August 28, 2023 Newsletter

Dear Friends,

Tangents: Happy Monday.
It’s the 60th anniversary of the historic March On Washington for Jobs and Freedom — best remembered today for Dr. Martin Luther King Jr.’s iconic “I Have a Dream” speech.
On Aug. 28, 1963, 200,000 people participated in a peaceful civil rights rally in Washington, D.C., where Dr. Martin Luther King Jr. delivered his “I Have a Dream”
speech in front of the Lincoln Memorial. Go to article >>

“In the end, we will remember not the words of our enemies, but he silence of our friends.” -Martin Luther King Jr., 1929-1968.

Baby sun-like star caught spewing out gamma-rays in cosmic ‘tantrum’ for the 1st time ever
The discovery represents the first evidence that low-mass T.Tauri stars, which are less than 10 million years old, can emit gamma radiation.  Read More.

Deformed skulls and ritual beheadings found at Maya pyramid in Mexico
Archaeologists announced that some individuals buried at a Maya pyramid more than 1,000 years ago had deformed skulls and had been killed in ritual beheadings.  Read More.

Did the Tonga eruption cause this year’s extreme heat?
The 2022 Hunga Tonga-Hunga Ha’apai volcano eruption may have contributed to this year’s heat, but it’s not causing climate change.  Read More.

Americans are being asked to tip more often, but is it really required?  Eateries and businesses are upping the pressure to tip at computer check-out screens. Listen to an etiquette expert explain when you should tip — and when you can skip.

How Starbucks created its own language for ordering coffee.  Short, tall, venti, grande or trenta? Learn why Starbucks adopted terms commonly associated with Italian coffee bars.

Do you have ‘gymtimidation’?  You head to the gym, and suddenly you’re anxious. These feelings, dubbed “gymtimidation,” can prevent you from achieving your goals. Here’s how to alleviate your fears.

Viktor Hovland wins PGA Tour finale.  Congratulations are in order for this 25-year-old pro golfer who claimed an $18 million prize on Sunday.

Simone Biles makes history.  The decorated gymnast won a record eighth all-around national title with a strong performance Sunday at the US Gymnastics Championships.

PHOTOS OF THE DAY

Edinburgh, Scotland
Earl Stephens (who has the Nisga’a cultural name Chief Ni’is Joohl) and Pamela Brown join delegates from the Nisga’a nation at the National Museum of Scotland ahead of the return of an 11-metre tall memorial pole to what is now British Columbia.  Photograph: Andrew Milligan/PA

Kandahar Province, Afghanistan
A farmer dries figs at a house in the Shah Wali Kot district Photograph: Sanaullah Seiam/AFP/Getty Images.

