October 08, 2019 Newsletter

Dear Friends,

Tangents:
1871~Great Chicago fire.
2004 Lifestyle guru Martha Stewart reported to prison to begin serving a sentence for lying about a stock sale. Go to article »
 
HOW IT HAPPENS

The sky said I am watching
to see what you
can make out of nothing
I was looking up and I said
I though you
were supposed to be doing that
the sky said Many
are clinging to that
I am giving you a chance
I was looking up and I said
I am the only chance I have
then the sky did not answer
and here we are
with our names for the days
the vast days that do not listen to us.
               -W.S. Mervin, 1927-2019

Scientists discover 20 new Saturn moons, giving it more than Jupiter. (h/t Scott Kominers) –Bloomberg.

PHOTOS OF THE DAY

Shoppers are reflected in mirrors of a mall in the district of Shibuya in Tokyo, Japan, Monday, Oct. 7, 2019. Shibuya is the most energetic district in Tokyo, offering countless restaurants, shops and entertainments.
CREDIT: AP PHOTO/CHRISTOPHER ENA

Water from Derwent Reservoir cascades down Derwent Dam in the Upper Derwent Valley this morning after heavy rainfall in Derbyshire, UK. The Dam was used by RAF 617 Squadron in 1943 for practising the low level bombing runs in Lancaster bombers needed for the Dam Buster raids.
CREDIT: ANDREW MCCAREN/LNP

Germany’s Phillip Herder competes during the men’s qualifying session at the FIG Artistic Gymnastics World Championships at the Hanns-Martin-Schleyer-Halle in Stuttgart, Southern Germany.

A ship’s hull and loaded containers are reflected in the sea at yangshan deep-water port in Shanghai, China.
CREDIT: COSTFOTO/BARCROFT MEDIA

