October 10, 2018 Newsletter

Dear Friends,

Tangents:
On Oct. 10, 1973, Vice President Spiro T. Agnew pleaded no contest to one count of federal income tax evasion and resigned his office. Go to article »

From The NY Times, October 10, 2018:
Print isn’t dead.

In fact, it’s throwing one of its biggest annual parties this week. 

The Frankfurt Book Fair can trace its origins back some 800 years. CREDIT: Boris Roessler/EPA, via Shutterstock

The Frankfurt Book Fair kicks off today, bringing hundreds of thousands of people in publishing and related fields together for days of wheeling, dealing, seeing and being seen. 
The tradition dates back some 800 years — long before Johannes Gutenberg turned out Europe’s first printed page in 1454. 
Frankfurt was a flourishing medieval commercial center. In 1240, the Holy Roman Emperor Frederick II decreed that no one should harass travelers to its autumn fair, where wine, gold, horses and more were bought and sold.
Handwritten manuscripts began selling there, a forerunner to the book trade. Frankfurt held its earliest recorded book fair in 1462. 
Then, as now, it was a place where people mingled and ideas flowed.
Henri II Estienne, a Frenchman, praised the fair in 1574 for bringing together so many scholars. 
The effect, he said, was a modern-day Athens: “In reality, it should be happening in that city where once bloomed the most celebrated intellectual life in all of Greece.”
The Frankfurt Book Fair’s guest of honor this year is the nation of Georgia, and 90 new translations of Georgian books are planned to mark that occasion.  
Nancy Wartik wrote today’s Back Story.
PHOTOS OF THE DAY

Chunks of ice are seen on the black sand beach known as Diamond Beach, where the Jokulsarlon glaciar lagoon meets the sea, along Route 1 between Hofn and Skaftafell in southeastern Iceland. Credit: Mariana Suarez/AFP/GETTY IMAGES

Cormorant master, Masahiko Sugiyama, uses sea cormorants to catch sweetfish in Giftu, Japan. In this traditional fishing art ‘ukai,’ a cormorant master called ‘usho’ manages cormorants to capture ayo or sweetfish. The ushos of River Nagara have been the official staff of the Imperial Household Agency of Japan since 1890. Currently six imperial fishermen of Nagara River conduct special fishing to contribute to the Imperial family eight times a year, on top of daily fishing from mid-May to mid-October. Credit: Carl Gourt/GETTY IMAGES

A stag bellows at first light in Bushy Park, south west London. Parts of the UK will experience unseasonably high autumnal temperatures over the next few days. Credit: Peter MacDiarmid/LNP
Market Closes for October 10th, 2018

International Markets

Bonds

Currencies

Commodities

Market Commentary:

• Analysts expect companies in the S&P 500 to increase third-quarter earnings by 19% from a year earlier, one of the fastest rates of growth during the 9 ½-year bull market, according to FactSet.

