June 06th, 2025, Newsletter

Dear Friends,

Tangents: Happy Friday!
Carolann is away from the office for attending the 2025 Bloomberg Tech Conference in San Francisco. I will be writing the newsletter on her behalf.

June 6, 1848 :  New York Yacht Club holds its first annual regatta; won by the schooner Carnelia
June 6, 1933 : US Employment Service created
June 6, 1944 : The D-Day invasion of Europe took place during World War II as Allied forces stormed the beaches of Normandy, France. Go to article
June 6, 1977 : The “Washington Post” reports the US has developed a neutron bomb

3 ancient Maya cities discovered in Guatemala, 1 with an ‘astronomical complex’ likely used for predicting solstices
Archaeologists have discovered the remains of three Maya cities in the Petén jungle of Guatemala.

Two stunning conjunctions will light up the night sky this month. Here’s how to see Mars and Mercury ‘kiss’ the moon
This month will usher in two separate conjunctions — one between the moon and a rarely-visible Mercury, and another between the moon and Mars.

Hidden layer beneath Italy’s Campi Flegrei caldera may explain why it’s so restless
According to new research, the active volcano that sits west of Naples has a “tuff” layer about two miles beneath the surface that traps volcanic gases deep below the caldera’s floor.

Tomorrow is National Chocolate Ice Cream Day, and all you need is chocolate ice cream. 🍫🍦

PHOTOS OF THE DAY

Roe by roe … two deer wander through a poppy field near Cholderton in the Bourne Valley of Wiltshire, UK.
Photograph: Nick Bull/pictureexclusive.com

A Przewalski’s horse runs free in a reserve in Kabak, Kazakhstan, having been transported from Hungary as part of a five-year plan to restore the endangered species to its historic habitat. The animals are the last remaining truly wild horses on the planet
Photograph: Attila Kovács/EPA

A deer peers out from Catherine Chevalier woods, in Chicago, Illinois, US. The forest enclave supports a variety of wildlife despite its position right next to O’Hare International, one of the world’s busiest airports
Photograph: Anadolu/Getty Images
Market Closes for June 6^th, 2025

International Markets

Bonds

Currencies

Commodities

Market Commentary:
“An investment in knowledge pays the best interest.” — Benjamin Franklin
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the second day, climbing 0.3%, or 86.84 to 26,429.13 in Toronto.
Shopify Inc. contributed the most to the index gain, increasing 6.3%.
Algoma Steel Group Inc. had the largest increase, rising 10.8%.
Today, 122 of 217 shares rose, while 93 fell; 6 of 11 sectors were higher, led by information technology stocks.

Insights
* This quarter, the index rose 6.1%
* So far this week, the index rose 1%
* The index advanced 19% in the past 52 weeks. The MSCI AC Americas Index gained 13% in the same period
* The S&P/TSX Composite is at its 52-week high and 23.1% above its low on June 17, 2024
* S&P/TSX Composite is trading at a price-to-earnings ratio of 18.9 on a trailing basis and 16.7 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$4.24t
* 30-day price volatility fell to 6.75% compared with 6.80% in the previous session and the average of 17.46% over the past month

