July 26th, 2024, Newsletter

Dear Friends,

Tangents: Happy Friday.  Opening ceremonies for the Olympics in Paris today.

July 26, 1971: Apollo 15 was launched on a manned mission to the moon.  Go to article >>
July 26, 1972: The Rolling Stones play Madison Square Gardens on Mick Jagger’s 29^th birthday and participate in a pie fight with the audience.

Mick Jagger, b. 1943.
Aldous Huxley, b. 1894.
George Bernard Shaw, b. 1894.
Carl Jung, b. 1875.

The world’s greatest places of 2024, according to TIME
Looking for destination ideas? TIME just released its list of the world’s 100 greatest places to visit in 2024.

A thrilling baseball moment
Dylan Cease, a 28-year-old pitcher for the San Diego Padres, threw the second no-hitter in franchise history on Thursday.

Site of 1893 shipwreck discovered in Lake Michigan
Maritime historians recently found the historic schooner Margaret A. Muir, which was lost in a terrible storm in 1893, just a few miles off a Wisconsin harbor town.

Mangrove Photography Award: Images show the world’s disappearing coastal forests
From powerful cyclones to dreamlike scenery, these award-winning photos show beauty and destruction in nature.

World’s loneliest tree species can’t reproduce without a mate. So AI is looking for one hidden in the forests of South Africa.
A single specimen of an ancient tree species was found in 1895. Now scientists are using AI to find it a mate. Read More.

What causes blushing? Science finally reveals the answer.
A new study harnessed Mariah Carey karaoke and brain scans to reveal the neuroscience behind blushing. Read More.

Strange compound used to treat cancer can extract rare-earth metals from old tech at 99% efficiency
Scientists harness a compound normally used in cancer treatment to reclaim rare-earth elements from electronic waste. Read more.

Antimatter detected on International Space Station could reveal new physics
Eight years ago, the ISS detected weird antimatter particles that challenge our entire understanding of physics. Now, researchers have proposed that mysterious cosmic “fireballs” could help explain the detection. Read More.

Boeing Starliner astronauts remain stuck on International Space Station with no set return date, NASA announces
After nearly two months of postponement, Butch Wilmore and Suni Williams are still on board the ISS. But NASA and Boeing say they still plan to return the two aboard Starliner. Read More.

Ultra-rare black hole found hiding in the center of the Milky Way
A potential intermediate-mass black hole is hiding right next to our galaxy’s supermassive black hole. Read More.

PHOTOS OF THE DAY

Paris, France
Artworks decorate the banks – and even the water – of the River Seine
Photograph: Vadim Ghirdă/AP

A humpback whale swims past an iceberg in Disko Bay near Ilulissat, Greenland. Earlier this year scientists released a study in which they concluded that the country’s glaciers, which all descend from the Greenland Ice Sheet, have retreated about 20% more than previously estimated. Of the 200 glaciers included in the study, only one has grown since 1985. Overall, the amount of glacial ice melting globally has increased markedly over the past 30 years
Photograph: Sean Gallup/Getty Images

