May 24, 2018 Newsletter

Dear Friends,

Tangents:
On this day in 1844, the  first telegraph line in the USA became operational when Samuel Finley Breese Morse, portrait painter and co-inventor of the telegraph, transmitted this message to the floor of the U.S. Senate: “What hath God wrought.”

Bob Dylan’s birthday today…

…He hears the ticking of the clocks
And walks along with a parrot that talks
Hunts her down by the waterfront docks
Where the sailors all come in
Maybe she’ll pick him out again
How long must he wait?
One more time, for a simple twist of fate
People tell me it’s a sin
To know and feel too much within
I still believe she was my twin
But I lost the ring
She was born in spring
But I was born too late
Blame it on a simple twist of fate
   -written by Bob Dylan, Simple Twist of Fate, Blood on the Tracks,1975

PHOTOS OF THE DAY

A group of geishas during a performance at the press preview of the annual Azuma Odori Dance Festival at the Shinbashi Enbujo Theater in Tokyo, Japan. Credit: Issei Kato/Reuters

Molton lava from the Kilauea Volcano explodes as it reaches the Pacific Ocean, the extreme temperature difference causing the dramatic reaction about Kalapana, Hawaii. Credit: L.E. Baskow/Zuma Wire/Rex/Shutterbox

A double rainbow over Portland Bill Lighthouse in Dorset. Credit: Mattpinner/BNPS

Steam locomotive 45407 pulls The Jacobite over Loch Nan Uamh Viaduct, on the West Highland Line between Fort William and Mallaig, Scotland. Credit: Andrew Plummer/Alamy Live News
Market Closes for May 24^th, 2018

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Canada
By Elena Popina
     (Bloomberg) — Canadian stocks fell the most since April 30, down a third day after an 11-day winning streak that had been inching the benchmark index closer to its record high.
     The S&P/TSX Composite Index dipped 0.13 percent to 16,113.62 on Thursday. Health care, energy and financials led declines; marijuana companies dragged health to a 2 percent drop. Technology and materials stocks gained the most, adding 1.3 percent and 1.1 percent, respectively.
     Aecon Group Inc. fell 15 percent after the Canadian government blocked a proposed takeover of the construction firm by a unit of China Communications Construction Co. Auto-parts makers including Magna International Inc. and Linamar Corp. slid as U.S. President Donald Trump’s administration started an investigation into whether car and truck imports threaten national security, a move that could lead to new U.S. tariffs on foreign vehicles.
     In other moves:
* Canopy Growth Corp. fell 6.2 percent as bearish bets against the global marijuana boom increased to a record
* Alamos Gold Inc. climbed 5.1 percent after extending high- grade mineralization at Island Gold mine
* Iamgold Corp. rose 4.4 percent to its highest level since September
* Western Canada Select crude oil traded at a $17.25 discount to WTI
* Gold rose less than 1.2 percent, the most in seven weeks, to
$1,309.70 an ounce 
* The Canadian dollar weakened 0.3 percent to C$1.2883 per U.S. dollar
* The Canada 10-year government bond yield fell ~3 basis points to 2.41%
US
By Sarah Ponczek
     (Bloomberg) — U.S. stocks partially rebounded from early declines Thursday sparked by the cancellation of the U.S.-North Korea summit, as investors assessed the broader impact on trade relations and economic growth. Gold posted its biggest gain in a month and Treasuries rose with the yen amid a move to safe-haven assets.
     The S&P 500 Index and Dow Jones Industrial Average remained lower despite the bounce-back, while the Nasdaq Composite Index and small cap Russell 2000 Index were essentially unchanged. Transportation stocks led gainers and energy companies paced decliners, as oil weighed on the shares.
     The moves followed the release of President Donald Trump’s letter to the North Korean leader Kim Jong-Un, in which he blamed the “tremendous anger and open hostility” in recent statements from Pyongyang for his decision. The news heightened concerns that geopolitical turmoil may upend hopes for a global expansion, particularly as a China trade deal looks less likely. On Wednesday, the administration threatened to impose tariffs on imported cars and trucks for “national security” purposes.
    “The headline that Trump canceled the talk with North Korea — we are seeing a lot of these kinds of episodes,” said Zhiwei Ren, managing director and portfolio manager with Penn Mutual Asset Management. “Most of the time I just ignore it, because at the end of the day, the U.S. stock market trades with the fundamentals. This is noise. In general, we treat this as noise and hold our current position. My expectation is that I don’t think this is going to change our current bullish tone in the market because the economy is doing well and earnings are great.”
     Crude plunged after Russia’s energy minister reiterated that OPEC and its partners will discuss phasing out supply curbs when they meet next month. The Stoxx Europe 600 Index gave up an advance as foreign carmakers took a hit while U.S. auto companies gained. Turkey’s lira resumed its slump as traders weighed whether an emergency rate hike was enough to stem losses.
     It’s been a challenging week for investors, who’ve been forced to navigate escalating geopolitical and trade risks, from Trump’s decision to back away from an agreement with China to North Korea warning of a “nuclear-to-nuclear showdown.” Questions are swirling around the Italian populist government’s economic policies, while Brexit negotiations loom large over British assets.
     “Today you had a host of headlines, one having to do with trade and others having to do with North Korea,” said Quincy Krosby, the chief market strategist at Prudential Financial Inc. “You see money going into the Treasury market and money going into gold. You would not have gold being a safe haven trade if it was just about trade. That’s typically related to geopolitical issues. The question for the market is, are there going to be more headlines like this?”
      Meanwhile, emerging-market currencies rose despite the lira move, and developing-nation stocks gained. The euro strengthened after falling to a six-month low.
     These are some key events to watch this week:
* At the St. Petersburg Forum Friday, Russian President Vladimir Putin and French President Emmanuel Macron, IMF Managing Director Christine Lagarde, and Japan Prime Minister Shinzo Abe participate on a panel moderated by Bloomberg News Editor-in- Chief John Micklethwait.
* Also Friday, European Union finance ministers discuss the latest on Brexit talks, in Brussels.

      These are the main moves in markets:
                           Stocks
* The S&P 500 fell 0.2 percent to 2,727.77, while the Russell 2000 rose less than 0.1 percent.
* The Stoxx Europe 600 Index declined 0.5 percent.
* The U.K.’s FTSE 100 Index sank 0.9 percent.
* The MSCI Emerging Market Index added 0.2 percent.
* The MSCI Asia Pacific Index fell 0.1 percent.
                          Currencies
* The Bloomberg Dollar Spot Index dipped 0.1 percent.
* The euro gained 0.2 percent to $1.1723.
* The British pound jumped 0.3 percent to $1.3383, the largest climb in more than five weeks.
* The Japanese yen advanced 0.7 percent to 109.26 per dollar.
* The Turkish lira sank 2.7 percent to 4.701 per dollar, the weakest on record with the largest tumble in almost two years.
                           Bonds
* The yield on 10-year Treasuries dipped two basis points to 2.9733 percent.
* Germany’s 10-year yield declined four basis points to 0.472 percent, the lowest since January.
* Britain’s 10-year yield fell four basis points to 1.401 percent.
                           Commodities
* West Texas Intermediate crude dipped 1.7 percent to $70.65 a barrel.
* Gold advanced 0.9 percent to $1,304.67 an ounce.
–With assistance from Andreea Papuc, Yakob Peterseil and Samuel Potter. 

Have a great evening.

Be magnificent!

As ever,

Carolann

When you feel in your gut what you are and then dynamically pursue
it – don’t back down and don’t give up – then you’re
going to mystify a lot of folks.
                                            -Bob Dylan, b. 1941

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