July 27, 2023, Newsletter

Dear Friends,

Tangents: Happy Friday Eve.
July 27, 1866: Atlantic telegraph cable lays.

July 27, 1953: The Korean War armistice is signed, bringing an end to three years of conflict and establishing a demilitarized zone between North and South Korea.

July 27, 1940: Bugs Bunny made his debut in the Warner Bros. animated cartoon “A Wild Hare.”  Go to article >>

On July 27, 1940: Billboard magazine published its first “music popularity chart” listing best-selling retail records. In first place was “I’ll Never Smile Again” recorded by Tommy Dorsey and His Orchestra, with featured vocalist Frank Sinatra.

Ancient Nero’s Theater ruins found at a hotel site near the Vatican:  Archaeologists discover that the ruins of Nero’s Theater, an imperial theater referred to in ancient Roman texts but never found, have been found under the garden of a future Four Seasons Hotel steps from the Vatican.

Chincoteague wild ponies complete 98th annual swim: Thousands of people gathered to watch the Chincoteague wild ponies make their annual trek across the Assateague Channel.

Paris 2024 Olympic and Paralympic torch unveiled.  French designer Mathieu Lehanneur has created a sleek Olympic torch for next year’s Games.

Iconic piece of space exploration history goes up for auction:  For around half a million dollars, a bidder can own the first recorded interstellar message from humankind to potential intelligent life in space.

Iconic piece of space exploration history goes up for auction: For around half a million dollars, a bidder can own the first recorded interstellar message from humankind to potential intelligent life in space.

US government is hiding evidence of ‘non-human intelligence’, UFO whistleblower tells Congress
During a congressional hearing on Wednesday (July 26), military witnesses claimed that evidence of non-human technology is being hidden from the public. Read More

PHOTOS OF THE DAY

New York City, US:  People take part in a ‘Sky-High’ yoga session on the Edge observation deck in Manhattan Photograph: Amr Alfiky/Reuters

Milan, Italy: Performers at the Weeknd’s concert at Ippodromo SNAI La Maura.  Photograph: Sergione Infuso/Corbis/Getty Images

​​​​​​​Vancouver, Canada: Fireworks presented by Team Mexico light up the sky during the 31st Celebration of Light fireworks competition at English Bay in British Columbia Photograph: Xinhua/Shutterstock
Market Closes for July 27^th, 2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1694, amid choral chants of “Laus Deo” (Praise the Lord), the Bank of England opened for business in London to print currency and manage the national debt.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell 0.9% at 20,385.47 in Toronto.
The move was the biggest since falling 1.5% on July 6 and follows the previous session’s little change.
Today, materials stocks led the market lower, as 10 of 11 sectors lost; 189 of 228 shares fell, while 37 rose.
TC Energy Corp. contributed the most to the index decline, decreasing 3.4%.
StorageVault Canada Inc. had the largest drop, falling 9.3%.
Insights
* This month, the index rose 1.1%
* So far this week, the index fell 0.8%
* The index advanced 5.9% in the past 52 weeks. The MSCI AC Americas Index gained 13% in the same period
* The S&P/TSX Composite is 2.2% below its 52-week high on Feb. 2, 2023 and 14.1% above its low on Oct. 13, 2022
* The S&P/TSX Composite is down 0.3% in the past 5 days and rose 3.3% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 13.4 on a trailing basis and 14.5 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$3.25t
* 30-day price volatility rose to 10.45% compared with 10.05% in the previous session and the average of 10.74% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Materials | -45.0070| -1.8| 10/40
Energy | -40.7744| -1.2| 3/35
Industrials | -20.6698| -0.7| 3/23
Financials | -18.3740| -0.3| 9/20
Communication Services | -13.8344| -1.7| 0/5
Real Estate | -11.5411| -2.3| 0/21
Utilities | -9.7807| -1.1| 2/14
Information Technology | -9.6901| -0.6| 3/8
Consumer Discretionary | -4.6382| -0.6| 4/11
Consumer Staples | -2.2823| -0.3| 2/9
Health Care | 0.4246| 0.7| 1/3
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
TC Energy | -11.7300| -3.4| 15.0| -12.4
Enbridge | -9.6320| -1.4| -51.7| -8.1
Rogers Communications| -8.6800| -5.5| 231.7| -9.3
First Quantum Minerals | 2.5900| 1.8| 61.4| 32.5
Fairfax Financial | 2.9850| 1.8| -30.1| 30.4
Cenovus Energy | 6.2390| 2.
US
By Rita Nazareth
(Bloomberg) — Just when US traders were trying to take a break from all the anxiety on whether Federal Reserve rate hikes will cause a recession, speculation about a tweak in policy on the other side of the world roiled markets across the board.
Stocks erased gains, Treasury 10-year yields hit 4% and the yen advanced on a news report the Bank of Japan will discuss tolerating higher domestic bond yields at a scheduled meeting Friday.
Wall Street’s “fear gauge”, the VIX, jumped the most since May.
In late trading, Intel Corp. rose on a bullish revenue forecast.
With the BOJ widely expected to retain its ultra-easy policy, investor focus will now fall on whether authorities use a revision to their inflation forecast as an excuse to tweak the yield curve control program.
If the BOJ adjusts its YCC program, markets will likely take it as the start of a policy tightening cycle,” according to Kristina Clifton at Commonwealth Bank of Australia.
“Headlines around the potential for the BOJ to discuss widening the YCC were enough to exaggerate the selling pressure in Treasuries in the wake of the 7-year auction,” said Ian Lyngen at BMO Capital Markets. “What had been a collective expectation of unchanged policy was replaced by far more uncertainty.”
Implied volatility in Japan’s bond futures has climbed to a three-month high, signaling wariness over the potential for near-term gyrations.
Equities gained earlier in the day as US gross domestic product unexpectedly picked up steam in the second quarter, while pending home sales unexpectedly climbed in June.
On Wednesday, Fed Chair Jerome Powell said his staff had ditched the recession forecast it put in place in March, when banking turmoil had raised fears about a potential credit crunch.
To Mike Loewengart at Morgan Stanley Global Investment Office, Thursday’s reports all pointed to a buoyant economy that continues to cruise despite interest rates reaching their highest levels in more than two decades.
“The Fed has been hesitant to close the door on additional rate hikes, and if today’s strong data is any indication, it may have to wait a while longer before it’s comfortable signaling this tightening cycle has run its course,” Loewengart added.
“For now, the indicators are still pointing toward a relatively soft economic landing.”
Earlier this week, the International Monetary Fund raised its outlook for the world economy, estimating that risks have eased in recent months after the US averted a default and authorities staved off a banking crisis on both sides of the Atlantic.
The fund is among a growing number of voices that see a potential American soft landing.
Economists in a Bloomberg survey this month boosted estimates for GDP growth in the second and third quarters, although they still say there’s a 60% chance the US will fall into recession in the next 12 months.
Meantime, investors are still split: 58% of respondents in JPMorgan Chase’s weekly survey expect a soft landing, while 42% are bracing for a recession.
Michelle Cluver, portfolio strategist at Global X ETFs, said despite the growing sentiment the US may avoid a recession, the resilience of the consumer and the economy keeps the focus on the Fed and its September meeting.
To Richard Flynn at Charles Schwab, while the solid US GDP is a positive sign of a strengthening economy, high demand will also reinforce the inflationary pressures that are an “ongoing concern” for policymakers.  “As long as the labor market remains tight and inflation remains above the central bank’s 2% target, we can expect to see further rate increases in coming months,” Flynn noted. “The market eagerly awaits the end of the rate hiking cycle, but may be reassured to see that policy has not yet pushed the economy closer to recession as some investors fear.”

