June 18th, 2025, Newsletter

Dear Friends,

Tangents:
June 18, 1812:  Declaration of the War of 1812.
June 18, 1948: Columbia Records unveiled its new long-playing, 33 1/3 rpm phonograph record. Go to article.
June 18, 1983: First US woman is space, Sally Ride.

Paul McCartney, musician, b. 1942.
Roger Ebert, critic, b. 1942.
Isabella Rossellini, actress, b. 1952.

Top Hollywood honors
The organization behind the Academy Awards has decided to give honorary Oscars to Tom Cruise, Dolly Parton, Debbie Allen and Wynn Thomas for their contributions to cinema and humanity.

We have a new winner
Vienna is no longer the most livable city in the world. After a three-year run at the top of the annual list from the Economic Intelligence Unit, the Austrian capital was surpassed by another “wonderful” place.

‘Artificial intelligence is not a miracle cure’: Nobel laureate raises questions about AI-generated image of black hole spinning at the heart of our galaxy
Researchers have used an AI model to create a new image of the black hole at the center of our galaxy. But some experts are skeptical of the results. Read More.

Industrial waste is turning into a new type of rock at ‘unprecedented’ speed, new study finds
Samples from slag cliffs in England reveal industrial waste products can turn into rock in less than four decades, challenging assumptions about how rocks form. Read More.

James Webb telescope spots tiny galaxies that may have transformed the universe
The James Webb Space Telescope has revealed dozens of tiny, distant galaxies piercing the fog of the cosmic dark age in the first billion years after the Big Bang. Read More.

Mysterious deep-space radio signals reveal location of the universe’s ‘missing matter’
Much of the universe’s regular “baryonic” matter is spread through intergalactic space and in diffuse halos around galaxies, researchers proposed after studying the behavior of fast radio bursts emitted from deep space. Read More.

Hurricanes and sandstorms can be forecast 5,000 times faster thanks to new Microsoft AI model
Microsoft’s Aurora AI beat existing systems in predicting weather conditions over a 14-day period in 91% of cases, including hurricanes, sandstorms and ocean swells. Read More.

PHOTOS OF THE DAY

Ascot, UK
Racegoers arrive on the second day of the Royal Ascot horse racing meeting
Photograph: John Walton/PA

Chongqing, China
A drone light show sets a new Guinness World Record for the largest aerial image formed by 11,787 drones
Photograph: Li Hongbo/VCG/Getty Images

Ankara, Turkey
An Anatolian ground squirrel forages on the steppes
Photograph: Harun Ozalp/Anadolu/Getty Images
Market Closes for June 18^th, 2025

International Markets

Bonds

Currencies

Commodities

Market Commentary:
I risk, therefore I am. -Marsh insurance-broker advertising slogan, 2007.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite advanced slightly to 26,559.85 in Toronto.
The move follows the previous session’s decrease of 0.1%.
Brookfield Corp. contributed the most to the index gain,increasing 3.0%.
Bausch Health Cos. had the largest increase, rising 8.5%.
Today, 109 of 217 shares rose, while 99 fell; 6 of 11 sectors were higher, led by financials stocks.

Insights
* This quarter, the index rose 6.6%
* The index advanced 23% in the past 52 weeks. The MSCI AC Americas Index gained 10% in the same period
* The S&P/TSX Composite is 0.5% below its 52-week high on June 16, 2025 and 23.6% above its low on June 19, 2024
* The S&P/TSX Composite is little changed in the past 5 days and rose 2.3% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 19 on a trailing basis and 16.9 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$4.27t
* 30-day price volatility fell to 6.25% compared with 6.46% in the previous session and the average of 8.88% over the past month