Index Points
Information Technology | 81.4931| 3.3| 7/3
Financials | 51.3567| 0.6| 18/6
Energy | 21.1366| 0.5| 33/7
Industrials | 8.1388| 0.2| 22/6
Real Estate | 1.9103| 0.4| 13/6
Health Care | 0.0962| 0.2| 2/2
Consumer Discretionary | -0.5667| -0.1| 5/5
Communication Services | -1.4246| -0.2| 0/5
Utilities | -3.3991| -0.3| 6/9
Consumer Staples | -7.8468| -0.8| 1/9
Materials | -64.0495| -1.7| 15/35
(MT Newswires)
The Toronto Stock Exchange closed higher on Friday and eked out the third record close of the week as market watchers differed in their readings of Canada’s May job numbers released today and year to date, and how they might influence the Bank of Canada’s rate policy.
The S&P/TSX Composite Index ended the session up 86.84 points to 26,429.13, single digits ahead of the prior record close of 26,426,64 hit on June 3.
Most sectors were higher, with the Battery Metals Index, up 2.5%, Info Tech, up 1.9% and Energy, up 1.4%, leading the way.
Telecoms and Utilities were both down less than 0.5%.
On Canada’s labor force survey, Robert Embree, Senior Economist and geopolitical risk analyst at Rosenberg Research, noted it beat expectations in May.
But, he said, when you add up the five months so far this year, “the overall picture is not good”.
Canada’s May employment data showed a rise of 8,800 jobs, beating the consensus estimate for a drop of 10,000 positions.
But given the “massive volatility, month to month”, Embree would advise people not to focus too much on the consensus beat and look, instead, at the trendline.
Embree noted the unemployment rate rose to 7.0%, matching the consensus estimate.
That’s now the highest since September 2021, around 1.3 percentage points above a “neutral” rate of unemployment, and is a “sign of massive and still growing slack in the labor market”.
Embree said all of this means that in 2025 so far, total employment is up just 60,700 positions, the slowest five-month pace since May 2021.
The two-year run-up in the unemployment rate is now 1.8 percentage points, the same as April and up from 1.7 ppts in March, and is “a clear recession indicator”, he added.
Douglas Porter, Chief Economist at BMO Capital Markets, in his regular ‘Talking Points’ column said Canada’s jobs data also “flashed signs of trade stress”, with manufacturing payrolls declining another 12,000 in May.
That’s the fourth consecutive drop, bringing cumulative losses to 55,000 or almost 3% of all factory jobs.
Porter noted transportation and warehousing also sustained job losses as U.S. tariffs bite, while other sectors managed to partially offset trade related damage, and employment outside of election related workers rose about 40,000 in May.
However, Porter said, the “steady and sustained” rise in the unemployment rate to 7.0% last month is probably the clearest indication that the economy isn’t keeping up with “still solid” population growth.
He noted the 2.8 percentage point gap between Canada’s jobless rate and the U.S. rate is the widest since early 2001, aside from the wild distortion in March 2020.
“The conclusion,” Porter said, “is that while the Bank of Canada stayed on the sidelines again this week, we believe that as long as the trade uncertainty persists, it’s only a matter of time before it is cutting again.
Labour market slack is building, trade and manufacturing are now facing reality after a pre-tariff burst, and housing activity remained subdued in the major Canadian cities in all-important May.
The Bank wants more time to ensure that inflation remains “contained” before resuming rate cuts, and we suspect that evidence will emerge before too long.
While this week’s seeming thaw in some bilateral relations is mildly encouraging, the reality on the ground is a still-raging trade war, highlighted by the U.S. doubling of steel and aluminum tariffs to 50%. Talk is cheap, but a trade fight is very costly.”
But elsewhere Derek Holt, Head of Capital Markets Economics at Scotiabank, said unlike the “distorted” readings over January to April that were “artificially depressed by cooked seasonal adjustment factors”, that “wasn’t the case this time”.
Holt cited a chart he said shows the seasonally adjusted factor “wasn’t a deep outlier this time, as May typically is not”.
He added: “Alternative scenarios for job growth at other SA factors would have still mostly generated decent job growth.”
Holt noted the unemployment rate ticked up to 7% because the labour force expanded by 35,000 last month and that exceeded aggregate job growth.
He also noted the rise in the unemployment rate since 2022 has been mostly focused upon excessive numbers of temps.
“I think the Bank of Canada will fade these numbers. Not because they’re bad; they’re actually quite good.
But because their reaction function has signaled a stronger focus upon the next two CPI reports notwithstanding how contradictory its guidance is right now.”
Of commodities, West Texas Intermediate crude oil closed higher on Friday, on some economic optimism after the United States added more jobs than expected last month, while the Trump Administration will stage trade talks with China next week.
WTI oil for July delivery closed up $1.21 to settle at US$64.58 per barrel, while August Brent crude was last seen $0.99 to US$66.33.
US
By Rita Nazareth and Andre Janse van Vuuren
(Bloomberg) — Stocks closed at their highest since February andbond yields rose asjobs data allayed concerns of an imminent economic slowdown.
Equities also gained amid hopes US- China trade tensions are easing, with President Donald Trump saying negotiators will talk Monday.
A 1% advance in the S&P 500 drove the gauge to the 6,000 mark.
All major industries climbed.
Tesla Inc. jumped over 3.5% to lead megacaps higher.
Treasuries dropped across the curve, with two-year yields topping 4%.
Money markets trimmed bets that the Federal Reserve will cut interest rates this year.
The dollar rose.
Bitcoin also got a boost.
While US job growth moderated in May and the prior months were revised lower, Friday’s report narrowly exceeded forecasts, bolstering bulls who were primed for disappointment after data this week raised doubts about the buoyancy of American hiring.
“While it may not be firing on all cylinders, it’s far from showing signs of a major breakdown,” said Bret Kenwell at eToro.
“Today’s solid labor report buys the Fed more time, but Chair Jerome Powell may have a hard time justifying a restrictive rate policy should inflation continue lower.”
Following Friday’s data, Trump urged the Fed to cut rates by a full percentage point, intensifying his pressure campaign against Powell.
“‘Too Late’ at the Fed is a disaster!” Trump posted Friday on social media, using a derisive nickname for Powell.
“Europe has had 10 rate cuts, we have had none.
Despite him, our Country is doing great. Go for a full point, Rocket Fuel!”
Nonfarm payrolls increased 139,000 last month after a combined 95,000 in downward revisions to the prior two months.
The unemployment rate held at 4.2%, while wage growth accelerated.
The payrolls figure helped alleviate concerns of a rapid deterioration in labor demand as companies contend with higher costs related to tariffs and prospects of slower economic activity.
“A solid jobs report reinforces the ‘slowly slowing’ economic narrative,” said Adam Hetts at Janus Henderson Investors.
“Today’s news is positive, but ongoing tariff uncertainty means the subsequent hard data releases over the summer will be extremely important for clarity.”
In fact, Fed officials have signaled a wait-and-see approach on rates as they await further insights on the impacts of Trump’s policies on the economy.
“For the Fed, there is little urgency to cut rates,” said Seema Shah at Principal Asset Management.
“Holding on until the trade mist clears will reduce the risk of a policy misstep.
We expect the first rate cut to come in late-2025.”
Interest-rate swaps showed traders now see a roughly 70% chance of a quarter-point rate cut by September, compared with a probability of about 90% on Thursday.
The amount of easing priced in for the year declined to about 43 basis points, fewer than two quarter-point cuts.
“The Fed should be reluctant to cut rates because the full effects of tariffs haven’t impacted inflation numbers yet and the job market isn’t deteriorating enough to force their hand,” said Chris Zaccarelli at Northlight Asset Management.
Under this backdrop, Zaccarelli thinks caution is still warranted because valuations are high, much of the tariff risks haven’t been removed and the economy appears to be slowing.
“While there is still uncertainty over tariffs, the stock market is forward looking and has been pricing in an eventual thawing of trade fears,” said Glen Smith at GDS Wealth Management.
“We would not be surprised to see stocks breach and even move above their February peak at some point this summer, albeit with some continued volatility.”
US equities will put the worst of this year’s trade-war turmoil behind them and rally to fresh highs in 2025, according to a survey of Bloomberg subscribers who attended a panel discussion on macro trends.
The S&P 500 will climb to 6,500 by year-end, according to 44% of the 27 responses in a Markets Live Pulse survey.
The index was seen reaching that level by the first half of next year by 26% of participants, with 11% saying it would happen in the second half and the remainder estimating 2027 or later.
Investors are enjoying a much-needed breather following a tumultuous two-month period, with the S&P 500 gaining for the fifth week in seven, noted Mark Hackett at Nationwide.
“Earnings revisions have stabilized, forward earnings have marginally improved, and corporate resilience is evident in forward guidance, suggesting the path of least resistance is to new highs,” Hackett said.

