October 30, 2019 Newsletter

Dear Friends,

Tangents: Happy Hump Day!
Fyodor Dostoievski, b. 1821
Ezra Pound, b. 1885
On Oct. 30, 1974, Muhammad Ali knocked out George Foreman in the eighth round of a 15-round bout in Kinshasa, Zaire, to regain his world heavyweight title.  Go to article »

Smarter Living: There are benefits to being alone. Experts say that taking time for yourself can help you better handle negative emotions and experiences. Thirty minutes a week reading at a cafe could make a real difference.-New York Times.

From Bloomberg today:
It’s a Halloween tradition here at Bloomberg to ask investors and analysts for the charts that scare them the most. My colleague Luke Kawa rounded up some truly scary ones. One I want to focus on, via George Pearkes of Bespoke Investment Group, shows U.S. crude oil imports drifting steadily down as the U.S. ramps up domestic shale production.
So why’s that so scary? Pearkes points out that the rise of shale production basically means the U.S. is exchanging far fewer dollars in return for the world’s oil, which limits the amount of petrodollars circulating around the world. As Pearkes puts it: “Add on what might happen as electric vehicle deployment ramps up, and the prospects for a net crude trade surplus in the near future mean one source of dollar liquidity … drying up.” It’s almost certainly going to happen, and it’s a huge change that has the potential to impact the entirety of global markets. Spooky!

PHOTOS OF THE DAY

General View of a skeleton statue emerging from potholes in a street in the town of the municipality of Tlahuac, Mexico City, Mexico. The simulation of the potholes was recreated by Raymundo Medina, an inhabitant of this urban are of the Mexican capital, to commemorate the Day of the Dead and incidentally, take advantage of making a call to the authorities so that the streets of his town are fixed.
CREDIT: MARIO GUZMAN/EPA-EFE/REX

Participants prepare their hot air balloons at the Flutuar- III Coruche Balloning Festival, in Coruche, Portugal.
CREDIT: MIGUEL A LOPES/EPA-EFE/REX

Aurora Borealis, the Northern Lights, over Skogafoss waterfall in Southern Iceland as it begins to freeze.
CREDIT: OWEN HUMPHREYS/ PA WIRE