Index Points
Financials | 46.7251| 0.5| 15/8
Information Technology | 17.5715| 0.7| 8/2
Industrials | 7.1665| 0.2| 20/8
Real Estate | 2.3582| 0.5| 16/2
Communication Services | 1.8002| 0.3| 3/2
Health Care | 1.2746| 1.9| 2/2
Consumer Staples | -0.3923| 0.0| 7/2
Utilities | -3.8664| -0.4| 5/9
Materials | -4.8363| -0.1| 19/29
Consumer Discretionary | -6.1108| -0.7| 5/4
Energy | -43.2493| -1.0| 9/31
(MT Newswires)
The Toronto Stock Exchange recorded a modest gain on Wednesday, despite continuing tariff uncertainties and growing geopolitical tensions in the Middle East, as Rosenberg Research sees “continuing strength” in Canada’s Aerospace and Defense sector and Scotiabank sees Canada’s energy sector benefiting from a “power shift” that reflects the nation’s “rising role in global energy resilience.”
The S&P/TSX Composite Index closed up 18.46 points at 26,559.85, leaving it less than 60 points behind the record close hit on June 12.
Among sectors, most were higher, led by Health Care, up near 2.2%.
The Battery Metals Index and Energy sectors were the biggest losers, both down about 1%.
On sectors, Rosenberg Research said it sees “continuing strength” in the Aerospace and Defense sector across countries, including Canada, as geopolitical risk and new technologies send military budgets upward.
It added: “The aerospace/defense theme has gone global and the bullish case keeps getting stronger.
Military budgets are expanding sharply worldwide, and industry backlogs and production schedules are in acceleration mode.
Few, if any industries, are experiencing such earnings visibility and positive re-rating of growth prospects, alongside the adaptation of new military technologies (especially related to cyber security and the escalating global war in space).
In fact, it is becoming increasingly difficult to differentiate between these aerospace-defense companies and the technology sector at large, except that the former trades at far more compelling valuations.
This remains one of our highest-conviction investment themes.
“Of commodities today, gold prices fell late afternoon on Wednesday, as the two-day meeting of the Federal Reserve’s policy committee ended with interest rates unchanged, as expected.
Gold for August delivery was last seen down US$23.80 to US$3,383.10 per ounce.
West Texas Intermediate crude oil closed at to a five-month high as Israel and Iran continue an air war while the Trump Administration ponders entering the conflict in order to destroy Iran’s nuclear-weapons program.
WTI oil for Julydelivery closed up $0.30 to settle at US$75.15 per barrel, the highest sinceJan.21, while August Brent crude was last seen up $0.10 to US$76.55.
US
By Rita Nazareth
(Bloomberg) — A rally in stocks fizzled out after Federal Reserve Chair Jerome Powell warned that tariff-driven economic uncertainty and inflation risk continued to complicate the central bank’s bid to ease monetary policy in earnest.
Gains in bonds waned.
The dollar barely budged.
Equities closed little changed, with the S&P 500 ending below 6,000 after briefly crossing that mark.
Powell noted that increases in tariffs are likely to boost prices, while adding that the effects on inflation could be more persistent.
He also declined to say if he’ll stay on after his term ends.
Treasury two-year yields, which are more sensitive to imminent Fed moves, almost erased a decline that had earlier reached seven basis points.
The Fed’s decision to hold rates steady – coupled with Powell’s latest warning on tariffs – underscores the delicate balance facing policymakers guiding the economy toward continued economic expansion.
While officials continued to pencil in two rate cuts in 2025, they also downgraded their estimates for economic growth this year while lifting their forecasts for unemployment and inflation.
“Powell played it safe,” said Haris Khurshid, chief investment officer at Karobaar Capital in Chicago.
“They’re sticking to two cuts for now, but clearly rattled by tariffs and sticky inflation.  No urgency to move.
It’s a tough spot: growth slowing, inflation lingering, and geopolitical risk heating up.”
Traders also kept a very close eye on geopolitics, with President Donald Trump saying he’d hold another meeting Wednesday to discuss the conflict in the Middle East.
Asked earlier in the day if he was moving closer to bombing Iran, Trump said “I may do it.  I may not do it.”
“They are clearly in wait-and-see mode,” said Chris Zaccarelli at Northlight Asset Management.
“They are sitting on their hands, waiting to see if tariffs increase inflation or the jobs market starts to falter, and whichever part of their dual mandate is impacted first will likely guide whichever direction they take.”
While the median expectation for two rate cuts in 2025 didn’t change, a number of officials lowered their projections.
Seven officials now foresee no rate cuts this year, compared with four in March. Two others pointed to one cut this year.
“Much like the tariff talk, the Fed has pivoted to a more of a kick the can down the road narrative as uncertainty may have diminished, but it’s still elevated according to their terms,” said Jay Woods at Freedom Capital Markets.
“Overall, the Fed’ss dual mandate is still in question. Expect them to go ‘one meeting at a time’ until there is more certainty with tariffs.”
To Seema Shah at Principal Asset Management, the Fed’s decision to keep 50 basis points of cuts for this year despite the higher inflation outlook is somewhat surprising.
“Yet, any change in this year’s dot plot would have been interpreted as a signal that the Fed has a clear plan about its future policy path, when actually the likely truth is that, with the economic outlook still very much shrouded in uncertainty, the Fed is unsure of how things will pan out,” she said.
Shah expects the Fed will ultimately remain on hold until the fourth quarter, with just one 25 basis-point cut this year.
At Strategas, Don Rissmiller says that with inflation likely to pick up over the summer, the next opportunity to cut rates could be in fact in the fourth quarter.
“The Fed does not want to move preemptively given how fluid the US economic situation still is,” said Rissmiller.
“Pausing a while longer would buy additional time to see the effects of recent shocks.”
To Ellen Zentner at Morgan Stanley Wealth Management, solid economic footing will allow the Fed to remain patient and away greater clarity before cutting interest rates.
“Markets will need to be patient as we await incoming data that will reveal the extent to which tariffs will drive higher inflation and slower growth,” she said.