Corporate Highlights:
* Meta Platforms Inc. climbed after the social-media company reported strong results for the second quarter and gave an optimistic outlook for the current period.
* Royal Caribbean Cruises Ltd. advanced after raising its full year profit forecast to a level that significantly beat expectations.
* McDonald’s Corp. rose as sales and profit surpassed analysts’ projections, but the company warned of slower growth later this year amid a challenging economic backdrop.
* Lam Research Corp. climbed after the semiconductor equipment maker gave a strong revenue forecast for its first quarter, prompting analysts to raise their price targets on the stock.
* eBay Inc. dropped after projecting earnings in the current quarter that narrowly missed analysts’ estimates, suggesting the e-commerce company is struggling to perform with a shrinking customer base.
* Southwest Airlines Co. fell after warning of higher-than-expected costs, pressuring the carrier’s earnings and countering gains from a surge in early-summer travel.
Key events this week:
* Japan Tokyo CPI, Friday
* BOJ rate decision, Friday
* Eurozone economic confidence, consumer confidence, Friday
* US consumer income, employment cost index, University of Michigan consumer sentiment, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.6% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.2%
* The Dow Jones Industrial Average fell 0.7%
* The MSCI World index fell 0.2%
Currencies
* The Bloomberg Dollar Spot Index rose 0.6%
* The euro fell 1.1% to $1.0967
* The British pound fell 1.2% to $1.2784
* The Japanese yen rose 0.8% to 139.12 per dollar
Cryptocurrencies
* Bitcoin fell 1.4% to $29,167.5
* Ether fell 1.1% to $1,860.76
Bonds
* The yield on 10-year Treasuries advanced 13 basis points to 4.00%
* Germany’s 10-year yield declined one basis point to 2.47%
* Britain’s 10-year yield advanced three basis points to 4.31%
Commodities
* West Texas Intermediate crude rose 1.4% to $79.85 a barrel
* Gold futures fell 1.3% to $1,982.90 an ounce
This story was produced with the assistance of Bloomberg Automation.

–With assistance from Brett Miller, Tassia Sipahutar, Sujata Rao, Isabelle Lee and Emily Graffeo.
Have a lovely evening.

Be magnificent!
As ever,

Carolann
You can’t use up creativity.  The more you use, the more you have. –Maya Angelou, 1928-2014.

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