Market Closes for October 08^th, 2019  

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1998, amid the Asian financial crisis and the collapse of the Long-Term Capital Management hedge fund, the Dow slid 10 more points to close at 7732, bringing its drop to 17% in less than three months. Citing the recent panic, analysts called for more declines, but the very next day, the Dow rose more than 160 points. One year later, the Dow was at 10650, a 38% gain.
Canada
By Kristine Owram
(Bloomberg) — Canadian equities fell to the lowest level since August as trade tensions between the U.S. and China escalated. The S&P/TSX Composite Index lost 0.8% to 16,294. Energy stocks came under pressure as Canadian heavy oil prices widened to the biggest differential since May, ahead of an anticipated announcement that Alberta will ease production limits. Most other sectors also retreated after U.S. President Donald Trump’s administration slapped visa bans on some Chinese officials and placed eight of the country’s technology companies on a blacklist over alleged rights abuses. The technology index tumbled 2% and consumer discretionary stocks lost 1.6%.
Commodities
* Western Canada Select crude oil traded at a $15.95 discount to WTI
* Spot gold rose 0.5% to $1,511.30 an ounce
FX/Bonds
* The Canadian dollar weakened 0.1% to C$1.3321 per U.S. dollar
* The Canada 10-year government bond yield fell 2 basis points to 1.28%
Insights
* The S&P/TSX Composite is 3.9% below its 52-week high on Sept. 20, and 18.3 above its low on Dec. 24
* The S&P/TSX Composite is down 0.9% in the past 5 days and fell 1.5% in the past 30 days
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Energy | -50.7212| -1.9| 3/28
Financials | -38.7991| -0.7| 2/25
Industrials | -25.0955| -1.4| 2/30
Information Technology | -17.1276| -2.0| 1/8
Consumer Discretionary | -11.2815| -1.6| 0/16
Consumer Staples | -6.5398| -1.0| 1/9
Communication Services | -3.9007| -0.4| 1/6
Utilities | -0.5112| -0.1| 8/8
Real Estate | -0.0540| 0.0| 19/6
Health Care | 0.3205| 0.1| 5/5
Materials | 23.1537| 1.3| 30/19
US
By Sarah Ponczek and Vildana Hajric
(Bloomberg) — U.S. equities tumbled on concern tensions with China are escalating just days before high-level talks between officials from the world’s biggest economies. Chipmakers led the S&P 500 Index to a 1.6% loss and Chinese companies that trade in New York sank to the lowest since mid- August as the Trump administration put visa bans on Chinese officials linked to the mass detention of Muslims in Xinjiang province. That came after China said it strongly opposed a U.S. move to blacklist some of its technology firms and Bloomberg reported the White House is moving ahead with discussions about restricting capital flows to China. The flare-up overshadowed comments by Federal Reserve Chairman Jerome Powell that the central bank will seek to calm money markets while leaving his options open on interest rates weeks ahead of policy makers’ next meeting. Ten-year Treasury yields fell below 1.55% and the dollar rose. The escalation in tension between the U.S. and China comes just days before senior representatives will resume their effort to resolve a protectionist dispute that has roiled markets for more than a year. People’s Bank of China Governor Yi Gang will join Chinese Vice Premier Liu He at the talks in Washington and a report from China’s Global Times said that the full delegation is “one of the largest and broadest teams.” “China is still the overhang that’s going to be the most important,” JJ Kinahan, the chief market strategist at TD Ameritrade, said in an interview at Bloomberg’s New York headquarters.
“Even though we have the talks this week, it seems hard to believe they’re going to come out on Friday afternoon and be like, ‘Alright, we’ve done it! It’s over!’” The Stoxx Europe 600 Index declined after two days of gains. The pound weakened after Boris Johnson told German Chancellor Angela Merkel a Brexit deal is essentially impossible if the EU demands Northern Ireland stay in the bloc’s customs union. Asian equity benchmarks had jumped from Tokyo and Seoul to Shanghai and Hong Kong, where trading showed little concern about ongoing unrest. The tech-heavy South Korean index led the regional advance after Samsung Electronics Co. earnings beat analyst estimates. Elsewhere, the dollar rose, shrugging off data that showed a measure of underlying U.S. producer prices posted the biggest monthly drop in more than four years. Turkey’s lira stabilized after tumbling Monday in wake of U.S. President Donald Trump’s threat to “destroy” the country’s economy if it acts in excess in a military operation targeting Kurdish forces in Syria. West Texas crude fell toward $52 a barrel.
Here are some key events coming up this week:
* On Wednesday, minutes will be released from the last policy meeting of the Fed’s rate-setting committee.
* The account of the ECB’s last gathering is due Thursday.
* Chinese President Xi Jinping and Indian Prime Minister Narendra Modi reportedly will meet at an unofficial summit.
* The U.S. releases a key measure of inflation on Thursday.

Here are the main moves in markets:

Stocks
* The S&P 500 Index fell 1.6% at the close of trading in New York.
* The Stoxx Europe 600 Index sank 1.1%.
* The MSCI Asia Pacific Index increased 0.4%.
* The MSCI Emerging Market Index fell 0.2%.
Currencies
* The Bloomberg Dollar Spot Index rose 0.1%.
* The euro fell 0.2% to $1.0953.
* The British pound declined 0.6% to $1.2221.
* The Japanese yen strengthened 0.1% to 107.11 per dollar.
Bonds
* The yield on 10-year Treasuries decreased three basis points to 1.53%.
* Germany’s 10-year yield dipped two basis points to -0.6%.
* Britain’s 10-year yield declined three basis points to 0.41%.
Commodities
* Gold increased 0.9% to $1,506.14 an ounce.
* West Texas Intermediate crude fell 0.8% to $52.32 a barrel.
–With assistance from Sybilla Gross, Andreea Papuc, Vassilis
Karamanis, Samuel Potter and Todd White.
Have a great night.

Be magnificent!
As ever,

Carolann

Indulge your imagination in every possible flight.
                               -Jane Austen, 1775-1817

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