July 10, 2024, Newsletter

Dear Friends,

Tangents:
July 10, 1962: Testar, the world’s first communication satellite is launched in space.

On July 10, 1940, during World War II, the 114-day Battle of Britain began as Nazi forces began attacking southern England by air. By late October, Britain managed to repel the Luftwaffe, which suffered heavy losses. Go to article >>

July 10, 1985: Rainbow Warrior sunk. Greenpeace.
John Calvin, founder of Presbyterianism, b.1509.
James M. Whistler, painter, b.1834.
Marcel Proust, writer, b. 1871.
Arthur Ashe, tennis player, b.1943.

Roman emperor Caligula’s 2,000-year-old garden unearthed near the Vatican
The gardens overlooking the Tiber river in Italy once belonged to an infamous Roman emperor.  Read More.

4,500-year-old tomb in France reveals secrets of how ‘European genome’ came to be
Researchers used DNA analysis to learn more about ancient human interbreeding. Full Story: Live Science (7/10)

‘Eyeball’ planet spied by James Webb telescope might be habitable
Located 50 light-years from Earth, the beady-eyed exoplanet LHS 1140 b could be a perfect candidate for discovering liquid water outside the solar system, new research suggests. Read More.

World’s most difficult maze could help reveal the secrets of otherworldly quasicrystals
Scientists created a maze-like fractal inspired by the movements of chess pieces. The ultra-difficult maze could help to improve our understanding of bizarre quasicrystals. Read More.

Earliest known photograph of a US first lady acquired by Smithsonian’s National Portrait Gallery
This photograph of former first lady Dolley Madison, wife of fourth US President James Madison, dates from around 1846.

Copa América: Argentina celebrates semifinal win
Guided by Lionel Messi, Argentina defeated Canada 2-0 on Tuesday to advance to the finals. The team will face either Uruguay or Colombia in Sunday’s highly anticipated match

World’s biggest indoor snow and ice park opens in China
The world’s largest indoor ice and snow theme park has opened its doors to the public, giving visitors to the northeast Chinese city of Harbin a chance to feel wintry temperatures year-round.

Despite the decades between us, we were fortunate to spend those 10 minutes together, so I could experience this tradition passed down by our ancestors.  — CNN’s Kathleen Magramo, describing her experience getting inked by 107-year-old Apo Whang-Od Oggay, the world’s oldest tattoo artist. Residing in the Philippines’ Kalinga province, Whang-Od is internationally renowned for hand-tapping tattoos used by the region’s indigenous tribes.

PHOTOS OF THE DAY

Tokyo, Japan
An immersive digital artwork is displayed at the TeamLab Planets Tokyo Museum
Photograph: Yoshio Tsunoda/Aflo/Rex/Shutterstock

Shaoxing, China
Woven Passage to Cloudy Peaks by line+ studio.
Photograph: line+studio/World Architecture Festival

