October 11,2022 Newsletter

Dear Friends,

Tangents: Carolann is away from the office today, I will be writing the newsletter on her behalf.

PHOTOS OF THE DAY

A plaster cast of a battle scene from the temple at Karnak is displayed during the Hieroglyphs: unlocking ancient Egypt exhibition at the British Museum. The exhibition, which marks 200 years since the decipherment of ancient Egyptian hieroglyphs, explores the inscriptions and objects that helped academics unlock an ancient civilisation.
Photograph: Jonathan Brady/PA

The Royal Liver Building is illuminated in yellow for World Mental Health Day.
Photograph: Peter Byrne/PA

Bluewater, golden sand, white foam mixed with bright sunlight paints gorgeous design under the Sea Cliff bridge in New South Wales.
Photograph: Dasun Nirmala Malaarachchi/Courtesy TNC Photo Contest 2022
Market Closes for October 11, 2022

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1817, the New York Stock Exchange formally banned negotiated fees, compelling all its members to charge fixed commission rates to the investing public—including members of the brokers’ own families. Commissions would remain non-negotiable for the next 158 years.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the fourth day, dropping 2%, or 366.45 to 18,216.68 in Toronto. The index dropped to the lowest closing level in at least a year.
Royal Bank of Canada contributed the most to the index decline, decreasing 2.4%. Canopy Growth Corp. had the largest drop, falling 14.4%.
Today, 202 of 236 shares fell, while 32 rose; 10 of 11 sectors were lower, led by financials stocks.

Insights
* In the past year, the index had a similar or greater loss 10 times. The next day, it declined nine times for an average 0.8% and advanced 0.1% once
* This year, the index fell 14%, heading for the worst year in at least 10 years
* The index declined 11% in the past 52 weeks. The MSCI AC Americas Index lost 19% in the same period
* The S&P/TSX Composite is 18% below its 52-week high on April 5, 2022 and 0.3% above its low on July 14, 2022
* The S&P/TSX Composite is down 3.5% in the past 5 days and fell 7.9% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 12.3 on a trailing basis and 11.2 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.4% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$2.97t
* 30-day price volatility rose to 22.29% compared with 21.66% in the previous session and the average of 17.36% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | -131.0826| -2.3| 2/27
Energy | -117.9369| -3.3| 3/35
Materials | -30.9601| -1.4| 10/40
Information Technology| -30.7596| -3.2| 1/13
Industrials | -18.8262| -0.8| 5/22
Utilities | -15.9930| -1.8| 0/16
Communication Services| -10.6405| -1.2| 0/7
Real Estate | -5.6943| -1.2| 1/21
Consumer Discretionary| -5.6807| -0.9| 3/11
Health Care | -4.1068| -5.2| 0/6
Consumer Staples | 5.2040| 0.7| 7/4
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
RBC | -28.1400| -2.4| 70.5| -12.0
Brookfield Asset Management | -19.4700| -3.6| -1.1| -29.9
Canadian Natural Resources | -19.3400| -3.3| 112.0| 39.2
West Fraser Timber | 1.7540| 4.2| -23.4| -14.7
Intact Financial | 2.2720| 1.0| -11.1| 17.3
Couche-Tard | 2.6570| 0.9| -15.2| 6.2
US
By Stephen Kirkland
(Bloomberg) — US stocks turned sharply lower in late trading after comments by the Bank of England chief on removing market support rattled investor sentiment. Benchmark Treasury yields rose and the dollar gained.
The S&P 500 slid amid renewed selling in tech shares that sent the Nasdaq 100 down more than 1%. Long-end Treasuries bore the brunt of losses and the pound tumbled after BOE Governor Andrew Bailey urged investors to finish winding up positions that they can’t maintain, saying the central bank will halt intervention in the market as planned at the end of this week.
“When Andrew Bailey makes a comment that he will stop QE on Friday, this is going to be an interesting test,” Jimmy Chang, chief investment officer at Rockefeller Global Family Office, said on Bloomberg TV. “It’s a very interesting line in the sand. Will the market push back? How much higher will the yields run? We’ll see.”
Risk sentiment remained fragile after a four-day losing streak wiped $1.6 trillion off the value of the S&P 500 Index ahead of US inflation readings. Data Thursday may seal the case for another 75-basis-point interest-rate increase at the next Federal Reserve meeting in the absence of a major shortfall.
Nor have officials given any inclination to pause their rate-hiking cycle in the near future, with Cleveland Fed President Loretta Mester saying Tuesday officials need to keep raising interest rates and cannot get complacent.
More market comments:
* “The gilt market is one of the more fragile elements of global finance right now,” said Steve Sosnick, chief strategist at Interactive Brokers. “The BOE rescued global markets in the last week of September when they stabilized gilts, so it’s a big risk if they’re going to let them potentially drift lower.”
* “Tuesday’s price action was heavily reliant on the influence of the gilt market; selling off in sympathy with British yields overnight and stabilizing once London left for the day until governor Bailey’s hawkish remarks drove a partial reversal,” Ian Lyngen and Ben Jeffery at BMO Capital Markets wrote in a note.