Corporate Highlights:
* The top US bank regulators plan to reduce a key capital buffer by up to 1.5 percentage points for the biggest lenders after concerns that it constrained their trading in the Treasuries market.
** The Federal Reserve, Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency are focusing on what’s known as the enhanced supplementary leverage ratio, according to people briefed on the discussions. This rule applies to the largest US banks, including JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley.
* Nippon Steel Corp. closed its $14.1 billion acquisition of United States Steel Corp., bringing an end to a bruising takeover battle that was embroiled in American politics for months until finally gaining support from US President Donald Trump.
* US safety investigators called for urgent actions to be taken in response to an engine issue on Boeing Co. 737 Max aircraft that can lead to smoke in the cockpit or cabin.
* Robert F. Kennedy Jr.’s plan for America’s vaccines is coming into focus, with his revamped immunization advisory panel set to discuss the use of measles shots in kids next week and vote on an ingredient that’s been wrongly linked to autism.
* Alphabet Inc.’s Waymo has applied for a permit to test its robotaxis in New York City, underscoring its intent to operate in one of the largest ride-hailing markets in the US despite an absence of local regulations supporting commercially operated autonomous vehicles.
* Visa Inc. and Mastercard Inc. slipped amid continued worries about the impact of stablecoins on credit-card issuers.
* Kellanova fell after a report from Reuters that European Union regulators are opening an investigation into Mars Inc.’s acquisition of the maker of Pop-Tarts and Eggo waffles.
* Ford Motor Co. has instructed its dealers to stop selling the electric Mustang Mach-e because a software defect could lock the doors, potentially trapping occupants inside.
* Texas Instruments Inc. touted plans to spend more than $60 billion on semiconductor plants in the US, making it the latest chipmaker to promote its domestic manufacturing ambitions as the Trump administration urges investments and threatens to upend the sector with tariffs.
* Intel Corp. named new engineering leadership as part of a turnaround effort under Chief Executive Officer Lip-Bu Tan, tapping veterans of Cadence Design Systems Inc., Apple Inc. and Google.
* OpenAI is phasing out the work it does with data-labeling startup Scale AI, cutting ties with the company days after Meta Platforms Inc. invested billions of dollars in it and hired its founder.
* Nike Inc.’s new brand with entrepreneur and reality TV star Kim Kardashian’s Skims label has pushed back its launch after initially planning to release its first collection this spring.

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 was little changed
* The Dow Jones Industrial Average fell 0.1%
* The MSCI World Index fell 0.1%
* Bloomberg Magnificent 7 Total Return Index was little changed
* The Russell 2000 Index rose 0.5%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro was little changed at $1.1477
* The British pound fell 0.1% to $1.3413
* The Japanese yen was little changed at 145.15 per dollar
Cryptocurrencies
* Bitcoin fell 0.4% to $103,952.39
* Ether fell 0.6% to $2,497.55
Bonds
* The yield on 10-year Treasuries was little changed at 4.39%
* Germany’s 10-year yield declined four basis points to 2.50%
* Britain’s 10-year yield declined six basis points to 4.49%
Commodities
* West Texas Intermediate crude was little changed
* Spot gold fell 0.6% to $3,367.61 an ounce

Have a lovely evening.

Be magnificent!
As ever,

Carolann
Destiny is not a matter of chance, it is a matter of choice: it is not a thing to be waited for,
it is a thing to be achieved. –William Jennings Bryant, 1860-1925.

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
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www.carolannsteinhoff.com