August 10, 2022 Newsletter

Dear Friends,

Tangents:
August 10,1846: Smithsonian Institution established.
1945: Japan surrenders.
August 10, 1993: American jurist Ruth Bader Ginsburg is sworn in as an associate justice of the U.S. Supreme Court, becoming the second woman to serve on the court.  She remained in office until her death in September 2020.
Happy 60th Anniversary Spidey!  1962 Marvel Comics superhero Spider-Man made his debut in issue 15 of “Amazing Fantasy.”  Go to article »

A ‘potentially hazardous’ blue-whale-size asteroid will zip through Earth’s orbit on Friday:  A “potentially hazardous” asteroid the size of a blue whale is set to zip past Earth on Friday (Aug. 12), according to NASA.  The asteroid, named 2015 FF, has an estimated diameter between 42 and 92 feet (13 and 28 meters), or about the body length of an adult blue whale (Balaenoptera musculus), and it will zoom past the Earth at 20,512 mph (33,012 km/h).  Full Story: Live Science (8/10) 

Online shopping prices are suddenly falling fast.  We love good inflation news. If you want to treat yourself to a little retail therapy, now is a great time to snag online deals.

This travel company wants tourists to visit Ukraine right now:  Hmmm… a tourism organization is selling tickets to experience what it’s like in the middle of a war. But for obvious reasons, Ukrainian and US officials are advising against it. 

How to watch the Perseids peak (despite the full moon):  Once a year, from mid-July to late August, Earth passes through a cosmic junk heap that pelts our planet with thousands of tiny space rocks no wider than a grain of sand. We call this annual event the Perseid meteor shower — or simply the Perseids.  This year, the Perseids peak in the dark hours between Aug. 11 and 12. Unfortunately, the fact that there’s a bright full moon around the same time will dampen the show. You may be able to see 10 – 20 meteors per hour during the peak, according to NASA – down from the 50 to 60 per hour visible on a non-full-moon year. Still, you should be able to catch some shooting stars in the nights leading up to the peak, as well.  Full Story: Live Science (8/8) 

The Rhine is about to become impassable.

Oh, goody, another new virus.

The strong force is strong.

How to tie all the climbing knots you’ll ever need.
PHOTOS OF THE DAY

A view of the Roman camp Aquis Querquennis, located on the banks of the Limia River. The camp is usually under water but can now be seen because of the low water levels
CREDIT: Brais Lorenzo/EPA

Farmers wearing handmade caps to protect them from the heat of the sun collect water lilies early in the morning
CREDIT: Mustasinur Rahman Alvi/Rex/Shutterstock

A woman experiences the feeling of colour and light projection delivered by optical fibres to her eyelids during at an exhibition on computer graphics and interactive techniques
CREDIT: Xinhua/Rex/Shutterstock
Market Closes for August 10^th, 2022

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1971, “socially responsible” investing came out of the counterculture and went mainstream. Pax World Fund, the first broadly diversified mutual fund to invest in companies based on social and environmental criteria, was launched in Washington, D.C., by Luther Tyson and Jack Corbett
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 1.6% at 19,885.94 in Toronto.
The move was the biggest since rising 1.8% on July 19 and follows the previous session’s decrease of 0.5%.
Shopify Inc. contributed the most to the index gain, increasing 9.8%.
Boyd Group Services Inc. had the largest increase, rising 20.6%.
Today, 192 of 238 shares rose, while 43 fell; 10 of 11 sectors were higher, led by financials stocks.
Insights
* In the past year, the index had a similar or greater gain eight times. The next day, it advanced six times for an average 0.6% and declined twice for an average 1%
* The index declined 3% in the past 52 weeks. The MSCI AC Americas Index lost 6.9% in the same period
* The S&P/TSX Composite is 10.5% below its 52-week high on April 5, 2022 and 9.4% above its low on July 14, 2022
* The S&P/TSX Composite is up 1.7% in the past 5 days and rose 4.5% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 14.2 on a trailing basis and 12.3 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.13t
* 30-day price volatility rose to 15.37% compared with 14.72% in the previous session and the average of 18.19% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
* Financials | 120.9538| 2.0| 23/6
* Information Technology | 54.2352| 4.8| 13/1
* Materials | 30.0186| 1.4| 34/16
* Energy | 27.3130| 0.8| 31/5
* Industrials | 26.7800| 1.1| 25/4
* Consumer Discretionary | 16.0964| 2.4| 13/0
* Real Estate | 10.6741| 2.0| 23/0
* Consumer Staples | 10.4388| 1.3| 10/1
* Communication Services | 8.3829| 0.9| 7/0
* Health Care | 3.1512| 4.4| 6/1
* Utilities | -0.4050| 0.0| 7/9
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
* Shopify | 36.2800| 9.8| -3.0| -70.2
* Brookfield Asset Management | 30.3100| 4.7| 51.7| -11.3
* TD Bank | 24.3200| 2.3| -47.6| -12.6
* Centerra Gold | -2.6210| -21.6| 265.7| -35.7
* Intact Financial | -2.8740| -1.2| 11.6| 15.4
* CAE | -12.8000| -17.6| 355.0| -14.2
US
By Rita Nazareth
(Bloomberg) — Stocks surged and the dollar sank as softer-than-expected inflation data fueled bets the Federal Reserve could pivot to a smaller pace of hikes — a view taken with a grain of salt by market watchers saying officials may still be a long ways from achieving their goal.
Traders went risk-on Wednesday, with the S&P 500 jumping to a three-month high.
A rally in tech shares sent both Nasdaq indexes more than 20% above their June bottom, leaving them in a bull market going by a commonly held definition.
The CBOE Volatility Index slumped below 20, a level last seen in April.
The greenback slid the most since the onset of the pandemic.
Treasury two-year yields trimmed a plunge that earlier reached 20 basis points.
For a market plagued by fears about the Fed’s struggles to tame the inflation beast, the July consumer price index brought a sigh of relief — with both core and overall measures coming in below forecasts.
Swaps are now suggesting a move of 50 basis points as more likely in September than a repeat of the 75-basis-point increases that officials have opted to implement at their past two meetings.
“This is overall good news for risky assets,” wrote Florian Ielpo, head of macro at Lombard Odier Asset Management, adding that “a lower growth rate of prices does not mean the end of inflation, and naturally the end of hawkish central banking.  Inflation remains a situation that requires the Fed’s attention and more importantly the Fed’s measures.”
One danger of the stock-market bullishness right now is that could cause a relaxation of financial conditions that would actually go against the Fed’s goals.
It’s also worth looking back to the early 1980s, when then Fed Chair Paul Volcker eased policy as inflation peaked and the economy entered a recession.
But the moderation of price pressures proved to be much slower than officials wanted — and they had to tighten again months later.
In fact, the CPI surprise is just one piece of the intricate puzzle officials are playing with at the moment – and possibly over the next several months — with the central bank still miles away from reaching its inflation target.
Food prices in the US soared the most since 1979 in July, keeping the cost of living painfully high even as lower gasoline costs offered some relief to consumers.
Two Fed officials responded to softening inflation data by saying it doesn’t change the US central bank’s path toward even higher rates this year and next.
Alluding to market pricing of the policy path, Fed Bank of Minneapolis President Neel Kashkari said it was not realistic to conclude the central bank will start cutting rates in early 2023.
His Chicago counterpart Charles Evans said officials will probably continue hiking into next year to bring down “unacceptably high” inflation.
“The easing of financial conditions likely annoys the Fed, and we should not be surprised to see Fed speakers continue to try to talk down the market and risk assets,” said Christian Hoffmann, portfolio manager at Thornburg Investment Management.