Banc d’Arguin, Mauritania
A traditional sailing boat passes by a colony of birds in the Banc d’Arguin national park. Located in northern Mauritania, the Banc d’Arguin is a nature reserve established in 1976 to protect both the natural resources and the valuable fisheries, which makes a significant contribution to the national economy
Photograph: Michele Cattani/AFP/Getty Images
Market Closes for July 26^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1903, Vermont doctor Horatio Nelson Jackson completed the first crossing of the U.S. by automobile. The journey from San Francisco to Manhattan, with a mechanic and a dog, took 63 days
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 0.9% at 22,814.81 in Toronto.
The move was the biggest since rising 1.1% on July 16 and follows the previous session’s decrease of 0.1%.
Constellation Software Inc/Canada contributed the most to the index gain, increasing 2.7%.
Winpak Ltd. had the largest increase, rising 7.8%.
Today, 194 of 226 shares rose, while 27 fell; all sectors were higher, led by financials stocks.
Insights
* This month, the index rose 4.3%, heading for the biggest advance since November 2023
* So far this week, the index rose 0.5%
* The index advanced 11% in the past 52 weeks. The MSCI AC Americas Index gained 18% in the same period
* The S&P/TSX Composite is 0.8% below its 52-week high on July 16, 2024 and 22.1% above its low on Oct. 27, 2023
* S&P/TSX Composite is trading at a price-to-earnings ratio of 18.4 on a trailing basis and 15.6 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.59t
* 30-day price volatility rose to 10.35% compared with 10.18% in the previous session and the average of 11.09% over the past month
================================================================
|Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 69.6366| 1.0| 27/0
Industrials | 30.7619| 1.0| 22/5
Information Technology | 28.8856| 1.6| 10/0
Energy | 25.2797| 0.6| 32/8
Materials | 24.9545| 0.9| 43/7
Utilities | 7.6572| 0.9| 13/2
Communication Services | 6.8064| 1.0| 5/0
Consumer Discretionary | 5.4248| 0.7| 11/2
Real Estate | 4.2722| 0.9| 19/0
Consumer Staples | 1.7185| 0.2| 8/3
Health Care | 1.3948| 2.2| 4/0
================================================================
| | |Volume VS | YTD
| Index | | 20D AVG | Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
Constellation Software | 16.4000| 2.7| 27.5| 36.1
RBC | 15.9200| 1.1| 94.5| 14.3
Brookfield Corp | 13.3800| 2.1| -36.1| 23.0
Restaurant Brands | -1.6800| -0.8| -43.6| -9.2
Wheaton Precious Metals | -1.8050| -0.7| -14.5| 23.4
TFI International | -1.8660| -1.6| 104.2| 17.9
US
By Rita Nazareth
(Bloomberg) — The stock market got a boost at the end of a wild week after key economic data bolstered speculation the Federal Reserve will set up the stage for an interest-rate cut in September.
Every major group in the S&P 500 rose Friday on bets that a Fed easing cycle will keep fueling Corporate America — with the bull market broadening beyond a narrow group of companies.
While big tech has enjoyed massive gains this year, concern about the so-called concentration risk has come to the forefront after a disappointing start of the mega cap earnings season.
The rotation into economically sensitive shares has come on the heels of Fed-friendly data.
Investors who for months saw fewer alternatives to a tight group of market winners were suddenly faced with more choices.
Financial, industrial and staples shares have largely beaten tech in July.
Small caps have rallied 10% on bets they’d do better amid lower rates given their higher debt loads.
“We’ve seen this strength in small caps — a significant rotation not seen in decades,” said George Maris at Principal Asset Management. “As we see earnings likely broaden out and recover, you’re going to see greater enthusiasm for those smaller cap names. There is going to be lasting power to this rotation.”
Friday’s economic data only reinforced those bets. The Fed’s preferred measure of underlying US inflation — the so- called core personal consumption expenditures price index — rose at a tame pace in June and consumer spending remained healthy.
Separately, US consumer sentiment eased in July to an eight-month low.
“Certainly, the prospect for interest rate cuts has helped underpin the surge-like move into smaller names as they are more interest rate sensitive than the S&P 500,” said Quincy Krosby at LPL Financial. “Still, there has been a prevailing concern that
because small caps require a solid economic landscape, a weaker US economy could easily hinder investor interest.”
The S&P 500 rose 1.1%. The Dow Jones Industrial Average climbed 1.6%. The Nasdaq 100 added 1%.
The Russell 2000 of small caps climbed 1.7%.
Homebuilders hit a record high.
3M Co., the iconic maker of Post-it notes, soared the most since 1980 on a bullish outlook.
An initial public offering for billionaire Bill Ackman’s US closed-end fund was postponed.
Treasury 10-year yields dropped five basis points to 4.19%.
An equal-weighted version of the S&P 500 — where the likes of Nvidia Corp. carry the same heft as Dollar Tree Inc. — is beating the US equity benchmark for a third straight week.
This is a notable shift for the measure that’s trailed the US equity benchmark for months.
And it comes as optimism over eventual monetary easing is pushing investors away from the perceived safety of tech mega caps.
“A meaningful rotation from large-cap growth into SMID-cap value has been underway, and we think that will continue,” said Craig Johnson at Piper Sandler. “Our breadth indicators confirmed this seismic shift, along with the technical evidence that investors are reducing their concentration risk in the ‘Lag’ Seven and other large-cap leaders.”
The Fed is likely to signal next week its plans to cut interest rates in September, according to economists surveyed by Bloomberg News, a move they say will kick off reductions each quarter through 2025.
Nearly three-quarters of respondents say the US central bank will use the gathering to set the stage for a quarter-point cut at the following meeting in September.
“It seems the tide has finally turned,” said David Russell at TradeStation, in comments addressing the latest inflation data.
“Investors can now focus on the big earnings next week and worry less about prices and rates.”
“Next week’s earnings reports from a heavy package of mega-cap tech names, will be a crucial test for a market that is trying to find direction amid mixed economic data and underpinned by a historically negative seasonal pattern,” said Krosby at LPL Financial.
Indeed, traders will be on the lookout for a raft of earnings from big tech.
The stakes were already elevated for the group heading into this earnings season.
They just got a lot higher after a rout fueled by this week’s underwhelming results from a pair of mega caps.
Apple Inc., Microsoft Corp., Amazon.com Inc. and Meta Platforms Inc. are all due to report earnings next week.
“The ‘earnings issue’ will probably still be the more important one as we move into the month of August,” said Matt Maley at Miller Tabak + Co. “If this earnings season continues to weigh on the tech stocks, there is a good chance that it will cause investors to start to ‘rotate’ into cash  — instead of the small cap stocks.”
The rally in the biggest US technology stocks is at risk of fading further if the US economy continues to cool, according to Bank of America Corp.’s Michael Hartnett.
The strategist — who is bullish on bonds for the second half of 2024 — has said signs of an economic slowdown would fuel a rotation into stocks that have lagged behind the pricey tech mega caps this year.
Hartnett said recent data suggested the global economy was “ill,” and that “we are one bad payroll away” from big tech stocks losing their dominance.
Now here’s a piece of advice from Strategas: fear the cut, not the pause — for markets and earnings.
The market tends to perform much better during the period between the last hike in a Fed tightening cycle and the first cut in rates than it does after the first cut in the Fed Funds rate, according to Jason De Sena Trennert and Ryan Grabinski at Strategas.
On average, the market bottoms 213 days later and 23% lower after the first Fed cut in a series of rate cuts.
S&P 500 operating earnings decline by about 10% on average in the 12 months following the first easing, according to Strategas.

