October 3, 2018 Newsletter

Dear Friends,

Tangents:
On Oct. 3, 1990, West Germany and East Germany ended 45 years of postwar division, declaring the creation of a new unified country. Go to article »

Llamas. Bagels. Even mosquitoes. They’re all getting the respect they deserve, now that they’re among 70 new emoji Apple’s rolling out. -5things@CNN.com
While we’re all still debating whether Pluto is a planet (it is!!), scientists found an object called  “the Goblin” lurking at the edge of our solar system. -5things@CNN.com

Good luck is what happens when preparation meets opportunity; bad luck is what happens when lack of preparation meets a challenge. – Paul Krugman, Economist, NY Times Op-Ed, March 3, 2006
PHOTOS OF THE DAY

Lightening strikes the spire of One World Trade Center in lower Manhattan as a thunder storm moves through the New York City, US. Credit: UPI/Barcroft Images

British Museum stone conservator Kasia Weglowska, prepares a 1.8 ton head which is part of the final installations for the I Am Ashurbanipal: king of the world, king of Assyria, exhibition at the British Museum, London. Credit: Nick Ansell/PA

EastEnders hardman Jake Wood and rugby stars Thom Evans and Max Evans taking part in a ballet class taught by Bennet Gartside at the Royal Opera House in London. Credit: Andrej Uspenski/PA
Market Closes for October 3^rd, 2018

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 2008, in the depths of the financial crisis, President Bush signed into law a $700 billion plan to rescue the U.S. financial system. Meanwhile, Wells Fargo trumped Citigroup’s offer with a proposed $15 billion takeover of Wachovia with no government aid.
Canada
By Tatiana Darie
     (Bloomberg) — Canadian stocks followed U.S. peers higher as a global selloff in government bonds deepened and trading volume surged. The yield on 10-year Canadian government debt jumped to the highest in more than four years as traders bet on faster interest rate hikes in the wake of a revised free-trade agreement with the U.S.
     The S&P/TSX Composite Index gained 0.3 percent, led by health care, and pot stocks, energy and technology groups. Rate-sensitive sectors such as utilities and consumer staples led declines.
                            Stocks
* Norbord Inc. fell 3 percent, along with U.S. peers, as lumber/oriented strand board prices declined more, and buyers remained concerned about additional downside risk, CIBC wrote, citing trade journals.
* Canopy Growth Corp. rose 8 percent ahead of its second-quarter earnings Thursday from its largest shareholder, Constellation Brands.
* Enbridge Inc. gained 1.5 percent after entering a second agreement with Michigan committing to a “range of measures” to protect the Straits of Mackinac and the Great Lakes
                            Commodities
* Western Canada Select crude oil traded at a $41.75 discount to WTI
* Gold fell 0.4 percent to $1,202.30 an ounce
                            FX/Bonds
* The Canadian dollar fell 0.2 percent at C$1.2851 per U.S. dollar
* The Canada 10-year government bond yield gained 6.8 basis points to 2.527%
US
By Jeremy Herron and Vildana Hajric
     (Bloomberg) — U.S. stocks edged higher after flirting with records as a selloff in Treasuries deepened amid a surge in trading volume. Crude rallied above $76 a barrel and the dollar rose. The S&P 500 Index eked out a gain after earlier climbing to within a whisker of an all-time high. Steep losses in rate-sensitive shares from utilities to real-estate firms weighed on the measure. Banks surged as 30-year Treasury yields popped to the highest since 2014, while the two-year rate jumped to a pre-crisis high and 10-year yields hit levels last seen in 2011.
     The moves were sparked by data on private payrolls and American services industries that underscored the economy’s robustness at the same time Chairman Jerome Powell signaled the Federal Reserve will press on with rate hikes. More than two million 10-year Treasury futures contracts traded before the 3 p.m. settlement, about 170 percent above average.
     The retreat in equities rekindled discussions of the tug-of-war between rising rates and stocks, as investors weigh allocations. The equity gains come days after the Trump administration clinched a new Nafta deal, removing some investor angst that the trade wars would spiral out of control.
     While political risks remain in Europe and Washington, there’s few signs they’ll spilling into financial markets.  “It will likely become an issue when higher yields lead to slower economic activity through the interest rate sensitive housing and durable goods areas,” Brian Jacobsen, senior investment strategist at Wells Fargo Asset Management, said.
     “These things tend to go too far too soon and tend to correct when the enthusiasm for growth gives way to worries about the weight of higher debt servicing costs.” Elsewhere, crude in New York rose past $76 a barrel, trading near the highest level in almost four years, while aluminum in London rose the most since 2011. European shares rallied, and emerging-market equities slipped. MSCI Inc.’s Asia Pacific share index fell for a third day, with Japanese and South Korean equities leading declines. The rupiah and the rupee remained under pressure on surging oil prices. In India, the focus was also back on the country’s financial sector after Prime Minister Narendra Modi’s government took control of a financial firm.
Here are some key events coming up this week:
* American factory orders for August are due Thursday; data on the trade balance will come Friday.
* The U.S. government’s September jobs report is also due on Friday.
* The Reserve Bank of India’s policy decision is due Friday.
These are the main moves in markets:
                            Stocks
* The S&P 500 Index rose 0.1 percent at 4 p.m. in New York. It had been on track for a record close.
* The Dow Jones Industrial Average rose 0.3 percent, adding to an all-time high.
* The Russell 2000 Index gained 1 percent.
* The Stoxx Europe 600 Index jumped 0.5 percent
* The MSCI Asia Pacific Index sank 0.7 percent to the lowest in more than two weeks.
* The MSCI Emerging Market Index slipped 0.1 percent.
                            Currencies
* The Bloomberg Dollar Spot Index climbed 0.4 percent, hitting the highest in almost four weeks with its fifth straight advance.
* The euro fell for a sixth day, dropping 0.3 percent to $1.1518.
* The Japanese yen declined 0.7 percent to 114.43 per dollar.
                            Bonds
* The yield on 10-year Treasuries climbed nine basis points to 3.15 percent.
* The 30-year rate topped 3.30 percent, rising nine basis points. Two-year yields climbed four basis points to 2.8516 percent.
* Italy’s 10-year yield decreased 14 basis points to 3.31 percent, the first retreat in a week and the biggest tumble in more than two weeks.
                            Commodities 
* West Texas Intermediate crude climbed 1.4 percent to $76.27 a barrel, the highest in almost four years.
* Gold futures fell 0.4 percent to $1,202.20 an ounce.
–With assistance from Adam Haigh, Samuel Potter and Edward Bolingbroke.

Have a great night.

Be magnificent!

As ever,

Carolann

Alone we can do so little; together we can do so much.
                                       -Helen Keller, 1880-1968

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