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Omaha, Nebraska, US
Winged formation … bee-eaters line up on a branch in Konya, TurkeyJune 13, 2024, Newsletter
Tangents: Happy Friday Eve.
JUNE 13, 1983: Pioneer 10 becomes the first man-made object to leave the central solar system.
The U.S. space probe Pioneer 10 became the first spacecraft to leave the solar system as it crossed the orbit of Neptune. Go to article >>
William Butler Yeats, poet, b.1865.
1963: Medgar Evars assassinated.
Ship of renowned polar explorer Ernest Shackleton found on ocean floor
Shipwreck experts found Ernest Shackleton’s last vessel on the ocean floor 62 years after its sinking. Read about his legacy and daring expeditions
Boston Celtics take 3-0 lead over Mavericks in NBA finals
The Celtics are now one victory away from clinching an NBA record 18th championship. Game 4 is scheduled for Friday.
‘I’m not retired.’ Rihanna sets the record straight
The superstar singer and entrepreneur is speaking out about rumors floating in the air of pop culture.
‘At least 150,000 tons’ of water frost discovered atop Mars’ tallest volcanoes
Once thought impossible to exist, water frost found atop Mars’ Tharsis region volcanoes could come in handy for future human exploration missions, new research suggests. Read More.
Mysterious 4,000-year-old ‘palace’ with maze-like walls found on Greek island of Crete
Archaeologists in Crete have discovered a 4,000-year-old structure that the Minoans may have used for rituals. Read More.
Why can’t we see colors well in the dark?
In the dark, vivid colors seem to fade to gray and they’re hard to tell apart. Why is that? Read More.
PHOTOS OF THE DAY
California, US
Some of the 249 flags planted in Dana Point on Flag Day
Photograph: Jeff Gritchen/AP
Narathiwat province, Thailand
A museum worker preserves an old copy of the Qur’an at the Museum of Islamic Cultural Heritage, which exhibits dozens of scriptures that are up to 1,000 years old
Photograph: Madaree Tohlala/AFP/Getty Images
London, England
Christie’s gallery assistants adjust a gown from the Dressed to Scale autumn/winter 1998-1999 collection during a photocall for the auction Vivienne Westwood: The Personal Collection
Photograph: Benjamin Cremel/AFP/Getty Images
Market Closes for June 13th, 2024
| Market Index |
Close | Change |
| Dow Jones |
38647.10 | -65.11 |
| -0.17% | ||
| S&P 500 | 5433.74 | +12.71 |
| +0.23% | ||
| NASDAQ | 17667.56 | +59.12 |
| +0.34% | ||
| TSX | 21698.11 | -263.44 |
| -1.20% |
International Markets
| Market Index |
Close | Change |
| NIKKEI | 38720.47 | -156.24 |
| -0.40% | ||
| HANG SENG |
18112.63 | +174.79 |
| +0.97% | ||
| SENSEX | 76810.90 | +204.33 |
| +0.27% | ||
| FTSE 100* | 8163.67 | -51.81 |
| -0.63% |
Bonds
| Bonds | % Yield | Previous % Yield |
| CND. 10 Year Bond |
3.327 | 3.391 |
| CND. 30 Year Bond |
3.272 | 3.334 |
| U.S. 10 Year Bond |
4.2442 | 4.3160 |
| U.S. 30 Year Bond |
4.3964 | 4.4752 |
Currencies
| BOC Close | Today | Previous |
| Canadian $ | 0.7276 | 0.7287 |
| US $ |
1.3744 | 1.3723 |
| Euro Rate 1 Euro= |
Inverse | |
| Canadian $ | 1.4759 | 0.6775 |
| US $ |
1.0739 | 0.9312 |
Commodities
| Gold | Close | Previous |
| London Gold Fix |
2310.80 | 2316.50 |
| Oil | ||
| WTI Crude Future | 78.62 | 78.50 |
Market Commentary:
📈 On this day in 1986, real-time market data took a big leap forward (for better and for worse) as Standard & Poor’s began disseminating the value of the S&P 500-stock index every 15 seconds. Previously, the index price was updated once a minute.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell 1.2% at 21,698.11 in Toronto.
The move was the biggest since falling 1.6% on May 29 and follows the previous session’s increase of 0.3%.
Canadian Natural Resources Ltd. contributed the most to the index decline, decreasing 3.4%.
BlackBerry Ltd. had the largest drop, falling 9.2%.
Today, 179 of 222 shares fell, while 39 rose; 10 of 11 sectors were lower, led by financials stocks.
Insights
* In the past year, the index had a similar or greater loss 14 times. The next day, it declined eight times for an average 0.4% and advanced six times for an average 0.5%
* This quarter, the index fell 2.1%
* So far this week, the index fell 1.4%, heading for the biggest decline since the week ended April 12
* The index advanced 8.5% in the past 52 weeks. The MSCI AC Americas Index gained 23% in the same period
* The S&P/TSX Composite is 3.8% below its 52-week high on May 21, 2024 and 16.1% above its low on Oct. 27, 2023
* The S&P/TSX Composite is down 2.4% in the past 5 days and fell 2.5% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 17.5 on a trailing basis and 14.8 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$3.48t
* 30-day price volatility rose to 11.31% compared with 10.76% in the previous session and the average of 9.95% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | -86.5580| -1.3| 1/26
Energy | -74.0080| -1.9| 5/35
Materials | -46.0341| -1.7| 7/41
Information Technology | -19.8761| -1.1| 3/7
Industrials | -16.1357| -0.5| 6/21
Consumer Staples | -8.2591| -0.9| 2/8
Communication Services | -7.2725| -1.0| 2/3
Utilities | -4.6609| -0.6| 2/13
Real Estate | -1.0111| -0.2| 5/14
Health Care | -0.4211| -0.7| 1/3
Consumer Discretionary | 0.7838| 0.1| 5/8
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
Canadian Natural Resources | -25.1100| -3.4| 552.2| 8.0
TD Bank | -14.7900| -1.6| 91.1| -12.9
RBC | -13.9900| -1.0| -46.5| 7.0
Celestica | 2.1830| 3.5| -28.1| 100.9
Cameco | 2.2510| 1.0| 3.1| 27.3
AtkinsRealis Group Inc | 3.9350| 5.8| 94.8| 35.9
US
By Rita Nazareth
(Bloomberg) — Stocks closed at a fresh all-time high as tech rallied, with Treasury yields sinking on bets the Federal Reserve will cut rates this year amid signs of disinflation.
Equities rebounded after a brief drop, with the S&P 500 notching a fourth consecutive record — its 29th this year.
Treasuries climbed across the curve, with 10-year yields breaking below 4.3%.
A $22 billion sale of 30-year debt saw strong demand.
Heightened political risk in France drove the premium on the nation’s 10-year bonds to the widest since 2017 over German peers.
The producer price index unexpectedly declined the most in seven months, adding to evidence that inflationary pressures are moderating.
Several categories that are used to calculate the Fed’s preferred inflation measure — the personal consumption expenditures price index — were softer in May than a month earlier.
“The latest data in hand nudge the door a little wider open for the Fed to begin making an interest rate cut later this year,” said Bill Adams at Comerica Bank, which forecasts Fed reductions in September and December.
The S&P 500 topped 5,430. Tesla Inc. jumped after Elon Musk said shareholders backed his compensation package. Broadcom Inc. led a rally in chipmakers after announcing solid earnings and a 10-for-1 stock split.
GameStop Corp. climbed as Keith Gill, known as “Roaring Kitty,” posted on X.
Treasury 10-year yields fell eight basis points to 4.24%.
Aside from France’s political jitters, the European Union’s bonds got hit as bets they would soon be added to key sovereign benchmarks received a blow, undermining the bloc’s efforts to broaden the appeal of its debt.
Fear of missing out on the technology rally is running as rampant among active mutual funds as it’s ever been.
Mutual funds have been upping their technology positions since the beginning of 2024 to catch the group’s rally — while cutting exposure everywhere else.
That’s pushed their overweight on the group to an all-time high, data compiled by Barclays Plc strategists show.
A historically strong start to the year for the US stock market should continue into the second half of 2024, according to JPMorgan Chase & Co.’s asset management division.
While the move may look more like a grind than a rocket ride after the S&P 500’s double-digit return since January, solid earnings, the end of the Fed’s monetary-tightening campaign and economic strength will continue to lift US equities in the coming months, strategists at the firm led by David Kelly wrote.
They recommend buying large-cap shares and a mix of value and growth stocks.
US large caps look more expensive relative to bond markets than at any point in the last two decades, though this may have little meaning for equity returns and may not imply a bubble has emerged in stocks, according to Bloomberg Intelligence strategists led by Gina Martin Adams.
“The most recent historical precedent shows relative value is a poor predictor of returns,” they wrote.
Stocks spent the better part of the bull market in the 1980s and ‘90s at worse relative value levels and still posted remarkable annualized growth, according to BI.
Valuation excesses are also only evident via the market-cap weight, with the equal-weighted index near its pre-pandemic norm and nine of 11 sectors’ relative valuations below average.
Traders continued to keep a close eye on the macroeconomic picture.
The producer price index unexpectedly declined the most in seven months, adding to evidence that inflationary pressures are moderating.
Several categories that are used to calculate the Fed’s preferred inflation measure — the personal consumption expenditures price index — were softer in May than a month earlier.
The PPI report came on the heels of a soft reading on consumer prices that offered some reassurance that progress toward the Fed’s 2% inflation target has resumed.
US officials penciled in just one interest-rate cut this year and forecast more cuts for 2025, reinforcing policymakers’ calls to keep borrowing costs high for longer to suppress inflation.
The Fed’s “dot plot” showed four policymakers saw no cuts this year, while seven anticipated just one reduction and eight expected two cuts.
“This is still just one month and the takeaway from the June Fed meeting stands: a much more sustained downshift extending across the coming months will be needed for the Fed to move on rates,” said Krishna Guha at Evercore.
But this is exactly the kind of data Jerome Powell needs to steer a wary FOMC to two cuts, he added.
The Fed’s favored inflation gauge is set for the smallest advance since November following two better-than-expected reports on prices out this week.
Several analysts expect the so-called core PCE gauge, due later this month, advanced just 0.1% in May.
Such a print would help bolster the case for two interest-rate cuts this year.
Corporate Highlights:
* Boeing Co. said it’s inspecting undelivered 787 Dreamliners after discovering that fasteners were incorrectly installed on a section of the carbon-composite aircraft, underscoring the heightened scrutiny on quality lapses at the embattled manufacturer.
* Ford Motor Co. will sell its lineup of electric vehicles through all 2,800 of its US dealers in a bid to boost sales of battery-powered models now being shunned by mainstream buyers.
* Snowflake Inc. plans to close its own investigation this week into a hacking campaign that ensnared as many as 165 of its customers.
* John R. Tyson was suspended from his role as chief financial officer of Tyson Foods Inc. after an arrest for allegedly driving while intoxicated, the company said in a Thursday statement
* The US Supreme Court sided with Starbucks Corp. over the National Labor Relations Board in a decision that will make it more difficult for the agency to win temporary reinstatement of workers fired during labor disputes.
Key events this week:
* Bank of Japan’s monetary policy decision, Friday
* Chicago Fed President Austan Goolsbee speaks, Friday
* US University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.2% as of 4:01 p.m. New York time
* The Nasdaq 100 rose 0.6%
* The Dow Jones Industrial Average fell 0.2%
* The MSCI World Index fell 0.4%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro fell 0.6% to $1.0741
* The British pound fell 0.3% to $1.2765
* The Japanese yen fell 0.2% to 157.07 per dollar
Cryptocurrencies
* Bitcoin fell 2.1% to $66,632.76
* Ether fell 2% to $3,482.52
Bonds
* The yield on 10-year Treasuries declined eight basis points to 4.24%
* Germany’s 10-year yield declined six basis points to 2.47%
* Britain’s 10-year yield was little changed at 4.12%
Commodities
* West Texas Intermediate crude fell 0.6% to $78.03 a barrel
* Spot gold fell 0.9% to $2,303.53 an ounce
This story was produced with the assistance of Bloomberg Automation.
Have a lovely evening.
Be magnificent!
As ever,
Carolann
We are all here for some special reason. Stop being a prisoner of your past. Become the architect of your future. –Robin Sharma, b. 1964.
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
June 12, 2024, Newsletter
Tangents:
On June 12, 1987, during a visit to the divided German city of Berlin, President Ronald Reagan publicly challenged Soviet leader Mikhail S. Gorbachev to ”tear down this wall.” Go to article >>
June 12,1939: National Baseball Hall of Fame opened.
Baseball is 90% mental; the other half is physical. -Yogi Berra.
Anne Frank, b. 1929.
James Webb telescope reveals ‘cataclysmic’ asteroid collision in nearby star system
The James Webb Space Telescope has caught a snapshot of two massive asteroids colliding in a nearby star system — and it could teach us about how common solar systems like our own are. Read More.
4,000-year-old ‘Seahenge’ in UK was built to ‘extend summer,’ archaeologist suggests
The construction of the monument and another beside it more than 4,000 years ago corresponds to a time of bitter cold. Read More.
Enormous deposit of rare earth elements discovered in heart of ancient Norwegian volcano
The Fen Carbonatite Complex may be Europe’s key to a secure rare-earth-element supply chain following the discovery of a huge deposit at the site. Read More.
How do people ‘wake up’ from comas?
People can stay in comas for weeks, months or even years. But what causes some of these patients to “wake up”? Read More.
‘Friends’ star recreates iconic 1984 moment with Bruce Springsteen
Courteney Cox famously appeared in Bruce Springsteen’s music video for “Dancing in the Dark,” jumping on stage to dance with The Boss. Now she has recreated the moment for TikTok.
Starbucks joins the value menu wars with a new discounted offer
The coffee chain rolled out a new “Pairings Menu” on Tuesday, which combines a drink and a breakfast item for a discount.
