August 3, 2023, Newsletter

Dear Friends,

Tangents: Happy Friday Eve.

August 3, 1936: American sprinter Jesse Owens wins the 100m (10.3 seconds) in front of Adolph Hitler in a famous race at the Berlin Olympics, first of 4 gold medals at the Games.
1987: The Iran-Contra congressional hearings ended with none of the 29 witnesses tying President Ronald Reagan directly to the diversion of arms-sales profits to Nicaraguan rebels.  Go to article >>
Martha Stewart, b. 1941

The best of the 16th annual iPhone Photography Awards:  Never underestimate the power of a smartphone camera. Here are the winners of the 2023 iPhone Photography Awards.

Caroline Kennedy recreates her father JFK’s World War II swim.  The daughter of former US President John F. Kennedy swam about three-quarters of a mile in honor of her father’s heroic swim 80 years ago.

Remarkable fossils reveal jellyfish that lived 505 million years ago.  Fossils belonging to the oldest known species of jellyfish were discovered in the Canadian Rockies.

Taylor Swift gives ‘life-changing’ bonuses to Eras Tour truck drivers.  Swift stunned the tour’s trucking staff by giving each trucker a check in the amount of $100,000.

Crusader sword found in Holy Land was bent, possibly in naval battle, X-rays reveal
A sword found at the bottom of the Mediterranean Sea was likely dropped there during a battle between 800 and 900 years ago. Read More.

Iceland’s newest volcano is now spewing out tornadoes
Iceland’s newborn volcano is spewing out methane explosions and tornadoes to complement the ribbons of lava painting the landscape. Read More.

Google’s ‘mind-reading’ AI can tell what music you listened to based on your brain signals
AI can produce a song that matches the genre, rhythm, mood and instrumentation of music that the individual recently heard. Read More.

PHOTOS OF THE DAY

Fustiñana, Spain: A herd of sheep is driven by Angel Mari Sanz, 62, along La Cañada Real de los Roncaleses (the Path of the Roncaleses), an ancient transhumance route
Photograph: Álvaro Barrientos/AP

Takachiho, Japan: Eleanor Smart of the USA dives from the 21-metre platform during the final competition day of the fourth stop in the Red Bull Cliff Diving World Series
Photograph: Getty Image

​​​​​​​Aiguilles Rouges, France: People take a break during a hike in the Lac Blanc area of the nature reserve, which faces Mont Blanc above Chamonix, Haute-Savoie. Faced with an increase in visitor numbers since 2021, measures have been introduced this summer to protect the site, including a limit on camping.
Photograph: Emmanuel Dunand/AFP/Getty Images
Market Closes for August 3^rd, 2023,