Market Closes for October 30^th, 2019  

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1929, the Dow Jones Industrial Average had one of its best days ever, rocketing up 29.40 points, or 12.3%, to 258.47. John D. Rockefeller, Sr. said, “There is nothing in the business situation to warrant the destruction of values that has taken place on the exchanges during the past week, [so] my son and I have for some days been purchasing sound common stocks.” The Dow went on to lose 84.1% more of its value before bottoming out on July 8, 1932.  Today the Dow, closed at 27186.69.
Canada
By Michael Bellusci
(Bloomberg) — Canadian equities rose Wednesday, closing at the session high, amid a blur of third-quarter earnings reports. The Bank of Canada kept the current 1.75% policy interest rate unchanged. The S&P/TSX Composite rose for a second day, climbing 0.5%, 83.29 to 16,501.43 in Toronto, then highest close this month. Information technology shares were the top performers, climbing 1.9% as a group. Meanwhile, TC Energy Corp.’s Keystone crude oil pipeline was shut following a spill in North Dakota, the third along the pipeline’s route in less than three years, roiling Canadian and U.S. oil markets.
Commodities
* Western Canada Select crude oil traded at a $16.75 discount to WTI
* Spot gold gained 0.6% to $1,496 an ounce
FX/Bonds
* The Canadian dollar weakened 0.6% to C$1.3165 per U.S. dollar
* The Canada 10-year government bond yield fell 14.8 basis points to 1.453%
Insights
* This month, the index fell 0.9%
* This year, the index rose 15%, heading for the best year since 2016
================================================================
|Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 23.1613| 0.4| 16/9
Industrials | 18.0883| 1.0| 25/6
Information Technology | 16.0428| 1.9| 9/0
Materials | 10.9788| 0.6| 30/18
Communication Services | 10.2583| 1.1| 7/0
Utilities | 4.1496| 0.5| 13/3
Consumer Discretionary | 4.0005| 0.6| 9/7
Health Care | 1.6807| 0.8| 8/2
Real Estate | 0.5673| 0.1| 21/4
Consumer Staples | -0.2294| 0.0| 7/3
Energy | -5.4286| -0.2| 9/23
US
By Vildana Hajric and Sarah Ponczek
(Bloomberg) — U.S. stocks advanced to an all-time high after the Federal Reserve cut interest rates as expected and signaled it was unlikely to move in either direction any time soon as inflation remains muted. Treasuries extended gains and the dollar erased an advance. The S&P 500 turned higher when Chairman Jerome Powell said rate hikes won’t occur as long as inflation remains persistently cool. That fueled a rally in Treasuries and sent the dollar Lower. Prior to the comment, risk assets were under pressure after hawks saw a change in the policy statement’s language — removing “act as appropriate” — as signaling officials will not make any further cuts this year. “Markets believe that, irrespective of easing trade issues, there is a gigantic pause on future rate increases unless and until inflation moves markedly higher,” said Jamie Cox, managing partner for Harris Financial Group. “The Federal Reserve just put a big stake in the ground on the future rate path.” After the close of trading, Apple, Starbucks and Facebook advanced after posting results. Twitter fell after saying it won’t accept political advertisements. Equities had spent most of the day treading water as investors digested the latest batch of earnings and trade headlines. Shares fell to session lows when Chile canceled next month’s APEC meeting where the U.S. and China intended to sign a partial trade pact. Johnson & Johnson led gains in the Dow Jones Industrial Average. Yum Brands, C.H. Robinson and Molson Coors slumped after reporting results. General Electric jumped after raising its forecast while Mattel soared after a sales beat. Data showed the U.S. economy rose 1.9% in the third quarter and a report on private hiring showed solid gains, with both data sets topping estimates.
“This quarter’s results suggest that recession fears may have been overblown, and the U.S. economy is simply going through another growth scare, akin to late 2015/early 2016,” said Michael Reynolds, investment strategy officer at Glenmede. Earnings also set the tone in Europe, where the Stoxx 600 added 0.1%. Total’ profit beat analyst estimates and cash flow held firm, Airbus cut its full-year delivery target and Volkswagen lowered its outlook for vehicle deliveries. Deutsche Bank saw earnings from trading debt securities and currencies drop 13%, Credit Suisse Group posted better-than-expected profit and Standard Chartered generated 19% more revenue in Europe and the Americas. PSA Group and Fiat Chrysler Automobiles rose after saying they’re in talks about a tie-up. Elsewhere, the pound strengthened after U.K. Prime Minister Boris Johnson won backing in Parliament for a Dec. 12 election. The euro was steady after data showed France’s economy grew more than expected in the third quarter, but economic confidence in the broader region extended a slide. Oil fluctuated and gold rose.
Here are some key events coming up this week:
* Earnings include: Apple and Facebook on Wednesday; Mitsubishi Heavy on Thursday; Exxon Mobil and Macquarie Group on Friday.
* The Fed is expected to lower the main interest rate when policy makers decide on Wednesday.
* The Fed’s preferred inflation metric, the core PCE deflator, is due Thursday.
* The Bank of Japan sets policy on Thursday and Governor Haruhiko Kuroda will hold a news conference.
* Friday brings the monthly U.S. non-farm payrolls report.

These are some of the main moves in markets:
Stocks
* The S&P 500 Index rose 0.3% at 4 p.m. New York time.
* The Dow Jones Industrial Average added 0.4% and the Nasdaq 100 climbed 0.4%.
* The Stoxx Europe 600 Index rose 0.1%.
* The MSCI Asia Pacific Index declined 0.2%.
* The MSCI Emerging Market Index fell 0.2%.
Currencies
* The Bloomberg Dollar Spot Index fell 0.1%.
* The euro rose 0.2% to $1.1137.
* The Japanese yen added 0.1% to 108.79 per dollar.
Bonds
* The yield on 10-year Treasuries lost five basis points to 1.78%.
* The two-year yield slipped two basis points to 1.62%.
* Germany’s 10-year yield was flat at -0.35%.
Commodities
* Gold futures increased 0.2% to $1,494.10 an ounce.
* West Texas Intermediate crude declined 1.4% to $54.77 a barrel.
–With assistance from Samuel Potter.
Have a great night.

Be magnificent!
As ever,

Carolann

Good words are worth much, and cost little.
                  -George Herbert,  1593-1633

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