May 18, 2022 Newsletter

Dear Friends,

Tangents: International Museum Day.
1642:  My hometown, the Canadian city of Montreal was founded.  Go to article ».  I must say, it was a wonderful place in which to grow up.  Historic buildings are everywhere to inspire and provide reflection on the past.  It also has a fabulous cultural scene, education system and educational institutions, restaurants, bars, Jewish delis with the best smoked meat in the world….
1980: Mount St. Helen’s eruption.
Maye Musk becomes oldest Sports Illustrated Swimsuit cover model.  Her billionaire son may have dominated headlines recently, but the 74-year-old is now catching the spotlight for her own stunning swimsuit feature.

World paper airplane championship.  One word: Impressive! Prepare to be wowed by the highlights from the event.

30 of the best fried foods around the world.  If you have a crunchy craving for deep-fried foods, this one is for you. 

Queen Elizabeth makes surprise appearance at opening of new London train line.  What a pleasant surprise! The Queen was all smiles at this special event.

Coming this summer: blackouts.

Oh nothing, just continent-sized blobs deep inside the Earth. (h/t Liam Denning)

Who owns the rights to Einstein’s face? (h/t Scott Kominers)

What rocks teach us about the human condition.
PHOTOS OF THE DAY

Dancers perform on the steps of Sydney Opera House
CREDIT: Mark Metcalfe/Getty Images

A sled dog named Alaska pictured at a camp near Longyearbyen in the Svalbard archipelago
CREDIT: Jonathan Nackstrand/AFP/Getty Images

A person walks past artist Ron Mueck’s installation Mass, comprising more than 100 hand-cast skulls that collectively weigh about 5,000kg, at an exhibition at the National Gallery of Victoria
CREDIT: William West/AFP/Getty Images
Market Closes for May 18^th, 2022