PHOTOS OF THE DAY
Wenchuan County, China
Giant panda Fu Bao, the first giant panda born in South Korea, sniffs flowers in her enclosure at the Wolong national nature reserve after returning to China
Photograph: Xinhua/Rex/Shutterstock
Nyon, Switzerland
Life-size paper figures made by Belgian artist Isabelle de Borchgrave are displayed during the exhibition Fantomes de Papier (Paper Ghosts). The 18th-century costumed silhouettes were made to mark the 300th birth anniversary of King Frederick II of Prussia
Photograph: Salvatore Di Nolfi/EPA
Frankfurt, Germany
A light show illuminates the sky and the Main River during a test run of the city’s entertainment programme for the Euro 2024 soccer tournament
Photograph: Michael Probst/AP
Market Closes for June 12th, 2024
| Market Index |
Close | Change |
| Dow Jones |
38712.21 | -35.21 |
| -0.09% | ||
| S&P 500 | 5421.03 | +45.71 |
| +0.85% | ||
| NASDAQ | 17608.44 | +264.89 |
| +1.53% | ||
| TSX | 21961.55 | +74.21 |
| +0.34% |
International Markets
| Market Index |
Close | Change |
| NIKKEI | 38876.71 | -258.08 |
| -0.66% | ||
| HANG SENG |
17937.84 | -238.50 |
| -1.31% | ||
| SENSEX | 76606.57 | +149.98 |
| +0.20% | ||
| FTSE 100* | 8215.48 | +67.67 |
| +0.83% |
Bonds
| Bonds | % Yield | Previous % Yield |
| CND. 10 Year Bond |
3.391 | 3.477 |
| CND. 30 Year Bond |
3.334 | 3.402 |
| U.S. 10 Year Bond |
4.3160 | 4.4040 |
| U.S. 30 Year Bond |
4.4752 | 4.5365 |
Currencies
| BOC Close | Today | Previous |
| Canadian $ | 0.7287 | 0.7270 |
| US $ |
1.3723 | 1.3755 |
| Euro Rate 1 Euro= |
Inverse | |
| Canadian $ | 1.4840 | 0.6739 |
| US $ |
1.0814 | 0.9247 |
Commodities
| Gold | Close | Previous |
| London Gold Fix |
2316.50 | 2304.40 |
| Oil | ||
| WTI Crude Future | 78.50 | 77.90 |
Market Commentary:
📈 On this day in 1928, more than 5 million shares traded hands on the New York Stock Exchange for the first time. President Calvin Coolidge’s announcement that he wouldn’t run again caused a selloff that caused many stocks to drop between $25 and $150 in price.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 0.3% at 21,961.55 in Toronto.
The move follows the previous session’s decrease of 0.8%.
Today, financials stocks led the market higher, as 8 of 11 sectors gained; 135 of 222 shares rose, while 84 fell.
Shopify Inc. contributed the most to the index gain, increasing 2.4%.
Canadian Western Bank had the largest increase, rising 68.3%.
Insights
* This quarter, the index fell 0.9%
* The index advanced 10% in the past 52 weeks. The MSCI AC Americas Index gained 24% in the same period
* The S&P/TSX Composite is 2.6% below its 52-week high on May 21, 2024 and 17.5% above its low on Oct. 27, 2023
* The S&P/TSX Composite is down 0.8% in the past 5 days and fell 1.6% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 17.8 on a trailing basis and 15.1 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 10.76% compared with 10.72% in the previous session and the average of 9.89% over the past month
================================================================
|Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 33.0208| 0.5| 18/9
Information Technology | 27.7949| 1.6| 9/1
Consumer Staples | 14.9071| 1.6| 4/7
Real Estate | 4.5394| 1.0| 17/3
Industrials | 3.9955| 0.1| 20/6
Communication Services | 1.0100| 0.1| 3/2
Materials | 0.9186| 0.0| 29/20
Health Care | 0.9048| 1.5| 4/0
Energy | -2.7532| -0.1| 16/23
Utilities | -3.9562| -0.5| 6/9
Consumer Discretionary | -6.1755| -0.8| 9/4
================================================================
| | | | YTD
|Index Points| | Volume VS | Change
Top Contributors | Move |% Change |20D AVG (%)| (%)
================================================================
Shopify | 17.5200| 2.4| 29.5| -12.9
Couche-Tard | 15.2500| 3.9| 45.1| 2.6
Canadian Western Bank | 11.4800| 68.3| 1,212.8| 35.7
Canadian Natural Resources | -5.7130| -0.8| 229.1| 11.8
Dollarama | -10.1300| -4.1| 68.5| 26.2
National Bank of Canada | -16.2700| -5.9| 154.0| 8.4
US
By Rita Nazareth
(Bloomberg) — Stocks hit fresh all-time highs as the Federal Reserve did little to alter Wall Street’s bets that interest rates will drop at least twice in 2024 — even after the central bank’s more-conservative outlook.
The S&P 500 topped 5,400 for the first time in its history, with Wednesday marking the 20-month anniversary of the bull market.
While Treasury yields did pare their slide after the central bank decision, Fed swaps are still pointing to rate cuts in both November and December.
The dollar retreated against all of its developed-world counterparts.
Fed officials penciled in just one rate cut this year and forecast more cuts for 2025, signaling no rush to reduce borrowing costs.
“The most-recent inflation readings have been more favorable than earlier in the year, however, and there has been modest further progress toward our inflation objective,” Chair Jerome Powell said.
“This is a nothing-burger Fed meeting,” said David Russell at Trade Station. “They know conditions are improving, but don’t need to rush with rate cuts. The strong economy is letting Jerome Powell wring inflation out of the system without hurting jobs. Goldilocks is emerging. Policymakers don’t want to jinx it.”
A few hours before the Fed decision, data showed the core consumer price index cooled to the slowest pace in more than three years.
In a session marked by strong trading volume, the S&P 500 rose almost 1%.
Big tech consolidated its leadership, with Tesla Inc. and Nvidia Corp. rallying at least 3.5%.
Gains were also fueled by blowout earnings from Oracle Corp., which soared 13%.
Lower bond rates also helped, with 10-year yields down nine basis points to 4.32%.
“Don’t put the cut before the horse,” said Bank of America Corp.’s Michael Gapen. “This Fed will be reactionary and will ease when the inflation data allow.”
Gapen retained his view for the first rate cut in December and a gradual easing cycle that ends with a terminal rate of 3.50-3.75%.
Officials on Wednesday voted unanimously to keep the benchmark federal funds rate in a range of 5.25% to 5.5% — a two-decade high first reached in July.
The Fed’s acknowledgement of “modest progress” towards the 2% inflation target likely stems from the disinflationary signals in May’s CPI data, according to Whitney Watson at Goldman Sachs Asset Management.
“The Summary of Economic Projections was hawkish as it implies only one cut — but the statement did acknowledge ‘modest’ progress on inflation,” said Jay Hatfield at Infrastructure Capital Advisors. “The press conference was neutral as this morning’s low inflation print was hard to ignore.”
Individual officials’ views on the best path forward for borrowing costs differed. The Fed’s “dot plot” showed four policymakers saw no cuts this year, while seven anticipated just one reduction and eight expected two cuts.
“These ‘dot plot’ projections likely don’t account for the latest May inflation data, which were softer than expected and reversed some of the heat we saw in the first quarter,” said Sonu Varghese at Carson Group. “We still think the odds are high
for two rate cuts in 2024 if the disinflation process continues, as we expect.”
“On net, while there was a modest surprise in this year’s median dot, we didn’t come away from this afternoon thinking much differently about the Fed,” said Michael Feroli at JPMorgan Chase & Co. “We continue to look for a first ease in November, and after this morning, perhaps see risks tilted a little more toward September than December.”
Powell said the officials welcomed the latest inflation figures, adding that he hopes for more reports like that. He said Wednesday’s figures had helped build their confidence on the trajectory of inflation but not enough to warrant rate cuts at this time.
To Krishna Guha at Evercore, the Fed chair is keeping the door very much open to a September cut — provided that the May downshift is broadly sustained in the next few months.
“Powell’s presser fine-tunes to a 1.5 cut signal — we still see thin baseline of two,” he noted.
“Jay was purposely noncommittal on giving any opinion on the timing of a possible cut,” said Peter Boockvar at The Boock Report.
“Whether they cut once or twice after 525 bps of rate increases since March 2022? Who cares? It’s what happens next year and if the cuts are aggressive, it will be because the economy deteriorates notably, more so than if inflation further slows.”
“Chair Powell provided a cautious view around the economic outlook, particularly for inflation and despite the better-than-expected news that we received on that front earlier today,” said Oscar Munoz and Gennadiy Goldberg at TD Securities.
“While on the surface the projections appear to have a hawkish tilt, the details suggest otherwise, in our opinion.”
They remain optimistic that the Fed will first ease rates at its September meeting, as we look for core personal consumption expenditures inflation to gradually moderate by then to a monthly pace that is consistent with a return to the inflation target.
“The Treasury market largely treated the June meeting as a placeholder, with the focus going forward likely to remain on economic data,” they added. “This should keep markets volatile around inflation and labor market data.
However, with 10-year rates slipping into a “bullish channel,” we continue to expect them to finish the year at 3.9%,” they added.
Corporate Highlights:
* Broadcom Inc., a chip supplier for Apple Inc. and other big tech companies, rallied in late trading after its latest results and annual forecast topped estimates, lifted by robust demand for artificial intelligence products.
* Virgin Galactic Holdings Inc. shares tumbled after the company’s board of directors agreed to a 1-for-20 reverse stock split aimed at maintaining the stock’s listing on the New York Stock Exchange.
* The GameStop Corp. calls that Keith Gill — known online as “Roaring Kitty” — purported to own traded huge volumes late Wednesday as the firm’s shares dove in the final stretch of trading.
* Caterpillar Inc. hiked its dividend by about 8% and added $20 billion to its share buyback program after seeing strong performance from its division best known for making iconic yellow heavy-duty machinery.
* FedEx Corp. plans to cut as many as 2,000 jobs in Europe, the latest move by the package-delivery giant to streamline its global workforce and rein in costs.
* A second major Southwest Airlines Co. investor has joined the call for a shakeup in the carrier’s board and executive leadership team, upping the pressure for change.
Key events this week:
* Eurozone industrial production, Thursday
* US PPI, initial jobless claims, Thursday
* Tesla annual meeting, Thursday
* New York Fed President John Williams moderates a discussion with Treasury Secretary Janet Yellen, Thursday
* Bank of Japan’s monetary policy decision, Friday
* Chicago Fed President Austan Goolsbee speaks, Friday
* US University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.8% as of 4 p.m. New York time
* The Nasdaq 100 rose 1.3%
* The Dow Jones Industrial Average was little changed
* The MSCI World Index rose 0.9%
Currencies
* The Bloomberg Dollar Spot Index fell 0.2%
* The euro rose 0.6% to $1.0806
* The British pound rose 0.4% to $1.2797
* The Japanese yen rose 0.2% to 156.84 per dollar
Cryptocurrencies
* Bitcoin rose 0.3% to $67,515.01
* Ether rose 1.2% to $3,528.95
Bonds
* The yield on 10-year Treasuries declined nine basis points to 4.32%
* Germany’s 10-year yield declined nine basis points to 2.53%
* Britain’s 10-year yield declined 14 basis points to 4.13%
Commodities
* West Texas Intermediate crude rose 0.6% to $78.34 a barrel
* Spot gold rose 0.2% to $2,321.36 an ounce
This story was produced with the assistance of Bloomberg Automation.
Have a lovely evening.
Be magnificent!
As ever,
Carolann
How far you go in life depends on your being tender with the young, compassionate with the aged, sympathetic with the striving,
and tolerant of the weak and strong. Because someday in your life you will have been all of these. -George Wahington Carver, c.1964-1943.
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
June 12, 2024 Newsletter
Tangents: King Kamehameha Day, Hawaii.
June 11, 1817: the first predecessor of the bicycle (the Laufmaschine) is demonstrated. German inventor Karl Drais completed a 14 km test run in less than an hour.
Richard Strauss, composer, b.1964.
Jacques Cousteau, undersea explorer, b. 1910.
Hundreds of centuries-old coins unearthed in Germany likely belonged to wealthy 17th-century mayor
Construction workers have unearthed a collection of 285 silver coins hidden in a trench. Read More.
Evidence of more than 200 survivors of Mount Vesuvius eruption discovered in ancient Roman records
After Mount Vesuvius erupted, survivors from the Roman cities of Pompeii and Herculaneum fled, starting new lives elsewhere. Read More.
Noise-canceling headphones can use AI to ‘lock on’ to somebody when they speak and drown out all other noises
Using only a small embeddable computer, microphone-equipped consumer headphones can block out all environmental sounds apart from a single target voice — even if it moves around. Read More.
‘Physics itself disappears’: How theoretical physicist Thomas Hertog helped Stephen Hawking produce his final, most radical theory of everything
Theoretical physicist Thomas Hertog tells us how he collaborated with Stephen Hawking on his final theorem — a Darwinian revolution in physics that explains the origin of time. Full Story: Live Science (6/11)
7 potential ‘alien megastructures’ spotted in our galaxy are not what they seem
Scientists recently identified seven stars in the Milky Way that could potentially be gigantic alien structures called Dyson spheres. New research proposes an alternative explanation: Those are just cosmic “hot DOGs” in disguise.
Read More.
2024 James Beard Award winners announced
The Oscars of the food world — the James Beard Awards — were handed out Monday night. See the chefs and restaurants that received top honors.
What science says about blue-light blocking glasses and eye exercises.
There is a lack of evidence that eye exercises can improve vision, according to medical experts. Here’s what works
Vintage action figure fetches $525,000 at auction
An unreleased “Star Wars” action figure from 1979 has become the most valuable vintage toy ever sold at auction
Everything Apple announced at its big AI event
Apple introduced a suite of artificial intelligence tools for its various products, including iPhones, iPads, Macs and more. Here are the highlights.