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1984, total trading volume on the New York Stock Exchange exceeded 200 million shares for the first time, as 236,565,110 shares changed hands.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the third day, dropping 0.5%, or 97.47 to 20,120.74 in Toronto.
The index dropped to the lowest closing level since July 12.
Today, information technology stocks led the market lower, as 8 of 11 sectors lost; 120 of 227 shares fell, while 105 rose.
Shopify Inc. contributed the most to the index decline, decreasing 5.4%.
Bombardier Inc. had the largest drop, falling 8.5%.
Insights
* So far this week, the index fell 1.9%, heading for the biggest decline since the week ended June 23.
* The index advanced 2.9% in the past 52 weeks. The MSCI AC Americas Index gained 8% in the same period
* The S&P/TSX Composite is 3.5% below its 52-week high on Feb. 2, 2023 and 12.6% above its low on Oct. 13, 2022
* The S&P/TSX Composite is down 1.3% in the past 5 days and was little changed in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 13.1 on a trailing basis and 14.2 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$3.2t
* 30-day price volatility fell to 11.29% compared with 11.37% in the previous session and the average of 10.65% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Information Technology | -38.3328| -2.5| 4/7
Financials | -37.5620| -0.6| 13/16
Utilities | -22.1917| -2.6| 3/13
Materials | -15.3622| -0.6| 21/29
Communication Services | -6.5807| -0.8| 0/5
Consumer Discretionary | -4.6913| -0.6| 6/8
Consumer Staples | -3.9675| -0.5| 3/8
Real Estate | -1.5068| -0.3| 5/14
Health Care | 0.2822| 0.5| 2/2
Industrials | 1.9210| 0.1| 14/12
Energy | 30.5122| 0.9| 34/6
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
Shopify | -37.7800| -5.4| 35.6| 67.8
Nutrien | -12.6000| -4.0| 12.6| -12.8
Brookfield Corp | -12.0700| -2.7| 56.3| 1.9
Cenovus Energy | 6.1470| 2.6| 7.5| -3.2
Canadian Natural Resources | 7.0610| 1.2| -33.7| 6.4
Canadian Pacific Kansas | 8.0140| 1.2| -10.9| 7.0
US
By Rita Nazareth
(Bloomberg) — The slide in the world’s biggest bond market deepened and stocks fell ahead of the US jobs report, which is expected to provide clues on the outlook for the Federal Reserve’s next steps.
In late trading, Amazon.com Inc. climbed after a bullish revenue forecast, while traders awaited results from Apple Inc.
Longer-dated Treasuries are now set for their worst week of 2023 amid signs of unexpected economic strength and concern over a widening budget deficit.
A report Thursday underscored resilient demand for workers, while separate numbers showed labor productivity climbed, helping to offset rising labor costs.
Those figures preceded the government’s employment data — forecast to show the US added 200,000 jobs in July.
While that would be the weakest print since the end of 2020, it’s still a strong advance historically.
“The good news is that almost everyone agrees that an imminent recession isn’t very likely,” said Ed Yardeni, founder of his namesake research firm. “That reduces the downside concerns about corporate earnings, but it increases the downside potential for the stock market’s valuation multiple if the bond yield continues to rise.”
The S&P 500 dropped for a third straight day.
Tech mega-caps, which bore the brunt of the recent selling in equities, outperformed.
Treasury 30-year yields hit 4.3%, extending a three-day surge to about 30 basis points.
The dollar was little changed.
The pound wavered as the Bank of England warned its fight against inflation may require tighter borrowing conditions for an extended period.
A survey conducted by 22V Research shows that investors expect strong employment and weak wage inflation.
Roughly 65% of respondents are betting payrolls will be greater than consensus.
Meantime, 55% expect average hourly earnings to trail estimates — which helps explain why they also expect the equity-market reaction to be muted, the firm noted.
To Jason Draho at UBS Global Wealth Management, markets actually may be listless for the next month in the absence of any significant catalyst and after a strong run.
“Markets are already pricing in a soft landing, and increasingly with the belief that relatively little growth pain is required for inflation to gradually return to 2%,” Draho noted. “The markets are vulnerable to any signs that the economy, with the Fed’s steering, is at risk of not sticking to that soft landing.”
Meantime, rate options traders are paying through the nose for protection against further increases in long-maturity Treasury yields.
A metric that compares demand for bearish put options to demand for bullish call options shows the widest divergence since September for options on CME Group Inc.’s US Treasury Bond Futures contract, which currently tracks a bond that matures in 2039.
The gaps are less extreme for options on shorter-maturity Treasury futures.
The steepening of the yield curve extended a trend since the Bank of Japan surprised markets last week with a policy tweak.
At 4.88%, two-year yields are 71 basis points higher than those on the 10-year note.
That’s compared to a gap of 102 basis points two weeks ago.
“I remain wary of taking duration risks and still much prefer short duration bonds,” said Peter Boockvar, author of the Boock Report. “This sovereign bond bubble continues to unwind and the problem now is higher rates just exacerbates the sovereign debt rise as interest expense starts to explode higher, everywhere, not just in the US, highlighted by the Fitch downgrade.”
Bill Ackman, founder of Pershing Square Capital Management, said he’s short 30-year Treasuries “in size” — as both a hedge against the impact of higher long-term rates on stocks and also as a standalone bet. Bill Gross, the former chief investment officer of Pacific Investment Management Co. noted he’s “overall bearish” on 10-year yields, while Berkshire Hathaway Inc. Chairman  Warren Buffett told CNBC he had been buying Treasury bills and would likely continue.
Elsewhere, oil rose after Saudi Arabia prolonged its unilateral production cut by another month and hinted that deeper reductions may be on the way.

Corporate Highlights:
* Apollo Global Management Inc. hit an all-time high after it reported a record profit as strong inflows powered results at its Athene annuities business.
* Tesla Inc.’s China deliveries slumped in July to the lowest level this year, as the electric vehicle maker struggles to attract buyers despite price cuts and other incentives.
* Qualcomm Inc., the largest maker of smartphone processors, gave a tepid sales forecast for the current quarter, indicating that demand for mobile devices remains weak.
* Moderna Inc. raised its Covid-19 vaccine sales outlook for the year, finalizing contracts with Japan and several American health-care companies as the US government largely stops paying for the shots.
* DoorDash Inc. reported a record number of delivery orders in the second quarter, showing consumers’ commitment to takeout despite rising prices. 
Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.3% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.1%
* The Dow Jones Industrial Average fell 0.2%
* The MSCI World index fell 0.3%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro was little changed at $1.0947
* The British pound was little changed at $1.2706
* The Japanese yen rose 0.5% to 142.57 per dollar
Cryptocurrencies
* Bitcoin rose 0.6% to $29,285.66
* Ether rose 0.3% to $1,846.5
Bonds
* The yield on 10-year Treasuries advanced 10 basis points to 4.18%
* Germany’s 10-year yield advanced seven basis points to 2.60%
* Britain’s 10-year yield advanced seven basis points to 4.47%
Commodities
* West Texas Intermediate crude rose 2.9% to $81.77 a barrel
* Gold futures fell 0.3% to $1,969.50 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Richard Henderson, Tassia Sipahutar, John Viljoen and Isabelle Lee.
Have a lovely evening.

Be magnificent!

As ever,

Carolann
Civilization is a movement and not a condition, a voyage and not a harbor. –Arnold Toynbee, 1889-1975.

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