August 16, 2022 Newsletter

Dear Friends,

Tangents:
August 16, 2010: China eclipsed Japan as the world’s second biggest economy after three decades of blistering growth. Go to article »
BABE Ruth, baseball player, d. 1948.
Elvis Presley, d. 1977.
Madonna, b. 1958.

Scientists blast atoms with Fibonacci laser to make an ‘extra’ dimension of time: By firing a Fibonacci laser pulse at atoms inside a quantum computer, physicists have created a completely new, strange phase of matter that behaves as if it had two dimensions of time.  The new phase of matter, created by using lasers to rhythmically jiggle a strand of 10 ytterbium ions, enables scientists to store information in a far more error-protected way, thereby opening the path to quantum computers that can hold on to data for a long time without becoming garbled. The researchers outlined their findings in a paper published July 20 in the journal Nature.  Full Story: Live Science (8/16) 

America’s most outstanding restaurant says a lot about America. — Bobby Ghosh

A new era of supersonic travel is here, and you won’t believe how short the flight is from NYC to London

PHOTOS OF THE DAY

Postgraduate researcher Isabel Milligan monitors rudbeckia development at Wakehurst Royal Botanic Gardens Kew, in West Sussex, in part of the 2.4-hectare (6-acre) North American Prairie, one year on since 50,000 of them were planted
CREDIT: Graeme Robertson/The Guardian

Thunderstorms gather over the city skyline
CREDIT: David Heerde/Rex/Shutterstock

Fishing boats set sail in Guangdong province after the annual summer fishing ban in the South China Sea was lifted on Monday
CREDIT: VCG/Getty Images

Market Closes for August 16^th, 2022

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1922, the nation’s first “toll station,” or commercial broadcaster, opened as AT&T launched its WEAF radio station in New York City. Radio Dealer, a leading trade publication, denounced AT&T for its “mercenary advertising purposes,” predicting a “man-sized vocal rebellion” among the users of free air time. A 10-minute block of air time on WEAF cost $50, and nearly two weeks passed before anyone bought any.
Canada
By Ana Paula Barreto Pereira
(Bloomberg) — Canadian equities advanced to the highest closing level in more than two months after data showed that yearly inflation may have already peaked in Canada.
The S&P/TSX Composite rose 0.4%, or 89.37 to 20,269.97 in Toronto.
Toronto-Dominion Bank contributed the most to the index gain, increasing 1.5%.
First Quantum Minerals Ltd. had the largest percentage increase, rising 3.7%.
Today, 137 of 238 shares rose, while 97 fell; 7 of 11 sectors were higher, led by financials stocks.
Insights
* The index declined 1% in the past 52 weeks. The MSCI AC Americas Index lost 5.6% in the same period
* The S&P/TSX Composite is 8.7% below its 52-week high on April 5, 2022 and 11.6% above its low on July 14, 2022
* The S&P/TSX Composite is up 3.5% in the past 5 days and rose 10% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 13.7 on a trailing basis and 12.6 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$3.23t
* 30-day price volatility fell to 14.16% compared with 14.66% in the previous session and the average of 17.25% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
* Financials | 48.4774| 0.8| 23/6
* Materials | 16.6430| 0.7| 25/25
* Industrials | 12.2157| 0.5| 17/11
* Consumer Staples | 11.3803| 1.3| 10/1
* Communication Services | 9.1839| 0.9| 7/0
* Consumer Discretionary | 6.6006| 0.9| 7/6
* Utilities | 2.5846| 0.2| 11/4
* Real Estate | -0.1785| 0.0| 14/8
* Health Care | -0.7055| -0.9| 2/5
* Information Technology | -0.9904| -0.1| 7/7
* Energy | -15.8462| -0.4| 14/24
================================================================
| | |Volume VS |
| Index | | 20D AVG |YTD Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
* TD Bank | 16.7800| 1.5| -30.5| -8.8
* Canadian Pacific | 9.2860| 1.4| 19.9| 16.1
* Royal Bank of Canada | 7.9020| 0.6| -62.6| -3.7
* Cenovus Energy | -4.6200| -2.3| -29.9| 46.7
* Shopify | -4.7190| -1.2| -6.5| -70.8
* Canadian Natural Resources | -6.9960| -1.3| 92.3| 30.5
US
By Stephen Kirkland and Vildana Hajric
(Bloomberg) — US stocks closed higher following a sudden pullback in tech shares, with investors assessing the latest round of upbeat earnings against a backdrop of growing concerns over slowing growth and rising borrowing costs.
The S&P 500 managed to post modest gains in a roller-coaster session that included a sharp downturn after the index failed to push above its 200-day moving average.
The tech-heavy Nasdaq-100 ended lower, while the Dow Jones Industrial Average kept its leadership role among major benchmarks, rallying 0.7%.
Equity markets seesawed in a session marked by steep losses and gains. Treasuries stayed lower, with short-dated yields, the most sensitive to interest-rate changes, up more than five basis points.
Stocks started the day on the back foot as investors weighed the latest mixed economic data with the Federal Reserve on the path of hiking interest rates.
Data Tuesday showed a bigger-than-expected drop in US home construction, while production at US factories increased in July for the first time in three months.
Stocks gained traction later as risk sentiment got a boost from Walmart Inc. exceeding Wall Street’s diminished profit expectations and modestly improving its full-year forecast, while Home Depot Inc. posted results that beat estimates even as the US housing market shows signs of cooling off.
Those results helped spur gains in a swath of retailers, including the Target Corp. and Lowe’s Cos. ahead of their earnings due Wednesday.
“The move lower in the last hour is mostly technical — once the S&P 500 got to its 200-day moving average, the rally began to be exhausted and short sellers challenged the upward momentum,” Joe Gilbert, portfolio manager for Integrity Asset Management. “Realistically, at this level the market is range bound because there is still a fair amount of uncertainty as to how the Fed will perceive the most recent economic data in the prism of likely economic outcomes. The market is not confident enough to break out above this range with so many unknowns.”
Reports Monday showing a sharp drop in New York state manufacturing along with the longest streak of declines since 2007 in homebuilder sentiment sparked optimism in equity markets that the Fed may slow interest-rate hikes. The S&P 500 has rallied 17% from its mid-June nadir, fueled in part by traders dialing back wagers on rate hikes and speculation that inflation has peaked.
“We would caution investors against chasing this rally,” Mark Haefele, chief investment officer at UBS Global Wealth Management, said. “We expect renewed market volatility ahead, and we continue to recommend positioning portfolios for resilience under various scenarios. With inflation still high, we favor value stocks including global energy. And with the economic outlook uncertain, we think investors can consider defensive equity exposure via global healthcare or quality income stocks.”
Clues on how sensitive the Fed is to unfolding economic data may be known when the minutes of the last meeting of the Federal Open Market Committee is released on Wednesday.
However, the big event investors are waiting for is the annual monetary policy symposium at Jackson Hole, Wyoming during Aug. 25-27.
Traders are bracing for higher volatility until then.

