April 20, 2022 Newsletter

Dear Friends,

Tangents:
1940: RCA publicly demonstrated its new electron microscope. Go to article »
2010: The Deepwater Horizon drilling rig explodes, killing 11 and causing the rig to sink, causing a massive oil discharge into the Gulf of Mexico and an environmental disaster.

Today is 4/20.  You may notice something in the air today… Here are the myths and legends on how April 20 became widely known as “Weed Day.” 
 
Jupiter’s moon Europa may have a habitable ice shell.  Did someone say… aliens? Scientists say Europa stands out as one of the best candidates for harboring extraterrestrial life in our solar system.

Volkswagen is coming for Tesla.  Bring on the competition! VW is trying to take over the electric car market by phasing out all gasoline-powered vehicles from its US lineup.

PHOTOS OF THE DAY

Storm clouds pass over the lower Manhattan skyline as a rainstorm moves through New York City at sunset
CREDIT: Gary Hershorn/Corbis/Getty Images

Alnwick Garden’s cherry orchard, in the north-east of England, which has the world’s largest collection of Taihaku.
CREDIT: Owen Humphreys/PA

Reporters look at the Geo-Cosmos, a spherical display made using organic electroluminescent panels showing a high-resolution image of the Earth, during a media preview at Miraikan, the National Museum of Emerging Science and Innovation
CREDIT: Philip Fong/AFP/Getty Images

Market Closes for April 20^th, 2022

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1983, President Ronald Reagan signed into law the Social Security Amendments of 1983, delaying cost-of-living adjustments and making 50% of Social Security benefits taxable. “This bill,” said Reagan, “demonstrates for all time our nation’s ironclad commitment to Social Security.” The Social Security Administration then forecast that the system could remain solvent until the year 2063. By 1994, that date shrank to the year 2029.
Canada
By Stefanie Marotta
(Bloomberg) — Canadian equities fell, ending four straight days of gains as companies in the technology sector tumbled to their lowest point in two months.
The S&P/TSX Composite declined slightly to 21,998.38 in Toronto.
The loss follows the previous session’s increase of 0.6%.
Today, information technology stocks led the market lower, as 3 of 11 sectors lost; 101 of 239 shares fell, while 135 rose.
Shopify Inc. contributed the most to the index decline and had the largest move, decreasing 13.9%.
Insights
* This month, the index rose 0.5%
* The index advanced 16% in the past 52 weeks. The MSCI AC Americas Index gained 6.6% in the same period
* The S&P/TSX Composite is 1% below its 52-week high on April 5, 2022 and 16% above its low on April 20, 2021
* The S&P/TSX Composite is up 1.3% 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 18.4 on a trailing basis and 14 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.6% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.52t
* 30-day price volatility fell to 9.91% compared with 10.46% in the previous session and the average of 11.75% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
* Information Technology| -102.9131| -7.4| 3/13
* Consumer Staples | -6.5599| -0.8| 2/9
* Health Care | -2.1818| -1.6| 1/7
* Industrials | 0.7115| 0.0| 15/15
* Real Estate | 1.1138| 0.2| 15/8
* Materials | 1.6149| 0.1| 26/24
* Consumer Discretionary| 4.0580| 0.6| 9/5
* Utilities | 5.3670| 0.5| 11/4
* Communication Services| 11.2994| 1.0| 6/1
* Financials | 32.9227| 0.5| 20/8
* Energy | 34.1188| 0.9| 27/7
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
* Shopify | -83.5200| -13.9| 98.6| -62.2
* Constellation Software | -11.7100| -3.8| 51.3| -6.8
* Nutrien | -6.3290| -1.2| -17.1| 48.7
* TD Bank | 8.7810| 0.7| -56.1| -1.9
* Bank of Montreal | 9.8520| 1.5| 19.5| 7.7
* Canadian Natural Resources | 11.6400| 1.7| -44.9| 60.8

