September 20, 2023 Newsletter

Dear Friends,

Tangents:

September 20, 1870: Italian troops occupy Rome, leading to the eventual incorporation of Rome into the Kingdom of Italy and the limiting of papal governing authority to the Vatican itself and a small district around it.

1873 Panic swept the New York Stock Exchange in the wake of railroad bond defaults and bank failures.  Go to article >>

Sophia Loren, actress, b. 1934.

Sister’s bang cutting skills go viral.  These four siblings tried to cover up a hilarious haircut mishap. Watch the mischievous moment.

New discoveries off Egyptian coast reveal ‘treasures and secrets’.  An underwater archaeological team has retrieved gold relics and jewelry around four miles off the present coast of Egypt.

Want to sleep better on a plane? Try this with your feet.  These tips for snoozing in the sky will help maximize your chances of getting decent rest on long-haul flights.

The best hotel in the world is a 24-room building in Italy’s Lake Como.
PHOTOS OF THE DAY

Wellington, New Zealand
A creation by the US designers Dawn Mostow and Snow Winters at the 2023 World of Wearable Art preview show.  Photograph: Hagen Hopkins/Getty Images for World of Wearable Art.

Chennai, India
Children play around an idol of the Hindu god Ganesha in the Bay of Bengal during the 10-day Ganesh Chaturthi festival.  Photograph: R Satish Babu/AFP/Getty Images.

London, UK
Christie’s staff hold up a concert programme signed by Louis Armstrong, part of the collection of the late Rolling Stone drummer Charlie Watts to be auctioned this month
Photograph: Guy Bell/Shutterstock.
Market Closes for September 20^th, 2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1873, the stock market crashed and the NYSE Board of Governors closed the exchange for the first time on record. A third of all money on loan from New York banks had gone into buying stocks on margin.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite declined slightly to 20,214.69 in Toronto.
Shopify Inc. contributed the most to the index decline, decreasing 2.1%. Nuvei Corp. had the largest drop, falling 4.6%.
Today, 98 of 227 shares fell, while 123 rose; 2 of 11 sectors were lower, led by energy stocks.
Insights
* This year, the index rose 4.3%, heading for the best year since 2021
* This quarter, the index rose 0.3%
* This month, the index fell 0.4%
* The index advanced 4.4% in the past 52 weeks. The MSCI AC Americas Index gained 13% in the same period
* The S&P/TSX Composite is 3% below its 52-week high on Feb. 2, 2023 and 13.1% above its low on Oct. 13, 2022
* The S&P/TSX Composite is down 0.3% in the past 5 days and rose 2% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 15.4 on a trailing basis and 14.5 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.3% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.21t
* 30-day price volatility fell to 12.39% compared with 12.43% in the previous session and the average of 11.59% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Energy | -26.0861| -0.7| 8/29
Information Technology | -15.9513| -1.1| 2/9
Consumer Discretionary | 0.2318| 0.0| 8/6
Real Estate | 0.7281| 0.1| 14/6
Consumer Staples | 1.7725| 0.2| 7/4
Health Care | 2.0589| 3.4| 4/0
Communication Services | 2.7269| 0.4| 4/1
Utilities | 4.4795| 0.5| 12/4
Industrials | 4.7282| 0.2| 11/15
Financials | 5.7134| 0.1| 19/9
Materials | 15.4034| 0.6| 34/15
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
Shopify | -13.9700| -2.1| -40.9| 63.2
Canadian Natural Resources | -10.2400| -1.6| -21.2| 12.5
Cenovus Energy | -4.9930| -1.9| -26.6| 3.3
RBC | 4.0050| 0.3| -63.3| -3.6
Wheaton Precious Metals | 4.0230| 2.2| -26.4| 13.7
Agnico Eagle Mines | 5.0890| 2.2| 17.2| -3.8
US
By Rita Nazareth
(Bloomberg) — Stocks fell and bond yields rose, with the Federal Reserve signaling interest rates will be higher for longer after deciding to stay on hold Wednesday.
Big tech led losses, with the Nasdaq 100 down 1.5%.
The S&P 500 dropped almost 1%.
Treasury two-year yields, which are more sensitive to imminent Fed moves, hit the highest since 2006.
Swap contracts priced in fewer rate cuts next year than previously anticipated.
The dollar erased losses.
Oil retreated, following a rally that sent Brent to $95 a barrel earlier this week.
The Fed held its target range for the federal funds rate at 5.25% to 5.5%, while updated quarterly projections showed 12 of 19 officials favored another rate hike in 2023. Policymakers also see less easing next year. Jerome Powell said officials are “prepared to raise rates further if appropriate, and we intend to hold policy at a restrictive level until we’re confident that inflation is moving down sustainably toward our objective.” 

