Tangents:
The month of August is named after the Roman emperor Augustus Caesar. His 40 years in power were a high point for the Roman Empire, with literature and the arts flourishing during a time of relative peace.
August 2,1870: The Tower Subway beneath the River Thames in London opened its doors for passengers. The subway was closed within a few months because of bankruptcy. The tunnel is now used for utilities.
1939: Albert Einstein signed a letter to President Franklin D. Roosevelt urging creation of an atomic weapons research program. Go to article >>
Man who visited every country without flying has returned home. Meet a man who completed his dream of visiting every country in the world by either land or sea.
‘Exceptional’ winged Medusa discovered in Roman-era mosaic in Spain
The 1,800-year-old Medusa mosaic was discovered in the remains of lavish Roman-era house in western Spain. Read More.
Deadly swarm of earthquakes in Japan caused by magma moving through extinct volcano
Over 10,000 earthquakes are believed to be emanating from a long-dead volcano, with fluids pushing through the collapsed system. Read More.
Rare ‘Einstein cross’ warps light from one of the universe’s brightest objects in this stunning image
Einstein predicted the existence of these crosses back in 1915. Now, they are used to study distant galaxies. Read More
PHOTOS OF THE DAY
Sunflowers are pictured behind rain drops on a car window at a field in Frankfurt, Germany. Photograph: Michael Probst/AP
New York City, US. Supermoon rises over the Empire State Building. Photograph: Anadolu Agency/Getty Images
Encinitas, California, US. Surfers Sam Paulsen (R), of Encinitas, and Sean Bobo, of Cardiff, flip off a wave while surfing the high tide backwash along a cliff coastline. Photograph: Mike Blake/Reuters
Market Closes for August 2nd, 2023,
| Market Index |
Close | Change |
| Dow Jones |
35282.52 | -348.16 |
| -0.98% | ||
| S&P 500 | 4513.39 | -63.34 |
| -1.38% | ||
| NASDAQ | 13973.45 | -310.46 |
| -2.17% | ||
| TSX | 20218.21 | -314.72 |
| -1.53% |
International Markets
| Market Index |
Close | Change |
| NIKKEI | 32707.69 | -768.89 |
| -2.30% | ||
| HANG SENG |
19517.38 | -493.74 |
| -2.47% | ||
| SENSEX | 65782.78 | -676.53 |
| -1.02% | ||
| FTSE 100* | 7561.63 | -104.64 |
| -1.36% |
Bonds
| Bonds | % Yield | Previous % Yield |
| CND. 10 Year Bond |
3.622 | 3.604 |
| CND. 30 Year Bond |
3.451 | 3.410 |
| U.S. 10 Year Bond |
3.0775 | 3.0230 |
| U.S. 30 Year Bond |
4.1768 | 4.0919 |
Currencies
| BOC Close | Today | Previous |
| Canadian $ | 0.7491 | 0.7531 |
| US $ |
1.3349 | 1.3278 |
| Euro Rate 1 Euro= |
Inverse | |
| Canadian $ | 1.4602 | 0.6848 |
| US $ |
1.0938 | 0.9142 |
Commodities
| Gold | Close | Previous |
| London Gold Fix |
1947.20 | 1970.65 |
| Oil | ||
| WTI Crude Future | 79.49 | 81.37 |
Market Commentary:
📈 On this day in 1990, Saddam Hussein invaded Kuwait. Over the next two and a half months, the U.S. stock market lost 19%, and many experts began to forecast a protracted bear market. Yet, just one year later, stocks were up nearly 27%.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the second day, dropping 1.5%, or 314.72 to 20,218.21 in Toronto.
The move was the biggest since falling 1.6% on March 15.
Today, information technology stocks led the market lower, as all sectors lost; 197 of 227 shares fell, while 28 rose.
Shopify Inc. contributed the most to the index decline and had the largest move, decreasing 7.0%.
Insights
* In the past year, the index had a similar or greater loss nine times. The next day, it declined five times for an average 0.9% and advanced four times for an average 1.5%
* The index advanced 3.7% in the past 52 weeks. The MSCI AC Americas Index gained 9.9% in the same period * The S&P/TSX Composite is 3% below its 52-week high on Feb. 2, 2023 and 13.1% above its low on Oct. 13, 2022
* The S&P/TSX Composite is down 1.7% in the past 5 days and rose 0.3% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 13.2 on a trailing basis and 14.3 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.4% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.25t
* 30-day price volatility rose to 11.37% compared with 10.25% in the previous session and the average of 10.62% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Information Technology | -77.6415| -4.8| 0/11
Financials | -69.3406| -1.1| 4/25
Materials | -57.0835| -2.3| 4/45
Energy | -37.7151| -1.1| 4/36
Industrials | -30.1222| -1.1| 4/22
Utilities | -15.5753| -1.8| 1/15
Communication Services | -12.8115| -1.6| 0/5
Consumer Discretionary | -8.1735| -1.0| 1/13
Consumer Staples | -4.4272| -0.5| 4/7
Real Estate | -1.5457| -0.3| 5/16
Health Care | -0.2765| -0.4| 1/2
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
Shopify | -52.3000| -7.0| 109.4| 77.4
Canadian Natural Resources | -13.9700| -2.3| -42.7| 5.2
Constellation Software | -13.0900| -3.4| 81.4| 28.8
Colliers International | 3.0720| 9.0| 141.3| 17.3
Thomson Reuters | 3.2820| 1.7| 55.0| 18.2
TC Energy | 4.9400| 1.5| -48.8| -10.9
US
By Rita Nazareth
(Bloomberg) — This year’s $6.5 trillion rally in stocks hit a wall, following hot jobs data and a ramp-up in Treasury issuance just a day after a US credit downgrade by Fitch Ratings.
