June 4th, 2025, Newsletter

Dear Friends,

Tangents:
June 4, 1783: The Montgolfier brothers demonstrate the first hot air balloon, with a 10-minute flight that secures their place in aviation history.
June 4, 1942: Battle Of Midway
June 4, 1989: Tiananmen Square Massacre, China: On June 4, 1989, Chinese army troops stormed Tiananmen Square in Beijing to crush the pro-democracy movement; hundreds – possibly thousands – of people died. Go to article

Socrates, philosopher, b.470 BC.
Dr. Ruth Westheimer, b.1928.
Angelina Jolie, actress, b.1975.

Braided gold Viking arm-ring discovered by amateur metal detectorist on Isle of Man
Around 1,000 years ago, this Viking Age arm-ring from the Isle of Man was likely used not only to display its owner’s wealth but also to serve as currency in financial transactions. Read More.

NASA spacecraft finds solar ‘cannonballs’ may have stripped Mars of its water — proving decades-old theory
After nearly a decade in orbit, NASA’s MAVEN spacecraft has, for the first time, directly observed the process that scientists had long suspected was responsible for stripping Mars
of its atmosphere. Read More.

Weed may be bad for your heart, whether you smoke or consume edibles
Smoking cannabis and consuming THC edibles are both linked to impaired blood vessel dilation, possibly through separate mechanisms, a study finds. Read More.

Australian ‘trash parrots’ have now developed a local ‘drinking tradition’
Wild cockatoos in Western Sydney have learned to drink from water fountains — choosing to drink from them even if they have to queue. Read More.

Galactic impact update
For more than 100 years, a collision between the Milky Way galaxy and its largest neighbor, the Andromeda galaxy, was predicted to occur in about 4.5 billion years. New calculations tell a different story.

Copycat cookies?
Snack brand giant Mondelēz is suing Aldi, claiming the grocery chain’s store-brand cookies and crackers are packaged in a way that is “likely to deceive and confuse” customers.

4,000: That’s an estimate of how many fatal unintentional drownings happen every year in the US — an average of 11 drowning deaths per day, the CDC reports.  

PHOTOS OF THE DAY

Diamond Beach Emerald Sky by Brent Martin
With a clear night forecast and the Milky Way core returning for 2025, I set out to explore the Great Ocean Road. After a few setbacks – such as getting the car stuck on a sandy track – I almost gave up. However, I pushed on and found a great spot above the beach to capture the scene. The night was full of colour, with comet C/2024 G3 Atlas and a pink aurora in the early hours, followed by the Milky Way rising amid intense green airglow. Despite the challenges, the reward of this stunning image and the memory of the view made it all worthwhile
Photograph: Brent Martin/Milky Way photographer of the year

One in a Billion by Don Pettit
I float in the cupola, looking out the seven windows composing this faceted transparent jewel. While my mind is submerged in contemplation, my eyes gorge on the dim reflections from a night-time Earth. There are more than 8 billion people who call this planet home. There are seven of us who can say the same for the space station. What a privilege it is to be here. I used an orbital star tracker to take out the star streak motion from orbit
Photograph: Don Pettit/Milky Way photographer of the year

Somerset, UK
We visited the town of Wells on our holiday trip through the UK. We particularly liked Vicars Close, which is reportedly the oldest residential street in Europe.’
Photograph: Hans J Förster
Market Closes for June 4^th, 2025

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Never leave to chance what you can achieve through calculation. –Cardinal Richelieu, 1585-1642.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell 0.4% at 26,329.00 in Toronto.
The move was the biggest since falling 0.8% on May 21 and follows the previous session’s increase of 0.1%.
Shopify Inc. contributed the most to the index decline, decreasing 1.7%.
Algonquin Power & Utilities Corp. had the largest drop, falling 4.9%.
Today, 123 of 217 shares fell, while 92 rose; 10 of 11 sectors were lower, led by energy stocks.

