October 9, 2018 Newsletter

Dear Friends,

Tangents:
On Oct. 9, 1967, Latin American guerrilla leader Che Guevara was executed in Bolivia while attempting to incite revolution. Go to article »
John Lennon, b.  October 9, 1940

Blackbird singing in the dead of night
Take these broken wings and learn to fly
All your life
You were only waiting for this moment to arise…
        ~John Lennon and Paul McCartney

www.thebeatles.com

PHOTOS OF THE DAY

Student Eimear Heath sitting in her room at St John’s College, Cambridge, enjoying the warm Autumn weather by the wall of Boston Ivy which is turning red. The largest wall of Boston Ivy in Britain is putting on a stunning display after turning a blaze of red, as the UK looks to see the warmest October weather in seven years this week. The magnificent 170-year-old ivy is looking spectacular as temperatures are expected to hit 23C in the south on Wednesday – making it the hottest October day since 2011. The bright red creeper on the back of the building at St John’s College at Cambridge University is one of the city’s most famous autumn spectacles. CREDIT: GEOFF ROBINSON PHOTOGRAPHY

The sun rises behind mist on Lake Windermere in the Lake District, UK. CREDIT: DEAN ALLAN/MERCURY PRESS & MEDIA

The SpaceX Falcon 9 rocket carrying the SAOCOM 1A satellite launched from Vandenberg Air Force Base as SpaceX completed the secondary mission of landing the first stage of the Falcon 9 rocket at Landing Zone 4, which was previously called SLC-4W. This was SpaceX’s first land landing attempt at Vandenberg Air Force Base. CREDIT: DANIEL J. QUINAJON/AFP/GETTY IMAGES
Market Closes for October 9th, 2018