Equities fell across the board, with the S&P 500 notching its worst day since April.
The tech-heavy Nasdaq 100 dropped 2% after a surge that topped 40% this year amid the artificial-intelligence frenzy.
Nvidia Corp. and Tesla Inc. sank at least 2.7%. Wall Street’s so-called fear gauge, the VIX, climbed the most in almost five months.
Ten-year yields hit the highest since November, while the dollar rose against all of its developed-market peers.
In late trading, Qualcomm Inc., the largest maker of smartphone processors, gave a tepid revenue forecast for the current period, indicating that demand for mobile devices remains weak even as the industry emerges from a glut.
To Dan Wantrobski at Janney Montgomery Scott, the stock market is seeing a “high-level consolidation” after a rally that included overbought conditions, bullish sentiment and generally thinner breadth readings.
“While consolidation is generally considered a healthy phase on the way to resumption of previous trend, our outlook for the second half of 2023 has not changed materially at this time,” Wantrobski noted. “We are still on watch for a deeper correction.”
He also expects more volatility over the next several months triggered by any number of potential catalysts such as Federal Reserve policy, rate volatility and tightening liquidity.
Wall Street traders also had something else to worry about — a steeper yield curve — with rates on longer-term bonds rising faster than rates on shorter-term maturities.
Whenever the US curve has steepened in a significant way from an inverted position over the past 50 years, it has been followed by a meaningful drop in the equity market, according to Matt Maley at Miller Tabak.
“With this in mind, we’re not worried about the downgrade impact,” Maley noted. “There are some developments to be concerned about, including the recent rise in Treasury yields. The steepening of the yield curve — from an inverted position — is bearish, not bullish for the stock market.”
The steepening of the yield curve extended a trend since the Bank of Japan last week surprised markets with a policy tweak.
At 4.92%, two-year yields are 82 basis points higher than those of the 10-year note.
That’s compared to a gap of 102 basis points two weeks ago.
Fitch Ratings stripped the US of its top-tier rating, criticizing the ballooning fiscal deficit and an “erosion of governance.”
The downgrade serves up an extra dose of uneasiness among investors already concerned about the risks of a recession and whether this year’s run-up in stocks is sustainable.
The US credit rating downgrade should not have been a surprise for investors that have been following Fitch’s comments, but the timing surely caught everyone off guard, according to Ed Moya at Oanda.
“Wall Street can’t ignore what is happening with fixed income as Treasury yields surge,” Moya added. “Equity traders are using this surge in yields and some nervousness ahead of Apple and Amazon’s earnings as an opportunity to lock in some profits.”
The next few hours will be key for risk appetite also because of Friday’s jobs data, which could sway markets in thinking we might need to see more Federal Reserve tightening, Moya added.
US companies added more jobs in July than expected, highlighting the persistent strength of the labor market, according to figures published Wednesday by the ADP Research Institute in collaboration with Stanford Digital Economy Lab.
Corporate Highlights
* American Airlines Group Inc. is in talks with Airbus SE and Boeing Co. to order at least 100 narrowbody jets to replace some of the oldest aircraft in its fleet, according to people familiar with the matter.
* CVS Health Corp. beat estimates for second-quarter profit and sales, a sign of strength as the drugstore chain cuts staff to reduce costs and focuses on broadening its health-care offerings.
* Advanced Micro Devices Inc. topped second-quarter estimates and touted inroads in artificial intelligence computing, putting it in closer competition with Nvidia Corp.
* Pinterest Inc. said revenue in the current quarter will rise in line with analysts’ estimates, disappointing some investors after digital-ad rivals posted surprisingly upbeat results last week.
* Starbucks Corp.’s quarterly sales fell short of analysts’ estimates as traffic growth slowed in the US. Higher prices and add-ons to beverages helped bolster profit.
Key events this week:
* China Caixin Services PMI, Thursday
* Eurozone S&P Global Eurozone Services PMI, PPI, Thursday
* Bank of England rate decision, Thursday
* US initial jobless claims, productivity, factory orders, ISM Services, Thursday
* Eurozone retail sales, Friday
* US unemployment rate, non-farm payrolls, Friday
Some of the main moves in markets:
Stocks
* The S&P 500 fell 1.4% as of 4 p.m. New York time
* The Nasdaq 100 fell 2.2%
* The Dow Jones Industrial Average fell 1%
* The MSCI World index fell 1.6%
Currencies
* The Bloomberg Dollar Spot Index rose 0.4%
* The euro fell 0.4% to $1.0939
* The British pound fell 0.5% to $1.2714
* The Japanese yen was little changed at 143.38 per dollar
Cryptocurrencies
* Bitcoin fell 0.3% to $29,129.14
* Ether fell 0.5% to $1,840.77
Bonds
* The yield on 10-year Treasuries advanced five basis points to 4.07%
* Germany’s 10-year yield declined two basis points to 2.54%
* Britain’s 10-year yield was little changed at 4.40%
Commodities
* West Texas Intermediate crude fell 1.9% to $79.81 a barrel
* Gold futures fell 0.4% to $1,971.70 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Brett Miller, Tassia Sipahutar, John Viljoen, Isabelle Lee and Lu Wang.
Have a lovely evening.
Be magnificent!
As ever,
Carolann
Ignorance is preferable to error; and he is less remote from the truth who believes nothing, than he who believes what is wrong. -Thomas Jefferson, 1743-1826.
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
