June 27, 2024, Newsletter

Dear Friends,

Tangents: Happy Friday Eve.

June 27, 1954: The world’s first nuclear power plan tis activated. The reactor at Obninsk in present-day Russia
June 27, 1859: Happy Birthday to You song composed.
June 27, 1972: The video game company Atari was founded by Nolan Bushnell and Ted Dabney in Santa Clara, Calif. Go to article >>

Helen Keller, b. 1880.

Panda express: China sends two pandas to the San Diego Zoo
Two giant pandas are heading to San Diego in China’s first new loan to the US in more than 20 years.

Marilyn Monroe’s former home saved from demolition
The Los Angeles City Council unanimously voted to preserve Marilyn Monroe’s Brentwood home, where the star lived and died, as a Historic-Cultural Monument. It comes nearly a year after the new homeowners filed a request to have it demolished.

Elvis Presley’s actual blue suede shoes are up for auction
Fans have the opportunity to step into the King’s very own blue suede shoes as they go up for sale this week. Here’s how much they could fetch at auction

‘Space potato’ spotted by NASA Mars satellite is actually something much cooler
The starchy-looking moon Phobos, destined to crash into Mars’ surface, has been revealed in new detail by NASA’s Mars Reconnaissance Orbiter. The ‘space potato’ image was recently shared on NASA’s Instagram. Read More

‘Exceptional’ discovery reveals more than 30 ancient Egyptian tombs built into hillside
Archaeologists have unearthed more than 30 ancient Egyptian tombs that date to the Greco-Roman period, and reveal clues about those who once lived in this vibrant trading port. Read More.

Boiling rocks from Earth’s crust tore an ocean into Mongolia 410 million years ago
An ocean that opened up in what is now Mongolia 410 million years ago was created by a hot upwelling of rock known as a mantle plume.  Read More.

‘It’s like we opened a buffet’: Market Commentary:
📈 On this day in 1967, the world’s first cash point—a forerunner of today’s ATMs—was unveiled at a Barclays Bank branch in London. The machine allowed customers to withdraw up to £10, then equivalent to $28, at a time.
Sharks in Gulf of Mexico learn to steal food from fishing nets
Sharks in the Gulf of Mexico are learning to associate boat engines with food, leading to more and more cases of depredation, experts say. Read More.

PHOTOS OF THE DAY

Rainbow Valley conservation reserve, Northern Territory | Australia
Photographer Baillie Farley: ‘The central Australian Outback has some of the darkest southern night skies in the world. This image captures the breathtaking scene at Rainbow Valley conservation reserve, where the southern Milky Way gracefully arches above a remarkable formation of colourful sandstone. This area exudes a unique charm, with its vibrant hues and stunning geological formations creating a mesmerising landscape’
Photograph: Baillie Farley/2024 Milky Way photographer of the year

Glastonbury, UK
Performers entertain festival goers in the Theatre Field during day two of Glastonbury Festival
Photograph: Jim Dyson/Redferns/Getty Images

