic,” said Kurt Reiman, who sets strategy for the Canadian arm of BlackRock Inc.
Case in point: Asian economies that have seen some of the most success quelling the coronavirus are now facing resurgences. It’s a painful reminder that as countries open up again and people resume normal life, flare-ups are likely. Closer to home, Quebec had to push back the time frame to restart the economy in Montreal as the city and its suburbs became Canada’s biggest Covid-19 hotspot. In contrast, Ontario announced it would begin to reopen most stores, except for those in shopping malls.
The S&P/TSX Composite gained Friday, but was down 2.2% for the week, trimming its gains to 30% from the low on March 23. “It’s normal to see a pullback in markets in any environment, especially given the highly uncertain backdrop created by the Covid-19 pandemic,” said Lesley Marks, chief investment officer at BMO Private Wealth. “Investors are realizing that even though there is optimism for a recovery with easing restrictions globally, the recovery will be slow and not necessarily be a smooth path upward.” Reiman noted the uneven performance of various industries. Both growth and defensive sectors, like tech, utilities and consumer staples, had stronger earnings and returns in Canada and globally. Cyclicals like energy and financials experienced sharp earnings downgrades and dividend cuts. While markets may have priced in the bad economic data released so far, there’s more to come.
“Our view is that in the coming months, we’re probably not going to see the same level of policy responses and announcements,” Craig Basinger, chief investment officer at Richardson GMP, said. “It’s hard to keep throwing a trillion dollars every month at the market.
     As far as the Bank of Canada is concerned, the country’s financial system remains resilient in the face of the Covid-19 pandemic and moves to keep credit markets functioning have been largely effective, though risks remain. The central bank’s balance sheet grew to C$416.6 billion, about 18% of Canada’s gross domestic product. Consumer confidence is showing signs of improving as Canadians’ views on their personal finances, job security and
expectations for the economy all improved.
Earlier this week, Justin Trudeau’s government unveiled a loan program for large companies with annual revenue of C$300 million ($212 million) or more that have been hit by Covid-19 and can’t get financing by conventional means. Firms in all sectors can apply for the funding except the finance industry.
The world’s longest undefended border will likely remain shut until late June, according to a newspaper report. Prime Minister Justin Trudeau said at a media briefing this week that Canada will be “very, very careful about reopening any international travel including the United States.”

By Bloomberg Automation:
     (Bloomberg) — The S&P/TSX Composite rose for the second day, climbing 0.9 percent, or 129.24 to 14,638.90 in Toronto.
Today, materials stocks led the market higher, as 7 of 11 sectors gained; 144 of 229 shares rose, while 83 fell. Barrick Gold Corp. contributed the most to the index gain, increasing 3.8 percent. Aurora Cannabis Inc. had the largest increase, rising 66.9 percent.
Insights
* So far this week, the index fell 2.2 percent, heading for the biggest decline since the week ended March 20
* The index declined 10 percent in the past 52 weeks. The MSCI AC Americas Index lost 0.9 percent in the same period
* The S&P/TSX Composite is 18.5 percent below its 52-week high on Feb. 20, 2020 and 31 percent above its low on March 23, 2020
* S&P/TSX Composite is trading at a price-to-earnings ratio of 17 on a trailing basis and 22.5 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$2.2t
* 30-day price volatility fell to 29.87 percent compared with
30.23 percent in the previous session and the average of 56.60 percent over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Materials | 87.4705| 4.0| 45/2
Energy | 49.4341| 2.6| 26/2
Information Technology | 23.4335| 1.7| 7/3
Health Care | 11.1636| 8.5| 9/1
Real Estate | 2.1648| 0.5| 17/9
Consumer Discretionary | 0.3319| 0.1| 7/7
Communication Services | 0.1353| 0.0| 5/3
Industrials | -1.4432| -0.1| 17/14
Consumer Staples | -2.9121| -0.4| 2/9
Utilities | -10.0656| -1.3| 2/14
Financials | -30.4537| -0.8| 7/19
US
By Rita Nazareth and Claire Ballentine
(Bloomberg) — U.S. stocks rose as traders looked past trade jitters and weak economic data. Treasuries fell. Oil jumped.
The S&P 500 erased losses, but still posted its worst week since March 20 — just before the gauge started a torrid rally. Sorrento Therapeutics soared 158% amid coronavirus antibody development claims. J.C. Penney surged 21% after saying it made an almost $17 million interest payment due May 7. Earlier Friday, stocks slumped as retail sales and factory output registered their steepest declines on record.
     Meanwhile, the U.S. moved to curtail Huawei Technologies’ chip supply, spurring a rout in semiconductor companies.
The Federal Reserve issued a stark warning Friday that stock and other asset prices could suffer “significant declines” should the coronavirus pandemic deepen, with the commercial real estate market being among the hardest-hit industries. Mounting tension between the world’s two largest economies has investors concerned of an even deeper global recession. The cost of the coronavirus pandemic could reach as much as $8.8 trillion, according to the Asian Development Bank.
“It’s a sobering week,” said Tracie McMillion, head of global asset allocation strategy at Wells Fargo Investment Institute. “Investors have a lot to think about with regard to China. We got data this week that accentuate the difficulty the economy is experiencing right now.”
These are some of the main moves in markets:
Stocks
* The S&P 500 Index climbed 0.4% at 4 p.m. New York time.
* The Stoxx Europe 600 Index advanced 0.5%.
* The MSCI Asia Pacific Index advanced 0.2%.
Currencies
* The Bloomberg Dollar Spot Index increased 0.3%.
* The euro climbed 0.1% to $1.0818.
* The Japanese yen was little changed at 107.20 per dollar.
Bonds
* The yield on 10-year Treasuries climbed one basis point to 0.63%.
* Germany’s 10-year yield climbed one basis point to -0.53%.
* Britain’s 10-year yield increased three basis points to 0.231%.
Commodities
* The Bloomberg Commodity Index advanced 0.6%.
* West Texas Intermediate crude increased 7.4% to $29.61 a barrel.
* Gold climbed 0.7% to $1,753.30 an ounce.
–With assistance from Saket Sundria, Adam Haigh, Constantine
Courcoulas and Sam Potter.

Have a wonderful weekend everyone.

Be magnificent!
As ever,

Carolann

It ain’t what hey call you, it’s what you answer to.
                                 -W.C. Fields, 1880-1946

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