More comments on CPI:
* “The Fed still has significantly further to tighten and the US economy ultimately cannot avoid its fate. Enjoy today and the next few weeks, it won’t last for too long,” said Seema Shah, chief global strategist at Principal Global  
Investors.
* “This data point will fuel talk of a policy pivot. But, for me, the issue really does boil down to the labor market. Wage growth is running red hot and absent a turnaround in productivity, this will ultimately fuel higher prices,” wrote
Neil Dutta, head of economics at Renaissance Macro Research.
* “This is a step in the right direction but keep in mind we have many miles ahead of us before inflation normalizes. One month’s data point does not make a trend, however, so cautious optimism is likely the name of the game,” said Mike Loewengart, managing director of investment strategy at E*TRADE from Morgan Stanley.
* “Wow, finally the anecdotal evidence that inflation was easing has finally showed up in a mainstream inflation report. The Fed is rapidly losing its case for further tightening and this report reinforces for investors that either a new easing cycle has already begun or we are getting very close to one,” said Jim Paulsen, chief investment strategist at the Leuthold Group.
In corporate news, Tesla Inc. climbed after Elon Musk offloaded $6.9 billion of stock in the electric-vehicle maker to accumulate cash ahead of a trial that could force the billionaire to follow through on an agreement to acquire Twitter
Inc.
Wendy’s Co. became the latest restaurant chain to show signs of strain thanks to rising inflation as sales and restaurant margin fell short of Wall Street projections.
What to watch this week:
* US PPI, initial jobless claims, Thursday
* San Francisco Fed President Mary Daly is interviewed on Bloomberg Television, Thursday
* Euro-area industrial production, Friday
* US University of Michigan consumer sentiment, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 2.1% as of 4 p.m. New York time
* The Nasdaq 100 rose 2.8%
* The Dow Jones Industrial Average rose 1.6%
* The MSCI World index rose 1.8%
Currencies
* The Bloomberg Dollar Spot Index fell 1%
* The euro rose 0.9% to $1.0302
* The British pound rose 1.2% to $1.2220
* The Japanese yen rose 1.6% to 132.93 per dollar
Bonds
* The yield on 10-year Treasuries advanced one basis point to 2.79%
* Germany’s 10-year yield declined three basis points to 0.89%
* Britain’s 10-year yield declined two basis points to 1.95%
Commodities
* West Texas Intermediate crude rose 1.1% to $91.49 a barrel
* Gold futures fell 0.4% to $1,805.90 an ounce
–With assistance from Isabelle Lee, Natalia Kniazhevich, Enrique Roces, Emily Graffeo, Andreea Papuc, Sunil Jagtiani, John Viljoen, Cecile Gutscher and Peyton Forte.
Have a lovey evening.

Be magnificent!
As ever,

Carolann

War is mainly a catalogue of blunders. –Winston Churchill, 1874-1965.

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