Wall Street’s Reaction:
* Will Compernolle, macro strategist at FHN Financial:
“Overall, this was the ‘hawkish skip’ we were expecting.  Just because the 2023 median dot shows one more hike, that doesn’t necessarily represent the terminal rate. There could be more increases early next year.”
* Brian Henderson, chief investment officer at BOK Financial:
“There’s still some pressure on them to hike later this year. The longer the economy is able to remain this strong, even with these higher interest rates, it’s going to put in doubt whether the Fed is doing enough to bring inflation down. But that doesn’t necessarily mean the Fed has to keep hiking rates until inflation gets to 2%, either. Keeping rates at this level or slightly higher can bring inflation down to that point, but to ensure we’re on the right track, month-over-month readings have to keep trending downward.”
* David Russell, global head of market strategy at TradeStation:
“Today’s slightly hawkish Fed statement reflects the strength we’ve seen in the economy since their last meeting.  Policymakers have zero incentive to get dovish now,  especially with oil on the rise and the auto strike threatening to push up wages and potentially car prices.  This announcement keeps them data dependent, which could
be a positive if shelter costs continue to ease. Jerome Powell isn’t ready to back down yet, but markets might look past the rhetoric. Investors know he’s wary of declaring victory against inflation after his infamous transitory call two years ago.”  
* Seema Shah, chief global strategist at Principal Asset Management:
“In light of the still strong economic data, the hawkish pause and lingering threat of a November hike should not be a surprise to anyone. It’s the 2024 projections where all the fun resides. The new projections suggest that the Fed has a fairly strong degree of confidence in its outlook for a soft landing and, in turn, that there will be very minimal space for policy easing next year. The dot plot for next year has certainly rammed home the message of higher for longer and reflects the continued wariness and fear of an inflation resurgence if it takes the foot off the brake too soon and too quickly.”
* John Lynch, chief investment officer at Comerica Wealth Management:
“This is consistent with our “higher for longer” expectation.  To the degree the Fed holds rates steady, any improvement in core inflation measures leads to higher real rates, which serve to further constrain credit while eliminating the need for the Fed to raise rates during an election year.”
* Richard Carter, head of fixed interest research at Quilter Cheviot:
“With today’s pause, we are now in the waiting game with the Fed to see if their action to date is enough to achieve the coveted ‘soft landing’ in the US. Each and every data point released from now on will be scrutinized and pored over with a fine toothcomb to get any indication of if the Fed will raise rates again, or when in fact it is time to start cutting rates.”
* Alexandra Wilson-Elizondo at Goldman Sachs Asset Management:
“We, like many, expected to see the hawkish hold that Powell nodded to at Jackson Hole. However, the release was more hawkish than expected. While a share of past policy tightening is still in the pipeline the Fed can go into wait and see mode, hence the pause. We believe that their next meeting will be live, but not a done deal.”
* Charlie Ripley, senior investment strategist at Allianz Investment Management:
“While this meeting was widely viewed as a ‘skip’ meeting, we think it still remains to be seen if another hike is in the cards later this year. Fed officials appear to be divided on whether higher policy rates are needed to bring inflation back down to their 2% target. In addition, there are significant risks to the economy on the horizon with the autoworkers strike in motion and the potential for a government shutdown looming.  Thus, there is a decent case building that the last rate hike during this cycle may already be behind us. However, the Fed’s projections did show less rate cuts in 2024, which gives the Fed more optionality to keep policy rates higher for longer should the economy fail to materially slow.”

Corporate Highlights
* Marketing and data automation provider Klaviyo Inc. rose as much as 32% in its trading debut after exceeding the marketed range in its initial public offering to raise
$576 million.
* Pinterest Inc. climbed, with analysts positive on the social-networking company in the wake of its investor day event. 
* International Business Machines Corp. advanced after being rated outperform at RBC Capital Markets.
* Coty Inc. rose after raising its sales outlook for the current fiscal year, citing continued robust demand for higher-end fragrances.
* Instacart’s debut rally is fizzling out, just a day after it went public in one of this year’s biggest US listings.
* Chewy Inc. fell after the pet-supplies retailer was downgraded to market perform from outperform at Oppenheimer & Co.
Key events this week:
* Eurozone consumer confidence, Thursday
* Bank of England policy meeting, Thursday
* US leading index, initial jobless claims, existing home sales, Thursday
* China’s Bund Summit, Friday
* Japan CPI, PMIs, Friday
* Bank of Japan rate decision, Friday
* Eurozone S&P Global Eurozone PMIs, Friday
* US S&P Global Manufacturing PMI, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.9% as of 4 p.m. New York time
* The Nasdaq 100 fell 1.5%
* The Dow Jones Industrial Average fell 0.2%
* The MSCI World index fell 0.6%
Currencies
* The Bloomberg Dollar Spot Index rose 0.2%
* The euro fell 0.2% to $1.0659
* The British pound fell 0.4% to $1.2340
* The Japanese yen fell 0.2% to 148.19 per dollar
Cryptocurrencies
* Bitcoin fell 0.9% to $26,944.88
* Ether fell 1.6% to $1,616.55
Bonds
* The yield on 10-year Treasuries advanced one basis point to 4.37%
* Germany’s 10-year yield declined four basis points to 2.70%
* Britain’s 10-year yield declined 13 basis points to 4.21%
Commodities
* West Texas Intermediate crude fell 1% to $90.28 a barrel
* Gold futures were little changed
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Sophie Caronello.
Have a lovely evening.

Be magnificent!
As ever,

Carolann
A man has made at least a start on discovering the meaning of human life when he plants shade trees under which he knows full well
he will never sit. –D. Elton Trueblood, 1900-1994.

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