July 11, 2022 Newsletter

Dear Friends,

Tangents: Happy Monday.

July 11, 1960: American author Harper Lee’s To Kill a Mockingbird is published and becomes a classic, noted for its sensitive treatment of a child’s awakening to racism and prejudice in the South.

8,200-year-old burials in Russia contain pendants crafted from human bone: 
Nearly a century ago, archaeologists excavating a 8,200-year-old graveyard in northwestern Russia took note of a number of bone and animal-tooth pendants buried with the Stone Age people entombed there. But when researchers recently began to re-analyze the bone pendants to determine which species of animal each came from, they were in for a shock.  Some of the pendants weren’t made from animal bone at all. They were human.
Full Story: Live Science (7/11) 

A giant fossil is being put up for auction.  If you’ve got an extra $8 million burning a hole in your pocket, this spectacular Gorgosaurus skeleton could be yours! 

PHOTOS OF THE DAY

A field planted to display a dove of peace, based on an artwork by Pablo Picasso, and a world map. The picture covers an area of approximately 18,000 sq metres and consists of 350,000 plants, including sunflowers, hemp, beans and corn. The maze was created by a farming family and a team of 20 employees.
CREDIT: Christof Stache/AFP/Getty Images

A woman shields her face from the sun while walking in Hyde Park on what could be the hottest day of the year, with temperatures predicted to hit 33C
CREDIT: James Manning/PA

Insulating foam covers part of the Rhone glacier, near Gletsch in the Swiss Alps, to prevent it from melting. The glacier has been selected among 10 around the world to be monitored by high-resolution time-lapse cameras as part of a Planet Watch project helping to document and measure the impact of the climate crisis
CREDIT: Fabrice Coffrini/AFP/Getty Images

Market Closes for July 11^th, 2022

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1864, as Confederate Lt. Gen. Jubal A. Early defeated Union Maj. Gen. Lew Wallace (later the author of Ben Hur) and marched toward the outskirts of Washington, D.C., the U.S. dollar hit an all-time low. Alarmed at the bad news from the battlefield, traders in New York were willing to pay only .3509 gold dollars for a single greenback
Canada
By Ana Paula Barreto Pereira
(Bloomberg) — Canadian equities dipped as investors sold risky stocks — cannabis, tech, and consumer discretionary — amid recession fears ahead of the Bank of Canada’s rate decision this week.
This marks the second day of losses for the S&P/TSX index, which dropped 1.1%, or 206.06 to 18,816.80 in Toronto.
The move was the biggest loss since June 30.
Shopify Inc. contributed the most to the index decline, decreasing 8.9%. Canopy Growth Corp. had the largest drop, falling 11.5%.
Today, 204 of 238 shares fell, while 33 rose; 10 of 11 sectors were lower. 
Insights
* The index declined 7.1% in the past 52 weeks. The MSCI AC Americas Index lost 14% in the same period
* The S&P/TSX Composite is 15.3% below its 52-week high on April 5, 2022 and 1.6% above its low on July 5, 2022
* The S&P/TSX Composite is down 1.1% in the past 5 days and fell 7.2% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 14.7 on a trailing basis and 11.4 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.2% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.05t
* 30-day price volatility fell to 19.64% compared with 19.82% in the previous session and the average of 20.01% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
* Information Technology | -48.6092| -4.5| 0/14
* Financials | -46.1954| -0.8| 3/26
* Materials | -29.9525| -1.4| 5/46
* Energy | -27.6773| -0.8| 4/34
* Industrials | -15.0364| -0.6| 4/25
* Consumer Discretionary | -11.9740| -1.9| 1/12
* Communication Services | -11.2343| -1.1| 1/6
* Consumer Staples | -9.2205| -1.2| 2/9
* Health Care | -3.5017| -4.5| 1/6
* Real Estate | -3.1660| -0.6| 6/16
* Utilities | 0.4892| 0.0| 6/10
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
* Shopify | -32.1100| -8.9| 188.8| -75.9
* TD Bank | -17.3000| -1.7| 20.5| -15.6
* Brookfield Asset Management | -11.3800| -1.9| -39.8| -24.4
* Hydro One | 1.3470| 1.9| -3.5| 5.4
* Intact Financial | 1.6490| 0.7| -11.4| 15.3
* Telus | 1.8020| 0.7| -0.2| -2.7
US
By Rita Nazareth
(Bloomberg) — Stocks slumped, with traders positioning for a hot inflation reading and the start of a key earnings season that may provide clues on whether the economy is headed toward a recession.
The dollar climbed.
A rout in megacaps like Tesla Inc. and Apple Inc. weighed heavily on trading.
Twitter Inc. sank as Elon Musk walked away from his $44 billion deal to buy the company, setting the scene for a legal battle.
The euro edged closer toward parity with the greenback, while 10-year US yields dropped below 3%.
Amid a pervasive confluence of economic challenges, investors are waiting to see if profits are holding up or if companies will cut forecasts significantly.
One reason for caution is the dichotomy between two major Wall Street forces.
Analysts are betting Corporate America is resilient enough to pass on higher costs to consumers at a time when many strategists aren’t really convinced that’s the case.
“The stock market has NOT already priced in any possible upcoming decline in earnings estimates from this year (or next),” wrote Matt Maley, chief market strategist at Miller Tabak. “Even if earnings estimates stay stable and especially if they decline, the stock market is going to have to fall further before we see an important bottom.”
Maley noted that stocks are trading at valuation levels that are seen as highs — not lows.
The current price-to-sales metric, for instance, is at the same level of market tops in 2020, 2018 and at the tech bubble in 2000, he added.
Price pressures, a wave of monetary tightening and a slowing economy continue to keep investors on the sidelines even after an $18 trillion first-half wipeout in global equities.
A US inflation reading on Wednesday is expected to get closer to 9%, buttressing the Federal Reserve’s case for a jumbo rate boost in July.
Steep Fed hikes and recession fears have lifted the greenback to the highest levels since March 2020.
The dollar surge will be a “massive headwind” for profits at many large US firms and another reason to expect a dimming earnings outlook, wrote Michael Wilson, chief US equity strategist at Morgan Stanley.
Billionaire investor Leon Cooperman said that a stronger dollar is indeed “negative for corporate profits.”
In fact, several firms like giants Microsoft Corp., Costco Wholesale Corp. and Salesforce Inc. have also bemoaned the impacts of the US currency’s meteoric ascent.
For Wilson, the S&P 500’s bear market will continue, and he sees fair value at 3,400-3,500 in case of a soft landing and 3,000 in a recession — a 23% downside from Friday’s close.
“A stagflationary stall is as probable as an outright recession,” wrote Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management.

