October 23, 2018 Newsletter

Dear Friends,
Tangents:
On this day in…
1956: Hungarian Revolution
1989: Hungarian Independence
1993 – October 23 – Baseball – Toronto Blue Jays slugger Joe Carter hits a three-run homer in the bottom of the 9th inning to give Toronto an 8-6 win over the Philadelphia Phillies in Game 6 of the World Series; defending champions take the Series 4-2; First team to win the World Series on Canadian soil. Paul Molitor, who hit .500, is MVP. Toronto, Ontario. -The Morning Meeting, Advisor Analyst.
PHOTOS OF THE DAY

The Hong Kong-Zhuhai-Macau Bridge is lit up in Hong Kong. The bridge, the world’s longest cross-sea project, which has a total length of 55 kilometers (34 miles), will have an opening ceremony in Zhuhai on Oct. 23. Credit: Kin Cheung/AP Photo

People enjoy the view over fog-covered valleys during sunny autumn weather near the peak of Mount Rigi, Switzerland. Credit: Arnd Wiegmann/Reuters

People walk in a field of fireweed, or Kochia scoparia, at the Hitachi Seaside Park in Hitachinaka, Japan. Fireweed is a grass bush that takes on a bright colour in autumn. Credit: Toru Hanai/Reuters

Weighing one tonne, the UK’s largest pumpkin arrives in Covent Garden at the area kicks off 10 days of family fun to celebrate Halloween. Credit: Jeff Moore/Thisismission.com
Market Closes for October 23^rd, 2018

International Markets

Bonds

Currencies

Commodities

Market Commentary:
I succeeded because I have a long attention span. –Charlie Munger, The Tao of Charlie Munger, David Clark 2017, Scribner.
The key to making money in stocks is not to get scared out of them. -Peter Lynch.
Canada
By Tatiana Darie
     (Bloomberg) — Canadian stocks swung through another volatile session amid a morning rout in U.S. stocks spurred by disappointing results from Caterpillar and 3M. Those results added to worries that rising costs will erode profit margins.
     The Canadian 10-year yield fell to the lowest in nearly a month as bonds rallied. The S&P/TSX Composite Index fell 0.8% to the lowest since April 16, with health care and industrials leading losses.  Consumer staples rose while a rally in gold stocks wasn’t enough to boost materials shares higher.
Stocks
* Barrick Gold Corp. rose 1.9 percent after a report that the company favors taking back control of its separately listed Tanzanian assets after completing its takeover of Africa-focused rival Randgold Resources Ltd., according to people familiar with the situation.
* Crescent Point Energy Corp. and Parkland Fuel Corp. followed energy peers lower as oil traded at its lowest in more than a month after Saudi Arabia reiterated plans to raise output.
* AirBoss of America Corp. rose 2.6 percent after Industrial Alliance Securities analyst Navdeep Malik upgraded shares to buy from hold.
Commodities
* Western Canada Select crude oil traded at a $46 discount to WTI
* Gold gained 0.7 percent to $1,233.70 an ounce
FX/Bonds
* The Canadian dollar rose 0.1% to C$1.3087 per U.S. dollar
* The Canada 10-year government bond yield fell 3.6 basis points to 2.446%
US
By Vildana Hajric and Sarah Ponczek
     (Bloomberg) — U.S. stocks closed lower for a fifth day, as an afternoon rally from the lowest levels for the S&P 500 since May fell short of pushing benchmark indexes back into positive territory. Treasury yields declined and crude oil tumbled.  The S&P 500 pared to 0.6 percent a loss that took it below 2,700 for the first time since July, while the Nasdaq Composite Index flirted with a correction before paring losses. Defensive sectors from consumer staples to real-estate firms recovered.
     Verizon and McDonald’s advanced on solid results, while Netflix led gains in tech shares. Industrial stocks remained under pressure after disappointing results from Caterpillar and 3M added to worries that rising costs will erode profit margins. The Russell 2000 Index erased gains for the year. Energy producers in the S&P 500 sank more than 2 percent. Texas Instruments reported disappointing results after the market closed.
     “Today we opened down, basically at technical support at 2,700 on the S&P, 7,000 on the Nasdaq 100, this is kind of a picture-perfect day to buy,” said Michael O’Rourke, JonesTrading’s chief market strategist. “But now the question is how far does this rally get, how far does it go?”
     The afternoon rebound in American equities delivered a measure of calm for investor nerves frayed by a monthlong sell-off. U.S. growth data later in the week as well as earnings from companies including Amazon, Alphabet, Microsoft and Intel could be key to where equities go from here. In the meantime, uncertainty over the death of a Saudi journalist, Italy’s budget and Brexit are among the factors weighing on sentiment.
     The Stoxx Europe 600 Index slid to the lowest level since December 2016 and Asian equities teetered on the verge of a bear market. Some of the steepest losses were in Japan, Hong Kong and China, where shares had posted the biggest jump in more than two years a day earlier. Disappointing earnings from Renault and some European tech companies added to the pain in Europe.
     Equities failed to get any reprieve after China announced fresh measures to ease the funding strains of private companies, as top officials seek to restore confidence in the world’s second-largest economy.
     “Trade tensions here are important, interest rate levels are important, but the next week or two, earnings will be important,” said Matt Maley, equity strategist at Miller Tabak + Co. “The fact that some key multinationals are giving disappointing guidance is a problem.” Elsewhere, oil traded near the lowest in almost five weeks. Emerging-market equities slumped as Turkish President Recep Tayyip Erdogan said a team including Saudi generals conducted the killing of writer Jamal Khashoggi.
     Here are some key events coming up this week:
* Earnings season gathers pace with notable highlights including Twitter, UBS, Deutsche Bank, Barclays, Total, Halliburton and Linde.
* Monetary policy decisions are due in Europe, Indonesia, Sweden and Canada.
* ECB policy makers could on Thursday confirm that asset purchases will end this year, reiterating its pledge to keep interest rates at record lows through summer 2019. President Mario Draghi will hold a press conference.
* U.S. gross domestic product growth may have slowed in the third quarter, yet remained near its best pace since mid-2015, according to forecasts ahead of Friday’s release.
These are the main moves in markets:
Stocks
* The S&P 500 fell 0.6 percent to 2,740.69 as of 4:05 p.m. in New York, while the Dow Jones Industrial Average dropped 0.5 percent to 25,191.43 and the Nasdaq Composite Index eased 0.4 percent to 7,437.54. 
* The Stoxx Europe 600 fell 1.6 percent. 
* The U.K.’s FTSE 100 declined 1.2 percent.
* Germany’s DAX Index dropped 2.2 percent higher, the fifth straight decline.
* The MSCI Emerging Market Index dipped 2.1 percent.
* The MSCI Asia Pacific Index slumped 2.2 percent.
Currencies
* The Bloomberg Dollar Spot Index dropped 0.2 percent.
* The euro gained 0.1 percent to $1.1470.
* The British pound rose 0.2 percent to $1.2984.
* The Japanese yen strengthened 0.4 percent to 112.40 per dollar.
Bonds
* The yield on 10-year Treasuries dropped three basis points to 3.17 percent, while the two-year note yield fell three basis points to 2.87 percent.
* Germany’s 10-year yield fell four basis points to 0.41 percent.
Commodities
* West Texas Intermediate crude slumped 4.2 percent to $66.26 a barrel, the first drop in three days.
* Gold gained 0.7 percent to $1,230.45 an ounce.

Have a great night.

Be magnificent!

As ever,

Carolann

Justice is the right of the weakest.
         -Joseph Joubert, 1754-1824

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