In addition to inflation data, big US banks kick off the third-quarter earnings season in earnest later this week, with strategists braced for weak profits against a drumbeat of warnings over the rising risk of a global recession. The International Monetary Fund joined the refrain, warning of a worsening outlook as efforts to curb inflation may add to damage from the war in Ukraine and China’s slowdown.
“We have not seen the impact of tightening,” Michael Kelly, head of the multi-asset team at PineBridge Investments told Bloomberg TV. “That lies ahead and when we see that, it’s another leg down for risk assets.”
Meanwhile, Russian President Vladimir Putin threatened further missile attacks on Ukraine after hitting Kyiv and other cities in the most intense barrage of strikes since the first days of its invasion.
“It’s little wonder investors enter the week in a dreary mood, especially with headlines from Ukraine signaling a further escalation in geopolitical tensions,” Christopher Smart, chief global strategist at Barings, said in a note.
With world growth under pressure, US oil futures tumbled more than 2%, giving up more of last week’s 17% rally.

Key events this week:
* Earnings this week include: JPMorgan Chase & Co., Citigroup Inc., Morgan Stanley, BlackRock Inc., Delta Air Lines Inc., UnitedHealth Group Inc., U.S. Bancorp, Wells Fargo & Co.
* FOMC minutes for September meeting, Wednesday
* US PPI, mortgage applications, Wednesday
* OPEC Monthly Oil Market Report, Wednesday
* Fed’s Michelle Bowman and Neel Kashkari speak
* ECB’s Christine Lagarde speaks
* US CPI, initial jobless claims, Thursday
* G-20 finance ministers and central bankers meet, Thursday
* China CPI, PPI, trade, Friday
* US retail sales, business inventories, University of Michigan consumer sentiment, Friday
* BOE emergency bond buying is set to end, Friday

Some of the main moves in markets:

Stocks
* The S&P 500 fell 0.7% as of 4 p.m. New York time
* The Nasdaq 100 fell 1.2%
* The Dow Jones Industrial Average rose 0.1%
* The MSCI World index fell 1%
Currencies
* The Bloomberg Dollar Spot Index rose 0.2%
* The euro was little changed at $0.9711
* The British pound fell 0.6% to $1.0986
* The Japanese yen was little changed at 145.82 per dollar
Cryptocurrencies
* Bitcoin fell 1.3% to $18,996.28
* Ether fell 1.9% to $1,282.09
Bonds
* The yield on 10-year Treasuries advanced six basis points to 3.94%
* Germany’s 10-year yield declined four basis points to 2.30%
* Britain’s 10-year yield declined three basis points to 4.44%
Commodities
* West Texas Intermediate crude fell 2.9% to $88.52 a barrel
* Gold futures fell 0.1% to $1,673.40 an ounce

–With assistance from Naoto Hosoda, Abhishek Vishnoi, Sujata Rao, Peyton Forte, Vildana Hajric, Emily Graffeo and Elaine Chen.

Have a great evening.

Be magnificent!
As ever,

Isabel 

If a little dreaming is dangerous, the cure for it is not to dream less, but to dream more, to dream all the time.

– Marcel Proust, 1871-1922

Isabel Luo
Assistant to Carolann Steinhoff

Queensbury Securities Inc.,
St. Andrew’s Square,
Suite 340A, 730 View St.,
Victoria, B.C. V8W 3Y7

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