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1553, one of the earliest business ventures financed by selling stock to the public was launched, as three ships set out from Gravesend in England seeking “discoverie of new trades northe warde” in Russia. The Russia Company, or Muscovy Company, had raised 6,000 pounds from more than 200 investors at 25 pounds a share. But the company earned no money for at least three decades, and many of its investors died without ever receiving a dividend.
Canada
By Geoffrey Morgan
(Bloomberg) — Cannabis, consumer staples and consumer discretionary stocks led a sharp selloff in Canadian stocks Wednesday as the S&P/TSX Composite fell 1.9% to 20,101.38 in Toronto.
The move was the biggest since falling 3.1% on May 9.
Today, utilities was the only sector to rise as 10 of 11 sectors lost; 218 of 239 shares fell, while 19 rose.
Brookfield Asset Management Inc. contributed the most to the index decline, decreasing 5.7%.
Dye & Durham Ltd. had the largest drop, falling 11.8%.
Insights
* In the past year, the index had a similar or greater loss six times. The next day, it declined five times for an average 0.6% and advanced 0.1% once
* The index advanced 3% in the past 52 weeks. The MSCI AC Americas Index lost 6.5% in the same period
* The S&P/TSX Composite is 9.5% below its 52-week high on April 5, 2022 and 4.6% above its low on May 19, 2021
* The S&P/TSX Composite is up 1.3% in the past 5 days and fell 8.1% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 16.1 on a trailing basis and 12.7 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.9% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.28t
* 30-day price volatility rose to 20.31% compared with 19.71% in the previous session and the average of 14.90% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
* Financials | -122.5965| -1.9| 1/27
* Materials | -65.4879| -2.5| 0/51
* Energy | -50.2703| -1.3| 3/31
* Industrials | -49.9590| -2.1| 0/30
* Consumer Staples | -33.7833| -4.1| 0/11
* Consumer Discretionary| -27.0978| -4.1| 0/14
* Information Technology| -19.8433| -1.8| 1/15
* Communication Services| -9.2760| -0.9| 1/6
* Real Estate | -7.8377| -1.4| 4/19
* Health Care | -5.3071| -5.1| 1/7
* Utilities | 1.8313| 0.2| 8/7
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
* Brookfield Asset Management | -35.6300| -5.7| 20.2| -22.6
* Couche-Tard | -18.5200| -5.6| -11.5| 3.1
* TD Bank | -17.9400| -1.5| -45.3| -4.7
* Brookfield Infrastructure | 0.7140| 0.4| 8.2| 1.9
* TC Energy | 0.8090| 0.2| -55.4| 24.7
* Fortis | 1.3060| 0.6| 147.3| 4.1
US
By Stephen Kirkland and Vildana Hajric
(Bloomberg) — US stocks are headed for the biggest daily drop in almost two years as investors assess the impact of higher prices on earnings and prospects for monetary policy tightening on economic growth.
The dollar and Treasuries gained amid a pickup in haven bids.
The selloff sent the S&P 500 down more than 4%, with the plunge in consumer shares surpassing 7%.
Target Corp. tumbled more than 20% in its worst rout since 1987, after trimming its profit forecast due to a surge in costs.
Shares of retailers from Walmart Inc. to Macy’s Inc. were caught in the downdraft.
The Nasdaq 100 fell the most among major benchmarks, dropping more than 5% as growth-related tech stocks sank.
Mega caps Apple Inc. and Amazon.com Inc. slid at least 5%.
Treasuries rose across the board, sending the 10- and 30-year Treasury yields down as much as 11 basis points.
The dollar rose against all of its Group-of-10 counterparts, except the yen and Swiss franc.
Gold caught bids in the move into havens.
The benchmark S&P 500 is emerging from the longest weekly slump since 2011, but any rebounds in risk sentiment are proving fragile amid tightening monetary settings, Russia’s war in Ukraine and China’s Covid lockdowns.
In some of his most hawkish remarks to date, Federal Reserve Chair Jerome Powell said Tuesday that the US central bank will raise interest rates until there is “clear and convincing” evidence that inflation is in retreat.
Chicago Fed President Charles Evans said Wednesday he sees a half-point rate increase at next month’s meeting and “probably thereafter.”
Commentary
* “Stocks are getting hammered as inflation fears and weak earnings hit market sentiment hard,” Fiona Cincotta at City Index said in an email. “While strong retail sales helped boost stocks yesterday, disappointing quarterly numbers from retail giants Target and Lowe’s are striking fear into the market today. The data yesterday suggests that consumers are weathering the inflation hit for now. Retailers, however, are not doing so well at navigating through soaring input costs.”
* “Worries over inflation and a hawkish Fed are nothing new, but now add in worries over profit margins and the impact of inflation on the consumer and you have the recipe for a big down day,” Ryan Detrick, chief market strategist at LPL Financial, said in a note.
* “We are pricing in a growth scare,” Lori Calvasina at RBC Capital Markets told Bloomberg TV. “The market is trying to find a bottom here. There is a lot of uncertainty in this market right now about whether or not that recession is going to come through or if it’s going to be another near-death experience.”
* “What we’re seeing this week from big box retailers could be a clue as to what a recession might feel like for markets overall,” said Mike Bailey, director of research at FBB Capital Partners. “We’re seeing consumers vote with their wallets on what they value most, and we are seeing winners and losers emerge.”
* “The threat to asset prices is broad-based inflation pushing central banks to tighten monetary policy even more rapidly,”  Carl Ludwigson at Bel Air Investment Advisors said in a note.  “If the Federal Reserve’s policy response proves too aggressive, then Treasuries and high-quality municipal bonds will again be the place to hide as tighter financial conditions lead to demand destruction.”
In Europe, new-vehicle sales shrank for a 10th month in a row as the industry remains mired in supply-chain crises, while euro-area inflation plateaued at a record high.
Meanwhile, UK inflation rose to its highest level since Margaret Thatcher was prime minister 40 years ago, adding to pressure for action from the government and central bank.
Elsewhere, the Biden administration is poised to fully block Russia’s ability to pay US bondholders after a deadline expires next week, a move that could bring Moscow closer to a default.
Sri Lanka, meantime, is on the brink of reneging on $12.6 billion of overseas bonds, a warning sign to investors in other developing nations that surging inflation is set to take a painful toll.
Some of the main moves in markets:
Stocks
* The S&P 500 fell 4.3% as of 3:31 p.m. New York time
* The Nasdaq 100 fell 5.2%
* The Dow Jones Industrial Average fell 3.8%
* The MSCI World index fell 2.9%
Currencies
* The Bloomberg Dollar Spot Index rose 0.4%
* The euro fell 0.8% to $1.0465
* The British pound fell 1.2% to $1.2340
* The Japanese yen rose 1% to 128.14 per dollar
Bonds
* The yield on 10-year Treasuries declined 10 basis points to 2.89%
* Germany’s 10-year yield declined two basis points to 1.03%
* Britain’s 10-year yield declined two basis points to 1.86%
Commodities
* West Texas Intermediate crude fell 3.2% to $108.78 a barrel
* Gold futures were little changed
–With assistance from Michael Msika, Andreea Papuc, Robert Brand and Isabelle Lee.
Have a lovely evening.

Be magnificent!
As ever,

Carolann

The Enlightenment started with essentially philosophical insights spread by a new technology.  Our period is moving in the opposite direction. 
It has generated a potentially dominating technology in search of a guiding philosophy. -Henry A. Kissinger, b. 1923.

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