PHOTOS OF THE DAY
Van, Turkey
Bathers visit an artificial waterfall at the end of the channel used for water discharge at Zernek Dam where the water level has reached 100% due to recent rains
Photograph: Anadolu/Getty Images
New York, US
Pedestrians cross a street at sunset in Manhattan
Photograph: Charly Triballeau/AFP/Getty Images
Full steam ahead on the Snowdon Mountain Railway – in pictures
Photograph: Guardian photographer Christopher Thomond
Market Closes for June 11th, 2024
| Market Index |
Close | Change |
| Dow Jones |
38747.42 | -120.62 |
| -0.31% | ||
| S&P 500 | 5375.32 | +14.53 |
| +0.27% | ||
| NASDAQ | 17343.55 | +151.02 |
| +0.88% | ||
| TSX | 21887.34 | -182.42 |
| -0.83% |
International Markets
| Market Index |
Close | Change |
| NIKKEI | 39134.79 | +96.63 |
| +0.25% | ||
| HANG SENG |
18176.34 | -190.61 |
| -1.04% | ||
| SENSEX | 76456.59 | -33.49 |
| -0.04% | ||
| FTSE 100* | 8147.81 | -80.67 |
| -0.98% |
Bonds
| Bonds | % Yield | Previous % Yield |
| CND. 10 Year Bond |
3.477 | 3.506 |
| CND. 30 Year Bond |
3.402 | 3.424 |
| U.S. 10 Year Bond |
4.4040 | 4.4670 |
| U.S. 30 Year Bond |
4.5365 | 4.5958 |
Currencies
| BOC Close | Today | Previous |
| Canadian $ | 0.7270 | 0.7269 |
| US $ |
1.3755 | 1.3757 |
| Euro Rate 1 Euro= |
Inverse | |
| Canadian $ | 1.4773 | 0.6769 |
| US $ |
1.0740 | 0.9311 |
Commodities
| Gold | Close | Previous |
| London Gold Fix |
2304.40 | 2310.80 |
| Oil | ||
| WTI Crude Future | 77.90 | 77.74 |
Market Commentary:
📈 On this day in 1930, New York Stock Exchange President Richard Whitney tried to instill confidence in the markets by buying 60,000 shares of U.S. Steel at $160 a share. It sunk to $21 a share within two years.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell 0.8% at 21,887.34 in Toronto.
The index dropped to the lowest closing level since May 2 after the previous session’s increase of 0.3%.
Royal Bank of Canada contributed the most to the index decline, decreasing 0.9%.
Advantage Energy Ltd. had the largest drop, falling 6.1%.
Today, 181 of 222 shares fell, while 39 rose; 10 of 11 sectors were lower, led by financials stocks.
Insights
* This quarter, the index fell 1.3%
* The index advanced 10% in the past 52 weeks. The MSCI AC Americas Index gained 24% in the same period
* The S&P/TSX Composite is 3% below its 52-week high on May 21, 2024 and 17.1% above its low on Oct. 27, 2023
* The S&P/TSX Composite is down 0.4% 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$3.5t
* 30-day price volatility fell to 10.72% compared with 11.22% in the previous session and the average of 9.84% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | -73.1273| -1.1| 1/26
Materials | -40.4745| -1.5| 6/43
Energy | -28.6518| -0.7| 8/32
Industrials | -16.3051| -0.5| 5/22
Utilities | -8.5891| -1.0| 2/13
Consumer Staples | -5.6380| -0.6| 4/7
Real Estate | -4.3298| -1.0| 2/18
Consumer Discretionary | -4.0014| -0.5| 3/10
Information Technology | -1.5830| -0.1| 4/5
Health Care | -1.1201| -1.9| 0/4
Communication Services | 1.4055| 0.2| 4/1
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
RBC | -13.0100| -0.9| -52.5| 8.1
Cameco | -11.8600| -5.3| 33.8| 22.3
Nutrien | -9.2150| -3.5| 3.5| -2.0
BCE | 1.4700| 0.5| 33.4| -10.2
Canadian Natural Resources | 1.7290| 0.2| 242.4| 12.7
Shopify | 8.4620| 1.2| -6.9| -14.9
US
By Rita Nazareth
(Bloomberg) — Stocks and bonds lost steam on the eve of a key US jobs reading that will help shape the outlook for the Federal Reserve’s next steps.
Equities stalled near all-time highs as traders refrained from big bets ahead of the data.
A 22V Research survey shows there’s no consensus about the market reaction — with 36% of investors betting on a “risk-off” move, 33% saying “risk-on” and 31% “negligible/mixed.” Treasuries wavered.
The euro rose as the European Central Bank raised inflation forecasts after cutting rates.
US PREVIEW: Nonfarm Payrolls and Unemployment to Rise Together In the run-up to the payrolls reading, Wall Street waded through a slew of data.
Jobless claims topped estimates, labor costs increased by less than previously reported and the trade deficit widened.
Friday’s report is expected to show the US added 180,000 jobs in May while the unemployment rate held steady.
“A slowing in the job market, and even an increase in unemployment, should be welcome to the extent that it alleviates some upwards pressure on inflation,” said Chris Zaccarelli at Independent Advisor Alliance. “But we are aware that too much weakness in the labor market and in the economy could eventually prove to be an even greater threat to markets than inflation.”
The S&P 500 was little changed after notching its 25th record in 2024.
The US is opening antitrust investigations into Microsoft Corp. and Nvidia Corp. over their dominance of artificial intelligence, according to people familiar with the matter.
GameStop Corp. surged as Keith Gill, known as “Roaring Kitty,” scheduled a YouTube live stream for June 7 at 12 p.m. New York.
US 10-year yields fluctuated near 4.29%.
Swap markets continued to pencil in the start of the Fed rating cut in November, with a strong likelihood of another reduction in December.
“We look for payrolls to continue to lose momentum,” said Oscar Munoz and Gennadiy Goldberg at TD Securities. “Markets will likely react more to a weaker print than strong data, but data likely needs to be much weaker given that investor expectations have declined.”
A pre-payrolls survey conducted by BMO Capital Markets showed that 33% of respondents would “sell strength” and 54% indicated a willingness to “buy a dip.”
“The takeaway from this month’s pre-payrolls survey was that investors are comfortable playing the range, at least for the time being,” wrote strategists led by Ian Lyngen.
The tally also showed that 46% of respondents expect the next 15 basis-point move in 10-year yields to be higher — while 41% expect a fall.
Investors are balancing between growing evidence of an economic slowdown and the implications for rate cuts, according to Ed Clissold at Ned Davis Research.
“Moderating, but positive, growth would be the best-case scenario for stocks,” he added.
On the one hand, a cooling economy is signaling potential interest rate cuts, which can be bullish for stocks. But the reason of rate cuts matters too.
“If it’s because of a slowdown in inflation, it can be bullish for stocks. But if the Federal Reserve cuts because of a slowdown in growth, it’s not good news for corporate earnings,” said Matt Maley, chief market strategist at Miller Tabak + Co.
As equities remain near record levels, stock fragility — or the magnitude of a company’s daily share-price move relative to realized volatility of the past 21 days — is approaching a 30- year extreme for the 50 largest stocks of the S&P 500 according to Bank of America Corp. strategists.
“So far, these fragility shocks have been idiosyncratic,” BofA analysts wrote. “However, there’s a risk of a correlated shock among these companies that control so much of the US as well as global equity indexes.”
The stock market will continue its uptrend in the second half of 2024, albeit at a slower pace following a double-digit run since January, according to Morgan Stanley’s Lisa Shalett.
“The path of least resistance between now and the end of the year is for the market to grind higher,” the chief investment officer of the bank’s wealth management unit told Bloomberg Television. That said, investors should have “measured expectations” around the magnitude of equity returns from now through December, with the S&P 500 already up 12% year-to-date, Shalett added.
The stock market’s strength in the first half of 2024 is on track to carry on into the remaining months of the year — and expand into quieter corners of the market, according to Citigroup Inc.’s wealth management business.
That’s why the group predicts the S&P 500 Equal Weight Index — which gives an even share to each constituent — may soon outperform the market-value weighted benchmark S&P 500.
While US technology behemoths have almost single-handedly powered the market of late, continued economic strength and profit growth in companies other than Big Tech are expected to broaden equity returns through the rest of this year.
Traders have escalated rate-cut bets in the past week, emboldened by a slew of softer-than-forecast US economic data, the Bank of Canada’s decision to ease monetary policy, and bets the ECB would be the next to cut — a move confirmed on Thursday.
“Bullish trading action in recent days has been motivated by the expectation that the Fed will follow suit as bond investors incrementally expand expectations for an accommodative central bank,” said Jose Torres at Interactive Brokers.
In a historic move that saw the ECB slashing borrowing costs ahead of the Fed, officials led by President Christine Lagarde said that while the inflation outlook has improved “markedly,” they’ll “keep policy rates sufficiently restrictive for as long as necessary.”
“The meeting signals the ECB is not going to cut in July, and September is not locked in advance,” said Krishna Guha at Evercore. “But we stand by our view this is a ‘cautious cut’ not a ‘hawkish cut’.”
Corporate Highlights:
* Lyft Inc. is expecting gross bookings to grow about 15% at a compound annual rate over the next three years.
* Hertz Global Holdings Inc., seeking to bolster its balance sheet after an electric-vehicles blunder, is considering the sale of at least $700 million in secured debt as well as a convertible note offering, according to people with knowledge of the matter.
* Instacart announced a new $500 million share repurchase program, the third round of buybacks the grocery delivery company has authorized since September as it seeks to boost confidence in its growth potential.
* Nio Inc. reported a bigger-than-expected loss in the first quarter as increased competition dealt the electric-vehicle maker another setback in its push for profitability.
* SpaceX’s Starship rocket blasted off to space and plunged through Earth’s atmosphere for an ocean landing, notching a key objective on its fourth major test flight.
* Boeing Co.’s space taxi docked with the International Space Station, bringing the spacecraft’s first two passengers to the orbiting laboratory as part of a critical flight test for NASA.
Key events this week:
* China trade, forex reserves, Friday
* Eurozone GDP, Friday
* US unemployment rate, nonfarm payrolls, Friday
Some of the main moves in markets:
Stocks
The S&P 500 Index was little changed at 4 p.m. New York time.
The Dow Jones Industrial Average increased 0.2%.
The Nasdaq Composite Index fell 0.1%.
The Stoxx Europe 600 Index jumped 0.7%.
The MSCI All-Country World Index gained 0.3%.
Currencies
The Bloomberg Dollar Spot Index was little changed at 1,252.46.
The euro increased 0.2% to $1.0889.
The British pound was little changed at $1.279.
The Japanese yen strengthened 0.3% to 155.61 per dollar.
Bitcoin sank 1.1% to $70,427.
Bonds
The yield on 10-year Treasuries rose one basis point to 4.29%.
Germany’s 10-year yield gained four basis points to 2.55%.
Britain’s 10-year yield decreased one basis point to 4.174%.
Commodities
The Bloomberg Commodity Index jumped 1.6% to 103.46.
West Texas Intermediate crude jumped 2% to $75.58 a barrel.
Gold strengthened 0.7% to $2,372.52 an ounce.
–With assistance from Winnie Hsu, John Viljoen, Sujata Rao, Ruth Carson, Masaki Kondo, Natalia Kniazhevich and Alexandra Semenova.
Have a lovely evening.
Be magnificent!
As ever,
Carolann
It is our responsibilities, not ourselves, that we should take seriously. -Peter Ustinov, 1921-2004.
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
June 10, 2024, Newsletter
Dear Friends,
Tangents: Happy Monday.
June 10, 1903: The first practical and commercially successful colour photography technology is introduced by the legendary Lumière brothers.
On June 10, 1967, the Six-Day War ended as Israel and Syria agreed to observe a United Nations-mediated cease-fire. Go to article >>
1935: Alcohol Anonymous founded
1943: Ball-point pen patented.
Saul Bellow, writer, b. 1915.
Judy Garland, actress, b. 1922.
F, Lee Bailey, lawyer, b. 1939.
Elizabeth Hurley, actress, b. 1965.
1st Neuralink user describes highs and lows of living with Elon Musk’s brain chip
Thirty-year-old Noland Arbaugh says the Neuralink chip has let him “reconnect with the world.” Read More.
32 haunting shipwrecks from the ancient world
Shipwrecks can reveal information about traded goods and even which rituals people partook in centuries ago. Here’s a look at shipwrecks from ancient times found around the world. Read More
Viking Age ‘treasure’ discovered by metal detectorist on Isle of Man
The silver ingot would have been used during the Viking Age in exchange for goods and services. Full Story: Live Science (6/10)
‘The difference between alarming and catastrophic’: Cascadia megafault has 1 especially deadly section, new map reveals
The Cascadia subduction zone is more complex than researchers previously knew. The new finding could help scientists better understand the risk from future earthquakes. Read More.
James Webb telescope finds carbon at the dawn of the universe, challenging our understanding of when life could have emerged
The James Webb Space Telescope has found carbon in a galaxy just 350 million years after the Big Bang. That could mean life began much earlier too, a new study argues. Read More.
Watch Pat Sajak sign off from ‘Wheel of Fortune’ for the final time
Pat Sajak spun the wheel on “Wheel of Fortune” one last time after 41 years as the host. He shared this heartfelt message with his audience.
Carlos Alcaraz wins third grand slam title at French Open
The 21-year-old tennis star is adding to his collection of trophies.
Boston Celtics take 2-0 series lead in NBA Finals
The Boston Celtics have seized a 2-0 series lead in the NBA Finals after a Game 2 win over the Dallas Mavericks Sunday night. Here’s the latest on the best-of-seven series.
Couple finds $100,000 in cash while magnet fishing in NYC
A New York couple was shocked to discover what was inside a safe they found while fishing in a park! Watch the video here.
PHOTOS OF THE DAY
East Sussex, UK
Paragliding at sunset at Devil’s Dyke on the South Downs
Photograph: David Burr/Alamy Live News/Alamy Live News.
