September 3, 2024 Newsletter

Dear Friends,

Tangents: Happy new month of September!

September 3, 1783: Treaty of Paris, ended the American Revolution.
September 3, 1971: Qatar gains independence after 55 years of British rule.
On Sept. 3, 1976, the unmanned U.S. spacecraft Viking 2 landed on Mars to take the first close-up, color photographs of the planet’s surface.   Go to article >>

Charlie Sheen, b. 1965

New Titanic photos reveal intact statue:  Much of the art that decorated the halls and rooms of the Titanic decomposed in the decades since the ship’s demise in 1912. However, this bronze statue of the goddess Diana remains beautifully intact.

It really is necessary to wash fruits and vegetables before eating them
A few unwashed strawberries can’t do much harm, right? Well, many health experts would argue otherwise. Each year, 1 in 10 people get sick by eating unsafe food — and about 46% of these cases of foodborne illness come from eating vegetables and fruit.

Can humans grow new islands in the world’s lowest-lying country?
The Maldives is eroding. See how an MIT lab is harnessing the ocean’s natural forces to protect beaches — and maybe one day to grow islands.

Earthquakes can trigger quartz into forming giant gold nuggets, study finds
Geologists have known for decades that gold forms in quartz with the help of earthquakes, but now they have worked out exactly how the setting and seismic waves combine to form large nuggets. Read More.

Early galaxies weren’t mystifyingly massive after all, James Webb Space Telescope finds
‘The bottom line is, there is no crisis in terms of the standard model of cosmology.’ Read More.

World’s biggest battery coming to Maine — and it could store 130 million times more energy than your laptop
The battery storage system will be able to store 8,500 megawatt-hours of energy — which is 130 million times the capacity of the best laptops today. Read More.

PHOTOS OF THE DAY

Spectrum – Vestrahorn, Iceland
“The full spectrum of the northern lights over the iconic Vestrahorn location in Iceland. What a dreamlike experience! A G3 strong geomagnetic storm hit the earth on 31 October and produced these wonderful colours”
Photograph: Stefan Liebermann

New York, US
A reveller marches during the West Indian Day parade in Brooklyn
Photograph: Andrés Kudacki/AP

​​​​​​​Balcombe, UK
‘Ouse Valley viaduct. Taken while on my way to wild camp near Chichester with my buddy, who is in the photograph.’
Photograph: Simon Arthrell
Market Closes for September 3^rd, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1929: The Dow Jones Industrial Average hit a high of 381.17, up 27% for the year, a peak that wasn’t reached again for 25 years. Markets cratered the next month in the Great Crash
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell 1.3% at 23,042.45 in Toronto.
The move was the biggest since falling 2.2% on Aug.
2 and follows the previous session’s increase of 0.5%.
Today, materials stocks led the market lower, as 9 of 11 sectors lost; 171 of 226 shares fell, while 52 rose.
Brookfield Corp. contributed the most to the index decline, decreasing 4.2%.
First Quantum Minerals Ltd. had the largest drop, falling 13.8%.
Insights
* In the past year, the index had a similar or greater loss eight times. The next day, it declined five times for an average 0.8% and advanced three times for an average 0.8%
* This year, the index rose 9.9%, heading for the best year since 2021
* This quarter, the index rose 5.3%
* The index advanced 12% in the past 52 weeks. The MSCI AC Americas Index gained 22% in the same period
* The S&P/TSX Composite is 1.6% below its 52-week high on Aug. 26, 2024 and 23.3% above its low on Oct. 27, 2023
* The S&P/TSX Composite is down 1.3% in the past 5 days and rose 3.7% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 18.5 on a trailing basis and 15.8 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.9% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.71t
* 30-day price volatility rose to 14.33% compared with 13.89% in the previous session and the average of 14.32% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Materials | -117.2358| -4.1| 1/51
Energy | -78.2093| -1.9| 3/38
Information Technology| -52.1179| -2.7| 3/7
Financials | -31.3315| -0.4| 11/16
Consumer Discretionary| -14.5075| -1.8| 1/11
Consumer Staples | -9.5515| -1.0| 6/4
Industrials | -5.8419| -0.2| 6/22
Utilities | -3.0458| -0.3| 5/10
Real Estate | -0.8411| -0.2| 11/8
Health Care | 0.3095| 0.5| 2/2
Communication Services| 8.6418| 1.2| 3/2
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
Brookfield Corp | -28.6500| -4.2| 14.0| 22.2
Shopify | -27.3000| -3.2| -25.2| -6.4
Canadian Natural Resources | -24.7200| -3.4| 29.4| 8.6
Bank of Nova Scotia| 4.5540| 0.8| 3.9| 5.1
Canadian Pacific Kansas | 7.2350| 1.0| 49.7| 7.8
RBC | 7.6120| 0.5| -26.1| 22.2
US
By Rob Verdonck
(Bloomberg) — Stocks in Asia were poised for losses after US benchmarks posted their worst day since the Aug. 5 market meltdown, as concerns about growth and monetary policy combined to torch risky assets.
Equity futures were down across Australia, Hong Kong and Japan, pointing to losses of 3% in the Tokyo bourse.
US contracts edged lower in early trading after the S&P 500 fell more than 2%, with Nvidia Corp. driving a plunge in tech stocks.
Meanwhile, the yen jumped, a closely watched manufacturing gauge again missed forecasts, and oil sank on concern about tepid global demand.
Wall Street’s “fear gauge” – the VIX – soared.
Treasury yields tumbled, with traders keeping their bets on an unusually large half-point Federal Reserve rate cut this year.
A dollar gauge rose for a fifth session, its longest winning streak since April.
The S&P 500 and the Nasdaq 100 saw their worst starts to a September since 2015 and 2002, respectively.
With inflation expectations anchored, attention has shifted to the health of the economy as signs of weakness could speed up policy easing.
While rate cuts tend to bode well for equities, that’s not usually the case when the Fed is rushing to prevent a recession.
Traders are anticipating the Fed will reduce rates by more than two full percentage points over the next 12 months — the steepest drop outside of a downturn since the 1980s.
The trepidation after the latest rise in unemployment will leave traders “on edge” until Friday’s payrolls data, said Ian Lyngen and Vail Hartman at BMO Capital Markets.
“This week’s jobs report, while not the sole determinant, will likely be a key factor in the Fed’s decision between a 25 or 50 basis-point cut,” said Jason Pride and Michael Reynolds at Glenmede. “Even modest signals in this week’s jobs report could be a key decision point as to whether the Fed takes a more cautious or aggressive approach.”
The S&P 500 dropped to around 5,530 while the Nasdaq 100 lost over 3% as Nvidia tumbled 9.5% — erasing $279 billion in a record one-day wipeout for a US stock.
The US Justice Department sent subpoenas to Nvidia and other companies as it seeks evidence that the chipmaker violated antitrust laws.
US 10-year yields fell seven basis points to 3.83%.
A record number of blue-chip firms tapped the corporate-bond market, taking advantage of cheaper borrowing.
The yen climbed as Bank of Japan’s Kazuo Ueda reiterated the central bank will continue to raise rates if the economy and prices perform as expected.
Marking the start of a busy week for economic data, a report showed US manufacturing activity shrank in August for a fifth month.
The Morgan Stanley strategist who foresaw last month’s market correction says firms that have lagged the rally in US stocks could get a boost if Friday’s jobs data provide evidence of a resilient economy.
A stronger-than-expected payrolls number would likely give investors “greater confidence that growth risks have subsided,” Michael Wilson wrote.
The August jobs report is expected to show payrolls in the world’s largest economy increased by about 165,000, based on the median estimate in a Bloomberg survey of economists.
While above the modest 114,000 gain in July, average payrolls growth over the most recent three months would ease to a little more than 150,000 — the smallest since the start of 2021.
The jobless rate probably edged down in August, to 4.2% from 4.3%.
While the Fed is finally coming around to cutting rates, it does not feel like stringing out a bunch of 25 basis-point rate cuts will do the job, said Neil Dutta at Renaissance Macro Research.
Under that scenario, it will take a long time to return the funds rate to neutral and in the process, you’ll keep policy restrictive, keeping open downside risks to growth.
“That muddling through scenario will probably risk further increases in the unemployment rate,” he said. “So, if they aren’t going 50 in September, they are going to need to go 50 at some point later this year.”