Corporate Highlights:
* Honeywell International Inc. is considering an initial public offering of its majority-owned quantum computing firm Quantinuum as soon as next year, according to people with knowledge of the matter.
* McDonald’s Corp.’s new $5 meal deal has led to a modest increase in US visits and brought back some low-income diners — the first signs that the burger chain’s strategy to appear more affordable is paying off.
* Apollo Global Management Inc. has agreed to buy International Game Technology Plc’s gaming division and the gambling machines company Everi Holdings Inc. in a $6.3 billion, all-cash deal that will see the two businesses merged.
* Apple Inc. lost ground in China’s smartphone market in the June quarter after local companies like Huawei Technologies Co. surged ahead.
* Dexcom Inc. plunged after the maker of blood sugar monitoring devices for diabetics unexpectedly slashed its 2024 sales guidance, catching Wall Street by surprise.

Some of the main moves in markets:
Stocks
* The S&P 500 rose 1.1% as of 4 p.m. New York time
* The Nasdaq 100 rose 1%
* The Dow Jones Industrial Average rose 1.6%
* The MSCI World Index rose 0.9%
* Bloomberg Magnificent 7 Total Return Index rose 0.9%
* The Russell 2000 Index rose 1.7%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro rose 0.1% to $1.0857
* The British pound rose 0.2% to $1.2873
* The Japanese yen rose 0.1% to 153.78 per dollar
Cryptocurrencies
* Bitcoin rose 4% to $67,913.38
* Ether rose 3.6% to $3,267.93
Bonds
* The yield on 10-year Treasuries declined five basis points to 4.19%
* Germany’s 10-year yield declined one basis point to 2.41%
* Britain’s 10-year yield declined three basis points to 4.10%
Commodities
* West Texas Intermediate crude fell 1.9% to $76.80 a barrel
* Spot gold rose 0.9% to $2,386.90 an ounce

This story was produced with the assistance of Bloomberg Automation.

Have a wonderful weekend everyone.

Be magnificent!
As ever,

Carolann
Champions aren’t made in gyms.  Champions are made from something they have deep inside them: a  desire, a dream, a vision.
They have to have last-minute stamina, they have to be a little faster, they have to have the skill and the will.  But the will must be stronger than the skill. -Muhammad Ali, 1942-2016.

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