More market commentary
* “I like consumer discretionary,” Brad McMillan, chief investment officer at Commonwealth Financial Network, said on Bloomberg Radio. “As inflation goes down, consumer confidence is going to come back.” The Walmart data “is something that says, ‘yeah, that may be starting to happen.’ I think tech is also a good place going forward. Play on growth, play on the consumer.”
* “The equity market drawdown has been primarily rates led, earnings weakness is next,” says Seema Shah, chief global strategist at Principal Global Investors, in a note. “A near-term bear market rally is possible as Fed rate expectations settle and inflation peaks. However, with margin pressures growing and demand weakening, earnings concerns are mounting so a sustained rebound is unlikely.”
* “The idea of a soft landing is a bit of a fairy tale at this point given how extreme inflation levels are,” David Schassler, head of quantitative investment solutions at VanEck, said by phone. “Historically speaking, when the government’s been forced to fight inflation at these levels, bad things have happened.”

Here are some key events to watch this week:
* Federal Reserve July minutes, Wednesday
* New Zealand rate decision, Wednesday
* UK CPI, US retail sales, Wednesday
* Australia unemployment, Thursday
* U.S. existing home sales, initial jobless claims, Conference Board leading index, Thursday
* Fed’s Esther George, Neel Kashkari speak at separate events, Thursday

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 fell 0.2%
* The Dow Jones Industrial Average rose 0.7%
* The MSCI World index was little changed
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro was little changed at $1.0170
* The British pound rose 0.3% to $1.2095
* The Japanese yen fell 0.6% to 134.18 per dollar
Bonds
* The yield on 10-year Treasuries advanced three basis points to 2.81%
* Germany’s 10-year yield advanced seven basis points to 0.97%
* Britain’s 10-year yield advanced 11 basis points to 2.13%
Commodities
* West Texas Intermediate crude fell 3.2% to $86.56 a barrel
* Gold futures fell 0.4% to $1,790.80 an ounce
–With assistance from Andreea Papuc, Tassia Sipahutar, Srinivasan Sivabalan, Emily Graffeo, Isabelle Lee and Peyton Forte.

Have a lovely evening.

Be magnificent!

As ever,

Carolann

To go fast, go alone.  To go far, go together. -Chinese Proverb.

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
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www.carolannsteinhoff.com