May 21, 2020 Newsletter

Dear Friends,
Tangents:
The Book Review’s annual summer reading list is out, and it can point you to the latest in thrillers, cookbooks, true crime stories and more. –The New York Times.

Fragments of Dead Sea Scrolls long thought to be blank actually contain text invisible to the naked eye
Those ancient scribes, such practical jokers. -CNN.
PHOTOS OF THE DAY

A woman picks up poppies near the village of Kholmovka in Bakhysarai District, Russia
CREDIT: SERGEI MALGAVKO// TASS VIA GETTY IMAGES

British skateboarder Alex Decunha trains at Stantonbury Skatepark in Milton Keynes, England
CREDIT: JACOB KING/PA WIRE

A man entertains the public with bubble tricks in the sunshine on the beach in Brighton, on the south coast of England on the hottest day of the year so far
CREDIT: BEN STANSALL/AFP VIA GETTY IMAGES
Market Closes for May 21^st , 2020 

International Markets

Bonds

Currencies

Commodities

Market Commentary:
The U.K. on Wednesday sold three-year government bonds, known as gilts, with a negative 0.003% yield. That was the first auction result below zero, meaning the government is being paid by investors to borrow from them.

Chinese companies could be forced to give up their listings on American stock exchanges under legislation approved by the Senate on Wednesday. Chinese companies such as Alibaba and Baidu have together raised tens of billions of dollars through listings on U.S. exchanges.
 
On this day in 1720, the earliest known “blind pool” appeared, an investment fund similar to a modern day blank check company. The London Daily Post advertised a prospectus offering stock in a “Proposal for raising the sum of Six Millions sterling to carry on a design of more general advantage…and of more certain profit…than any undertaking yet set on foot.”
Canada
By Aoyon Ashraf
(Bloomberg) — Canadian equities fell with global stocks as mining and energy companies underperformed on Thursday.
The S&P/TSX Composite Index lost 0.8% in Toronto. Gold and other precious metals dropped, with investors taking profits ahead of the long weekend in some markets as economic data showed signs the downturn may be easing. Meanwhile, copper prices fell as trade tension between the U.S. and China added to concern about the pace of recovery from the coronavirus pandemic.
Aside from Shopify Inc., the rise in e-commerce has also provided a boost for Lightspeed POS Inc., which surged 40% after releasing its fourth-quarter earnings.
Meanwhile, Bank of Canada Governor Stephen Poloz said that while the central bank needs to be prepared for a wide range of outcomes, he’s more optimistic than many pundits on the outlook for recovery. Poloz was speaking during a media roundtable with reporters.
Commodities
* Western Canada Select crude oil traded at a $9.35 discount to West Texas Intermediate
* Spot gold fell 1.2% to $1,726.44 an ounce
FX/Bonds
* The Canadian dollar weakened 0.4% to C$1.3953 per U.S. dollar
* The 10-year government bond yield fell 1.1 basis point to 0.55%