Candy Apple
Kyoto, Japan
Photograph: Donn Delson
North Yorkshire, UK
Fred Cowton with his restored 1939 Allis-Chalmers model U tractor at Tractor Fest at Newby Hall, Skelton-on-Ure
Photograph: Danny Lawson/PA
Market Closes for June 10th, 2024
| Market Index |
Close | Change |
| Dow Jones |
38868.04 | +69.05 |
| +0.18% | ||
| S&P 500 | 5360.79 | +13.80 |
| +0.26% | ||
| NASDAQ | 17192.53 | +59.40 |
| +0.35% | ||
| TSX | 22069.76 | +62.76 |
| +0.29% |
International Markets
| Market Index |
Close | Change |
| NIKKEI | 39038.16 | +354.23 |
| +0.92% | ||
| HANG SENG |
18366.95 | -109.85 |
| -0.59% | ||
| SENSEX | 76490.08 | -203.28 |
| -0.27% | ||
| FTSE 100* | 8228.95 | -16.89 |
| -0.20% |
Bonds
| Bonds | % Yield | Previous % Yield |
| CND. 10 Year Bond |
3.506 | 3.466 |
| CND. 30 Year Bond |
3.424 | 3.384 |
| U.S. 10 Year Bond |
4.4670 | 4.4335 |
| U.S. 30 Year Bond |
4.5958 | 4.5546 |
Currencies
| BOC Close | Today | Previous |
| Canadian $ | 0.7269 | 0.7267 |
| US $ |
1.3757 | 1.3761 |
| Euro Rate 1 Euro= |
Inverse | |
| Canadian $ | 1.4809 | 0.6853 |
| US $ |
1.0765 | 0.9289 |
Commodities
| Gold | Close | Previous |
| London Gold Fix |
2310.80 | 2360.60 |
| Oil | ||
| WTI Crude Future | 77.74 | 75.55 |
Market Commentary:
📈 On this day in 1997, the Dow Jones Industrial Average closed above 7500 for the first time. The Wall Street Journal said the market’s climb “seems to inspire equal parts awe and dread among many investors.”
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 0.3% at 22,069.76 in Toronto.
The move follows the previous session’s decrease of 1%.
Shopify Inc. contributed the most to the index gain, increasing 2.5%.
Ero Copper Corp. had the largest increase, rising 5.3%.
Today, 139 of 222 shares rose, while 79 fell; 6 of 11 sectors were higher, led by materials stocks.
Insights
* This quarter, the index fell 0.4%
* 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 2.2% below its 52-week high on May 21, 2024 and 18.1% above its low on Oct. 27, 2023
* The S&P/TSX Composite is little changed in the past 5 days and fell 1.1% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 17.8 on a trailing basis and 15.3 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$3.49t
* 30-day price volatility rose to 11.22% compared with 11.20% in the previous session and the average of 9.79% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Materials | 35.8820| 1.4| 42/8
Energy | 28.3209| 0.7| 35/4
Information Technology | 28.2401| 1.6| 10/0
Industrials | 5.7863| 0.2| 16/11
Real Estate | 0.9638| 0.2| 6/12
Health Care | 0.2113| 0.4| 2/1
Utilities | -0.0383| 0.0| 6/9
Consumer Discretionary | -4.3348| -0.6| 5/8
Financials | -5.1098| -0.1| 14/13
Communication Services | -12.1915| -1.7| 1/4
Consumer Staples | -14.9732| -1.6| 2/9
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
Shopify | 17.6000| 2.5| -13.4| -15.8
Agnico Eagle Mines | 7.0430| 2.3| 21.2| 23.6
Manulife Financial | 6.5790| 1.5| 4.7| 23.3
Bank of Nova Scotia| -6.2080| -1.1| 83.3| -1.0
TD Bank | -6.2160| -0.7| 35.8| -11.3
Couche-Tard | -11.2600| -2.8| 67.4| -0.1
US
By Rita Nazareth
(Bloomberg) — Stocks eked out gains in a cautious session that saw investors positioning for the Federal Reserve decision and key inflation data.
Apple Inc. slid even after unveiling new artificial-intelligence features.
As traders braced for volatility ahead of US macroeconomic catalysts, uncertainties across the Atlantic also kept a lid on equities.
European shares slid after French President Emmanuel Macron called a legislative vote in the wake of a crushing defeat in Parliament elections.
Yields on France’s 10-year bonds hit their highest this year, while the nation’s top banks tumbled.
The euro led losses in developed-world currencies.
Wall Street’s most-prominent trading desks from JPMorgan Chase & Co. to Citigroup Inc. are urging investors prepare for a stock market jolt after Wednesday’s consumer price index and the US rate decision.
The Fed is widely expected to hold borrowing costs steady, but there’s less certainty on officials’ rate projections.
A 41% plurality of economists expect them to signal two cuts in the “dot plot,” while an equal number expect the forecasts to show just one or no cuts at all.
“The interest-rate guessing game goes on,” said Chris Larkin at E*Trade from Morgan Stanley. “Even the friendliest inflation numbers probably won’t push the Fed to act any sooner than September.”
The S&P 500 rose 0.3% to close at a fresh record.
Nvidia Corp. began trading after a 10-for-one stock split.
GameStop Corp. plunged.
The Treasury market also saw small moves as a weak $58 billion three-year auction knocked sentiment ahead of Tuesday’s $39 billion 10-year sale.
“The release of a new ‘dot plot’ outlining Fed projections for the path of rates will be the top focus,” said Jason Pride and Michael Reynolds at Glenmede.
“For fixed income investors, the Fed’s more patient higher-for-longer approach is likely to keep bond yields elevated as inflationary pressures remain.”
After Friday’s solid jobs report, traders pulled back on rate-cut expectations, pricing in the first full 25 basis points of easing in December — rather than November.
The options market is betting the S&P 500 will move 1.3% to 1.4% in either direction by Friday, based on the price of at-the-money straddles that expire that day, according to Andrew Tyler, head of US market Intelligence on JPMorgan Chase’s trading desk.
Meanwhile, investors are preparing for a Fed day stock-market move that would be the largest since March 2023, according to Stuart Kaiser, Citigroup’s head of US equity trading strategy.
Investors remain too optimistic about the timing of a Fed-rate cut, according to RBC Capital Markets strategists led by Lori Calvasina.
The benchmark index could drop to 4,900 points if the Fed holds rates at current levels, inflation proves stickier than expected and the 10-year Treasury yield remains below 5%, the strategists wrote in a note.
If the central bank were to cut rates as expected, but earnings came in below projections, the S&P 500 would trade around 5,100 points — about 5% lower than current levels, Calvasina said.
And the third — bearish — scenario sees the benchmark slumping almost 16% if stubborn inflation results in Fed rate hikes.
“The equity market has had a terrific year, but there is a current pause in the rally as the Fed comes into question,” said David Donabedian at CIBC Private Wealth US.
“There is a real chance if the economy does not slow down there will be no rate cut this year.”
More than 60% of respondents in the latest MLIV Pulse survey expect US stocks to outperform Treasuries on a volatility-adjusted basis next month.
That reading has been higher only three times in the history of the survey going back to August 2022.
Corporate Highlights:
* Activist Elliott Investment Management called for sweeping changes to Southwest Airlines Co.’s leadership to reverse what it sees as years of underperformance by one of the biggest US carriers.
* The US Supreme Court agreed to consider killing a multibillion-dollar shareholder lawsuit that accuses Meta Platforms Inc. of misleading investors about the data-harvesting scandal involving political consulting firm Cambridge Analytica.
* Advanced Micro Devices Inc. was cut at Morgan Stanley, which said investor expectations for the chipmaker’s AI business “seem too high.”
* KKR & Co., CrowdStrike Holdings Inc. and GoDaddy Inc. will join the S&P 500 as part of its latest quarterly weighting change.
* Noble Corp., the world’s biggest offshore oil-rig contractor by market value, agreed to buy its smaller rival Diamond Offshore Drilling Inc. in a deal valued at $1.6 billion.
Key events this week:
* China PPI, CPI, Wednesday
* Germany CPI, Wednesday
* US CPI, Fed rate decision, Wednesday
* G-7 leaders summit, June 13-15
* Eurozone industrial production, Thursday
* US PPI, initial jobless claims, Thursday
* Tesla annual meeting, Thursday
* New York Fed President John Williams moderates a discussion with Treasury Secretary Janet Yellen, Thursday
* Bank of Japan’s monetary policy decision, Friday
* Chicago Fed President Austan Goolsbee speaks, Friday
* US University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.3% as of 4 p.m. New York time
* The Nasdaq 100 rose 0.4%
* The Dow Jones Industrial Average rose 0.2%
* The MSCI World Index rose 0.1%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro fell 0.4% to $1.0762
* The British pound was little changed at $1.2730
* The Japanese yen fell 0.2% to 157.01 per dollar
Cryptocurrencies
* Bitcoin fell 0.4% to $69,434.01
* Ether fell 1% to $3,663.81
Bonds
* The yield on 10-year Treasuries advanced three basis points to 4.47%
* Germany’s 10-year yield advanced five basis points to 2.67%
* Britain’s 10-year yield advanced six basis points to 4.32%
Commodities
* West Texas Intermediate crude rose 3.1% to $77.89 a barrel
* Spot gold rose 0.7% to $2,309.10 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Stephen Kirkland, Catherine Bosley, Andre Janse van Vuuren, Selcuk Gokoluk, Jessica Menton, Kasia Klimasinska and Felice Maranz.
Have a lovely evening.
Be magnificent!
As ever,
Carolann
It isn’t where you came from. It’s where you’re going that counts. -Ella Fitzgerald, 1917-1996.
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
June 7, 2024, Newsletter
Tangents: Happy Friday.
June 7, 1975: The first Cricket World Cup begins. England hosted the first edition of the event, which The West Indies won.
June 7, 2000: A federal judge ordered the breakup of Microsoft Corp. Go to article >>
June 7, 1975: VCR introduced.
Paul Gauguin, painter, b. 1848.
Liam Neeson, actor, b. 1952.
Prince, singer, b. 1958.
Humans didn’t domesticate horses until 4,200 years ago — a millennium later than thought
Ancient DNA of nearly 500 horses reveals that humans didn’t domesticate them until 2200 B.C., 1,000 years later than we previously thought. Read More.
Rare-earth elements could be hidden inside coal mines
Rare earth elements are necessary for modern technology, including green energy, but they only come from a few sources around the globe. New research has discovered them hiding in coal mines in the U.S. Read More.
We aren’t evolving fast enough to keep up with changes in culture
Social media, city life and even our sweet tooth can affect stress levels, health and even how many children we have. Read More.
What is the 3-body problem, and is it really unsolvable?
The three-body problem is a physics conundrum that has boggled scientists since Isaac Newton’s day. But what is it, why is it so hard to solve and is the sci-fi series of the same name really possible? Read More.
Razor-thin silk ‘dampens noise by 75%’ — could be game-changer for sound-proofing homes and offices
Researchers have engineered a silk fabric that can suppress noise by either generating sound waves that interfere with the noise or by blocking vibrations that are key to the transmission of sound. Read More.
Pat Sajak will host ‘Wheel of Fortune’ for the final time today
It’s Pat’s final spin. Sajak will host his last episode of “Wheel” today after more than 40 years and 8,000 episodes on the game show.
SpaceX launches mega Starship on its fourth test flight
Elon Musk’s SpaceX completed an unmanned test flight of the most powerful rocket ever built. Read about the milestones achieved during the latest flight.
USA scores major win against Pakistan at Men’s T20 Cricket World Cup
The victory was the biggest in USA Cricket history — and possibly one of the most shocking upsets in the sport of cricket.
‘House of the Dragon’ braces for war in its fiery second season
The “Game of Thrones” prequel will soon begin its second season on HBO, which, like CNN, is a unit of Warner Bros. Discovery. Read more about the storyline here.
PHOTOS OF THE DAY
Paris, France
With 50 days to go until the start of the Paris Olympics Games organisers unveil the five rings, which have been mounted on the Eiffel Tower Photograph: Thomas Padilla/AP
A seagull flies above a rooftop in Rome, Italy
Photograph: Tiziana Fabi/AFP/Getty Images
A roebuck enjoys a feast of poppy petals in Brandenburg, Germany
Photograph: Patrick Pleul/DPA/Cover Images
Market Closes for June 7th, 2024
| Market Index |
Close | Change |
| Dow Jones |
38798.99 | -87.18 |
| -0.22% | ||
| S&P 500 | 5346.99 | -5.97 |
| -0.11% | ||
| NASDAQ | 17133.13 | -39.99 |
| -0.23% | ||
| TSX | 22007.00 | -222.10 |
| -1.00% |
International Markets
| Market Index |
Close | Change |
| NIKKEI | 38683.93 | -19.58 |
| -0.05% | ||
| HANG SENG |
18366.95 | -105.85 |
| -0.59% | ||
| SENSEX | 76693.36 | +1618.85 |
| +2.16% | ||
| FTSE 100* | 8245.37 | -39.97 |
| -0.48% |
Bonds
| Bonds | % Yield | Previous % Yield |
| CND. 10 Year Bond |
3.466 | 3.393 |
| CND. 30 Year Bond |
3.384 | 3.315 |
| U.S. 10 Year Bond |
4.4335 | 4.2870 |
| U.S. 30 Year Bond |
4.5546 | 4.4371 |
Currencies
| BOC Close | Today | Previous |
| Canadian $ | 0.7267 | 0.7317 |
| US $ |
1.3761 | 1.3667 |
| Euro Rate 1 Euro= |
Inverse | |
| Canadian $ | 1.4878 | 0.6721 |
| US $ |
1.0812 | 0.9249 |
Commodities
| Gold | Close | Previous |
| London Gold Fix |
2360.60 | 2360.60 |
| Oil | ||
| WTI Crude Future | 75.55 | 74.07 |
Market Commentary:
📈 On this day in 2000, U.S. District Court Judge Thomas Penfield Jackson finalized his ruling that Microsoft was a monopoly, and ordered it be split in two. The breakup order was reversed on appeal the following year.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell 1% at 22,007.00 in Toronto.
