October 6,2022 Newsletter

Dear Friends,

Tangents: Happy Friday Eve.

1951 Joseph Stalin proclaims the Soviet Union has the atomic bomb.  Go to article »

Vladimir Putin, b. 1952.
Yo-Yo Ma, b. 1955.

A universal cancer treatment may be within reach.

Scientists are figuring out why we hallucinate.

Classical statue of Hercules nearly 2,000 years old found in Greece.  Archaeologists unearthed a stunning artifact after digging on a main street in Greece. Take a look at the classical statue here.

The rise of sleep tourism.  Soundproof walls. Pillow menus. Bedtime teas. A growing number of sleep-focused rooms are popping up in hotels and resorts across the world.

How did the moon form? A supercomputer may have just found the answer:  The moon could have formed immediately after a cataclysmic impact that tore off a chunk of Earth and hurled it into space, a new study has suggested.  Since the mid-1970s, astronomers have thought that the moon could have been made by a collision between Earth and an ancient Mars-size protoplanet called Theia; the colossal impact would have created an enormous debris field from which our lunar companion slowly formed over thousands of years.  Full Story: Live Science (10/5)

How old is ancient Egypt?  To many, Egypt’s history seems to stretch back into time immemorial. But how old exactly is ancient Egypt?  It depends how you define ancient Egypt, said Aidan Dodson, an Egyptology professor at the University of Bristol in the U.K.

WWI German U-boat discovered off US coast 100 years after it sank: A team of shipwreck hunters has discovered an extraordinary sunken vessel off the East Coast of the United States: the wreck of a World War I German U-boat sunk by U.S. warplanes a century ago for target practice.   According to an exclusive report by National Geographic, the team confirmed the identity of the wreck in early September as that of SM U-111, a submarine that served in the Imperial German Navy. After Germany agreed to an armistice in 1918, the U-boat surrendered to the British, who saved a handful of the early submarines to the U.S. to study and reverse engineer. In 1922, the U.S. Navy deliberately sank the vessel, but its exact location was not disclosed. Full Story: Live Science (10/6)

PHOTOS OF THE DAY

Gwendolyn Boevé-Jones, the founder and director of the art conservation and restoration specialist Studio Redivivus, speaks next to Fernand Léger’s painting Smoke Over the Rooftops. Art experts said they had discovered a masterpiece by the French cubist painter that was hidden on the back of another canvas for more than a century. Smoke Over the Rooftops, dating from 1911 to 1912, was on the flip side of Bastille Day, painted a year later
Photograph: François Walschaerts/AFP/Getty Images
A southern right whale (Eubalaena australis) is photographed near Puerto Madryn in Chubut province, Argentina. Despite the recent deaths of at least 13 southern right whales, authorities have recorded more than 1,400 whales in the Nuevo and San José gulfs, the largest number in more than 50 years
Photograph: Luis Robayo/AFP/Getty Images

A jute worker carries a 50kg load. Bangladesh is the world’s second largest producer of jute
Photograph: Syed Mahabubul Kader/Zuma Press Wire/Rex/Shutterstock
Market Closes for October 6, 2022