Corporate Highlights:
* China has approved temporary export licenses to rare-earth suppliers of the top US automakers, Reuters reported on Friday, citing unidentified people familiar with the matter.
* Boeing Co. has begun shipping commercial jets to China for the first time since early April, indicating a reopening of trade flows amid the long-simmering tariff war between the US and Asia’s biggest economy.
* Broadcom Inc., a chip supplier to companies like Alphabet Inc. and Apple Inc., fell after the company gave a lackluster revenue forecast for the current quarter, suggesting that the AI spending frenzy isn’t as strong as some investors anticipated.
* Lululemon Athletica Inc. sank after a second straight disappointing quarter fueled concerns that rising competition, new tariffs and a shift away from yoga pants are derailing its ambitious growth plans.
* Robinhood Markets Inc. rose for a sixth straight day as investors speculate that the online brokerage could become the latest firm to earn a coveted spot in the S&P 500 Index.
* UBS Group AG said it would examine steps to mitigate the effects of the Swiss government’s proposal for as much as $26 billion in fresh capital requirements, calling the demand “extreme” and vowing to continue its push to dilute the regulations.
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%
* The Dow Jones Industrial Average rose 1%
* The MSCI World Index rose 0.7%
* The Russell 2000 Index rose 1.7%
* Bloomberg Magnificent 7 Total Return Index rose 2%
Currencies
* The Bloomberg Dollar Spot Index rose 0.3%
* The euro fell 0.4% to $1.1397
* The British pound fell 0.3% to $1.3532
* The Japanese yen fell 0.9% to 144.79 per dollar
Cryptocurrencies
* Bitcoin rose 3.8% to $104,315.12
* Ether rose 3.6% to $2,487.06
Bonds
* The yield on 10-year Treasuries advanced 11 basis points to 4.50%
* Germany’s 10-year yield was little changed at 2.58%
* Britain’s 10-year yield advanced three basis points to 4.64%
Commodities
* West Texas Intermediate crude rose 2% to $64.63 a barrel
* Spot gold fell 1.2% to $3,312.90 an ounce

Have a wonderful weekend.

Be magnificent!

As ever,

Shab
” When your work speaks for itself, don’t interrupt.”– Henry J Kaiser

Shab Mohammadpour
Assistant to Carolann Steinhoff
Queensbury Securities Inc.
340A – 730 View Street
Victoria BC  V8W 3Y7
Tel: 778-430-5851
Fax: 778-430-5828