The move was the biggest since falling 1.6% on May 29 and follows the previous session’s increase of 0.4%.
Today, materials stocks led the market lower, as 9 of 11 sectors lost; 178 of 222 shares fell, while 43 rose.
Agnico Eagle Mines Ltd. contributed the most to the index decline, decreasing 6.6%.
Iamgold Corp. had the largest drop, falling 9.5%.
Insights
* In the past year, the index had a similar or greater loss 16 times. The next day, it declined eight times for an average 0.4% and advanced eight times for an average 0.6%
* This quarter, the index fell 0.7%
* So far this week, the index fell 1.2%, heading for the biggest decline since the week ended April 12
* The index advanced 10% in the past 52 weeks. The MSCI AC Americas Index gained 24% in the same period
* The S&P/TSX Composite is 2.4% below its 52-week high on May 21, 2024 and 17.7% above its low on Oct. 27, 2023
* S&P/TSX Composite is trading at a price-to-earnings ratio of 0 on a trailing basis and 15.3 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$3.53t
* 30-day price volatility rose to 11.20% compared with 10.80% in the previous session and the average of 9.70% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Materials | -115.5393| -4.2| 2/48
Energy | -41.6974| -1.0| 4/36
Industrials | -28.3459| -0.9| 7/19
Financials | -23.6435| -0.3| 9/18
Utilities | -8.7179| -1.0| 5/10
Real Estate | -7.3473| -1.6| 1/19
Consumer Discretionary| -5.5543| -0.7| 4/9
Communication Services| -2.1866| -0.3| 0/5
Health Care | -0.1666| -0.3| 1/3
Consumer Staples | 2.6275| 0.3| 6/5
Information Technology| 8.4633| 0.5| 4/6
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
Agnico Eagle Mines | -21.4800| -6.6| 38.3| 20.8
Barrick Gold | -17.8300| -6.1| 29.7| -7.1
Canadian Natural Resources | -12.6300| -1.7| 71.2| 11.4
Saputo | 3.2570| 6.8| 382.2| 11.2
Constellation Software | 4.6790| 0.9| -18.1| 16.9
Shopify | 6.1770| 0.9| -27.3| -17.9
US
By Rita Nazareth
(Bloomberg) — The world’s biggest bond market got hammered as a solid US jobs report made traders dial back their bets on Federal Reserve rate cuts.
A selloff in Treasuries drove yields up over 10 basis points, with swaps no longer pricing in a Fed reduction before December.
Nonfarm payrolls advanced 272,000 — beating estimates — and wages accelerated.
The unemployment rate increased to 4%.
Equities closed well off session lows as the data helped quell fears about an economic slowdown that could hurt Corporate America.
To Bret Kenwell at eToro, the jobs report is sort of a mixed bag.
On the one hand, it calms worries the US is hurling toward some sort of economic cliff.
On the other hand, it pushes back bets on Fed easing.
“Today’s jobs report may lower rate-cut expectations,” Kenwell said. “But at the end of the day, a strong labor market is hardly a bad thing — especially for an economy that’s so dependent on consumer spending.”
The S&P 500 fell 0.1%, with banks up and most tech mega-caps down.
GameStop Corp. plunged after Keith Gill’s appearance on the “Roaring Kitty” stream on YouTube — as well as the video-game retailer’s unexpected earnings report and plans to sell up to 75 million additional shares.
Treasury 10-year yields jumped 14 basis points to 4.43%.
The dollar climbed the most since January. Gold, silver and copper tumbled.
Oil also fell.
Bitcoin sank below $70,000.
“We still expect the Fed to cut rates in September, but another set of prints like today’s would likely also take that off the table,” said Seema Shah at Principal Asset Management.
“The positive news, however, is that with a labor market this strong, the US economy is nowhere near recession territory.”
Swap traders had escalated rate-cut bets earlier in the week, emboldened by a slew of softer-than-forecast US economic data, the Bank of Canada’s decision to ease monetary policy, and bets the European Central Bank would be the next to cut — a move that was confirmed by the ECB on Thursday.
The latest jobs figures highlight a labor market that continues to defy expectations and blunt the impact on the economy from high interest rates and prices.
That strength risks keeping inflationary pressures stubborn, which will likely reinforce the Fed’s cautious stance.
To Jeff Schulze at ClearBridge Investments, Friday’s jobs report likely takes a September rate cut off the table.
“The Fed can have patience and remain data-dependent over the next quarter to ensure that inflation is moving sustainably back to target,” he noted.
Economists at Citigroup Inc. and JPMorgan Chase & Co., among the few who were still predicting a Fed cut in July, changed their calls after the jobs report.
Citi’s Andrew Hollenhorst now sees cuts in September, November and December.
JPMorgan’s Michael Feroli predicts a Fed reduction in November.
This is one of the last major reports Fed officials will see before Wednesday’s rate decision, when they’re forecast to keep borrowing costs at a two-decade high.
A key inflation print — the Consumer Price Index — is due on the same day.
While the strong US payrolls data underscore no urgency for the Fed to cut, it’s inflation — not jobs — that will decide that, according to Krishna Guha at Evercore.
“Next week’s CPI could help clarify whether the US is enjoying a ‘Goldilocks’ moment of decelerating inflation combined with resilient employment or whether inflationary pressures are persisting,” said Ronald Temple at Lazard.
The June Fed meeting will be one of the most-pivotal this year as Chair Jerome Powell may provide the clearest hint yet to the rate-cut timetable, according to Anna Wong at Bloomberg Economics.
With the Fed widely expected to stay on hold, the focus of the meeting will be the new Summary of Economic Projections.
Back in March, Fed officials maintained their outlook for three rate cuts in 2024.
“The new ‘dot plot’ likely will indicate two 25-basis-point cuts this year,” Wong said.
Corporate Highlights:
* Walgreens Boots Alliance Inc. has shelved plans for a potential initial public offering of its UK drugstore chain Boots, people with knowledge of the matter said, dashing hopes for a blockbuster listing to revive the fortunes of the London stock market.
* Health-care payments software maker Waystar Holding Corp. shares declined as much as 4.7% after its initial public offering raised $968 million, the largest by a US-based company this year.
* KKR & Co. put $50 million of fresh capital into one of its major property trusts and agreed to a plan to support its valuation as the money manager looks to weather the ongoing turmoil in commercial real estate.
Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.1% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.1%
* The Dow Jones Industrial Average fell 0.2%
* The MSCI World Index fell 0.3%
Currencies
* The Bloomberg Dollar Spot Index rose 0.8%
* The euro fell 0.8% to $1.0800
* The British pound fell 0.5% to $1.2721
* The Japanese yen fell 0.7% to 156.75 per dollar
Cryptocurrencies
* Bitcoin fell 2.1% to $69,185.63
* Ether fell 3.1% to $3,679.9
Bonds
* The yield on 10-year Treasuries advanced 14 basis points to 4.43%
* Germany’s 10-year yield advanced seven basis points to 2.62%
* Britain’s 10-year yield advanced nine basis points to 4.26%
Commodities
* West Texas Intermediate crude fell 0.3% to $75.30 a barrel
* Spot gold fell 3.7% to $2,288.74 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Divya Patil, Sujata Rao and Elizabeth Stanton.
Have a wonderful weekend everyone.
Be magnificent!
As ever,
Carolann
We do not see things as they are, we see things as we are. –Anaïs Nin, 1903-1977.
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
June 6, 2024, Newsletter
Tangents: Happy Friday Eve.
On June 6, 1944, the D-Day invasion of Europe took place during World War II as Allied forces stormed the beaches of Normandy, France. Go to article >>
June 6, 1984: The video game Tetris is published by Russian computer engineer, Alexey Pajitnov,. With over 100 million copies sold, it is one of the most successful video games in history.
World’s best restaurant for 2024 revealed
The results are in from a competition described as the “Oscars of fine dining.”
The NBA Finals are upon us
The Boston Celtics and the Dallas Mavericks will face off in the 2024 NBA Finals, which begin today at TD Garden. Here’s how to watch.
100-foot ‘walking tree’ in New Zealand looks like an Ent from Lord of the Rings — and is the lone survivor of a lost forest
An unusual northern rātā tree that looks like it is striding across an empty field has been crowned New Zealand’s Tree of the Year. The giant plant is centuries old. Read More.
‘The blade of the sword was still sharp’: Lost metal detectorist discovers Bronze Age sword and ax in UK
A metal detectorist found the sword, ax head and bangle after he became separated from his peers during a treasure hunt in England. Read More.
10 ‘breathtaking’ photos of our galaxy from the 2024 Milky Way Photographer of the Year contest
From dangerous lion reserves to high mountain peaks, photographers go all out to capture the most spectacular images of our galaxy in this year’s Milky Way Photographer of the Year competition. Read More
PHOTOS OF THE DAY
Yogyakarta, Indonesia
‘A woman in yellow boots with a yellow umbrella crosses the courtyard of the Ullen Sentalu museum during a torrential rainstorm.’
Photograph: Devin McLachlan
Málaga, Spain
‘An Iberian waterfrog resting on a lotus pad in the pond in my front terrace in Ayuntamiento de Comares.’
Photograph: Gavin MacMillan
Bangkok, Thailand
‘A man delivering ice at Khlong Toei market. The ice is made in a nearby factory and blocks are delivered to the market several times a day, where it is crushed and delivered to stallholders.’
Photograph: Tim Russell
Market Closes for June 6th, 2024
| Market Index |
Close | Change |
| Dow Jones |
38886.17 | +78.84 |
| +0.20% | ||
| S&P 500 | 5352.96 | -1.07 |
| -0.02% | ||
| NASDAQ | 17173.12 | -14.78 |
| -0.09% | ||
| TSX | 22229.10 | +84.08 |
| +0.38% |
International Markets
| Market Index |
Close | Change |
| NIKKEI | 38703.51 | +213.34 |
| +0.55% | ||
| HANG SENG |
18476.80 | +51.84 |
| +0.28% | ||
| SENSEX | 75074.51 | +692.27 |
| +0.93% | ||
| FTSE 100* | 8285.34 | +38.39 |
| +0.47% |
Bonds
| Bonds | % Yield | Previous % Yield |
| CND. 10 Year Bond |
3.393 | 3.384 |
| CND. 30 Year Bond |
3.315 | 3.292 |
| U.S. 10 Year Bond |
4.2870 | 4.2755 |
| U.S. 30 Year Bond |
4.4371 | 4.4297 |
Currencies
| BOC Close | Today | Previous |
| Canadian $ | 0.7317 | 0.7304 |
| US $ |
1.3667 | 1.3691 |
| Euro Rate 1 Euro= |
Inverse | |
| Canadian $ | 1.4887 | 0.6717 |
| US $ |
1.0893 | 0.9180 |
Commodities
| Gold | Close | Previous |
| London Gold Fix |
2360.60 | 2340.05 |
| Oil | ||
| WTI Crude Future | 74.07 | 73.25 |
Market Commentary:
📈 On this day in 1934: The Securities Exchange Act, which created the Securities and Exchange Commission and required companies to file registration documents with stock exchanges, was signed into law by President Franklin D. Roosevelt.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the second day, climbing 0.4%, or 84.08 to 22,229.10 in Toronto.
Agnico Eagle Mines Ltd. contributed the most to the index gain, increasing 3.8%.
Transcontinental Inc. had the largest increase, rising 8.8%.
Today, 149 of 222 shares rose, while 69 fell; 5 of 11 sectors were higher, led by materials stocks.
Insights
* This quarter, the index rose 0.3%
* So far this week, the index was little changed
* 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 1.4% below its 52-week high on May 21, 2024 and 18.9% above its low on Oct. 27, 2023
* The S&P/TSX Composite is up 0.7% in the past 5 days and was little changed in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 17.9 on a trailing basis and 15.4 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.51t
* 30-day price volatility rose to 10.80% compared with 10.75% in the previous session and the average of 9.64% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Materials | 68.3617| 2.5| 50/0
Energy | 31.1525| 0.8| 36/4
Industrials | 9.8745| 0.3| 16/11
Consumer Staples | 3.1955| 0.3| 8/3
Utilities | 0.9072| 0.1| 7/8
Health Care | -0.0699| -0.1| 1/1
Real Estate | -1.9330| -0.4| 8/11
Communication Services | -2.1313| -0.3| 1/4
Consumer Discretionary | -2.7879| -0.4| 6/7
Information Technology | -3.6943| -0.2| 6/3
Financials | -18.8083| -0.3| 10/17
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
Agnico Eagle Mines | 11.8900| 3.8| 8.3| 29.3
Barrick Gold | 9.9610| 3.5| -15.4| -1.1
Wheaton Precious Metals | 8.0290| 3.4| -22.8| 16.3
Enbridge | -2.9780| -0.4| -55.1| 3.7
Celestica | -4.4660| -7.0| 18.1| 85.0
Brookfield Corp | -11.8200| -2.0| 22.2| 8.9
US
By Rita Nazareth
(Bloomberg) — Stocks and bonds lost steam on the eve of a key US jobs reading that will help shape the outlook for the Federal Reserve’s next steps.
Equities stalled near all-time highs as traders refrained from big bets ahead of the data.
A 22V Research survey shows there’s no consensus about the market reaction — with 36% of investors betting on a “risk-off” move, 33% saying “risk-on” and 31% “negligible/mixed.” Treasuries wavered.
The euro rose as the European Central Bank raised inflation forecasts after cutting rates.
In the run-up to the payrolls reading, Wall Street waded through a slew of data.
Jobless claims topped estimates, labor costs increased by less than previously reported and the trade deficit widened.
Friday’s report is expected to show the US added 180,000 jobs in May while the unemployment rate held steady.
“A slowing in the job market, and even an increase in unemployment, should be welcome to the extent that it alleviates some upwards pressure on inflation,” said Chris Zaccarelli at Independent Advisor Alliance.