Rostov region, Russia
A Cossack slashes a watermelon with a sabre during a sabre-cutting competition in the village of Novosvetlovsky.  hotograph: AFP/Getty Images
Market Closes for August 28^th, 2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 2000: The New York Stock Exchange began trading in decimals, ending the two-century-old practice of pricing stocks in increments of 1/8th of a dollar. The first stocks to adopt decimal pricing included Anadarko Petroleum and FedEx.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the second day, climbing 1%, or 189.39 to 20,025.14 in Toronto.
The index advanced to the highest closing level since Aug. 14.
Toronto-Dominion Bank contributed the most to the index gain, increasing 2.1%.
Novagold Resources Inc. had the largest increase, rising 6.5%.
Today, 192 of 227 shares rose, while 33 fell; 10 of 11 sectors were higher, led by financials stocks.
Insights
* This month, the index fell 2.9%
* The index advanced 0.8% in the past 52 weeks. The MSCI AC Americas Index gained 8.4% in the same period
* The S&P/TSX Composite is 3.9% below its 52-week high on Feb. 2, 2023 and 12% above its low on Oct. 13, 2022
* The S&P/TSX Composite is up 1.2% in the past 5 days and fell 2.4% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 15.1 on a trailing basis and 14.2 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.3% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.14t
* 30-day price volatility rose to 10.95% compared with 10.52% in the previous session and the average of 10.83% over the past month
================================================================
|Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 65.6600| 1.1| 23/5
Materials | 49.0741| 2.1| 50/0
Energy | 42.0972| 1.2| 37/3
Communication Services | 13.2335| 1.7| 5/0
Information Technology | 12.2547| 0.8| 9/2
Real Estate | 5.7568| 1.2| 21/0
Industrials | 3.2513| 0.1| 15/10
Utilities | 2.4207| 0.3| 14/2
Consumer Discretionary | 1.7023| 0.2| 10/4
Health Care | 0.2523| 0.4| 4/0
================================================================
| | |Volume VS |
| Index | | 20D AVG |YTD Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
TD Bank | 21.2700| 2.1| 1.4| -6.4
Canadian Natural Resources | 15.7300| 2.5| 61.1| 12.9
RBC | 9.7340| 0.8| -58.5| -4.1
Intact Financial | -1.2270| -0.5| 50.3| -0.6
Canadian National | -1.2940| -0.2| 69.4| -5.1
Couche-Tard | -6.6110| -1.8| -21.5| 17.7
US
By Rita Nazareth
(Bloomberg) — Stocks rose and bond yields fell at the start of a week full of economic data that will help shape the outlook for Federal Reserve policy.
In a reasonably quiet trading session, the S&P 500 hovered near 4,400.
3M Co. rallied as Bloomberg News reported a tentative agreement to pay over $5.5 billion to resolve lawsuits claiming it sold defective combat earplugs.
Nvidia Corp. led gains in mega-caps.
Auctions of two- and five-year Treasuries drew the highest yields since before the 2008 financial crisis.
August’s risk-off mood showed some signs of abating, but the US equity benchmark is still poised for its worst month of 2023 after a higher-for-longer rates narrative took hold.
Fed Chair Jerome Powell stuck to the script in his Jackson Hole speech Friday, saying officials are “prepared to raise rates further if appropriate,” while stressing the central bank would “proceed carefully” — guided by economic data.
Traders want to see economic figures that suggest activity is slowing enough to keep further rate hikes at bay, but not too slow to indicate the US is headed for a recession, according to Anthony Saglimbene, chief market strategist at Ameriprise.
Given that the earnings season is in the rearview mirror, and the next Fed gathering is weeks away, incoming data will likely take center stage for a while, he added.
“This week is important because it has the chance to either reinforce the ‘soft/no landing’ and ‘disinflation’ pillars of the rally, or potentially undermine them,” said Tom Essaye, founder of The Sevens Report newsletter. “The former will likely result in a reflex rally, while the latter could open up a sharp drop in stocks. We’ll be watching closely.”
Employment growth in the US probably cooled and wage increases moderated, suggesting a further tempering of inflation risks that reduces the urgency for another rate hike.
Other labor-market figures are seen showing fewer job openings than a month earlier, indicating supply and demand are coming into better balance.
Fed officials will also get a fresh read on  their preferred inflation gauge — the personal consumption expenditures price index minus food and energy.
There’s enough ambiguity about the recent strength of jobs, wage, and inflation data to keep the Fed on hold in September, according to Seema Shah, chief global strategist at Principal Asset Management.
By November, the economy should be showing clearer signs of softening, she added.
“Our expectation is that Fed policy rates have now peaked,” Shah noted. “Of course, the Fed will need to remain alert to inflation pressures — as long as economic growth is strong, a resurgence in inflation is a risk. As such, the first Fed rate cut will likely only come in late 2Q 2024.”
Chart watchers looking for clues about the stock market’s next direction have a few key levels to monitor.
Mark Newton at Fundstrat Global Advisors has his eyes on 4,440 for the S&P 500.
That level lies near a 38.2% Fibonacci retracement — and as such it marks a key hurdle for the index to clear in order to continue the rebound.
Meantime, the gauge’s companies are now evenly split, with half above and half below their 200-day moving-average lines.
That’s a departure from late July, when two-third of the members traded above those levels.
The equity market’s pullback in August was a healthy realignment as sentiment had previously been “overly optimistic” about Fed policy and corporate earnings, according to Rod von Lipsey, managing director at UBS Private Wealth Management.
“Our base case is that most of the stock market’s gains look to be in the books for the year,” he added. “Because of this, bonds are our preferred asset class, since slower economic growth and higher-for-longer rates should be favorable for bond yields, which are currently at very attractive levels.”
Western Asset Management also says bonds are set to outperform due to attractive yields, while JPMorgan Chase & Co. is keeping its bullish bets on fixed income despite Powell’s warning at Jackson Hole Friday.
Even fresh Fed hikes won’t deliver bond losses steep enough to outweigh the income from the highest yields since 2007, the bulls argue.
Treasuries will beat US stocks over the next month, according to 58% of respondents in the latest MLIV Pulse survey.
Yet history shows a different picture.
Looking back 20 years, equities did better than bonds 12 times during the month of September.
In addition to the current allure of Treasury yields, some traders see seasonality as another reason leading to consolidation in the equity market.
Since 1945, the S&P 500 posted the worst average return in September, according to Sam Stovall, chief investment strategist at CFRA.
With an only 44% frequency of gains, it was the only month to see the gauge decline more frequently than it rose, he noted.