​​​​​​​Boston, US
A group of boys toss their friend into the water at Good Harbor beach during a heatwave
Photograph: Joseph Prezioso/Anadolu/Getty Images
Market Closes for June 27^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1967, the world’s first cash point—a forerunner of today’s ATMs—was unveiled at a Barclays Bank branch in London. The machine allowed customers to withdraw up to £10, then equivalent to $28, at a time.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the second day, climbing 0.7%, or 148.26 to 21,942.16 in Toronto.
The index advanced to the highest closing level since June 12.
Shopify Inc. contributed the most to the index gain, increasing 1.4%. MDA Space Ltd. had the largest increase, rising 13.5%.
Today, 184 of 226 shares rose, while 41 fell; 10 of 11 sectors were higher, led by financials stocks.
Insights
* This quarter, the index fell 1%
* This month, the index fell 1.5%
* So far this week, the index rose 1.8%, heading for the biggest advance since the week ended Nov. 17
* The index advanced 11% in the past 52 weeks. The MSCI AC Americas Index gained 24% in the same period
* The S&P/TSX Composite is 2.7% below its 52-week high on May 21, 2024 and 17.4% above its low on Oct. 27, 2023
* The S&P/TSX Composite is up 1.7% in the past 5 days and fell 1.9% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 17.7 on a trailing basis and 14.9 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.1% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.47t
* 30-day price volatility rose to 11.27% compared with 11.05% in the previous session and the average of 10.52% over the past month
================================================================
|Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 40.3517| 0.6| 24/3
Energy | 36.0522| 0.9| 37/4
Information Technology | 25.2099| 1.4| 10/0
Materials | 11.6853| 0.4| 35/16
Industrials | 11.1757| 0.4| 22/6
Consumer Discretionary | 7.2351| 0.9| 9/4
Real Estate | 6.7602| 1.6| 20/0
Utilities | 5.8407| 0.7| 13/2
Consumer Staples | 5.7658| 0.6| 9/2
Health Care | 1.0429| 1.7| 4/0
Communication Services | -2.8497| -0.4| 1/4
================================================================
| | |Volume VS |
| Index | | 20D AVG |YTD Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
Shopify | 10.7300| 1.4| -23.2| -11.8
Manulife Financial | 10.2900| 2.3| -48.7| 23.9
Brookfield Corp | 9.2860| 1.7| -33.1| 7.1
Enbridge | -2.2290| -0.3| -54.3| 1.2
Canadian Pacific Kansas | -6.4540| -0.9| -38.5| 3.2
Bank of Montreal | -8.2570| -1.4| 7.2| -13.0
US
By Rita Nazareth
(Bloomberg) — The world’s largest bond market rose after the latest batch of economic reports reinforced speculation the Federal Reserve will be able to cut interest rates this year to prevent a bigger US slowdown.
Traders gearing up for the Fed’s favored inflation gauge piled into Treasuries as several data points illustrated a downshift in growth tied to the central bank’s higher-for-longer stance.
The government marked down personal spending to an annualized 1.5% in the first quarter. Separate releases showed declines in orders and shipments of certain business equipment, weakness in the job market and a slide in homebuying.
To Chris Low at FHN Financial, the slowdown story got stronger.
“Continuing claims inched higher and are now the highest since late 2021 — sending a warning sign that the labor market could be softening,” said Jeff Roach at LPL Financial. “We expect both consumer and business activity to slow in the latter half of 2024, giving the Fed ample opportunity to begin cutting rates later this year.”
Treasury 10-year yields fell four basis points to 4.29%.
The S&P 500 fluctuated around 5,480.
In late trading, Nike Inc. sank as sales missed estimates.
Walgreens Boots Alliance Inc. tumbled 22% in regular hours after slashing its guidance.
Chewy Inc. and Petco Health and Wellness Co. whipsawed as Keith Gill —known as “Roaring Kitty” — posted a cartoon image of a dog on X.
Traders are pricing in roughly “one volatility point” of added premium Friday, the session after Joe Biden and Donald Trump’s debate, according to an analysis from Citigroup Inc. that compared current and expected volatility.
That assumes the effect of options expiry at quarter-end, another potential catalyst that could swing stocks, will be similar to that for triple-witching last week.
US PREVIEW: May PCE Inflation to Offer Welcome News for Fed Fed Bank of Atlanta President Raphael Bostic said he continues to expect one rate reduction this year amid signs inflation has resumed its decline.
His projection echoes that of the Federal Open Market Committee.
Earlier this month, Fed officials penciled in just one rate reduction for 2024, according to the median forecast.
Swap markets are pricing in about 45 basis points of easing in 2024, which would equate to less than two cuts.
Economists expect data Friday to show that the Fed’s preferred gauge of underlying inflation slowed to an annualized rate 2.6% last month from 2.8%.
While that’s the lowest reading since March 2021, it remains above the Fed’s goal for 2% inflation.
“A consensus move would conform with the narrative that the early-2024 reflationary pressures are fading, and the cooling trend seen during the second half of 2023 has once again resumed in the second quarter,” said Ian Lyngen and Vail Hartman at BMO Capital Markets. “Perhaps more importantly, investors are anticipating a round of inflation data that offers incremental support for a September rate cut.”
A string of weaker-than-estimated data points has sent the US version of Citigroup’s Economic Surprise Index to the lowest since August 2022.
The gauge measures the difference between actual releases and analyst expectations.
Worries about the strength of the labor market and the subsequent effect on consumer spending — in addition to the market’s reliance on just a handful of stocks — have caused consternation and warnings that the bull market needs a rest,
recalibration and maybe help from the Fed, according to Quincy Krosby at LPL Financial.
Should Friday’s PCE data disappoint, stagflation headlines will hit the tape, Krosby noted.
But if estimates hold or surprise with cooler data, it should help the market ease into July.
“Still, an overbought market and relatively expensive market based on just a handful of mega names may need to recalibrate and allow other sectors to co-exist with them or even begin to lead the market,” she said. “Such adjustments can
trigger pockets of volatility coupled with attractive pockets of opportunity.”
Ed Clissold at Ned Davis Research says persistent pessimism toward the economy and stocks has been a key driver of the bull market. And much of the pessimism has given way to optimism or neutral views.
“The sentiment shift puts more of the onus on fundamentals for the bull market to continue,” he said. “Our conclusion is that the stock market can no longer rely on the economy beating low expectations. Fundamentals will need to drive the bull market in the second half.”
For now, Clissold remains bullish on stocks — both on an absolute basis and relative to bonds and cash.
To Chris Senyek at Wolfe Research, volatility will likely continue to pick up, and this will generally benefit the “Magnificent Seven” megacaps and the overall momentum trade in the weeks ahead.
“More specifically, we expect these themes to continue to benefit from environment in which growth is slowing — but the Fed is expected to kick off a deep cutting cycle,” he noted.
“Further, our sense is that the biggest companies driving these trends will once again put up very solid results during the second-quarter earnings season.”
A survey conducted by 22V Research showed that investors largely expect artificial-intelligence companies to beat second-quarter earnings estimates.
About 59% of the investors surveyed think AI earnings will “beat” expectations and 36% believe they will “meet”.
Only 5% think they will “miss” forecasts.
Despite thinking that these companies will beat, the investors surveyed are unsure about the the stock reaction for AI companies, 22V said.
In a month when Nvidia Corp. briefly became the world’s largest company amid AI optimism, hedge funds were “aggressively” selling tech stocks, according to analysis from Goldman Sachs Group Inc.
This month’s net selling in the US tech sector is on track to be the largest on record going back in data since 2017, according to Goldman’s prime brokerage data.
The trimming of exposure by hedge funds is in sharp contrast to the record inflows seen into tech-related funds last week.