“But we are aware that too much weakness in the labor market and in the economy could eventually prove to be an even greater threat to markets than inflation.”
The S&P 500 was little changed after notching its 25th record in 2024.
The US is opening antitrust investigations into Microsoft Corp. and Nvidia Corp. over their dominance of artificial intelligence, according to people familiar with the matter.
GameStop Corp. surged as Keith Gill, known as “Roaring Kitty,” scheduled a YouTube live stream for June 7 at 12 p.m. New York.
US 10-year yields fluctuated near 4.29%.
Swap markets continued to pencil in the start of the Fed rating cut in November, with a strong likelihood of another reduction in December.
“We look for payrolls to continue to lose momentum,” said Oscar Munoz and Gennadiy Goldberg at TD Securities.
“Markets will likely react more to a weaker print than strong data, but data likely needs to be much weaker given that investor expectations have declined.”
A pre-payrolls survey conducted by BMO Capital Markets showed that 33% of respondents would “sell strength” and 54% indicated a willingness to “buy a dip.”
“The takeaway from this month’s pre-payrolls survey was that investors are comfortable playing the range, at least for the time being,” wrote strategists led by Ian Lyngen.
The tally also showed that 46% of respondents expect the next 15 basis-point move in 10-year yields to be higher — while 41% expect a fall.
Investors are balancing between growing evidence of an economic slowdown and the implications for rate cuts, according to Ed Clissold at Ned Davis Research.
“Moderating, but positive, growth would be the best-case scenario for stocks,” he added.
On the one hand, a cooling economy is signaling potential interest rate cuts, which can be bullish for stocks.
But the reason of rate cuts matters too.
“If it’s because of a slowdown in inflation, it can be bullish for stocks. But if the Federal Reserve cuts because of a slowdown in growth, it’s not good news for corporate earnings,” said Matt Maley, chief market strategist at Miller Tabak + Co.
As equities remain near record levels, stock fragility — or the magnitude of a company’s daily share-price move relative to realized volatility of the past 21 days — is approaching a 30-year extreme for the 50 largest stocks of the S&P 500 according to Bank of America Corp. strategists.
“So far, these fragility shocks have been idiosyncratic,” BofA analysts wrote. “However, there’s a risk of a correlated shock among these companies that control so much of the US as well as global equity indexes.”
The stock market will continue its uptrend in the second half of 2024, albeit at a slower pace following a double-digit run since January, according to Morgan Stanley’s Lisa Shalett.
“The path of least resistance between now and the end of the year is for the market to grind higher,” the chief investment officer of the bank’s wealth management unit told Bloomberg Television.
That said, investors should have “measured expectations” around the magnitude of equity returns from now through December, with the S&P 500 already up 12% year-to-date, Shalett added.
The stock market’s strength in the first half of 2024 is on track to carry on into the remaining months of the year — and expand into quieter corners of the market, according to Citigroup Inc.’s wealth management business.
That’s why the group predicts the S&P 500 Equal Weight Index — which gives an even share to each constituent — may soon outperform the market-value weighted benchmark S&P 500.
While US technology behemoths have almost single-handedly powered the market of late, continued economic strength and profit growth in companies other than Big Tech are expected to broaden equity returns through the rest of this year.
Traders have escalated rate-cut bets in the past week, emboldened by a slew of softer-than-forecast US economic data, the Bank of Canada’s decision to ease monetary policy, and bets the ECB would be the next to cut — a move confirmed on Thursday.
“Bullish trading action in recent days has been motivated by the expectation that the Fed will follow suit as bond investors incrementally expand expectations for an accommodative central bank,” said Jose Torres at Interactive Brokers.
In a historic move that saw the ECB slashing borrowing costs ahead of the Fed, officials led by President Christine Lagarde said that while the inflation outlook has improved “markedly,” they’ll “keep policy rates sufficiently restrictive
for as long as necessary.”
“The meeting signals the ECB is not going to cut in July, and September is not locked in advance,” said Krishna Guha at Evercore. “But we stand by our view this is a ‘cautious cut’ not a ‘hawkish cut’.”
Corporate Highlights:
* Lyft Inc. is expecting gross bookings to grow about 15% at a compound annual rate over the next three years.
* Hertz Global Holdings Inc., seeking to bolster its balance sheet after an electric-vehicles blunder, is considering the sale of at least $700 million in secured debt as well as a convertible notes offering, according to people with knowledge of the matter.
* Instacart announced a new $500 million share repurchase program, the third round of buybacks the grocery delivery company has authorized since September as it seeks to boost confidence in its growth potential.
* Nio Inc. reported a bigger-than-expected loss in the first quarter as increased competition dealt the electric-vehicle maker another setback in its push for profitability.
* SpaceX’s Starship rocket blasted off to space and plunged through Earth’s atmosphere for an ocean landing, notching a key objective on its fourth major test flight.
* Boeing Co.’s space taxi docked with the International Space Station, bringing the spacecraft’s first two passengers to the orbiting laboratory as part of a critical flight test for NASA.
Key events this week:
* China trade, forex reserves, Friday
* Eurozone GDP, Friday
* US unemployment rate, nonfarm payrolls, Friday
Some of the main moves in markets:
Stocks
The S&P 500 Index was little changed at 4 p.m. New York time.
The Dow Jones Industrial Average increased 0.2%.
The Nasdaq Composite Index fell 0.1%.
The Stoxx Europe 600 Index jumped 0.7%.
The MSCI All-Country World Index gained 0.3%.
Currencies
The Bloomberg Dollar Spot Index was little changed at 1,252.46.
The euro increased 0.2% to $1.0889.
The British pound was little changed at $1.279.
The Japanese yen strengthened 0.3% to 155.61 per dollar.
Bitcoin sank 1.1% to $70,427.
Bonds
The yield on 10-year Treasuries rose one basis point to 4.29%.
Germany’s 10-year yield gained four basis points to 2.55%.
Britain’s 10-year yield decreased one basis point to 4.174%.
Commodities
The Bloomberg Commodity Index jumped 1.6% to 103.46.
West Texas Intermediate crude jumped 2% to $75.58 a barrel.
Gold strengthened 0.7% to $2,372.52 an ounce.
–With assistance from Winnie Hsu, John Viljoen, Sujata Rao, Ruth Carson, Masaki Kondo, Natalia Kniazhevich and Alexandra Semenova.
Have a lovely evening.
Be magnificent!
As ever,
Carolann
Dream big and dare to fail. -Col. Norman Dane Vaughan, 1905-2005.
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
June 5th, 2024, Newsletter
Tangents:
June 5, 1967: Six-Day War begins between Israel and the neighbouring Arab states of Egypt, Jordan and Syria.
On June 5, 1968, Sen. Robert F. Kennedy was shot and mortally wounded just after claiming victory in California’s Democratic presidential primary. Gunman Sirhan Bishara Sirhan was immediately arrested. Go to article >>
Adam Smith, economist, b.1723.
1981: AIDS first noted.
“Don’t let it end like this. Tell them I said something.” –Pancho Villa, revolutionary, b. June 5, 1878.
The brain can store nearly 10 times more data than previously thought, study confirms
Scientists harnessed a new method to precisely measure the amount of information the brain can store, and it could help advance our understanding of learning. Read More.
Viking sword with ‘very rare’ inscription discovered on family farm in Norway
The ancient weapon seems to be a rare type of iron sword made in the Frankish Empire. Read More.
Stunning ‘parade of planets’ image shows 6 worlds aligned over Earth
A stunning photo of the recent “parade of planets” shows Mercury, Mars, Jupiter, Saturn, Uranus and Neptune in alignment over Earth. It was captured from the U.K. on June 1. Read More.
A ‘new star’ could appear in the sky any night now. Here’s how to see the Blaze Star ignite.
The “Blaze Star” T Coronae Borealis will erupt with a magnificent explosion sometime between now and September, becoming visible to the naked eye. Here’s how to find it when it does. Read More.
Kids discover extremely rare teen T. rex fossils sticking out of the ground during North Dakota Badlands hike
“Teen Rex” is about to go on display for the first time and appear in a new T. rex documentary, thanks to a discovery made by three young boys. Read More.
Future of food: vertical strawberries?
Watch this video to see how farmers — and robots — are working together to grow high-tech strawberries in vertical structures.
Lionel Messi creates new sports drink
Soccer superstar Lionel Messi will release his new energy drink next week. Despite his global fandom, industry experts say the beverage will still face a challenging market with longstanding competitors.
San Diego Padres player Tucupita Marcano banned for life by MLB
The 24-year-old Padres infielder has been banned for life by Major League Baseball for gambling on baseball games.
King Charles III bank notes are in circulation.
Eleven Madison Park is opening a cocktail bar.
The deep sea is home to some crazy-looking animals.
PHOTOS OF THE DAY
Camp Hill, US
Pennsylvania’s wildlife agency, firefighters and police use a large blue tarpaulin to catch a wayward black bear as it falls from a tree
Photograph: Sean Simmers/The Patriot-News/AP
Dartmoor, UK
‘We were driving home from a wonderful walk and the light became really interesting, so we stopped and watched the sunset. The tree is one I have photographed in all seasons. It’s incredibly tough and rugged, and it’s really special to me.’
Photograph: Lucia Grun
Launceston, Tasmania
‘Aurora australis at nightfall in Hillwood.’
Photograph: Imogen Hewitt
Market Closes for June 5th, 2024
| Market Index |
Close | Change |
| Dow Jones |
38807.33 | +96.04 |
| +0.25% | ||
| S&P 500 | 5354.03 | +62.69 |
| +1.18% | ||
| NASDAQ | 17187.91 | +330.86 |
| +1.96% | ||
| TSX | 22145.02 | +166.84 |
| +0.76% |
International Markets
| Market Index |
Close | Change |
| NIKKEI | 38490.17 | -347.29 |
| -0.89% | ||
| HANG SENG |
18424.96 | -19.15 |
| -0.10% | ||
| SENSEX | 74382.24 | +2303.19 |
| +3.20% | ||
| FTSE 100* | 8246.95 | +14.91 |
| +0.18% |
Bonds
| Bonds | % Yield | Previous % Yield |
| CND. 10 Year Bond |
3.384 | 3.448 |
| CND. 30 Year Bond |
3.292 | 3.324 |
| U.S. 10 Year Bond |
4.2755 | 4.3259 |
| U.S. 30 Year Bond |
4.4297 | 4.4735 |
Currencies
| BOC Close | Today | Previous |
| Canadian $ | 0.7304 | 0.7311 |
| US $ |
1.3691 | 1.3677 |
| Euro Rate 1 Euro= |
Inverse | |
| Canadian $ | 1.4887 | 0.6717 |
| US $ |
1.0873 | 0.9197 |
Commodities
| Gold | Close | Previous |
| London Gold Fix |
230.05 | 2326.00 |
| Oil | ||
| WTI Crude Future | 73.25 | 73.25 |
Market Commentary:
📈 On this day in 1883, John Maynard Keynes was born in Cambridge, England. He became one of the most influential economists of all time, devising theories in the first half of the 20th century that led to massive government intervention across the Europe and the U.S.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 0.8% at 22,145.02 in Toronto.
The move follows the previous session’s decrease of 0.6%.
Today, materials stocks led the market higher, as all sectors gained; 179 of 222 shares rose, while 39 fell.
TC Energy Corp. contributed the most to the index gain, increasing 3.2%.
Celestica Inc. had the largest increase, rising 7.1%.
Insights
* This quarter, the index was little changed
* 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 1.8% below its 52-week high on May 21, 2024 and 18.5% above its low on Oct. 27, 2023
* The S&P/TSX Composite is up 1.1% in the past 5 days and rose 0.9% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 17.9 on a trailing basis and 15.4 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$3.49t
* 30-day price volatility rose to 10.75% compared with 10.70% in the previous session and the average of 9.59% over the past month
================================================================
|Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Materials | 38.4512| 1.5| 44/5
Industrials | 33.3058| 1.1| 24/2
Energy | 27.9045| 0.7| 28/10
Information Technology | 23.7167| 1.4| 9/1
Financials | 15.0922| 0.2| 17/10
Utilities | 8.2222| 1.0| 12/3
Consumer Discretionary | 8.1648| 1.0| 11/2
Real Estate | 6.9883| 1.6| 19/1
Consumer Staples | 3.3250| 0.4| 8/3
Communication Services | 0.9557| 0.1| 3/2
Health Care | 0.7308| 1.2| 4/0
================================================================
| | |Volume VS |
| Index | | 20D AVG |YTD Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
TC Energy | 12.4300| 3.2| 67.7| 5.3
Brookfield Corp | 7.7140| 1.3| -44.8| 11.1
Shopify | 7.3610| 1.1| -21.8| -18.7
Great-West Lifeco | -2.6520| -3.4| -29.3| -8.4
Bank of Montreal | -4.6240| -0.8| -23.7| -9.4
Nutrien | -6.6860| -2.5| 18.4| 2.2
US
By Rita Nazareth
(Bloomberg) — The world’s largest technology companies drove stocks to all-time highs, while bond yields fell with traders almost fully pricing in two Federal Reserve rate cuts in 2024.
The S&P 500 hit its 25th record this year, while the tech-heavy Nasdaq 100 climbed 2%.
Nvidia Corp. — the poster child of artificial-intelligence frenzy — led a rally in the “Magnificent Seven” mega-caps to hit $3 trillion in value.
Apple Inc. rose for an eighth straight day — the longest winning run since March 2022.
Hewlett Packard Enterprise Co. soared on strong AI server sales.
“The AI revolution is set to drive further growth,” said Solita Marcelli at UBS Global Wealth Management.
“US stocks are likely to remain supported. In addition to a strategic allocation to the tech sector, we see a particular opportunity in small-cap stocks supported by the beginning of the Fed’s easing cycle.”
Just 48 hours ahead of the US jobs report, a private payrolls reading showed hiring at companies grew at the slowest pace since the start of the year.
Meantime, the services sector expanded by the most in nine months, powered by the largest monthly gain in a measure of business activity since 2021.