Munich, Germany
A golden sky over Allianz Arena during the Uefa Euro 2024 semi-final match between Spain and France
Photograph: Christian Liewig/Corbis/Getty Images
Market Closes for July 10^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1991, Boris Yeltsin became Russia’s first freely elected president. He oversaw the country’s tumultuous embrace of capitalism in the 1990s, before Vladimir Putin succeeded him on the eve of the millennium. Yeltsin died in Moscow in 2007.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 1.4% at 22,350.23 in Toronto.
The move was the biggest gain since May 6 and follows the previous session’s decrease of 0.4%.
Today, energy stocks led the market higher, as 10 of 11 sectors gained; 175 of 226 shares rose, while 43 fell.
Canadian Pacific Kansas City Ltd. contributed the most to the index gain, increasing 3.4%.
Cameco Corp. had the largest increase, rising 9.4%.
Insights
* In the past year, the index had a similar or greater gain seven times. The next day, it advanced after all seven occasions
* The index advanced 13% in the past 52 weeks. The MSCI AC Americas Index gained 27% in the same period
* The S&P/TSX Composite is 0.9% below its 52-week high on May 21, 2024 and 19.6% above its low on Oct. 27, 2023
* The S&P/TSX Composite is up 0.6% in the past 5 days and rose 1.3% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 18 on a trailing basis and 15.2 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.1% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.5t
* 30-day price volatility fell to 11.23% compared with 11.62% in the previous session and the average of 11.00% over the past month
================================================================
|Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Energy | 70.4191| 1.8| 31/8
Materials | 65.5276| 2.4| 44/7
Financials | 65.2973| 1.0| 24/3
Industrials | 59.2629| 1.9| 21/6
Consumer Staples | 14.0738| 1.5| 9/1
Utilities | 13.6205| 1.6| 13/2
Consumer Discretionary | 9.1717| 1.2| 9/3
Information Technology | 7.4333| 0.4| 7/3
Real Estate | 3.1598| 0.7| 13/5
Health Care | 0.5807| 0.9| 2/2
Communication Services | -0.8376| -0.1| 2/3
================================================================
| | |Volume VS |
| Index | | 20D AVG |YTD Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
Canadian Pacific Kansas | 23.7300| 3.4| -14.4| 5.5
Cameco | 19.0700| 9.4| 130.5| 28.0
Canadian National | 15.7300| 2.5| 29.9| -3.0
Nutrien | -1.6940| -0.7| 10.3| -11.9
Telus | -2.2700| -1.1| -16.3| -11.7
Shopify | -6.5920| -0.9| -18.6| -13.4
US
By Rita Nazareth
(Bloomberg) — A rally in the world’s largest technology companies sent stocks to all-time highs, with Jerome Powell’s remarks to Congress not doing much to dissuade traders from betting on Federal Reserve rate cuts this year.
For the first time in its history, the S&P 500 topped 5,600.
A renewed bid for mega-caps drove the US equity benchmark to its longest rally since November, with Nvidia Corp. up over 2.5% and Apple Inc. climbing on news it aims to ship 10% more new iPhones after a bumpy 2023.
Treasuries remained fairly stable after a strong $39 billion sale of 10-year bonds.
Swaps are pricing in two Fed cuts in 2024 — and higher chances the first comes in September.
As Wall Street geared up for the consumer-price index, Powell said the Fed doesn’t need inflation below 2% before cutting rates, while adding officials still have more work to do. He noted the labor market has cooled “pretty significantly.”
Powell cited a “good ways to go” on the balance-sheet runoff, and said commercial real estate doesn’t threaten financial stability.
“The key takeaway from his testimony is the Fed’s assessment of the balance of risks is shifting in ways that – if supported and sustained by incoming data – will deliver a rate cut in September,” said Krishna Guha at Evercore.
The S&P 500 climbed 1% — up for a seventh straight day — to notch its 37th record this year.
Gold and silver mining stocks rallied on Fed easing bets.
Banks underperformed.
Google parent Alphabet Inc. has shelved efforts to acquire HubSpot Inc., according to people with knowledge of the matter.
US 10-year yields fell two basis points to 4.28%.
Bank of England Chief Economist Huw Pill said the timing of a rate cut is still an “open question,” prompting traders to pare bets on August cut.
Oil rose as a US holiday boosted demand for gasoline and jet fuel.
“Markets remain remarkably calm despite the flood of data this week, including Fed Chair Powell’s testimony, CPI/PPI reports, and the beginning of earnings season,” said Mark Hackett at Nationwide.
The so-called core CPI, which excludes food and energy costs and is seen as a better measure of underlying inflation, is expected to rise 0.2% in June for a second month.
That would mark the smallest back-to-back gains since August — a pace more palatable for Fed officials.
“June’s CPI report looks to be another ‘very good’ report that should boost the FOMC’s confidence about the inflation trajectory,” said Anna Wong at Bloomberg Economics. “That should set the stage for the Fed to start cutting rates in September.”
A survey conducted by 22V Research shows 55% of investors expect the market reaction Thursday’s CPI to be “risk-on,” 16% said “risk-off” and 29% “mixed/negligible.”
“There is optimism about inflation generally,” said Dennis DeBusschere at 22V, adding that the survey also showed investors think “CPI is on a Fed-friendly glide path.”
Meantime, some trading desks say investors should gear up for a potential break in the eerie calm that’s recently descended on the market.
The options market is betting the S&P 500 Index will move 0.8% in either direction after Thursday’s report on consumer prices, based on the price of that day’s at-the-money straddles, according to Stuart Kaiser, Citigroup’s head of US equity trading strategy.
If it happens, that would be the biggest move for the index since June 12, the day of the last CPI print and interest-rate decision.
Market volatility may pick up in the days and weeks ahead, amid US political uncertainty, comments from the Fed chair, and the start of the second-quarter earnings season, according to Mark Haefele at UBS Global Wealth Management.
For the first time since 2022, S&P 500 earnings may not be laser-focused on just technology, with the quarter’s success hanging on everything aside from the mega-cap tech heavyweights that have driven stocks to all-time highs, according to Bloomberg Intelligence strategists led by Gina Martin Adams.
“While forecasts for the ‘Magnificent Seven’ remain robust, their earnings are expected to slow in the second quarter — just as the rest of the S&P 500 may finally post their first year-on-year growth in at least five quarters,” they noted.
The Magnificent Seven may have already peaked, while the remaining S&P 500 stocks may post their first earnings expansion in at least six quarters, the strategists concluded.

