September 19, 2018 Newsletter

Dear Friends,

Tangents:
September 19, 957 The United States conducted its first underground nuclear test, in the Nevada desert.

I read an interview with David Ellsberg in the Financial Times recently in which he portends that Trump’s behavior toward North Korea has inched the world closer to nuclear war.  Ellsberg is the guy who released the Pentagon Papers in 1971 and was at the forefront of planning disaster preparedness in the event of a nuclear war in his job at the Rand corporation and latterly in the Nixon Administration.  His book, The Doomsday Machine: Confessions of a Nuclear War Planner, has recently been published after years of rejection by publishers.  The renewed conversation on the possibility of a nuclear war and publishers’ willingness to put his book in print finally is disturbing at the very least.

Nature’s peace will flow into you as sunshine flows into trees.  The winds will blow their own freshness into you, and the storms their energy, while cares will drop away from you like the leaves of Autumn. –John Muir

PHOTOS OF THE DAY

South Korean President Moon Jae-in and North Korean leader Kim Jong-un attend a luncheon in Pyongyang, North Korea, during a high-stakes summit intended to salvage nuclear diplomacy negotiations between their countries. Credit: Pyeongyang Press Corps Via Reuters

Ballerinas arriving at the premiere of NUREYEV at the Curzon Mayfair, the new film by Jacqui and David Morris about the life of legendary ballet dancer Rudolf Nureyev which hits cinemas nationwide on 25 September. Credit: Jeff Moore

View of the work “Viewing Machine” by Danish-Icelander artist Olafur Eliasson, displayed at the Inhotim Centre for Contemporary Art in Brumadinho, some 60 km southeast of Belo Horizonte, Minas Gerais, Brazil. Credit: Mauro Pimentel/AFP/Getty Images
Market Closes for September 19^th, 2018

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 2008, in the depths of the financial crisis, Treasury Secretary Henry Paulson presented a plan to use taxpayer money to buy “hundreds of billions” of dollars worth of illiquid assets from U.S. banks. The SEC also issued a short-selling ban on hundreds of financial shares, and stocks rebounded for the second straight day.
Canada
By Tatiana Darie
     (Bloomberg) — Canadian stocks halted a three-day streak of gains as officials continue to work toward a trade U.S. trade deal, with Canadian Foreign Minister Chrystia Freeland telling reporters talks are still productive but negotiators need to do more work.  The S&P/TSX Composite Index fell 0.3 percent, with health-care, telecom and industrials leading losses. Materials, tech and financials were the only groups that gained.
     The loonie strengthened against the dollar for a second day.
                            Stocks
* TMAC Resources Inc. rose 2.6 percent after Macquarie initiated coverage with an outperform recommendation; TMAC filed a prospectus to offer shares via BMO Nesbitt Burns and CIBC World
                            Markets
* Aphria Inc. and Canopy Growth fell 7.3 percent and 5.8 percent, respectively, taking a breather even as cannabis producer Tilray gained as much as 94% before trimming gains.
* Australis Capital closed at $2.93 on its first trading day after parent company Aurora completed distribution of Australis’ shares and warrants.
                            Commodities
* Western Canada Select crude oil traded at a $32 discount to  WTI
* Gold gained 0.5 percent to $1,208.30 an ounce
                            FX/Bonds
* The Canadian dollar gained 0.4 percent C$1.2922 per U.S. dollar
* The Canada 10-year government bond yield gained 2.8 basis points to 2.411%
US
By Randall Jensen
    (Bloomberg) — U.S. equities edged higher and Treasuries declined as investors assessed the latest developments in the varied trade disputes. The dollar fell. The S&P 500 Index gained for a second day, getting a lift from banking stocks as the 10-year Treasury yield rose toward its highest level of the year, while rate-sensitive utilities weighed. Grocers dropped on a report that said Amazon Inc. is considering opening as many as 3,000 cashier less stores. Shares of Caterpillar Inc. and The Boeing Co. helped push up the Dow Jones Industrial Average after China said it won’t devalue its currency.
     The dollar fell against most major currencies after a report said the U.S. and Canada are unlikely to reach a deal on Nafta in Washington this week. Emerging-market equities advanced for the fifth time in six sessions as their currencies strengthened. West Texas crude climbed above $71 a barrel.  “We continue to ignore concerns over escalation of trade.  We knew we’d get this latest round and that China would  retaliate,” Art Hogan, chief market strategist at B Riley FBR Inc., said. “Right now it feels like an endless round of one-upsmanship and tit-for-tat retaliation. The market is willing to look at this as a brutal negotiation process and not a mutually destructive trade war just yet.”
     While the threat to global growth remains, investors have had months to form a view on the trade war and stock markets have been signaling an improving sentiment of late: A basket of global shares is rising for the seventh time in eight sessions.  But that perspective could be in jeopardy if tariffs have a bigger-than-expected impact on the economy. As the week grinds on, Brexit remains a key item on the agenda as the U.K. and European Union battle against the clock for an accord.
     Here are some key events coming up this week:
* European PMIs are due on Thursday; U.S. PMIs out Friday
* The Organization of Petroleum Exporting Countries and its allies meet in Algiers this weekend.
     These are the main moves in markets:
                            Stocks
* The S&P 500 Index rose 0.1 percent to 2,907.95 as of 4:00 p.m. in New York. 
* The Nasdaq Composite Index fell 0.1 percent. 
* The Dow Jones industrial gained 0.6 percent, touching the highest since January. 
* The Russell 2000 Index declined 0.5 percent.
* The MSCI World Index of developed countries rose 0.4 percent to the highest in almost three weeks.
* The MSCI Emerging Market Index climbed 1.2 percent.
                            Currencies
* The Bloomberg Dollar Spot Index fell 0.1 percent to the lowest in three weeks.
* The euro rose less than 0.1 percent.
* The Japanese yen gained 0.1 percent.
* The Turkish lira advanced 2.1 percent to 6.2508 per dollar.
* South Africa’s rand gained 1.8 percent to 14.6485 per dollar.
* The MSCI Emerging Markets Currency Index climbed 0.3 percent.
                            Bonds
* The yield on 10-year Treasuries rose two basis points to 3.08 percent.
* Germany’s 10-year yield gained less than one basis point to 0.49 percent.
* Italy’s 10-year yield gained six basis points to 2.852 percent.
                            Commodities
* The Bloomberg Commodity Index gained 0.8 percent.
* West Texas Intermediate crude rose 1.9 percent to $71.15 a barrel, headed for the highest since July. 
* Gold climbed 0.4 percent to $1,203.15 an ounce.
–With assistance from Vildana Hajric, Eddie van der Walt, Samuel Potter and Todd White.

Have a great night.

Be magnificent!

As ever,

Carolann

In a real dark night of the soul it is always three o’clock in the morning.
                                                    -F. Scott Fitzgerald, 1896-1940

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
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www.carolannsteinhoff.com