Insights
* This quarter, the index rose 5.7%
* The index advanced 20% in the past 52 weeks. The MSCI AC Americas Index gained 14% in the same period
* The S&P/TSX Composite is 0.5% below its 52-week high on June 3, 2025 and 22.7% above its low on June 17, 2024
* The S&P/TSX Composite is little changed in the past 5 days and rose 5.2% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 18.8 on a trailing basis and 16.6 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.7% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$4.25t
* 30-day price volatility rose to 7.20% compared with 7.05% in the previous session and the average of 19.01% over the past month
Index Points
Energy | -50.7901| -1.2| 8/33
Financials | -23.6311| -0.3| 13/12
Information Technology | -16.4334| -0.7| 7/3
Utilities | -10.3196| -1.0| 3/11
Consumer Staples | -8.8562| -0.9| 3/7
Industrials | -7.5663| -0.2| 10/18
Consumer Discretionary | -0.9302| -0.1| 5/5
Communication Services | -0.7245| -0.1| 3/2
Real Estate | -0.3882| -0.1| 5/14
Health Care | -0.0885| -0.1| 3/1
Materials | 22.0811| 0.6| 32/17
(MT Newswires)
The Toronto Stock Exchange was down Wednesday after two record closes, as Rosenberg Research said the pace and magnitude of future gains on Canada’s largest stock market “may be slower and smaller” while Bank of Canada warned the economy is “expected to be considerably weaker” in the second quarter.
Not helped by mixed commodity prices, the S&P/TSX Composite Index was down 97.64 points to 26,329.0.
Among sectors, Energy and Utilities were down 1.78% and 1.00%, respectively.
Base Metals, up 1.13%, and Health Care, up 0.69%, are the biggest gainers.
Rosenberg Research revisited its earlier call of outperformance on the TSX and where the trade goes from here.
According to Market Strategist Marius Jongstra a “victory lap is in order” following a plus-12 percentage point outperformance of the TSX relative to the S&P 500 over the past year, and plus-5 ppts for the year to date.
“A trend we first noticed and began publishing about last year.”
Jonstra said while the research team is encouraged by these results, it is revisiting the outlook for this trade.
He added: “The good news is that the prior trend of relative strength has the conditions in place to continue — relative valuation support, better risk premia, looser liquidity conditions, and more attractive dividend yields are some examples.
The not so good news is that markets have awoken to this trend, meaning the pace and magnitude of future gains may be slower and smaller.”
In conclusion, Jongstra said while the team at Rosenberg Research still sees room for the up trend to continue, it added as more investors awaken to the extreme divergence that opened up between the two indices, pushing the TSX to new all-time highs, the pace of gains may slow down going forward.
Meanwhile, veteran economist David Rosenberg published separate research of his own on the big economic story of the day; Governor Tiff Macklem announcing the BoC decided to hold its key benchmark interest rate steady at 2.75%.
In a note entitled ‘Is Tiff Macklem a Deer in the Headlights?’ Rosenberg said “a dovish hold” by the BoC was no surprise, but added the central bank’s work is not done.
Rosenberg said the BoC had looked through the recent uptick in GDP growth to “the pull forward of exports to the United States and inventory accumulation boosted activity, with final domestic demand roughly flat.”
Looking ahead instead of back, Rosenberg noted the BoC added that, “The economy is expected to be considerably weaker in the second quarter, with the strength in exports and inventories reversing and final domestic demand remaining subdued.”
Rosenberg said a return to Fed easing by the end of the summer will only help make the BoC’s work easier, and there is no doubt in his mind that the next moves in rates will be lower.
“The only issue is the magnitude, and that should help act as a gravitational downward pull across the yield curve, notwithstanding some of the impediments that are already well-known and priced in,” he added.
Meanwhile, National Bank said its July cut call will be first put to the test on Friday, when the May Labour Force Survey will be released.
It expects net job losses and a higher unemployment rate to push markets toward pricing a July cut, after which the May CPI report will come into focus.
Further out the horizon, National Bank noted markets have consistently priced between 25 and 50 basis points of rate relief this year but it still sees a path to more forceful easing in the second half of 2025.
It highlights earlier comments from the Governor when he explained they are “prepared to act decisively if incoming information points clearly in one direction”.
To National Bank, the data is already starting to point in one direction; towards growing economic slack, and that trend is set to continue.
It expects the overnight target will end the year at 2%, which leaves Canadian bonds attractively priced, both outright and versus U.S. treasuries.
Elsewhere, David Doyle, head of economics at Macquarie, noted Macklem emphasized that the BoC was “proceeding carefully” and would remain less forward-looking than usual.
While he made clear it shouldn’t be viewed as forward guidance, Macklem did indicate that members are leaning towards a potential cut ahead, although this was couched in data dependence.
In Macquarie’s view, most critical to monitor ahead will be the CPI reports, the Labour Force Survey, and Q2 survey data, set for release on July 21.
Looking ahead, Macquarie continues to project three rate cuts of 25 bps ahead.
It suspects these may occur intermittently through year-end with the next cut likely in July.
Of commodities, gold rose mid-afternoon on Wednesday as the dollar fell after a report showed U.S. private-sector hiring plunged last month. Gold for August delivery was last seen up $21.90 to US$3,399.00 per ounce.
But West Texas Intermediate crude oil closed lower, falling for the first time in three sessions as an outsized rise in U.S. gasoline stocks offset lower supply from Canadian oil-sands projects threatened by wildfires.
WTI crude oil for July delivery closed down $0.56 to settle at US$62.85 per barrel, while August Brent crude was last seen down $0.84 to US$64.79.
US
By Rita Nazareth
(Bloomberg) — Treasuries rallied after weaker-than- expected economic data reinforced speculation that the Federal Reserve will cut interest rates at least twice this year to prevent an economic recession.
A contraction in US service providers and a deceleration in hiring drove bond yields down across the curve.
Swap traders are pricing in two Fed reductions in October and December.
The possibility of a move in September increased to over 90%.
The dollar slipped.
The S&P 500 was little changed, with defensive industries like health care and communications outperforming the market.
US activity fell slightly in recent weeks, indicating tariffs and elevated uncertainty are rippling across the economy, according to the Fed’s Beige Book.
The Institute for Supply Management’s index of services dropped a touch below the 50 level that separates expansion and contraction.
Private payrolls rose the least in two years.
“Markets are likely to view this through the lens of disappointment on the real growth side,” said Florian Ielpo at
Lombard Odier Investment Managers.
“While this represents good news for the US economy in terms of potential rate relief, the improvement already priced into equities and credit spreads could be challenged by this series of weaker numbers.”
The jobs report due Friday is expected to show that growth in nonfarm payrolls slowed and the unemployment rate remained steady.