The S&P 500 rose 1.2% to close above 5,350.
Treasury 10-year yields dropped five basis points to 4.28%.
Swap contracts continued to show bets on a first Fed cut in November, and possibly another in December.
The loonie edged lower after the Bank of Canada became the first Group of Seven central bank to kick off an easing cycle.
The euro was little changed, with the European Central Bank expected on Thursday to start a rate cutting cycle before the Fed for the first time ever.
The Japanese yen dropped almost 1%.
Bitcoin topped $71,000.
A “wall of money” from passive equity allocations will pour into the stock market in early July, setting up a continuing rally through the early summer, according to Goldman Sachs Group Inc.’s Scott Rubner.
Since 1928, the first 15 days of July have been the best two-week trading period of the year for equities, and they tend to fade after July 17, according to Rubner.
The S&P 500 has been positive for nine straight Julys, posting an average return of 3.7%.
The Nasdaq 100 has an even better record, posting gains in 16 straight Julys, with an average return of 4.6%, he noted.
“The slow and steady march higher for equity markets continues to confound the bears,” said Mark Hackett at Nationwide.
“The latest stretch is being attributed to shifting views of Fed policy, though the more accurate reason is that buying pressure from retail and institutional investors, share buybacks, and growing M&A activity provides a healthy backdrop.”
Investors are refocusing on mega-caps, and for good reason, according to Ed Clissold at Ned Davis Research.
After a strong May, the top 10 stocks account for 35.7% of the S&P 500 Index’s market cap — a record since at least 1972, he noted.
“US mega-caps have become investor favorites due to their ability to generate enough cash flow to both reinvest it into their businesses, with AI being the recent favorite, and return it to shareholders via dividends and buybacks,” Clissold said.
With earnings season basically over, the focus now turns back to the macro data — and that may impact stocks near-term, according to Gillian Wolff at Bloomberg Intelligence
The Bloomberg Intelligence Market Pulse Index, a sentiment gauge that acts as a contrarian signal, advanced within striking distance of “manic” territory last month.
It’s a rare sign that has typically tempered US stock returns in the short-run.
In the three months following a manic reading, the Russell 3000 Index has gained an average 1.7%, compared with 9.1% after panic.
With the Fed widely expected to stay on hold next week, the focus of the meeting will be the new Summary of Economic Projections.
Back in March, Fed officials maintained their outlook for three rate cuts in 2024.
“The ‘dots’ are likely to cluster around one or two interest rate cuts this year,” said Stephen Brown at Capital Economics.
“Nevertheless, as inflation falls a bit faster than officials expect and GDP growth disappoints, our base case remains that the Fed will cut in September.”
Corporate Highlights:
* CrowdStrike Holdings Inc. delivered first-quarter earnings that beat Wall Street’s expectations, despite a pullback in spending that has challenged its cybersecurity rivals.
* Boeing Co. finally launched its space taxi into orbit with NASA astronauts on board, and is on target to dock with the International Space Station on Thursday.
* Alphabet Inc. named Eli Lilly & Co. executive Anat Ashkenazi as its new chief financial officer, replacing Ruth Porat who announced last year she planned to step down.
* Discount retailer Dollar Tree Inc. is reviewing options for its troubled Family Dollar business, including a potential sale or spinoff.
* A top Senate Republican is asking a government watchdog to investigate nearly $1.7 billion in financing offered last month to hydrogen company Plug Power Inc., alleging potential conflicts of interest and risks to US taxpayers.
* ASML Holding NV became Europe’s second-biggest listed company, overtaking LVMH by market value for the first time ever.
Key events this week:
* Eurozone retail sales, ECB rate decision, Thursday
* US initial jobless claims, trade, Thursday
* China trade, forex reserves, Friday
* Eurozone GDP, Friday
* US unemployment rate, nonfarm payrolls, Friday
Some of the main moves in markets:
Stocks
The S&P 500 Index surged 1.2% to 5,354.01 as of 4 p.m. New York time.
The Dow Jones Industrial Average gained 0.2% to 38,807.45.
The Nasdaq Composite Index surged 2% to 17,187.91.
The MSCI All-Country World Index jumped 0.9% to 794.79.
Currencies
The Bloomberg Dollar Spot Index was little changed at 1,251.86.
The euro was little changed at $1.0874.
The British pound climbed 0.2% to $1.2792.
The Japanese yen weakened 0.8% to 156.09 per dollar.
Bitcoin jumped 1.3% to $71,347.
Bonds
The yield on 10-year Treasuries decreased five basis points to 4.28%.
Germany’s 10-year yield fell two basis points to 2.51%.
Britain’s 10-year yield gained one basis point to 4.184%.
Commodities
The Bloomberg Commodity Index advanced 0.6% to 101.87.
West Texas Intermediate crude climbed 1.2% to $74.15 a barrel.
Gold strengthened 1.2% to $2,354.14 an ounce.
–With assistance from Chiranjivi Chakraborty, Julien Ponthus, Cecile Gutscher, Sujata Rao, Jessica Menton, Natalia Kniazhevich and Ye Xie.
Have a lovely evening.
Be magnificent!
As ever,
Carolann
Diligence is the mother of good luck. –Benjamin Franklin, 1706-1790.
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
June 4, 2024, Newsletter
Tangents:
June 4, 1783: The Montgolfièr brothers demonstrate the first hot air balloon. The flight of the Montgolfière lasted about 10 minutes.
June 4, 1940: The Allies completed the evacuation of British troops from Dunkirk, France. Go to article >>
June 4, 1942: Battle of Midway.
June 4,1989: Tiananmen Square Massacre, China.
Socrates, philosopher, b. 470 BC.
Angelina Jolie, b. 1975.
Don’t drink before your nap on the plane, health experts say
Trying to get through your long-haul flight with a glass of wine and a nap? Research shows that tactic can hurt your health — and your sleep.
Skull of an extinct, massive ‘thunder bird’ discovered in Australia
A rare fossil discovery has given scientists their first face-to-face encounter with the extinct “thunder bird.”
Kylian Mbappé joins Real Madrid from Paris Saint-Germain
Real Madrid announced the signing of French superstar Kylian Mbappé on Monday, ending one of the longest-running transfer sagas in soccer.
2,000-year-old rock art, including nearly 140-foot-long snake, may mark ancient territories in Colombia, Venezuela
Archaeologists used cameras and drones to fully map 14 massive rock art sites scattered across Venezuela and Colombia. Read More.
China lands Chang’e 6 sample-return probe on far side of the moon
China’s Chang’e 6 spacecraft successfully touched down on the far side of the moon on Sunday (June 2). China has now landed two missions on the moon’s mysterious far side. Read More.
‘Fossil viruses’ embedded in the human genome linked to psychiatric disorders
Certain stretches of ancient viral DNA in the human genome may increase the chances of developing three neuropsychiatric disorders. Read More.
PHOTOS OF THE DAY
You Are On Bondi Bidjigal Land!
Photograph: Anne Zahalka
Stars and Stripes – Bird behaviour finalist
Two crimson rosellas face off
Photograph: Jason Moore
Castleton, England
The garland king is paraded through the town on Garland Day
Photograph: Molly Darlington/Reuters
Market Closes for June 4th, 2024
| Market Index |
Close | Change |
| Dow Jones |
38711.29 | +140.26 |
| +0.36% | ||
| S&P 500 | 5291.34 | +7.94 |
| +0.15% | ||
| NASDAQ | 16857.05 | +28.38 |
| +0.17% | ||
| TSX | 21978.18 | -138.51 |
| -0.63 % |
International Markets
| Market Index |
Close | Change |
| NIKKEI | 38837.46 | -85.57 |
| -0.22% | ||
| HANG SENG |
18444.11 | +41.07 |
| +0.22% | ||
| SENSEX | 72079.05 | -4389.73 |
| -5.74% | ||
| FTSE 100* | 8232.04 | -30.71 |
| -0.37% |
Bonds
| Bonds | % Yield | Previous % Yield |
| CND. 10 Year Bond |
3.448 | 3.503 |
| CND. 30 Year Bond |
3.324 | 3.356 |
| U.S. 10 Year Bond |
4.3259 | 4.3884 |
| U.S. 30 Year Bond |
4.4735 | 4.5376 |
Currencies
| BOC Close | Today | Previous |
| Canadian $ | 0.7311 | 0.7340 |
| US $ |
1.3677 | 1.3625 |
| Euro Rate 1 Euro= |
Inverse | |
| Canadian $ | 1.4882 | 0.6719 |
| US $ |
1.0881 | 0.9190 |
Commodities
| Gold | Close | Previous |
| London Gold Fix |
2326.00 | 2337.70 |
| Oil | ||
| WTI Crude Future | 73.25 | 76.99 |
Market Commentary:
📈 On this day in 1968: The S&P 500 closed above 100 for the first time. It had taken the index almost 10 years to double, and would take another 17 years for it to double again.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the second day, dropping 0.6%, or 138.51 to 21,978.18 in Toronto.
Today, materials stocks led the market lower, as 4 of 11 sectors lost; 137 of 222 shares fell, while 81 rose.
Agnico Eagle Mines Ltd. contributed the most to the index decline, decreasing 5.0%.
SSR Mining Inc. had the largest drop, falling 8.8%.
Insights
* This quarter, the index fell 0.9%
* The index advanced 9.8% in the past 52 weeks. The MSCI AC Americas Index gained 23% in the same period
* The S&P/TSX Composite is 2.6% below its 52-week high on May 21, 2024 and 17.6% above its low on Oct. 27, 2023
* The S&P/TSX Composite is down 1.3% in the past 5 days and was little changed in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 17.6 on a trailing basis and 15.2 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$3.51t
* 30-day price volatility rose to 10.70% compared with 10.69% in the previous session and the average of 9.53% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Materials | -110.0760| -4.0| 3/47
Energy | -53.4919| -1.3| 5/34
Financials | -17.5971| -0.3| 14/11
Real Estate | -0.3994| -0.1| 7/12
Health Care | 0.1767| 0.3| 2/2
Consumer Discretionary| 0.6609| 0.1| 7/6
Utilities | 1.9998| 0.2| 7/8
Communication Services| 4.5747| 0.6| 4/1
Consumer Staples | 5.5615| 0.6| 9/2
Information Technology| 9.5596| 0.6| 5/5
Industrials | 20.5085| 0.7| 18/9
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
Agnico Eagle Mines | -16.2500| -5.0| 38.7| 22.4
Barrick Gold | -15.0000| -5.1| 26.7| -5.8
Canadian Natural | | | |
Resources | -13.8300| -1.8| 195.5| 13.0
TD Bank | 8.4540| 0.9| -46.9| -11.1
Waste Connections | 8.7360| 2.2| -7.5| 15.0
Shopify | 13.3700| 1.9| -14.1| -19.6
US
By Rita Nazareth
(Bloomberg) — The bond market climbed as signs of labor-market cooling reinforced speculation the Federal Reserve will be able to cut rates this year.
Just a week away from the Fed meeting, the so-called JOLTS report showed US job openings hit the lowest since 2021.
The figures lifted Treasuries, with 10-year yields extending a four-day plunge to almost 30 basis points.
Fed swaps are now pricing in a first cut in November — and higher odds of a September reduction.
Despite the dovish bets, stocks struggled to gain much traction as the bad-news-is-good-news narrative failed to entice many traders.
To Bill Adams at Comerica Bank, the bright side of the story is that the risk of wage-price pressures fueling inflation is falling, which has the Fed breathing easier than a few years ago.
That’s probably why Fed Chair Jerome Powell took it in stride when inflation accelerated earlier this year, saying hikes were unlikely, he noted.
“The evidence is accumulating that the Fed should begin easing,” said Ronald Temple, chief market strategist at Lazard.
Treasury 10-year yields fell six basis points to 4.33%.
The S&P 500 edged up to around 5,290.
Oil fell to the lowest in about four months after OPEC+’s plan to loosen its production curbs this year deepened the market’s bearish sentiment.
Copper slid below $10,000.
Bitcoin topped $70,000.
The combination of spending/inflation data, ISM Manufacturing and JOLTS figures have reinforced the notion that investors are increasingly looking beyond the “Goldilocks” narrative toward something a bit more consistent with the
flagging trajectory of consumption,” said Ian Lyngen and Vail Hartman at BMO Capital Markets.
“There is nothing to imply that the real economy is on the precipice of a recession, however, rather than a no-landing for the labor market appears less likely than it did during the first quarter,” he noted.
“Goldilocks is edging toward the door, but has yet to leave the building.”
To Fawad Razaqzada at City Index and Forex.com, while the JOLTS data has caused bond yields to fall, this has been offset by concerns over economic and earnings growth.
“Thus, stocks have not responded in the usual way of cheering on weaker-than-expected data,” he noted.
“The questions, are we finally headed for a long overdue correction now? The S&P 500 outlook is not bearish yet from a technical viewpoint, but the potential is there for that to change in the coming days.”
Bank of America Corp. clients fled US equities for a fifth-straight week, withdrawing $5.7 billion from the asset class in the five-day period ended last Friday.
The outflow was the biggest since last July and the fourth-largest in bank’s data history, quantitative strategists led by Jill Carey Hall said.
Institutional and hedge fund clients were net sellers as retail investors bought.
Corporate Highlights:
* Intel Corp. Chief Executive Officer Pat Gelsinger took the stage at the Computex show in Taiwan to talk about new products he expects will help turn back the tide of share losses to peers, including AI leader Nvidia Corp.
* Nvidia Corp. is still working on the certification process for Samsung Electronics Co.’s high-bandwidth memory chips, a final required step before the Korean company can begin supplying a component essential to training AI platforms.
* Paramount Global, the parent of CBS and MTV, is considering joint-venture options for its streaming service and has identified $500 million in annual savings to boost profitability even as it prepares for a probable sale.
* CoreWeave Inc., a closely held cloud computing provider, has offered to acquire Bitcoin miner Core Scientific Inc. for about $1 billion, a person with knowledge of the matter said.