US
By Stephen Kirkland and Vildana Hajric
(Bloomberg) — Most U.S. stocks rose with earnings in focus, while Treasuries rallied as a growing chorus of money managers said inflation is nearing a peak and rate-hike bets are overdone.
After a roller-coaster session, the S&P 500 ended little changed with eight of 11 industry groups advancing.
Procter & Gamble Co. and International Business Machines Corp. climbed after reporting better-than-estimated results.
Meanwhile, the tech-heavy Nasdaq 100 stumbled, with Netflix Inc. sinking more than 30% after reporting its first subscriber decline in more than a decade.
That also weighed on other streaming and media companies such as Walt Disney Co., Warner Bros. Discovery Inc. and Paramount Global.
In extended trading, Tesla Inc. rose after earnings beat estimates and United Airlines Holdings Inc. also gained after posting results, saying it expects to be profitable this year.
Alcoa Corp. declined as its sales of aluminum were weaker than expected.
Ten-year yields in Treasuries shed 10 basis points as Bank of America Corp. to Nomura Asset Management saw buying opportunities in bonds. Bank of America said it has turned long on 10-year securities.
“There’s a feeling that markets are focused on the idea that inflation is expected to peak this quarter and that means that we might be expecting that this is going to be as bad as it gets,” Fiona Cincotta, senior market analyst at City Index, said by phone. “So those bets on really aggressive rate hikes from the Fed might have been a little bit overdone here.”
U.S. 10-year real yields turned positive for the first time since March 2020, signaling a potential return to the pre-pandemic normal.
But that was quickly followed by a global drop in bond yields as investors assessed growth challenges from the Ukraine war and the potential for a peak in inflation.
Short-term interest-rate traders pushed the market-implied odds that the Federal Reserve will raise rates in half-point increments in both May and June to 100% earlier on Wednesday.
The yen rose as much as 1% versus the dollar on Wednesday, but remained the weakest performer in the Group of 10 this year on the policy contrast with the U.S., the Bank of Japan offered
to buy an unlimited amount of bonds to contain yields, underscoring its desire for loose monetary settings. 
More market commentary:
* Netflix’s slump may not drag down the entire tech sector, “but certainly enough of it to cause all of the Nasdaq to bleed while value indices are buoyant,” said Max Gokhman, chief investment officer for AlphaTrAI. “This is the second horseman of the apocalypse for consumer tech, with the first being FB’s massive drop after their Q4 earnings.”
* “As I look through the earnings numbers that are coming in and the commentary that’s coming in, I still see evidence of a very healthy consumer, of an economy that is not cracking,” Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, said on Bloomberg TV. “We have some concentrated pockets of risk to navigate around. But the market deserves to be where it is right now.”

Will value stocks finally outperform growth peers? What will be the best-performing EM stock market for the rest of 2022? “Rotations” is the theme of this week’s MLIV Pulse survey.
Participation takes one minute and is anonymous, so please click here to get involved.
What to watch this week:
* Earnings include American Express, China Telecom, Tesla
* EIA crude oil inventory report, Wednesday
* Federal Reserve Beige Book, Wednesday
* French presidential election debate, Wednesday
* Euro zone CPI, U.S. initial jobless claims, Thursday
* Fed Chair Jerome Powell, ECB President Christine Lagarde discuss global economy at IMF event, Thursday
* Manufacturing PMIs: Euro zone, France, Germany, U.K, Friday
* Bank of England’s Andrew Bailey to speak, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 was little changed as of 4 p.m. New York time
* The Nasdaq 100 fell 1.5%
* The Dow Jones Industrial Average rose 0.7%
* The MSCI World index rose 0.3%
Currencies
* The Bloomberg Dollar Spot Index fell 0.6%
* The euro rose 0.6% to $1.0853
* The British pound rose 0.5% to $1.3062
* The Japanese yen rose 0.9% to 127.74 per dollar
Bonds
* The yield on 10-year Treasuries declined 10 basis points to 2.84%
* Germany’s 10-year yield declined five basis points to 0.86%
* Britain’s 10-year yield declined five basis points to 1.92%
Commodities
* West Texas Intermediate crude rose 0.2% to $102.75 a barrel
* Gold futures were little changed
–With assistance from Andreea Papuc, Srinivasan Sivabalan, Peyton Forte and Isabelle Lee.
Have a nice evening.

Be magnificent!
As ever,

Carolann

Children have never been very good at listening to their elders, but they’ve never failed to imitate them. -James Baldwin, 1924-1987.

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