May 17, 2022 Newsletter

Dear Friends,

Tangents: Norway Day.

May 17, 1940: The Nazis occupied Brussels, Belgium, during World War II.  Go to article »

1844: Rubber bank patented.
1954: School segregation banned.  Brown vs Board of Education.  Lawyer Thurgood Marshall scores a landmark victory as the US Supreme Court unanimously rules in Topeka that racial segregation in public schools is unconstitutional.

You missed the coolest wedding of the 21st century.

Men need to read more books. (h/t Mark Gongloff)

PHOTOS OF THE DAY

Fish swim among coral that has grown on the retired naval landing ship dock Spiegel Grove, sunk 20 years earlier, six miles off Key Largo in Florida, to become an artificial reef
CREDIT: Frazier Nivens/AP

Lightning illuminates the sky over the south-western city
CREDIT: György Varga/EPA

Workers unpack a painting by Rosa Bonheur during preparations for a retrospective of her work at the Musée des Beaux Arts. The exhibition will run until 18 September to mark the bicentenary of her birth
CREDIT: Philippe Lopez/AFP/Getty Images
Market Closes for May 17^th, 2022

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1994, the Federal Reserve raised interest rates by half a percentage point. Believing that this hike—the fourth in three months—was the last, analysts turned bullish on bonds, and the price on five-year Treasury notes shot up by 0.22%, one of the biggest jumps in years. The Fed went on to raise rates by another 1.25 percentage points by year-end, and bonds had their worst year since 1967.
Canada
By Geoffrey Morgan
(Bloomberg) — Canadian equities rose in a risk-on rally, led by gains from cannabis and information technology stocks.
The S&P/TSX Composite rose for the third day, notching its longest winning streak in a month, to climb 1.4% to 20,491.01 in Toronto.
Toronto-Dominion Bank contributed the most to the index’s gain, increasing 1.9%.
Dye & Durham Ltd. had the largest percentage increase, rising 22.4%.
On Tuesday, 210 of 239 shares rose, while 28 fell; 10 of 11 sectors were higher.
Insights
* In the past year, the index had a similar or greater gain seven times. The next day, it advanced four times for an average 0.6% and declined three times for an average 0.9%
* The index advanced 5.2% in the past 52 weeks. The MSCI AC Americas Index lost 3.3% in the same period
* The S&P/TSX Composite is 7.8% below its 52-week high on April 5, 2022 and 6.6% above its low on May 19, 2021
* The S&P/TSX Composite is up 3% in the past 5 days and fell 6.2% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 15.9 on a trailing basis and 12.7 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.8% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.23t
* 30-day price volatility rose to 19.71% compared with 19.08% in the previous session and the average of 14.65% over the past month
================================================================
|Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
* Financials | 96.6724| 1.5| 26/2
* Materials | 50.2111| 2.0| 44/7
* Energy | 48.1232| 1.3| 30/4
* Industrials | 45.4175| 2.0| 28/2
* Information Technology | 24.7944| 2.3| 16/0
* Consumer Discretionary | 10.1298| 1.5| 13/1
* Utilities | 9.0166| 0.9| 13/3
* Real Estate | 5.0929| 0.9| 22/1
* Health Care | 2.9828| 3.0| 8/0
* Communication Services | 0.3883| 0.0| 4/3
* Consumer Staples | -8.2265| -1.0| 6/5
================================================================
| | |Volume VS |
| Index | | 20D AVG |YTD Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
* TD Bank | 21.8300| 1.9| -36.7| -3.2
* Brookfield Asset Management | 13.2500| 2.2| 33.5| -17.9
* Canadian Pacific | 12.5300| 2.2| -37.0| 0.7
* Loblaw | -1.8200| -1.4| -35.2| 9.3
* Metro Inc | -1.8750| -1.6| -27.0| 3.7
* Couche-Tard | -6.0580| -1.8| -27.3| 9.2