* Airbus SE is negotiating a major sale of A330neo aircraft to China, with talks gaining momentum since President Xi Jinping visited his French counterpart Emmanuel Macron last month.
* Stellantis NV is willing to drop some of its suppliers and make car parts on its own to lower costs in the expensive shift to electrification.
Key events this week:
* China Caixin services PMI, Wednesday
* Eurozone S&P Global Services PMI, PPI, Wednesday
* Canada rate decision, Wednesday
* US ADP Employment, S&P services PMI, ISM services, Wednesday
* Eurozone retail sales, ECB rate decision, Thursday
* US initial jobless claims, trade, Thursday
* China trade, forex reserves, Friday
* Eurozone GDP, Friday
* US unemployment rate, nonfarm payrolls, Friday
Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.1% as of 4 p.m. New York time
* The Nasdaq 100 rose 0.3%
* The Dow Jones Industrial Average rose 0.4%
* The MSCI World Index was little changed
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro fell 0.2% to $1.0880
* The British pound fell 0.3% to $1.2772
* The Japanese yen rose 0.8% to 154.79 per dollar
Cryptocurrencies
* Bitcoin rose 1.7% to $70,301.01
* Ether rose 0.6% to $3,794.77
Bonds
* The yield on 10-year Treasuries declined six basis points to 4.33%
* Germany’s 10-year yield declined five basis points to 2.53%
* Britain’s 10-year yield declined four basis points to 4.18%
Commodities
* West Texas Intermediate crude fell 1.2% to $73.32 a barrel
* Spot gold fell 1% to $2,327.37 an ounce
This story was produced with the assistance of Bloomberg Automation.
Have a lovely evening.
Be magnificent!
As ever,
Carolann
Do the thing you fear most and the death of fear is certain. -Mark Twain, 1835-1910.
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
June 3, 2024 Newsletter
Tangents: Happy Monday.
June 3, 1492:Martin Behaim presents the world’s first globe. The German geographer called his terrestrial globe Erdapfel, or Earth Apple.
On June 3, 1965, astronaut Edward White became the first American to “walk” in space, during the flight of Gemini 4. Go to article >>
1972: First U.S. female Rabbi ordained.
Curtis Mayfield, soul musician, b.1942.
Allen Ginsberg, writer, b. 1926.
Jefferson Davis, confederate leader, b. 1808.
Simone Biles dominates, winning record-extending 9th all-around national title
The champion gymnast scored another major win ahead of the Olympic Trials later this month.
Rupert Murdoch ties the knot — for the fifth time
The 93-year-old billionaire married his 67-year-old partner, retired molecular biologist Elena Zhukova. See a photo of the newlyweds.
Adele scolds audience member at her Las Vegas concert
Adele had a profanity-laced response after a heckler made an anti-Pride Month comment during her concert.
‘Swicy’ is the hottest trend in food right now
Several food and beverage companies — including Starbucks — are bringing the heat this summer with spicier products.
France welcomes WWII vets ahead of grand D-Day commemoration
Dozens of veterans will be guests of honor at events in Normandy this week to commemorate the 80th anniversary of D-Day. Officials say they are going to incredible lengths to treat veterans like royalty.
Wreck of WWII ‘Hit ‘Em Harder’ submarine, which sank with 79 crew on board, discovered in South China Sea
The U.S. wreck is the grave site of the 79 crew who died when the sub was sunk in battle in 1944. Read More.
The 165-year reign of oil is coming to an end. But will we ever be able to live without it? Read More.
Mars is more prone to devastating asteroid impacts than we thought, new study hints
Potentially hazardous asteroids pose a risk to Mars missions, but they can also yield insight into the history of the Red Planet and the early solar system, new research suggests. Read More.
PHOTOS OF THE DAY
Liverpool, UK
Cunard’s new ship Queen Anne sails into the River Mersey before a naming ceremony at Liverpool Pier Head, as part of an introductory ‘lap of honour’ voyage around the British Isles
Photograph: Peter Byrne/PA
Carentan les Marais, France
MH-60 Blackhawk helicopters fly over as part of the D-day commemorations to mark the 80th anniversary and the Battle of Normandy
Photograph: Lou Benoist/aFP/AFP/Getty Images
Jammu, India
A labourer pours water over his head as he bathes on a hot summer day against the setting sun
Photograph: Mukesh Gupta/AFP/Getty Images
Market Closes for June 3rd, 2024
| Market Index |
Close | Change |
| Dow Jones |
38571.03 | -115.29 |
| -0.30% | ||
| S&P 500 | 5283.40 | +5.89 |
| +0.11% | ||
| NASDAQ | 16828.67 | +93.65 |
| +0.56% | ||
| TSX | 22116.69 | -152.43 |
| -0.68 % |
International Markets
| Market Index |
Close | Change |
| NIKKEI | 38923.03 | +435.13 |
| +1.13% | ||
| HANG SENG |
18403.04 | +323.43 |
| +1.79% | ||
| SENSEX | 76468.78 | +2507.47 |
| +3.39% | ||
| FTSE 100* | 8262.75 | -12.63 |
| -0.15% |
Bonds
| Bonds | % Yield | Previous % Yield |
| CND. 10 Year Bond |
3.503 | 3.629 |
| CND. 30 Year Bond |
3.356 | 3.483 |
| U.S. 10 Year Bond |
4.3884 | 4.4985 |
| U.S. 30 Year Bond |
4.5376 | 4.6472 |
Currencies
| BOC Close | Today | Previous |
| Canadian $ | 0.7340 | 0.7332 |
| US $ |
1.3625 | 1.3638 |
| Euro Rate 1 Euro= |
Inverse | |
| Canadian $ | 1.4864 | 0.6728 |
| US $ |
1.0909 | 0.9167 |
Commodities
| Gold | Close | Previous |
| London Gold Fix |
2337.70 | 2348.55 |
| Oil | ||
| WTI Crude Future | 76.99 | 76.99 |
MARKET Commentary:
📈 On this day in 1775: The national debt of the U.S. was born, as the Continental Congress authorized a loan of 6 million pounds sterling to buy gunpowder.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell 0.7% at 22,116.69 in Toronto.
The move follows the previous session’s increase of 0.9%.
Today, energy stocks led the market lower, as 6 of 11 sectors lost; 121 of 222 shares fell, while 99 rose.
Canadian Natural Resources Ltd. contributed the most to the index decline, decreasing 4.6%.
Baytex Energy Corp. had the largest drop, falling 6.6%.
Insights
* This quarter, the index was little changed
* The index advanced 10% in the past 52 weeks. The MSCI AC Americas Index gained 23% in the same period
* The S&P/TSX Composite is 1.9% below its 52-week high on May 21, 2024 and 18.3% above its low on Oct. 27, 2023
* The S&P/TSX Composite is down 1.1% in the past 5 days and rose 0.8% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 17.8 on a trailing basis and 15.4 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$3.53t
* 30-day price volatility rose to 10.69% compared with 10.47% in the previous session and the average of 9.45% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Energy | -119.9431| -2.9| 4/36
Industrials | -25.5619| -0.8| 9/18
Financials | -18.4105| -0.3| 11/16
Materials | -3.8303| -0.1| 22/28
Consumer Discretionary| -1.1124| -0.1| 8/5
Health Care | -0.8427| -1.4| 1/3
Communication Services| 2.4641| 0.3| 5/0
Real Estate | 3.1188| 0.7| 12/7
Consumer Staples | 3.4769| 0.4| 10/1
Information Technology| 3.9798| 0.2| 6/4
Utilities | 4.2478| 0.5| 11/3
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
Canadian Natural Resources | -36.0000| -4.6| 33.4| 15.1
Suncor Energy | -23.8600| -4.8| 64.4| 24.8
Cenovus Energy | -16.0100| -6.1| 21.1| 21.5
Shopify | 6.1770| 0.9| -46.9| -21.1
Barrick Gold | 6.2720| 2.2| 55.0| -0.8
GFL Environmental | 6.9760| 10.4| 347.4| 3.7
US
By Rita Nazareth
(Bloomberg) — Bonds climbed after as a weak manufacturing reading fueled speculation the Federal Reserve will have room to cut interest rates this year.
Stocks fluctuated as a rise in tech outweighed a plunge in energy producers.
Longer-dated Treasuries outperformed after data showed US factory activity shrank at a faster pace as output came close to stagnating.
“The Manufacturing ISM data reaffirmed several prevailing economic trends: decelerating inflation, slowing growth, and a tight labor market,” said Gary Pzegeo at CIBC Private Wealth US.
“We should see higher odds of a rate cut later this year priced into interest rate futures.”
US 10-year yields slid nine basis points to 4.4%.
The S&P 500 hovered near 5,280.
A technical issue at the New York Stock Exchange resulted in erroneous trading volatility halts earlier Monday.
Oil tumbled as OPEC+ unexpectedly rolled out a plan to restore some production to the market this year.
Bitcoin briefly topped $70,000.
“Thank goodness it’s Monday – at least from a bond-bullish perspective,” said Ian Lyngen and Vail Hartman at BMO Capital Markets. “There have been a few signs of stumbling in the real economy, albeit primarily on the consumption side. As a result, investors are on guard for indications that the downside trajectory is accelerating.”
With earnings season mostly in the rearview mirror, traders will focus on whether inflation is cooling or is stuck in a loop that will leave interest rates in “higher-for-longer’ limbo,” according to Chris Larkin at E*TRADE from Morgan Stanley. “This week’s jobs report represents the next big test.”
In fact, traders will also be focused on a slew of labor-market readings this week, including Friday’s payrolls figures.
That’s ahead of next week’s Fed decision, with US policymakers expected to continue signaling no rush to cut rates.
Swap contracts tied to upcoming meetings continue to fully price in a quarter-point rate cut in December, with the odds of a move as soon as September edging up to around 50% and November also given high odds.
“Additional cooling in job openings this week would also help to bring home the message that the labor market is no longer a meaningful threat for near-term inflation dynamics,” said Oscar Munoz at TD Securities.
Macroeconomic signals suggest a coming slowdown or even a recession, but investors don’t seem concerned based on lofty stock market valuations and continuing positive sentiment, according to JPMorgan Chase & Co.’s Marko Kolanovic.
Risks from an increase in unemployment over past year, drop in home sales, and nearly two years of yield curve inversion are being shrugged off, with equity indexes at or near all-time highs, he noted.
Upside for stocks will be limited during the summer due to an “inconsistency” between expectations for disinflation alongside a belief in “no landing” and earnings strength.
Meantime, Morgan Stanley’s Michael Wilson says his bull case is in play, for now.
Rising government debt will continue to fuel spending and inflate asset prices in the short-term — including equities — as long as the bond market doesn’t signal any tension.
A contrarian equity sentiment indicator from Bank of America Corp. jumped by the most since late 2023 in May to a two-year high, indicating that negative attitudes toward US stocks are no longer a tailwind.
The so-called Sell-Side Indicator (SSI), a gauge that measures Wall Street strategists’ average recommended US equity allocations, posted the largest increase since December last month, BofA head of US equity and quantitative strategy Savita Subramanian said in a note to clients Monday.
“Extreme bearish sentiment is no longer a tailwind for the index, arguing for a tilt toward active stock selection strategies,” she wrote.
Corporate Highlights:
* GameStop Corp. surged as the Reddit account that drove the meme-stock mania of 2021 posted what appeared to be a $116 million position in the video-game retailer.
* Nvidia Corp. and Advanced Micro Devices Inc.’s chiefs showcased new generations of the chips powering the global boom in AI development, deepening a rivalry that may decide the direction of artificial intelligence design and adoption.
* JetBlue Airways Corp.’s sales performance for this quarter will be somewhat better than expected as the carrier works to improve operations and capitalize on “healthy overall demand trends.”
* Skydance Media plans to offer $23 a share to investors in Paramount Global’s voting stock as part of its plan to merge with the film and TV giant, according to people with knowledge of the matter.
* Bill Ackman’s Pershing Square aims to raise $25 billion for a new closed-end fund targeting US retail investors, which would more than double the fee-paying assets the firm manages, according to people with direct knowledge of the plans.
* A.P. Moller-Maersk A/S, a bellwether for global trade, raised its full-year profit forecast, saying the congestion in the Red Sea is having a larger than previously expected impact on the world’s supply lines, which in turn is boosting freight rates.
Key events this week:
* US factory orders, JOLTS, Tuesday
* China Caixin services PMI, Wednesday
* Eurozone S&P Global Services PMI, PPI, Wednesday
* Canada rate decision, Wednesday
* US ISM services, Wednesday
* Eurozone retail sales, ECB rate decision, Thursday
* US initial jobless claims, trade, Thursday
* China trade, forex reserves, Friday
* Eurozone GDP, Friday
* US unemployment rate, nonfarm payrolls, Friday
Some of the main moves in markets:
Stocks
The S&P 500 Index increased 0.1% to 5,283.40 as of 4 p.m. New York time.
The Dow Jones Industrial Average declined 0.3% to 38,571.03.
The Nasdaq Composite Index climbed 0.6% to 16,828.67.
The MSCI All-Country World Index advanced 0.5% to 789.11.
Currencies
The Bloomberg Dollar Spot Index was little changed at 1,251.67.
The euro increased 0.5% to $1.09.
The British pound increased 0.5% to $1.2803.
The Japanese yen appreciated 0.7% to 156.25 per dollar.
Bitcoin advanced 2.1% to $69,186.
Bonds
The yield on 10-year Treasuries dipped 10 basis points to 4.40%.
Britain’s 10-year yield declined 10 basis points to 4.221%.
Germany’s 10-year yield dipped eight basis points to 2.58%.
Commodities
West Texas Intermediate crude sank 3.8% to $74.05 a barrel.
Gold strengthened 0.9% to $2,347.48 an ounce.
-Rita Nazareth in New York
Have a lovely evening.
Be magnificent!
As ever,
Carolann
Convictions are more dangerous foes of truth than lies. –Friedrich Wilhelm Nietzsche, 1844-1900.
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