October 29, 2018 Newsletter

Dear Friends,

Tangents:

Carolann is out of the office, I will be writing the newsletter on her behalf.

PHOTOS OF THE DAY

The Duke and Duchess of Sussex pose for a photo with actors in costume during a visit to Courtenay Creative, in Wellington, on day two of the royal couple’s tour of New Zealand. Credit: Dominic Lipinski/PA.

A dog in costume is seen during the 38^th Annual Tompkins Square Halloween Dog Parade as the East River Park in Amphitheatre in New York. Credit: Timothy A. Clary/AFP/Getty Images

Athletes competes in the bike portion of the IRONMAN 70.3 Waco in Waco, Texas. Credit: Tom Pennington/Getty Images
Market Closes for October 29^th, 2018

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Canada
By Janine Wolf
     (Bloomberg) — Canadian stocks were mostly higher in early trading Monday. U.S. stocks rose amid deal news with major averages trimming losses after a brutal month of selling. The S&P/TSX Composite Index rose about 0.9 percent, with consumer discretionary and info tech stocks leading gains.
     The loonie is edging higher and outperforming about half of its G-10 peers as investors take a pause from the risk-off mode that’s been affecting global markets and earnings season moves ahead.
     Also, Canada’mags household credit rose 3.2 percent month over month and 3.6 percent year over year, according to a Bank of Canada report. And consumer credit rose 7 percent in September from the month before, 4.2 percent year over year.
Stocks
* NexGen Energy jumped 4.9 percent ahead of its Toronto meeting with RBC Capital today 
* Cannabis stocks dropped on Gatineau, Quebec-based Hexo Corp. announcing plans to list shares on the New York Stock Exchange in December; Aurora Cannabis Inc. fell 4.4 percent and Aphria Inc. 4.0 percent
* Magna International Inc. rose 3.7 percent, a week after announcing acquisition of Haptronik GmbH 
Commodities
* Western Canada Select crude oil traded at a $43.5 discount to WTI
* Gold gained 1.4 percent to $1,232.2 an ounce
FX/Bonds
* The Canadian dollar was little changed at C$1.31044 per U.S. dollar
* The Canada 10-year government bond yield fell to 2.397%
US
By Jeremy Herron and Sarah Ponczek
     (Bloomberg) — U.S. stocks fell, with the S&P 500 flirting with a correction as technology shares tumbled after a report the Trump administration was set to press its trade war with China. The dollar rallied.
     The S&P 500 fell as much as 11 percent from its all-time high before paring the drop in the final 15 minutes of trading.
     The Dow Jones Industrial Average slid more than 500 points at its worst, dipping into a correction before closing down 1 percent. The Nasdaq 100 Index tumbled to the lowest level since May. The S&P 500 and Nasdaq indexes are on track for the steepest monthly declines of the record-long bull market.
     Selling intensified after Bloomberg reported the U.S. is preparing to announce by early December tariffs on all remaining. Chinese imports if talks next month between presidents Donald Trump and Xi Jinping fail to ease the trade war. That stoked anxiety in markets already under pressure by concerns from peak earnings growth to the end of easy money and rising rates. More than $8 trillion has been wiped off of global equities during a rout that’s now a month old. Bulls remain on the back foot, with early gains Monday fueled by speculation stocks had gotten cheap during the sell-off wiped out in afternoon trading.
     “There’s this pessimism that has been hanging on this market the whole month,” Chris Zaccarelli, chief investment officer at the Independent Advisor Alliance, said by phone . “ A trade war with China was one of the bigger overhangs. Any reminders of that just leads to more pessimism. Out of all the fears out there, that’s the one sticking most in peoples’ minds in terms of a reluctance to believe the economy is going to continue to be strong.”
     American investors will now turn to earnings this week from tech giants Facebook Inc. and Apple Inc., along with the October jobs report on Friday. Earnings have not been able to save other megacap tech names. Amazon plunged 6 percent Monday, Netflix lost 5 percent and Microsoft gave up 2.9 percent. Boeing led declines in the Dow, with a plunge of almost 6.6 percent. IBM fell 4.1 percent after agreeing to buy Red Hat.
     “There’s a not-so-faint scent of desperation,” said Christopher Harvey, head of equity strategy at Wells Fargo. “No catalysts left, Fed action will doom the market, trade will only get worse.” Elsewhere, there were a host of developments hitting specific markets. Brazilian assets rose after Jair Bolsonaro swept to power. The euro fell as German Chancellor Angela Merkel said she will quit as head of her party after nearly two decades, though she intends to see out her term as head of state. Mexico’s peso was under pressure after the incoming president canceled airport construction. The pound fell as U.K. Chancellor of the Exchequer Philip Hammond delivered the country’s budget.
Here are some key events coming up this week:
* Highlights from earnings season will include: Facebook, Komatsu, Ping An Insurance, PetroChina, Macquarie, Apple, Alibaba, China Telecom, Fanuc, GE, Airbus, Credit Suisse, Exxon Mobil, Shell and BP.
* Monetary policy decisions are due in Japan and the U.K. 
* On Friday, the final U.S. jobs report before the November midterm elections may show hiring improved as payrolls rose about 190,000, and the unemployment rate held at a 48-year low of 3.7 percent, analysts forecast.
And these are the main moves in markets:
Stocks
* The S&P 500 Index fell 0.7 percent at 4 p.m. New York time.
* The Nasdaq 100 lost 2 percent and the Dow Jones Industrial Average sank 1 percent.
* The Stoxx Europe 600 Index surged 1.3 percent to the highest in a week.
* Brazil’s Ibovespa Index rose 2.1 percent.
* The MSCI Emerging Market Index climbed 0.5 percent, the first advance in a week.
Currencies
* The Bloomberg Dollar Spot Index increased 0.6 percent to the highest in about 17 months.
* The euro was flat at $1.1392.
* The Japanese yen fell 0.4 percent to 112.34 per dollar, the biggest dip in almost two weeks.
Bonds
* The yield on 10-year Treasuries added one basis point to 3.08 percent.
* Germany’s 10-year yield increased two basis points to 0.38 percent.
* The spread of Italy’s 10-year bonds over Germany’s declined 18 basis points to 2.912 percentage points to the smallest premium in more than three weeks.
Commodities
* West Texas Intermediate crude decreased 0.2 percent to $67.47 a barrel.
* Gold fell 0.1 percent to $1,231.51 an ounce, the biggest fall in a week.

Have a wonderful evening. 

Be magnificent!

As ever,

Karen

“The way to get started is to quit talking and begin doing.” Walt Disney

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