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1979, Paul Volcker, who became chairman of the Federal Reserve only two months earlier, said the Fed was raising interest rates a full percentage point, to 12%, and would take tough measures to control the money supply. Mr. Volcker’s announcement, made on a Saturday night, became known as “the Saturday Night Massacre” for its murderous effect on bond prices—but it also broke the back of inflation.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the second day, dropping 1.3%, or 256.08 to 18,979.01 in Toronto.
The move was the biggest since falling 2.7% on Sept. 23.
Today, financials stocks led the market lower, as 9 of 11 sectors lost; 147 of 236 shares fell, while 85 rose.
Royal Bank of Canada contributed the most to the index decline, decreasing 2.8%.
Sleep Country Canada Holdings Inc. had the largest drop, falling 6.3%.
Insights
* In the past year, the index had a similar or greater loss 19 times. The next day, it declined 13 times for an average 0.9% and advanced six times for an average 0.6%
* This year, the index fell 11%, heading for the worst year since 2018
* So far this week, the index rose 2.9%, heading for the biggest advance since the week ended July 29
* 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 14.6% below its 52-week high on April 5, 2022 and 4.5% above its low on July 14, 2022
* The S&P/TSX Composite is up 2.9% in the past 5 days and fell 0.6% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 12.8 on a trailing basis and 11.7 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.3% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.06t
* 30-day price volatility rose to 21.24% compared with 21.13% in the previous session and the average of 16.34% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | -157.2221| -2.6| 2/27
Industrials | -31.3055| -1.2| 7/20
Utilities | -29.9480| -3.2| 0/16
Communication Services| -22.0019| -2.4| 1/5
Consumer Staples | -18.5975| -2.4| 2/9
Information Technology| -13.9734| -1.3| 5/9
Energy | -10.2877| -0.3| 26/12
Real Estate | -6.9050| -1.5| 2/20
Consumer Discretionary| -6.2483| -0.9| 5/8
Health Care | 7.2246| 8.8| 3/4
Materials | 33.1732| 1.5| 32/17
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
RBC | -34.4800| -2.8| 269.3| -7.2
Enbridge | -26.0700| -3.5| 24.5| 3.5
Bank of Montreal | -16.5400| -2.9| 13.0| -11.0
Suncor Energy | 8.3640| 2.0| 6.7| 42.5
Cenovus Energy | 10.3400| 4.4| -5.6| 65.0
Nutrien | 11.3600| 2.7| -20.2| 23.7
US
By Rita Nazareth
(Bloomberg) — The stock market found little encouragement to sustain any rebound attempt on the eve of the all-important US jobs report, with major benchmarks finishing solidly lower on Thursday.
Aside from the anxiety that usually precedes those numbers, traders had to digest remarks from a raft of Federal Reserve speakers who sounded unequivocally committed to crushing inflation with rate hikes.
The hawkish rhetoric helped push the S&P 500 to its second straight day of losses while lifting the dollar and Treasury yields. Oil topped $88 a barrel.
In the run-up to the payrolls data, Wall Street braced for a mixed picture of a labor market that’s showing some signs of moderation while still remaining robust.
With that in mind, several economists believe it may be just too early to think about concepts like “peak hawkishness” or “Fed pivot” as debated earlier in the week.
And officials are making that clear.
The central bank is “quite a ways away” from pausing its tightening campaign, according to Minneapolis Fed President Neel Kashkari.
His Chicago counterpart Charles Evans noted the benchmark rate will probably be at 4.5% to 4.75% by next spring — from the current 3% to 3.25% range. Cleveland Fed chief Loretta Mester said the US is in an unacceptably high inflation environment.
“I don’t think the Fed is going to be ready to pivot so quickly,” said Rich Steinberg, chief market strategist at The Colony Group. “We’re going to be in this kind of tug of war between good news, bad news. There’s going to still be a lot of volatility to this market.”
As a result, retail investors are stepping up their exodus after bailing on equities during the September rout.
They have kept selling this week even as the S&P 500 posted its biggest two-day rally since April 2020, according to an estimate by JPMorgan Chase & Co. based on public data on exchanges.
The degree of anguish among individual investors and traders has been so pronounced that a sentiment gauge by Sundial Capital Research that measures the group’s conviction on a stock rally — the so-called dumb-money confidence — plunged to around 20% last week.
That’s among the lowest levels since the firm started tracking the data in 1998.
From a contrarian perspective, the pessimism among retail investors is welcome news for market observers looking for signs of flushed-out sentiment that often signal the selloff has reached its trough.
With the economy likely to slow down next year, tech stocks and US equities are looking more attractive, according to Citigroup Inc. strategists led by Robert Buckland.
They expect 18% returns for global stocks by the end of 2023 but warn “it will likely be a volatile ride.”
“US stocks are likely to stay volatile for the foreseeable future as the market continues to face worries related to high inflation, tightening monetary policy, supply chain issues, economic growth, and geopolitical uncertainty,” said Brian Belski, chief investment strategist at BMO Capital Markets.
As rising interest rates rattle investors and threaten businesses’ profits, the US corporate-bond market will likely come under increased pressure, according to Arvind Narayanan at Vanguard Group Inc., who said the finances of corporations are “weakening incrementally” from very strong levels, which he anticipates will continue through the rest of 2022.
Mortgage rates in the US fell, shifting direction after a six-week streak of gains that sent borrowing costs to a 15-year high.
Even with the latest decline, mortgage costs have more than doubled since starting the year around 3% — a steep climb that has slammed the brakes on the pandemic housing rally, highlighting one of the Fed’s goals in its effort to cool inflation.
Elsewhere, Canada two-year yields hit the highest level since 2007 after the nation’s central bank Governor Tiff Macklem said he remains firmly on an interest-rate hiking path, quashing hopes for an imminent end to a tightening cycle that’s choking indebted households and threatening the economy with recession.
Key events this week:
* US unemployment, wholesale inventories, nonfarm payrolls, Friday
* BOE Deputy Governor Dave Ramsden speaks at event, Friday
* Fed’s John Williams speaks at event, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 1% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.8%
* The Dow Jones Industrial Average fell 1.1%
* The MSCI World index fell 0.9%
Currencies
* The Bloomberg Dollar Spot Index rose 0.7%
* The euro fell 0.9% to $0.9797
* The British pound fell 1.5% to $1.1157
* The Japanese yen fell 0.3% to 145.11 per dollar
Cryptocurrencies
* Bitcoin rose 0.1% to $20,010.03
* Ether rose 1% to $1,358.75
Bonds
* The yield on 10-year Treasuries advanced six basis points to 3.82%
* Germany’s 10-year yield advanced five basis points to 2.08%
* Britain’s 10-year yield advanced 13 basis points to 4.17%
Commodities
* West Texas Intermediate crude rose 1.4% to $89.01 a barrel
* Gold futures rose 0.1% to $1,722.70 an ounce
–With assistance from Srinivasan Sivabalan, Sujata Rao, Vildana Hajric and Isabelle Lee.
Have a lovely evening.

Be magnificent!

As ever,

Carolann

Engrave this upon thy heart: There isn’t anyone you couldn’t love once you’ve heard their story. –Mary Lou Kownacki, b. 1941.

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