Corporate Highlights:
* Dollar Tree Inc. warned investors that its second-quarter profit could be down as much as 50% from a year ago as it deals with tariff-related costs.
* Wells Fargo & Co. finally escaped a Federal Reserve asset cap that has restricted its size for more than seven years, unleashing the firm from the unprecedented punishment in a major win for Chief Executive Officer Charlie Scharf. The bank’s shares surged.
* CrowdStrike Holdings Inc. said US officials have asked for information related to the accounting of deals it’s made with some customers and said the cybersecurity firm is cooperating with the inquiry.
* Circle Internet Group Inc.’s initial public offering is likely to price above the marketed range, after fielding orders for more than 25 times the number of shares available in the upsized deal, according to people familiar with the matter.
Some of the main moves in markets:
Stocks
* The S&P 500 was little changed as of 4 p.m. New York time
* The Nasdaq 100 rose 0.3%
* The Dow Jones Industrial Average fell 0.2%
* The MSCI World Index rose 0.2%
* Bloomberg Magnificent 7 Total Return Index rose 0.3%
* The Russell 2000 Index fell 0.2%
Currencies
* The Bloomberg Dollar Spot Index fell 0.4%
* The euro rose 0.4% to $1.1412
* The British pound rose 0.2% to $1.3546
* The Japanese yen rose 0.8% to 142.89 per dollar
Cryptocurrencies
* Bitcoin fell 0.8% to $104,983.01
* Ether rose 0.3% to $2,624.64
Bonds
* The yield on 10-year Treasuries declined nine basis points to 4.36%
* Germany’s 10-year yield was little changed at 2.53%
* Britain’s 10-year yield declined three basis points to 4.61%
Commodities
* West Texas Intermediate crude fell 1% to $62.78 a barrel
* Spot gold rose 0.6% to $3,373.67 an ounce

Have a lovely evening.

Be magnificent!

As ever,

Carolann
Whenever God means to make you great, He always breaks you in pieces first. –Charles Spurgeon, 1834-1892.

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 (Text Only)
Toll Free: 1.877.430.5895
Fax: 778.430.5828
www.carolannsteinhoff.com