September 20, 2019 Newsletter

Dear Friends,

Tangents:

Carolann is out of the office for a conference, I will be writing the Newsletter on her behalf.

PHOTOS OF THE DAY

Macca the baby seal at the Blue reef centre in Tynemouth after being rescued by skippers from the Billy Shiel’s Farne island boats who found her drowning in the North sea about 45 minutes out of Seahouses on the Northumberland coast.
CREDIT: OWEN HUMPHREYS/PA

Luke Herram’s Museum of the Moon’ at English Heritage’s Illuminating Rievaulx installation at Rievaulx Abbey, near Helmsley, North Yorkshire.
CREDIT: DANNY LAWSON/PA WIRE

Sunrise in the woods at Ashley Heath, Doset.
CREDIT: NICK LUCAS/SWNS
Market Closes for September 20^th, 2019  

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 2000, juvenile delinquency spread to online investing, as the SEC brought a case of securities fraud against a minor for the first time in its 66-year history. The SEC alleged that on at least 11 occasions, Jonathan Lebed manipulated microcap stocks by posting hundreds of false and misleading statements at online message boards. Lebed, who racked up nearly $800,000 in illegal gains, was 14 years old at the time.
Canada
By Divya Balji, Nick Lichtenberg and Yueqi Yang
(Bloomberg) — After a week of fresh highs, Canadian stocks are still cheap.
The S&P/TSX Composite Index is trading below the five-year average of its forward price-to-earnings ratio, despite hitting seven records since Sept. 13. Relative to U.S. equities, the main Canadian stock gauge is valued about 13% lower. The nation’s stock market has rebounded from a bout of late-summer volatility as global markets plunged, roiled by trade tensions and geopolitical risks. The reversal of momentum stocks, a surge in oil prices and the easing of trade tensions propelled almost 50% of the benchmark index this month. Energy and financial stocks, which were lagging the broader gauge, bounced back.
In a world of low interest rates, “it’s far better to borrow money and buy ownership than it is to buy bonds for example,” said Thomas Caldwell, chairman and founder of Caldwell
Securities Ltd.
“The market isn’t a homogeneous thing,” he said. “It’s made up of big caps, midcaps, small caps and in all kinds of diffesinsrent industries. The mid-to-small caps lag the market. So that whole sector is underpriced.” One technical analysis may shed some light. Bloomberg’s Fear and Greed indicator, a measure of buying strength versus selling strength, for the S&P/TSX rose to a 7-month high during this month’s rally, but still fell short of the January peak. In January, stocks soared 8.5% — the most since 2009. Foreign investors may be making a comeback. After four months of net outflows, overseas investors returned with almost C$2 billion ($1.5 billion) of capital in July, according to a report from Statistics Canada. Caldwell acknowledged that markets will continue to be choppy: “There’s a lot of stuff out there that can add some angst on a short term basis.”
“I still think that it makes more sense to be an owner of things in this interest rate environment. You might have pullbacks but I’m an eternal optimist and it has served me well over 55 years in this business,” he said.
Here’s a recap of what happened this week:
Stocks
* The S&P/TSX Composite Index is on pace to have the best month since April.
* Value investing has returned, pushing energy and financial stocks to the top sectors and tech as the worst so far this month.
Bonds
* The spread between U.S. and Canadian 2- year yields tightened to about 11 basis points, compared to about 16 basis points on Sept. 13
* Bank of Nova Scotia raised C$1.5 billion after selling its first senior bail-in bonds in its home market one year after regulation opened the spigot for the sales.
–With assistance from Esteban Duarte.
US
By Vildana Hajric and Brendan Walsh
(Bloomberg) — U.S. equities struggled to gain traction at the end of a busy week for central bank meetings, with investors’ focus shifting back to the trade war and geopolitical tensions.
The S&P 500 Index edged higher, putting the gauge within 1% of its July 26 closing record, while the Nasdaq Composite slumped as Netflix Inc. weighed on the tech-heavy gauge. The Stoxx Europe 600 Index advanced. The pound fell as the Irish government damped hopes of an imminent breakthrough in Brexit negotiations. Oil prices climbed amid still-elevated tensions in the Middle East as President Donald Trump stepped up sanctions on Iran.
U.S. equity trading may be volatile because of a quarterly event known as “quadruple witching,” when options and futures on indexes and stocks expire. The moves bring some of the busiest trading days of the year.
After a slew of monetary policy decisions this week, traders are now looking toward negotiations between the U.S. and China as trade deputies from both nations prepare to meet. On Wednesday, the Federal Reserve cut borrowing costs for a second time this year as major central banks around the world move to soften the blow of a protectionist spat that has created headwinds for global growth.
“There’s a fair amount of risk to the outlook at this point, but the market seems to have a relatively rosy outlook,” said Michael Reynolds, investment strategy officer at Glenmede Trust. “Trade is one of those things that seems to be getting better although I feel like it goes through cycles.”
Elsewhere, Asian stocks saw modest gains on reduced volumes, except in India, where equities soared after the country cut its corporate tax rate. Hong Kong shares slipped while the Shanghai Composite Index added just 0.2% after China’s modest cut to a reference rate for bank loans failed to impress investors.
Here are the main moves in markets:
Stocks
* The S&P 500 Index gained 0.1% as of 11:26 a.m. New York time.
* The Stoxx Europe 600 Index advanced 0.4%.
* The MSCI Asia Pacific Index climbed 0.4%.
* The MSCI Emerging Market Index climbed 0.5%.
Currencies
* The Bloomberg Dollar Spot Index rose 0.1%.
* The euro fell 0.3% to $1.1009.
* The British pound decreased 0.2% to $1.2603.
* The Japanese yen gained 0.1% to 107.92 per dollar.
Bonds
* The yield on 10-year Treasuries fell two basis points to 1.77%.
* Germany’s 10-year yield fell one basis point to -0.52%.
* Britain’s 10-year yield slipped one basis point to 0.62%.
Commodities
* Gold rose 0.3% to $1,503.78 an ounce.
* West Texas Intermediate crude gained 0.7% to $58.56 a barrel.

–With assistance from Adam Haigh, Todd White, Lu Wang and
Constantine Courcoulas.

Have a great evening.

Be magnificent!
As ever,
Isabel

A champion is afraid of losing. Everyone else is afraid of winning.

Isabel Luo,
Assistant to Carolann Steinhoff

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