US
By Stephen Kirkland and Vildana Hajric
(Bloomberg) — US stocks regained session highs as investors weighed comments from Federal Reserve Chair Jerome Powell on the outlook for higher interest rates.
Short-term Treasuries underperformed, extending a flattening in the yield curve.
The S&P 500 rose to the highest closing level in more than a week amid a broad-based rally, as solid economic data boosted risk sentiment.
The Nasdaq 100 jumped more than 2%, with Apple Inc., Tesla Inc. and Nvidia Corp. bouncing back from a tech-led selloff Monday.
Treasury yields climbed Tuesday, with more policy-sensitive front-end tenors leading the way higher reflecting expectations for a series Fed rate hikes, as Powell said the central bank won’t hesitate to raise rates above neutral if needed.
No one should doubt the US central bank’s resolve to curb the highest inflation in decades, Powell said. He also noted that financial conditions have tightened quite a bit.
“The market is in the middle of a powerful moment where it’s digesting a major and relatively rapid change in expectations for monetary policy and what financial conditions should look like to keep inflation under control,” Lauren
Goodwin, economist and portfolio strategist at New York Life Investments, said by phone. “And so we’ve already seen a lot of tightening in market financial conditions.”
Earlier, St. Louis Fed President James Bullard, a hawk and Federal Open Market Committee voter, said he backs the central bank’s plan to hike interest rates in half-percentage-point steps — moves that are already reflected in rates markets for the upcoming three FOMC meetings.
Risk sentiment caught a tailwind Tuesday after data showed U.S. retail sales grew at a solid pace last month, the latest evidence that consumers remained resilient in the face of inflation and higher rates.
Another report showed factory production rose at a solid pace for a third month in April.
The dollar stayed lower, weakening against all of its Group-of-10 counterparts except the yen, while European currencies led gains.
The risk mood in Europe got a lift from data showing the economy in the euro area expanded more than initially estimated at the start of the year, defying headwinds from the early days of the war in Ukraine. 
Commentary
* “Retail sales were much stronger than expected, especially including revisions,” said Dennis DeBusschere, the founder of 22V Research. “This has been a worry of ours — the consumer staying too hot for the Fed. The consumer momentum and strength has been much stronger than just about anyone would have thought.”
* “The takeaway from this morning’s retail sales print was confirmation that spending during the second quarter has started on solid footing,” wrote BMO’s Ian Lyngen.
* “Inflation may be weighing down market sentiment and causing concern for the Fed, but it doesn’t seem to be slowing down the consumer at the moment,” said Mike Loewengart, managing director of investment strategy at E*TRADE from Morgan Stanley. “That’s not to say that higher prices won’t start to creep into these numbers. After all we did see a decline month over month. And with a mixed bag on the retail earnings front today, it remains
to be seen how investors will digest this read on the consumer.”
* “Going into ‘23, ‘24, yeah there’s a recession out there somewhere but I don’t see that in the near-term,” Scott Clemons, chief investment strategist at Brown Brothers Harriman, said on Bloomberg TV. “The backdrop is just too strong.”
Stocks briefly dipped to session lows in morning trading amid reports that New York City raised its Covid-19 alert level to high amid increasing pressure on the health care system, a move that it signaled Monday could be imminent.
On the corporate front, Citigroup Inc. jumped after report showed Warren Buffett’s Berkshire Hathaway took a stake in the lender.
Walmart Inc. tumbled after cutting its profit outlook due to inflationary pressures.
Boeing Co. rose after the Wall Street Journal reported that the black box for a China Eastern Airlines Corp. jet suggested the plane took an intentional nosedive.
US-listed Chinese tech stocks jumped Tuesday, after a state television report that top officials reaffirmed support for internet companies.
JD.com Inc., China’s second-largest e-commerce operator, rose after revenue growth beat estimates.
Meanwhile, Shanghai reported three days of zero community transmission, a milestone that could lead officials to start unwinding a punishing lockdown.
Flareups elsewhere in China showed how hard it is to tackle the omicron strain.
Cryptocurrencies weathered the latest stable coin turbulence, with Bitcoin rising above the $30,000 mark.
Oil hovered around $114 a barrel in New York amid news that the US government will allow Chevron Corp. to negotiate its oil license with Venezuela.
What to watch this week:
* G-7 finance ministers and central bankers meeting Wednesday
* Eurozone, UK CPI Wednesday
* Philadelphia Fed President Patrick Harker speaks Wednesday
* China loan prime rates Friday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 2% as of 4 p.m. New York time
* The Nasdaq 100 rose 2.6%
* The Dow Jones Industrial Average rose 1.3%
* The MSCI World index rose 2%
Currencies
* The Bloomberg Dollar Spot Index fell 0.7%
* The euro rose 1.1% to $1.0545
* The British pound rose 1.3% to $1.2482
* The Japanese yen fell 0.2% to 129.38 per dollar
Bonds
* The yield on 10-year Treasuries advanced 10 basis points to 2.98%
* Germany’s 10-year yield advanced 11 basis points to 1.05%
* Britain’s 10-year yield advanced 15 basis points to 1.88%
Commodities
* West Texas Intermediate crude fell 1.9% to $112.06 a barrel
* Gold futures were little changed
–With assistance from Andreea Papuc, Michael Msika, Brett Miller, Robert Brand and Isabelle Lee.
Have a lovely evening.

Be magnificent!

As ever,

Carolann

Keep true to the dreams of your youth. –Friedrich Von Schiller, 1759-1805.

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