Corporate Highlights:
* A gauge of US-listed Chinese stocks climbed as the Asian nation took steps to lure investors back to its market.
* American Airlines Group Inc. was ordered to pay a $4.1 million fine, the largest such penalty to date, for allowing aircraft to sit on the ground for three hours or more without giving passengers a chance to exit.
* PG&E Corp. said it will likely have to cut power in some parts of Northern California on Wednesday due to a forecast of high winds and dry conditions.
* Hawaiian Electric Industries Inc. soared after the utility pushed back against a lawsuit filed by Maui County that accused the company of starting the deadly Lahaina fire, suggesting that county’s fire department may be responsible for losing control of the blaze.
* Danaher Corp. said it will acquire Abcam Plc in a deal worth $5.7 billion, beating out rivals in a race to acquire the UK-based maker of supplies for the life-sciences industry whose technologies are used by thousands of researchers.
* CrowdStrike Holdings Inc. fell as Morgan Stanley downgraded the software company to equal-weight from overweight ahead of its results.
* Novocure Ltd. sank after the company said a late-stage trial of its ovarian cancer drug did not meet its primary endpoint of overall survival at the final analysis.
Key events this week:
* US Conference Board consumer confidence, Tuesday
* Eurozone economic confidence, consumer confidence, Wednesday
* US GDP, wholesale inventories, pending home sales, Wednesday
* China manufacturing PMI, non-manufacturing PMI, Thursday
* Japan industrial production, retail sales, Thursday
* Eurozone CPI, unemployment, Thursday
* ECB publishes account of July monetary policy meeting, Thursday
* US personal spending and income, initial jobless claims, Thursday
* China Caixin manufacturing PMI, Friday
* Eurozone S&P Global Eurozone Manufacturing PMI, Friday
* South African central bank governor Lesetja Kganyago, Atlanta Fed President Raphael Bostic, BOE’s Huw Pill, IMF’s Gita Gopinath on panel at the South African Reserve Bank conference, Friday
* Boston Fed President Susan Collins speaks at virtual event, Friday.
* US unemployment, nonfarm payrolls, light vehicle sales, ISM manufacturing, construction spending, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.6% as of 4 p.m. New York time
* The Nasdaq 100 rose 0.7%
* The Dow Jones Industrial Average rose 0.6%
* The MSCI World index rose 0.8%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro rose 0.2% to $1.0818
* The British pound rose 0.2% to $1.2604
* The Japanese yen was little changed at 146.51 per dollar
Cryptocurrencies
* Bitcoin fell 0.4% to $25,977.81
* Ether fell 0.5% to $1,645.73
Bonds
* The yield on 10-year Treasuries declined four basis points to 4.20%
* Germany’s 10-year yield was little changed at 2.56%
* Britain’s 10-year yield advanced two basis points to 4.44%
Commodities
* West Texas Intermediate crude rose 0.4% to $80.12 a barrel
* Gold futures rose 0.4% to $1,947.70 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Brett Miller, Tassia Sipahutar, Robert Brand, Isabelle Lee, Vildana Hajric and Elena Popina.
Have a lovely evening.

Be magnificent!
As ever,

Carolann
The way to fame goes through the palaces, the way to happiness goes through the markets,
the way to virtue goes though the deserts. –Chinese Proverb.

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