Corporate Highlights:
* Boeing Co. slumped as Wells Fargo & Co. lowered the planemaker to a sell-equivalent recommendation, saying it’s hard to see any upside in the shares.
* Vice President Kamala Harris joined President Joe Biden in declaring that United States Steel Corp. should remain domestically owned and operated, the latest headwind to the proposed sale of the company to Japan-based Nippon Steel Corp.
* Deutsche Bank AG cut the recommendation on JPMorgan Chase & Co. to hold from buy, while upgrading Bank of America Corp. and Wells Fargo & Co. on changing preferences within the banks sector.
* The German government plans to cut its stake in Commerzbank AG as it seizes on a recent share rally to initiate an exit from the lender it rescued over a decade ago.
* Illumina Inc.’s blocked $7 billion takeover of cancer- detection provider Grail Inc. should never have been probed by the European Union, according to a top court ruling that undermines the EU’s attempt to vet more global deals.
* Cathay Pacific Airways Ltd.’s inspection of its Airbus SE A350 fleet is focused on deformed or degraded fuel lines in the engines of the widebody aircraft, after the discovery of the issue caused multiple flight cancellations as engineers switch out parts.

Key events this week:
* China Caixin services PMI, Wednesday
* Eurozone HCOB services PMI, PPI, Wednesday
* Canada rate decision, Wednesday
* US job openings, factory orders, Beige Book, Wednesday
* Eurozone retail sales, Thursday
* US initial jobless claims, ADP employment, ISM services index, Thursday
* Eurozone GDP, Friday
* US nonfarm payrolls, Friday
* Fed’s John Williams speaks, Friday

Some of the main moves in markets:
Stocks
* S&P 500 futures fell 0.1% as at 7:29 a.m. in Tokyo; the S&P 500 fell 2.1%
* Nasdaq 100 futures fell 0.1%; the Nasdaq 100 fell 3.1%
* Nikkei 225 futures fell 3%
* Hang Seng futures fell 0.6%
* S&P/ASX 200 futures fell 1.2%
Currencies
* The Bloomberg Dollar Spot Index fell 0.1%
* The euro was little changed at $1.1042
* The Japanese yen was little changed at 145.54 per dollar
Cryptocurrencies
* Bitcoin fell 0.3% to $58,028.73
* Ether was little changed at $2,464.58
Bonds
* The yield on 10-year Treasuries declined seven basis points to 3.83%
Commodities
* West Texas Intermediate crude was little changed
* Spot gold was little changed

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Rita Nazareth.

Have a lovely evening.

Be magnificent!
As ever,

Carolann
A river cuts through rock, not because of its power, but because of its persistence. –James N. Watkins, b. 1952.

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