June 17, 2022 Newsletter

Dear Friends,

Tangents: Happy Friday.

On June 17, 1994, the police charged O. J. Simpson with murdering his former wife and a friend of hers, and then pursued him for about 50 miles along Southern California highways before he finally surrendered outside his home.  Go to article »

1972: Watergate arrests, Washington, D.C.

John Wesley, founder of Methodism, b. 1703.
Igor Stravinsky, composer, b. 1882.
Venus Williams. Tennis player, b. 1980
M.C. Escher, b. 1898

These Are the 13 Best Bars in London:  If ever there were a time to have a professionally made drink in London, it’s this summer. It might be to take advantage of the ability to drink without restriction as nations throw off precautions despite the ongoing Covid-19 pandemic. It may also be to bemoan high inflation, the UK downturn or the fallout of the bear market across the pond. Whatever your reason, these are the 13 places to go.

Black bear follows a hiking family.  Keep calm, and don’t run… Watch the tense encounter here. 

PHOTOS OF THE DAY

A dancer performs during the Eksotika Bromo cultural event near Mount Bromo
CREDIT: Juni Kriswanto/AFP/Getty Images

Ballet dancers onstage before a performance of Giselle. The Lviv National Opera house resumed performances last month for both ballet and opera. The bomb shelter can only hold 300 people so tickets are limited in case a siren goes off during the performance
CREDIT: Paula Bronstein/Getty Images