Meantime, Citigroup Inc. strategists pointed out that there’s a strong correlation between the Fed’s rate trajectory and earnings growth.
They say it’s been common for profits to rise as the Fed tightens its policy, and to contract when the central bank switches to easing in response to economic weakness.
That means corporate earnings should remain resilient to surging inflation and slowing growth, paving the way for battered US stocks to rally in the remainder of 2022, they added.
As big banks kick off the earnings season this week, traders will be looking for clues about the health of the consumer and spending trends as well as lending to businesses and corporate confidence.
Real-estate valuations and lending may also be key for market direction, along with thoughts on the state of capital markets.
Results from the FAANG cohort of megacaps like Facebook owner Meta Platforms Inc. and Google’s parent Alphabet Inc. won’t come out until later this month.
But traders are getting ready for heightened volatility as profit cuts by industry analysts have been lagging, leaving room for big surprises and dramatic post-earnings moves.
Elsewhere, Bitcoin fell again — and Wall Street expects the cryptocurrency’s selloff to get a whole lot worse.
The token is more likely to tumble to $10,000, cutting its value roughly in half, than it is to rally back to $30,000, according to 60% of the 950 investors who responded to the latest MLIV Pulse survey.
The tally also showed that 40% saw it going the other way.
Crude declined amid a renewed increase in China’s virus cases, while a court order allowed the crucial CPC terminal on Russia’s Black Sea coast to stay operational — easing some supply concerns.
 Chicago corn futures climbed as US forecasts point to a heat wave during the crop’s key development period.

What to watch this week:
* Earnings due from JPMorgan, Morgan Stanley, Citigroup, Wells Fargo
* BOE Governor Andrew Bailey discusses the economic landscape, Tuesday
* Amazon.com Inc. kicks off its Prime Day event, Tuesday
* South Korea, New Zealand rate decisions, Wednesday
* US CPI data, Wednesday
* Federal Reserve Beige Book, Wednesday
* US PPI, jobless claims, Thursday
* China GDP, Friday
* US business inventories, industrial production, University of Michigan consumer sentiment, Empire manufacturing, retail sales,
Friday
* G-20 finance ministers, central bankers meet in Bali, from
Friday
* Atlanta Fed President Raphael Bostic speaks, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 1.2% as of 4 p.m. New York time
* The Nasdaq 100 fell 2.2%
* The Dow Jones Industrial Average fell 0.5%
* The MSCI World index fell 1.3%
Currencies
* The Bloomberg Dollar Spot Index rose 1%
* The euro fell 1.4% to $1.0046
* The British pound fell 1.2% to $1.1892
* The Japanese yen fell 0.9% to 137.38 per dollar\\
Bonds
* The yield on 10-year Treasuries declined 10 basis points to 2.98%
* Germany’s 10-year yield declined 10 basis points to 1.25%
* Britain’s 10-year yield declined six basis points to 2.18%
Commodities
* West Texas Intermediate crude fell 1.2% to $103.55 a barrel
* Gold futures fell 0.7% to $1,730.30 an ounce
–With assistance from Andreea Papuc, Robert Brand, Vildana Hajric, Isabelle Lee and Peyton Forte.
Have a lovely evening.

Be magnificent!

As ever,

Carolann

A goal is a dream with a deadline. –Napoleon Hill, 1883-1970.

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