Corporate Highlights:
* Microsoft Corp. has avoided the threat of a lengthy European Union antitrust probe into its cloud business after it brokered a deal with an Amazon.com Inc.-backed trade lobby that had complained about its software license agreements.
* Intuit Inc. is cutting 1,800 employees, swapping out low performers and executives with fresh hires meant to sharpen the company’s focus on products that use artificial intelligence.
* Advanced Micro Devices Inc. agreed to buy Silo AI for $665 million in cash, adding a maker of artificial intelligence models that will help its push to close the gap on Nvidia Corp.
* Archer-Daniels-Midland Co. — working to put an accounting scandal behind it — hired a 3M Co. executive to oversee its finances and help restore its credibility with shareholders.
* The US Federal Trade Commission is preparing a lawsuit against the three largest drug middlemen over their use of rebates for insulin and other drugs, according to a person familiar with the probe.
* Honeywell International Inc. agreed to buy Air Products and Chemicals Inc.’s liquefied natural gas process technology and equipment business for $1.81 billion in cash.

Key events this week:
* US CPI, initial jobless claims, Thursday
* Fed’s Raphael Bostic and Alberto Musalem speak, Thursday
* China trade, Friday
* University of Michigan consumer sentiment, US PPI, Friday
* Citigroup, JPMorgan and Wells Fargo’s earnings, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 1% as of 4 p.m. New York time
* The Nasdaq 100 rose 1.1%
* The Dow Jones Industrial Average rose 1.1%
* The MSCI World Index rose 1%
Currencies
* The Bloomberg Dollar Spot Index fell 0.1%
* The euro rose 0.1% to $1.0829
* The British pound rose 0.5% to $1.2846
* The Japanese yen fell 0.3% to 161.74 per dollar
Cryptocurrencies
* Bitcoin fell 0.9% to $57,424.76
* Ether rose 1.2% to $3,108.05
Bonds
* The yield on 10-year Treasuries declined two basis points to 4.28%
* Germany’s 10-year yield declined five basis points to 2.53%
* Britain’s 10-year yield declined three basis points to 4.13%
Commodities
* West Texas Intermediate crude rose 1.2% to $82.40 a barrel
* Spot gold rose 0.3% to $2,372.14 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Cecile Gutscher, Richard Henderson, Joel Leon and Jessica Menton.
Have a lovely evening.

Be magnificent!
As ever,

Carolann
It ain’t about how hard you hit. It’s about how hard you can get hit and keep moving forward. -Sylvester Stallone (as Rocky Balboa), b. 1946.

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