A hoverfly inside a poppy during a summer’s day
CREDIT: Peter Byrne/PA

Market Closes for June 17^th, 2022

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1999, Federal Reserve Chairman Alan Greenspan asked whether the U.S. stock market was a bubble about to burst. “While bubbles that burst are scarcely benign,” he said, “the consequences need not be catastrophic for the economy.”  
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the second day, dropping 0.4%, or 73.58 to 18,930.48 in Toronto.
The index dropped to the lowest closing level in at least a year.
Canadian Natural Resources Ltd. contributed the most to the index decline, decreasing 5.1%.
Vermilion Energy Inc. had the largest drop, falling 8.6%.
Today, 110 of 239 shares fell, while 124 rose; 3 of 11 sectors were lower, led by energy stocks.
Insights
* This quarter, the index fell 14%, heading for the biggest decline since the first quarter of 2020
* So far this week, the index fell 6.6%, heading for the biggest decline since the week ended March 20
* The index declined 6% in the past 52 weeks. The MSCI AC Americas Index lost 15% in the same period
* The S&P/TSX Composite is at its 52-week low and 14.8% below its high on April 5, 2022
* S&P/TSX Composite is trading at a price-to-earnings ratio of 14.7 on a trailing basis and 11.7 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$3.04t
* 30-day price volatility little changed to 21.01% compared with 21.01% in the previous session and the average of 20.49% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
* Energy | -135.4284| -3.8| 2/31
* Materials | -17.2270| -0.7| 16/33
* Utilities | -7.5195| -0.8| 6/10
* Consumer Staples | 1.5179| 0.2| 4/7
* Health Care | 1.8052| 2.5| 8/0
* Real Estate | 6.0432| 1.3| 18/4
* Financials | 8.2920| 0.1| 13/15
* Consumer Discretionary| 10.0917| 1.7| 13/1
* Communication Services| 17.4562| 1.9| 6/1
* Industrials | 21.5458| 1.0| 24/6
* Information Technology| 25.3577| 2.6| 14/2
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
* Canadian Natural Resources | -29.2100| -5.1| 114.4| 27.9
* Suncor Energy | -29.1400| -6.2| 134.8| 41.3
* Cenovus Energy | -9.8810| -4.4| 137.3| 60.0
* Brookfield Asset Management | 6.8250| 1.2| 235.4| -26.0
* TELUS | 10.0800| 3.9| 231.3| -3.7
* Shopify | 14.3500| 4.6| 103.5| -76.3
US
By Isabelle Lee and Vildana Hajric
(Bloomberg) — US stocks rallied Friday as sentiment improved after traders parsed comments from Federal Reserve officials who reiterated that the central bank needs to do more to curb the hottest inflation in 40 years.
While the S&P 500 rose on Friday, it still closed the week at its lowest since December 2020 as investors grappled with a flurry of data that intensified recession fears.
The tech-heavy Nasdaq 100 surged.
Friday also brought the quarterly event known as triple witching.
The $3.5 trillion options expiry has arrived with limited downside volatility so far.
Treasury yields rose across the curve, with 10-year yields hovering around 3.2%.
The dollar snapped two days of losses.
Markets rounded off a week buffeted by interest-rate increases, including the Federal Reserve’s biggest move since 1994, a shock Swiss National Bank hike and the latest boost in UK borrowing costs.
The rate hikes are draining liquidity, sparking losses in a range of assets.
Traders are still assessing the path of rate hikes the Federal Reserve could take and the impact that would have on the economy.
“Coming off a painful week on Wall Street, investors are becoming optimistic that the Fed remains committed to bringing down inflation and that markets could be close to pricing in where the overnight rate will be at its peak next year,” said Edward Moya, senior market analyst at Oanda.​ “Many traders remain optimistic that some of the selling that took place this week was exaggerated and that a further deterioration is quite yet warranted.”
Federal Reserve Chair Jerome Powell said, on Friday, that the central bank is “acutely focused” on returning inflation to 2% and that another 75 basis-point hike or 50 basis-point move was likely at the July meeting.
Federal Reserve Bank of Kansas City President Esther George said she opposed the Fed’s Wednesday decision because the move, combined with the shrinking of the central bank’s balance sheet, creates uncertainty about the outlook.
“I think that we need to work on the basis that the macroeconomic and investment environment will remain potentially very fragile,” said Christian Nolting, Deutsche Bank’s private bank global chief investment officer. “Recovery will not be simple and, even on the most optimistic assumptions – for example, on Chinese economic reopening — issues such as supply-chain disruption will take time to fix.”
US factory production data for May pointed at cooler demand as output unexpectedly declined.
Meanwhile, industrial production for May rose, but below the estimate.
Global stocks are facing one of their worst weeks since pandemic-induced turmoil of 2020 and some investors aren’t sure that assets have sunk far enough to price in the tightening cycle.
“Near-term recession has become a foregone conclusion for many investors; the only questions now are its duration and the severity of its impact on earnings,” Wells Fargo’s Chris Harvey wrote in a note.
Compared with the last two bear markets that were also associated with runaway inflation, the current one, at six months, has a long way to go, Harvey said.
The 1980-1982 downturn lasted just over 20 months, as did the one between 1973 and 1974.
Bitcoin flirted with key $20,000 level, after snapping its longest streak of losses in Bloomberg data going back to 2010 earlier on Friday.
In a sign of deepening turmoil in the crypto community, Babel Finance became the second major digital-asset lender this week to freeze withdrawals, telling clients it is facing “unusual liquidity pressures” as it contends with recent market declines.
Oil fell as traders weighed the prospect of slower economic growth against tight supplies.
“The market continues to vacillate on the narrative of the year, between monetary normalization due to inflation and monetary policy error: a source of sustained volatility for equity valuations,” said Florian Ielpo, head of macro at Lombard Odier Asset Management.
US stocks attracted $14.8 billion in the week to June 15, their sixth consecutive week of additions, according to Bank of America Corp., citing EPFR Global data.
In total, $16.6 billion flowed into equities globally in the period, while bonds had the largest redemptions since April 2020 and just over $50 billion exited cash, the data showed.
In a separate report, BofA raised European stocks to neutral from negative, saying the impact of economic news is now priced in.

Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.2% as of 4 p.m. New York time
* The Nasdaq 100 rose 1.2%
* The Dow Jones Industrial Average fell 0.2%
* The MSCI World index fell 2.4%
Currencies
* The Bloomberg Dollar Spot Index rose 0.8%
* The euro fell 0.5% to $1.0494
* The British pound fell 1.1% to $1.2213
* The Japanese yen fell 2.1% to 134.98 per dollar
Bonds
* The yield on 10-year Treasuries advanced three basis points to 3.23%
* Germany’s 10-year yield declined five basis points to 1.66%
* Britain’s 10-year yield declined two basis points to 2.50%
Commodities
* West Texas Intermediate crude fell 6.3% to $110.22 a barrel
* Gold futures fell 0.5% to $1,839.90 an ounce
–With assistance from John Viljoen, Michael Msika, Sunil Jagtiani, Robert Brand, Isabelle Lee and Peyton Forte.
Have a wonderful weekend everyone.

Be magnificent!
As ever,

Carolann

If you want to truly understand something, try to change it. –Kurt Lewin, 1890-1947.

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