Corporate Highlights:
* Boeing Co.’s move to switch its bid for Spirit AeroSystems Holdings Inc. to a mostly stock deal is likely an effort to preserve cash and stave off ratings downgrades as the planemaker teeters on the edge of junk, according to credit analysts.
* Webtoon Entertainment Inc. shares climbed 9.5% in the online comics company’s debut after a US initial public offering that raised $315 million, priced at the upper end of a marketed range.
* Denim maker Levi Strauss & Co. reported quarterly sales that fell just short of estimates, underscoring Wall Street’s high expectations for the company.
* International Paper Co. plunged after Suzano SA said it would end its pursuit of the US paper giant.
* Customers of major US telecommunications companies including AT&T Inc., T Mobile US Inc. and Verizon Communications Inc. are reporting issues connecting to their networks while outside of the country.
* Target Corp. is lowering the bar to stop shoplifters, taking a tougher approach to further curb store theft that has weighed on operations.
* L’Oreal SA expects slower growth for the overall beauty market this year, according to its CEO, as weakness in China weighs on sales after years of rapid gains.

Key events this week:
* Japan Tokyo CPI, unemployment, industrial production, Friday
* US PCE inflation, spending and income, University of Michigan consumer sentiment, Friday
* Fed’s Thomas Barkin speaks, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 was little changed as of 4 p.m. New York time
* The Nasdaq 100 rose 0.2%
* The Dow Jones Industrial Average was little changed
* The MSCI World Index was unchanged
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro rose 0.2% to $1.0703
* The British pound rose 0.1% to $1.2639
* The Japanese yen was unchanged at 160.81 per dollar
Cryptocurrencies
* Bitcoin rose 0.7% to $61,385.55
* Ether rose 1.7% to $3,446.92
Bonds
* The yield on 10-year Treasuries declined four basis points to 4.29%
* Germany’s 10-year yield was little changed at 2.45%
* Britain’s 10-year yield was little changed at 4.13%
Commodities
* West Texas Intermediate crude rose 1.2% to $81.89 a barrel
* Spot gold rose 1.2% to $2,326.02 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Michael Msika, Carly Wanna, Richard Henderson, Divya Patil and Robert Brand.

Have a lovely evening.

Be magnificent!
As ever,

Carolann
I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel. –Maya Angelou, 1928-2014.

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