International Markets

Bonds

Currencies

Commodities

Market Commentary:
I think democracies are prone to inflation because politicians will naturally spend – they have the power to print money and will use money to get votes. -Charlie Munger
Canada
By Carolina Wilson
(Bloomberg) — Canadian stocks declined for a third day, reaching their lowest level since May, as shares of materials companies weighed on the market’s benchmark. The loonie pared earlier losses against the greenback.
     The S&P/TSX Composite Index fell about 0.6 percent, marking its longest losing streak in four weeks. 
     Technology stocks slid 2.5 percent, while the materials and consumer discretionary sectors each lost more than 1 percent. Health care firms rebounded, climbing the most.
     Canadian housing starts fell to the lowest in almost two years in September, led by a drop in British Columbia, a government report showed.
                                                    Stocks
* Pretium Resources Inc. slumped 11 percent after results at the key Brucejack mine disappointed 
* Interfor Corp. fell 7.5 percent alongside other lumber stocks, as analysts flagged pricing and capacity concerns for the group
* BRP Inc. slid 7.4 percent, even as the Ski-Doo maker won a new buy rating at UBS and an upgrade to outperform at RBC
* Suncor Energy Inc. rose as much as 1.4 percent after Macquarie analyst Brian Bagnell upgraded the stock to outperform from neutral; it closed lower by 0.5 percent
* Aphria Inc. climbed 6.8 percent, as pot-stock investors look ahead to Canada legalization next week 
                                                   Commodities
* Western Canada Select crude oil traded at a $47 discount to WTI
* Gold gained 0.4 percent to $1,193.50 an ounce
                                                    FX/Bonds 
* The Canadian dollar climbed about 0.1 percent to C$1.29467 per U.S. dollar
* The Canada 10-year government bond yield fell to 2.571%
US
By Vildana Hajric and Sarah Ponczek
(Bloomberg) — Technology stocks rebounded from a three-day rout but failed to lead the broader market higher, while yields on Treasuries retreated from a seven-year peak amid rising trade tensions and a sketchy outlook for global growth.
     The dollar drifted lower and crude hovered around $75 a barrel.  The Nasdaq 100 Index, which lost nearly 4 percent over the previous three sessions, rose despite giving up much of a 1 percent increase earlier in the day. The S&P 500 Index turned lower on a 3.4 percent decline in materials shares, the worst performing group in the stock market, after a leading coatings maker warned that profits would fall short of analyst forecasts.
     “Tech’s slide — outside semiconductors — has stopped due to the pause in interest rates moving higher,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.  “Separately from that, people are stepping in and buying some of these names because they’re on sale.” Meanwhile, the yield on benchmark 10-year Treasuries slipped after almost hitting 3.26 percent, the highest since 2011. 
     “There was some talk that when the bond market opened up today we may see rates move lower. That was a telling sign, and we did not see that,” said Victoria Fernandez, chief market strategist for Crossmark Global Investments. “We have really established this new range on the 10-year.”
     The Stoxx Europe 600 Index rose for the first time in four days. The MSCI Asia Pacific Index notched a seventh straight drop, though stocks in Shanghai rose following the biggest selloff in more than three months. The yuan gained in onshore trading after sliding a day earlier — a move that prompted concern from the U.S. government.  With a gloomy mood permeating markets, the latest report from the International Monetary Fund did little to spur investor confidence. The IMF cut its global growth outlook for the first time since 2016, in part because of rising trade tensions between the world’s two largest economies. China took steps to aid lending this week, a move that inevitably puts pressure on the yuan and potentially creates a vicious circle where the currency’s weakness threatens to further aggravate the situation by prompting more easing by Chinese officials. 
     “If the trade confrontation continues, the Chinese currency will go lower and that will create a whole host of problems for the global economy,” said Alicia Levine, chief strategist at BNY Investment Management.   
     Meanwhile, Chinese Internet giant Tencent Holdings Ltd. continued to plunge, falling 38 percent, or $220 billion, from its January high. It has lost more market value than any other company in the world this year.
     South Korea’s market was closed for a holiday. Next up, traders are bracing themselves for $230 billion of Treasury auctions this week.
Here are some key events coming up:
* The U.S. Treasury has $230 billion worth of debt auctions this week.
* The IMF and World Bank will hold meetings in Bali from Friday, where finance chiefs from around the world will gather.
* A closely watched gauge of U.S. consumer prices probably remained elevated in September and rose 2.3 percent from a year earlier, according to forecasts ahead of Thursday’s release.
* JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. kick off earnings season for U.S. banks on Friday.

These are the main moves in markets:
                                                    Stocks
* The S&P 500 declined 0.1 percent to 2,880.34, while the Nasdaq 100 increased 0.3 percent.
* The Stoxx Europe 600 Index rose 0.2 percent.
* The U.K.’s FTSE 100 Index gained 0.5 percent.
* The MSCI Asia Pacific Index sank 0.8 percent, hitting the lowest since July 2017 with its seventh consecutive decline.
* The MSCI Emerging Market Index added 0.1 percent, rebounding from a loss of almost 0.5 percent earlier in the day.
                                                    Currencies
* The Bloomberg Dollar Spot Index declined less than 0.1 percent.
* The euro was little changed at $1.1494.
* The British pound added 0.4 percent to $1.314.
* The Japanese yen gained 0.3 percent to 112.93 per dollar.
                                                     Bonds
* The yield on 10-year Treasuries fell three basis points to 3.2025 percent.
* Germany’s 10-year yield climbed two basis points to 0.547 percent.
* Britain’s 10-year yield increased four basis points to 1.716 percent.
                                                     Commodities
* The Bloomberg Commodity Index rose 0.4 percent.
* West Texas Intermediate crude added 0.8 percent to $74.85 a barrel.
* Gold gained 0.2 percent to $1,189.95 an ounce.
–With assistance from Emma Dai, Jan-Patrick Barnert and Samuel Potter.
Have a great night.

Be magnificent!
As ever,

Carolann
No man ever listened himself out of a job.
                   -Calvin Coolidge, 1872-1933

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