Canada
By Tatiana Darie
(Bloomberg) — Canadian stocks fell amid a global selloff fueled by fresh concerns about the impact of the trade war with China. U.S. peers tumbled, with the S&P 500 seeing its worst rout since February.
     The S&P/TSX Composite Index fell 2.1 percent to the lowest since April, with industrials, tech and energy leading losses.
     Reports about potentials deals in the cannabis industry offset weakness in health care.
     The loonie resumed losses against the dollar, trading at the lowest level in nearly two weeks.
                                                  Stocks
* Aphria Inc jumped 15 percent on reports that Altria Group was in talks to buy an equity stake in the company
* Canadian National Railway Co, Canadian Pacific Railway Ltd joined a selloff in the transportation sector; Cowen cautioned that tariff fears and concerns that the peak of the cycle has passed “could present near-term pressure on transport shares”
* Bombardier Inc fell 6.2 percent amid the merger between two of its suppliers, Esterline Technologies and TransDigm; the deal “will make it harder for [BBD/B] to push supplier costs lower,” according to Bloomberg Intelligence analyst George Ferguson.
                                                 Commodities
* Western Canada Select crude oil traded at a $47.00 discount to WTI
* Gold gained 0.5 percent to $1,197.00 an ounce
                                                  FX/Bonds
* The Canadian dollar fell 0.7 percent to C$1.30361 per U.S. dollar
* The Canada 10-year government bond yield fell 1.6 basis points to 2.550%
US
By Jeremy Herron and Sarah Ponczek
(Bloomberg) — U.S. stocks tumbled the most since February as fresh concern about the impact of the trade war with China roiled technology and industrial shares. Treasuries rose with the yen amid demand for haven assets.
     The broad selloff took the S&P 500 to the lowest in three months, the Dow Jones Industrial Average plunged as much as 836 points and the Nasdaq 100 Index tumbled more than 4 percent for its worst day in seven years. All 30 members of the blue-chip index retreated, with Boeing and Caterpillar dropping at least 3.8 percent. Computer companies led the S&P 500 to a fifth straight loss, the longest slide since Donald Trump’s election win.
     Fastenal Co. added to angst that the trade war with China is raising materials costs that will crimp profit margins. Estee Lauder and Tiffany led losses after French luxury goods maker LVMH confirmed China is enforcing customs rules more strictly as trade tensions remain high.
     The Cboe Volatility Index rose past 20 for the first time since April. Oil fell from $75 a barrel even as a major hurricane headed for the Florida Panhandle.  “The biggest thing going on in markets is you’re seeing an unwind,” Sameer Samana, a global quantitative and technical strategist for Wells Fargo Investment Institute, said by phone.
     “You had stocks doing really well, rates for the most part were very well-behaved. When you’ve got these risk-off moments, especially when you’re later in the cycle, there is some concern on the part of investors where it’s like, ‘Is this the beginning of the end?”’
     Just days before the start of the third-quarter earnings season, signs are mounting that companies might not be able to deliver the runaway growth that’s bolstered equities so far in 2018. Investors have long fretted that the trade war would crimp profits, and now a group of companies is warning just that is happening at the same time that rising bond yields makes the cost of borrowing higher.  Valuations look more appealing, but the backdrop to trading is still dominated by deepening U.S.-China tensions and a surge in volatility for stock and bond markets.
     In Europe, the Stoxx 600 Index dropped as declines for industries including miners and automakers outweighed gains in telecom companies and banks. Shares in Japan rose after four days of losses while those in China edged up, and South Korean equities slumped as trading resumed after a holiday.
     Elsewhere, Italian bonds erased a slump as the deputy premier predicted yields on the debt won’t blow out too far because of the government’s budget plans. The South African rand slipped following Tuesday’s rally. American crude traded near $75 a barrel as Hurricane Michael curtailed offshore oil production and the IEA issued a warning to the global market.
Here are some key events coming up:
* The U.S. Treasury has $230 billion worth of debt auctions this week.
* The IMF and World Bank will hold meetings in Bali from Friday,  where finance chiefs from around the world will gather.
* A closely watched gauge of U.S. consumer prices probably remained elevated in September and rose 2.3 percent from a year earlier, according to forecasts ahead of Thursday’s release.
* JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. kick off earnings season for U.S. banks on Friday.

These are the main moves in markets:
                                                  Stocks
* The S&P 500 Index declined 3.3 percent as of 4 p.m. New York time. The five-day slump is the longest since November 2016.  It’s down 4.8 percent during that span.
* The Dow fell 832 points, or 3.2 percent, for the biggest drop since February. It slid below 26,000 to the lowest since Aug. 16.
* The Nasdaq 100 lost 4.4 percent to the lowest since July 3 in the biggest rout since 2011. 
* The Stoxx 600 sank 1.6 percent to the lowest since March.
* The MSCI Asia Pacific Index fell less than 0.05 percent.
* The MSCI Emerging Market Index decreased 1.1 percent.
                                                   Currencies
* The Bloomberg Dollar Spot Index rose less than 0.1 percent.
* The euro rose 0.3 percent to $1.152.
* The British pound climbed 0.4 percent to $1.3143.
* The Japanese yen rose 0.4 percent to 112.499 per dollar, a fifth straight gain.
                                                    Bonds
* The yield on 10-year Treasuries was little changed at 3.21 percent.
* The two-year yield fell to 2.87 percent and the 30-year hit 3.39 percent.
* Germany’s 10-year yield was flat at 0.55 percent.
                                                     Commodities
* West Texas Intermediate crude decreased 2.8 percent to $72.89 a barrel.
* Gold futures were rose 0.4 percent to $1,196.40 an ounce.
–With assistance from Andreea Papuc, Adam Haigh, Samuel Potter and Luke Kawa.
Have a great night.

Be magnificent!
As ever,

Carolann

Study nature, love nature, stay close to nature.  It will never fail you.

                                                     -Frank Lloyd Wright, 1867-1959

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
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www.carolannsteinhoff.com