October 25, 2018 Newsletter

Dear Friends,

Tangents:
1881 ~ Pablo Picasso b.

1923 – October 25 – Frederick Banting & John Macleod of the University of Toronto jointly win the Nobel Prize for Medicine for their discovery of the hormone insulin, which was to save the lives of millions of diabetics. Banting, whose idea launched the research, shares the prize money with Charles Best. Macleod, who supervised the research, shares with J. B. Collip. They are the first Canadians to win a Nobel Prize. Stockholm, Sweden 

PHOTOS OF THE DAY

An incredible display of 15,000 knitted and crocheted poppies at St Peter Mancroft Church in Norwich, Norfolk. Credit: James Linsell-Clark/SWNS.COM

Cornwall hosts beautiful pastel coloured sunrise. Credit: Simon Maycock/Cover Images

A section of the Hong Kong-Zhuhai-Macau Bridge stands in Macau, China. Credit: Justin Chin/Bloomberg
Market Closes for October 25^th, 2018

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Canada
By Tatiana Darie
     (Bloomberg) — Canadian stocks managed to eke out a gain on Thursday despite erasing most of their intraday gain toward the market close. U.S. peers saw a bigger rally, as strong earnings pushed benchmark indexes back into the black for the year in the wake of Wednesday’s rout that had wiped out this year’s gains.
     The S&P/TSX Composite Index rose 0.1 percent, with health care snapping a seven-day streak of losses amid a rally in pot shares. Materials were the largest underperformer due to a plunge in gold-mining stocks.
     The loonie weakened against the dollar for the first time in the past four sessions.
Stocks
* AltaGas Ltd fell 2.7 percent after CIBC analyst Robert Catellier anticipated that the company may need to cut its dividend by 40 percent and raise C$1 billion in equity.
* Goldcorp Inc. plunged 18 percent on a “miserable quarter,” falling from the top tier of gold miners as peer Agnico-Eagle Mines Ltd. takes its spot.
* Canfor Corp rallied 7.5 percent after Canfor CEO Don Kayne said on a conference call that lumber pricing is expected to stabilize and move higher amid stronger seasonal demand and strength in the repair and remodel sector.
Commodities
* Western Canada Select crude oil traded at a $43.00 discount to WTI
* Gold little changed to $1,232.00 an ounce
FX/Bonds
* The Canadian dollar fell 0.1 percent at C$1.3069 per U.S. dollar
* The Canada 10-year government bond yield gained 2 basis points to 2.457%
US
By Vildana Hajric and Sarah Ponczek
     (Bloomberg) — U.S. stocks surged back into positive territory, with the Nasdaq Composite Index registering its biggest increase since March, a day after a broad-based rout sent equities negative for the year. Yields on Treasuries rose and the dollar strengthened to the highest level this year.
     The S&P 500 Index finished higher for the first time in seven days, propelled by strong earnings results from Twitter, Microsoft and Tesla. Amazon and Alphabet reported after the close. The Dow Jones Industrial Average surged 400 points, after tumbling 600 points Wednesday. European stocks edged higher. The sentiment was darker in Asia, where shares fell for a third day, with Japan’s Topix index falling to the lowest in more than a year. Oil advanced from a two-month low.
     “The most important thing to think about today is that we got into a valuation level that’s more constructive,” said Art Hogan, chief market strategist at B Riley FBR. “This is one of the first times in the earnings cycle where we’re getting a positive response on earnings, when stocks actually react positively to their good news — that’s in the action today.”
     “There’s a transition going on and when there’s a transition going on, there’s a lot of volatility both up and down,” Randy Swan, founder of Swan Global Investments, which manages about $5 billion, said in an interview at Bloomberg’s New York headquarters. “People are trying to figure out where things are going to go.”
     Sentiment has been tested in October, with global stocks poised for their worst month in more than six years as the effects of trade tensions and geopolitical uncertainty begin to bite. Investors remain apprehensive as a flood of earnings, while mostly stellar, have come with warnings about the future impact of tariffs and rising costs. Central banks remain in the spotlight, with investors speculating what, if any, impact the market uncertainty will have on policy decisions.  “The question is: can we go the distance?” said Donald Selkin, chief market strategist at Newbridge Securities. “You have to see how it goes.”  Elsewhere, the euro weakened after European Central Bank President Mario Draghi downplayed recent slowdown in economic momentum and Italian fiscal risks, reiterating that growth is returning to potential. The ECB kept its target rate unchanged at zero. 
Here are some key events coming up this week:
* 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 rose 1.9 percent to 2,705.64 as of 4:01 p.m. in New York, while the Dow Jones Industrial Average gained 1.6 percent to 24,983.37 and the Nasdaq Composite Index increased 3
percent to 7,318.34. All three benchmark indexes are still down this week.
* The Stoxx Europe 600 rose 0.5 percent.
* The U.K.’s FTSE 100 gained 0.6 percent.
* Germany’s DAX Index gained 1 percent for the first increase in seven days.
* The MSCI Emerging Market Index eased 0.4 percent.
* The MSCI Asia Pacific Index slumped 1.9 percent.
Currencies
* The Bloomberg Dollar Spot Index gained 0.1 percent.
* The euro weakened 0.2 percent to $1.1368.
* The British pound fell 0.5 percent to $1.2814.
* The Japanese yen weakened 0.3 percent to 112.55 per dollar.
Bonds
* The yield on 10-year Treasuries rose three basis points to 3.13 percent, while the two-year note yield increased two basis points to 2.85 percent.
* Germany’s 10-year yield was little changed at 0.40 percent.
Commodities
* West Texas Intermediate crude rose 0.4 percent to $67.07 a barrel.
* Gold fell 0.3 percent to $1,230.40 an
Have a great night.

Be magnificent!

As ever,

Carolann

Everything should be made as simple as possible, but not simpler.
                                                -Albert Einstein, 1879-1965

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