By Bloomberg Automation:
(Bloomberg) — The S&P/TSX Composite fell 0.8 percent at 14,884.85 in Toronto. The move was the biggest since falling 2.5 percent on May 13 and follows the previous session’s increase of 0.8 percent.
Royal Bank of Canada contributed the most to the index decline, decreasing 2.7 percent. Cineplex Inc. had the largest drop, falling 13.9 percent.
Today, 141 of 229 shares fell, while 85 rose; 7 of 11 sectors were lower, led by materials stocks.
Insights
* So far this week, the index rose 1.7 percent
* This month, the index rose 0.7 percent
* The index declined 9.4 percent in the past 52 weeks. The MSCI AC Americas Index gained 1.6 percent in the same period
* The S&P/TSX Composite is 17.2 percent below its 52-week high on Feb. 20, 2020 and 33.2 percent above its low on March 23, 2020
* The S&P/TSX Composite is up 2.6 percent in the past 5 days and rose 6.8 percent in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 17.6 on a trailing basis and 23 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.5 percent on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$2.27t
* 30-day price volatility fell to 26.25 percent compared with 26.75 percent in the previous session and the average of 46.58 percent over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Materials | -46.1928| -2.0| 8/39
Energy | -40.3564| -2.0| 1/27
Financials | -39.7562| -1.0| 12/14
Industrials | -17.5058| -1.0| 10/21
Utilities | -7.5137| -1.0| 5/11
Communication Services | -6.6367| -0.8| 3/5
Consumer Staples | -5.9664| -0.9| 1/10
Real Estate | 2.1916| 0.5| 19/6
Consumer Discretionary | 6.5589| 1.3| 13/1
Health Care | 9.2418| 6.0| 7/3
Information Technology | 33.1716| 2.3| 6/4
US
By Claire Ballentine and Vildana Hajric
(Bloomberg) — U.S. stocks fell as rising trade tension between America and China added to concern about the pace of recovery from the coronavirus pandemic. Crude oil rebounded from an earlier swoon and gold declined.
The S&P 500 declined 0.8%, with signs mounting that President Donald Trump will make his tough-on-China stance a key element of his re-election bid. The energy, technology and utilities sectors led the losses. After rallying as much as 32% from its March bottom, the index failed to hold at its average price over the past 100 days, a key technical level it hasn’t closed above since February. Trade tension with China contributed to market weakness in 2019 before a deal was reached.
“We’re seeing trade rhetoric and tensions between the U.S. and China heat up,” said Chris Gaffney, president of world markets at TIAA Bank. “It could be something that creates a hurdle for the recovery.” Stocks hit the lows of the day after China responded to overnight accusations from Trump, warning that it will safeguard its sovereignty, security and interests, and threatened countermeasures. Earlier, a report showed another 2.44 million Americans claiming jobless benefits.
Markets were already on the back foot after the Senate overwhelmingly passed a bill that could bar some Chinese companies from listing on U.S. exchanges. Trump stoked tensions by tweeting criticism of Xi Jinping’s leadership, days before the biggest Chinese political gathering of the year.
The Stoxx Europe 600 Index fell, with nearly all 19 sector groups in the red. Deutsche Lufthansa AG shares bucked the trend after the carrier said it was close to a multibillion-euro bailout deal from the German government. Concern over the stress between the U.S. and China and global coronavirus cases reaching 5 million are vying for investor attention with optimism over reopening economies and progress on thwarting the pandemic. The U.S. legislation could lead to Chinese mega-companies such as Alibaba Group Holding Ltd. and Baidu Inc. being barred from exchanges.
“Markets may be pricing in far too much complacency as the U.S.-China ‘phase one’ trade deal could be at risk,” said Stephen Innes, chief global market strategist at AxiCorp. “The pandemic and resulting acute economic downturn have made China’s trade commitment to the U.S. much more challenging to fulfill.” Overseas listings of Hong Kong shares fell as Chinese authorities prepared to pass national security measures, threatening to reignite violent protests in the city. The iShares MSCI Hong Kong ETF, the biggest listed exchange-traded fund, fell 3.7% in New York, the biggest drop since the global market volatility two months ago. Hang Seng Index futures for May delivery were off 1.6%.
The fresh jobless data has once again underscored the economic hit from the virus. The latest jump in claimants takes the number of newly unemployed since the crisis began nine weeks ago to almost 40 million.
These are some of the main moves in markets:
Stocks
* The S&P 500 Index dipped 0.8% to 2,948.51 as of 4:00 p.m. New York time.
* The Dow Jones Industrial Average fell 0.4% to 24,474.12.
* The Nasdaq Composite Index declined 1% to 9,284.88, the largest fall in more than a week.
* The MSCI All-Country World Index fell 0.8% to 494.07, the biggest fall in more than a week.
Currencies
* The Bloomberg Dollar Spot Index increased 0.2% to 1,242.61.
* The Japanese yen was little changed at 107.57 per dollar.
* The euro declined 0.3% to $1.0949, the first retreat in a week and the largest decrease in more than a week.
Bonds
* The yield on two-year Treasuries advanced less than one basis point to 0.17%.
* The yield on 10-year Treasuries decreased one basis point to 0.67%.
* Germany’s 10-year yield dipped three basis points to -0.50%, the biggest dip in two weeks.
Commodities
* West Texas Intermediate crude climbed 1.3% to $33.94 a barrel, hitting the highest in 10 weeks with its sixth straight advance.
* Gold depreciated 1.2% to $1,726.33 an ounce, the weakest in more than a week on the biggest tumble in three weeks.
–With assistance from Gregor Stuart Hunter and Sophie Caronello.
Have a great night.

Be magnificent!
As ever,

Carolann

The trouble with the world is that the stupid are so confident
while the intelligent are so full of doubt.
        -Bertrand Russell 1872-1970
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