August 26, 2022 Newsletter

Dear Friends,

Tangents: Happy Friday.
August 26, 1957: The Soviet Union announced that it had successfully tested an intercontinental ballistic missile. Go to article »
1883: Krakatoa erupts: 36,000 killed.

Christopher Columbus, explorer, b. 1451.

Lab-made mouse embryos grew brains and beating hearts, just like the real thing: Scientists coaxed mouse stem cells to grow into synthetic embryos that began developing hearts and brains, just like the real thing.
The lab-made embryos, crafted without any eggs or sperm and incubated in a device that resembles a fast-spinning Ferris wheel full of tiny glass vials, survived for 8.5 days. That’s nearly half the length of a typical mouse pregnancy. In that time, a yolk sac developed around the embryos to supply nutrition, and the embryos themselves developed digestive tracts; neural tubes, or the beginnings of the central nervous system; beating hearts; and brains with well-defined subsections, including the forebrain and midbrain, the scientists reported in a study published Thursday (Aug. 25) in the journal Nature.  Full Story: Live Science (8/25) 

Coleen Rooney signs multimillion-pound deal with Disney+ for a documentary about the Wagatha Christie trial. (h/t Andrea Felsted)

Pour your plants a martini: Researchers say giving alcohol to plants may protect them from dying in a drought. Here’s why plants benefit from a little liquid encourage-mint.

The majesty of weather photography: A weather photography competition has revealed striking images of extreme climate events. See the stunning photos here.
 
Looking back on 50 years of the Hard Rock Café: Since the first Hard Rock Cafe opened its doors in 1971, branches have popped up everywhere from Tokyo to Egypt.

Rivers, canals and reservoirs are running dry.

Paul Allen’s estate puts $1 billion in art up for auction.

The rise of tiny Men’s timepieces.

PHOTOS OF THE DAY

A kayaker paddles past the wreckage of a second world war German battleship in the Danube River near Prahovo. The hulks of dozens of German warships have been exposed on the river near the town of Prahovo after severe drought hit much of Europe.
CREDIT: Darko Vojinović/AP

David Lawless and his son Toby work with shire horses Cosmo and Boy to harvest the wildflower meadow at King’s College. The heavy horses from Waldburg Shires stable are helping to cut the meadow before turning and carting the hay on a traditional wain.
CREDIT: Joe Giddens/PA

A person flies a kite on Parliament Hill during a kite festival celebrating Afghan culture, held in solidarity with the people of Afghanistan on the first anniversary of the country falling under Taliban rule.
CREDIT: Henry Nicholls/Reuters
Market Closes for August 26^th, 2022

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1919, the Coca-Cola Co. successfully sold shares to outsiders for the first time, as a syndicate of banks and brokers from around the country bought 417,000 shares to resell to retail investors at an initial offering price of $40. An earlier attempt at a stock offering in 1892 had failed.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell 1.5% at 19,873.29 in Toronto.
The move was the biggest loss since July 14 and follows the previous session’s increase of 0.8%.
Today, financials stocks led the market lower, as all sectors lost; 227 of 238 shares fell, while 11 rose.
Brookfield Asset Management Inc. contributed the most to the index decline, decreasing 3.7%. Open Text Corp. had the largest drop, falling 13.7%.
Terminal users can read more in our markets live blog.
Insights
* In the past year, the index had a similar or greater loss 15 times. The next day, it declined nine times for an average 0.7% and advanced six times for an average 0.6%
* This month, the index rose 0.9%
* So far this week, the index fell 1.2%, heading for the biggest decline since the week ended July 15
* The index declined 3.1% in the past 52 weeks. The MSCI AC Americas Index lost 11% 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
* S&P/TSX Composite is trading at a price-to-earnings ratio of 13.4 on a trailing basis and 12.3 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$3.22t
* 30-day price volatility rose to 12.86% compared with 11.64% in the previous session and the average of 15.09% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
* Financials | -60.8512| -1.0| 1/28
* Materials | -57.9369| -2.5| 1/50
* Information Technology | -48.9665| -4.5| 0/14
* Industrials | -42.0225| -1.6| 1/28
* Energy | -29.7529| -0.8| 4/34
* Consumer Discretionary | -17.4270| -2.5| 0/13
* Consumer Staples | -14.2168| -1.7| 0/11
* Real Estate | -10.9875| -2.0| 1/22
* Communication Services | -8.0219| -0.8| 0/7
* Utilities | -4.9825| -0.5| 3/13
* Health Care | -3.8674| -5.1| 0/7
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
* Brookfield Asset Management | -24.7600| -3.7| 30.1| -16.1
* Shopify | -16.9200| -4.8| 8.7| -75.8
* Open Text | -12.3000| -13.7| 411.1| -30.8
* Advantage Energy Ltd | 0.5000| 3.3| 25.2| 61.0
* Brookfield Infrastructure | 1.0100| 0.6| 8.5| 9.4
* TD Bank | 10.1500| 0.9| 78.3| -10.4
US
By Rita Nazareth
(Bloomberg) — Stocks tumbled as Jerome Powell gave a clear message that rates will likely stay high for some time, throwing cold water on the idea of a Federal Reserve pivot that could jeopardize its war against inflation.
The rout deepened in afternoon New York trading, with the S&P 500 seeing its worst day since mid-June and the Nasdaq 100 tumbling over 4%.
Major equity indexes dipped below their 100-day price averages, indicating the potential for more losses, according to some traders.
Treasury two-year yields — which are more sensitive to imminent policy moves — rose alongside the dollar.
Hawkish Fedspeak grew louder in the last few weeks as financial conditions eased after a stock rally that began with short covering, restored $7 trillion to values — and ironically was linked to dovish expectations. Another reason cited by traders for Friday’s plunge was the concern that restrictive policy will raise the odds of a recession next year.
To Cliff Hodge at Cornerstone Wealth, the Fed is going to remain aggressive at the expense of growth and traders should expect more volatility and tougher conditions for equities.
“Powell can’t come right out and say that the Fed is fine walking us right into recession in order to crush inflation, but that is what this messaging unequivocally implies,” said Hodge.
“What does this mean for markets? Drastically reduces the chance of a soft landing and the bull case for new highs this year.”
The Fed Chief reiterated that another “unusually large” hike could be appropriate next month, though he stopped short of committing to one, adding that the decision will depend on incoming data.
Several officials have emphasized the central bank is in no way done, with Kansas City Fed Chief Esther George noting that the destination of the federal funds rate may be higher than markets are currently priced for.
Futures contracts referencing the Fed’s September policy meeting showed roughly even odds of a half-point or three- quarter-point hike.
The amount of additional tightening priced in for this year increased slightly, with traders seeing lower chances of rate cuts in 2023.
“Powell wants financial conditions to tighten further and wanted the market to know that the Fed is not ready to declare victory over inflation yet,” said Joe Gilbert, portfolio manager at Integrity Asset Management.
“He also renounced any prospects of interest rate cuts soon. The market is repricing this prospect.”
Former US Treasury Secretary Lawrence Summers handed out some rare praise for the Fed saying Powell’s latest pledge to restrain inflation was a “statement of being resolute.”
He said the policy maker “did what he needed to do” and that it was clear the Fed’s “overwhelming priority” is pulling back inflation from the fastest pace in four decades.
Investors are rushing out of stocks and bonds alike as they worry about the economic risks from the Fed pressing on with rate hikes, Bank of America Corp. strategists said in a note before Powell’s speech.
Global equity funds had outflows of $5.1 billion in the week through Aug. 24, with US stocks seeing their first redemptions in three weeks, according to a report from the bank, citing EPFR Global data.
Rate-sensitive technology funds posted their largest exodus since November 2021, while high-yield bonds led redemptions of $800 million from global bond funds.
About $600 million left gold.
Data Friday showed consumer spending rose less than expected as a key inflation metric turned negative.
Meantime, consumer sentiment beat estimates, suggesting Americans are growing more optimistic as gas prices continue to drop.
Some of the main moves in markets:

Stocks
* The S&P 500 fell 3.4% as of 4 p.m. New York time
* The Nasdaq 100 fell 4.1%
* The Dow Jones Industrial Average fell 3%
* The MSCI World index fell 2.5%
Currencies
* The Bloomberg Dollar Spot Index rose 0.5%
* The euro fell 0.1% to $0.9965
* The British pound fell 0.8% to $1.1738
* The Japanese yen fell 0.7% to 137.42 per dollar
Bonds
* The yield on 10-year Treasuries was little changed at 3.03%
* Germany’s 10-year yield advanced seven basis points to 1.39%
* Britain’s 10-year yield declined one basis point to 2.60%
Commodities
* West Texas Intermediate crude rose 0.4% to $92.85 a barrel
* Gold futures fell 1.2% to $1,749.60 an ounce
–With assistance from Sunil Jagtiani, Robert Brand and Peyton
Forte.

Have a wonderful weekend everyone.

Be magnificent!

As ever,

Carolann

Nothing can resist a will which will stake even existence upon fulfillment. –Benjamin Disraeli, 1804-1881.

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