July 2nd, 2025, Newsletter

Dear Friends,

Tangents: Halfway Day, 182nd day of the year.

July 2, 1698: Thomas Savery patents the first steam engine, laying the groundwork for industrial steam power.
July 2, 1776: Declaration of Independence.
On July 2, 1937, aviator Amelia Earhart and navigator Fred Noonan disappeared over the Pacific Ocean while attempting to make the first round-the-world flight at the equator. Go to article.
1964: Civil Rights Act.

Herman Hesse, writer, b. 1887.
Jerry Hall, model, b.1956.
Lindsay Lohan, actress, b.1986.

Too darn hot
A marine heat wave in the Mediterranean Sea that combined with a powerful heat dome is causing Europe to swelter. Even the Eiffel Tower in Paris had to close.

Let’s dive into it
The new Netflix documentary, “Shark Whisperer,” has people talking. Is conservationist Ocean Ramsey bringing attention to the plight of sharks or is she risking her life for fame? 

What’s in a name?
Actor Rob McElhenney (“It’s Always Sunny in Philadelphia,” “Welcome to Wrexham”) has decided to legally change his name.

The secrets of the Louvre
Elaine Sciolino, author of the book “Adventures in the Louvre: How to Fall in Love with the World’s Greatest Museum,” shares some of her discoveries.

Rare snowfall in Atacama Desert forces the world’s most powerful radio telescope into ‘survival mode’
The ALMA radio telescope array in the Atacama Desert temporarily halted operations after a rare snowfall blanketed the base camp last week. Read More.

2 ‘new stars’ have exploded into the night sky at once — potentially for the first time in history
Astronomers have spotted another never-before-seen “nova” blaze to life in the night sky. This may be the first time that simultaneous stellar explosions have been visible
to the naked eye in recorded history. Read More.

Zapping the brain may help boost math skills, study hints
A study suggests that carefully controlled electrical stimulation of the brain may improve math skills, most significantly in people with weaker connections in a specific part of the brain. Read More.

ChatGPT could pilot a spacecraft shockingly well, early tests find
In a recent contest, teams of researchers competed to see who could train an AI model to best pilot a spaceship. The results suggest that an era of autonomous space exploration may be closer than we think. Read More.

138 years:  🥫 That’s how long Del Monte Foods has been around, but the company best known for its canned fruits and vegetables just filed for bankruptcy and is looking for a buyer.

PHOTOS OF THE DAY
Rome, Italy
Fireworks explode over Castel Sant’Angelo to mark the Feast of Rome’s patron saints Peter and Paul
Photograph: Valentina Stefanelli/AP

Sulaymaniyah, Iraq
People gather for the second annual Cat Beauty Festival organised by the Royal Veterinary Hospital, with an aim to promote a love of animals and raise awareness about feline care
Photograph: Fariq Faraj Mahmood/Anadolu/Getty Images

Henley on Thames, Oxfordshire
Rowers on the River Thames on an overcast, cool morning on the second day of the Henley Royal Regatta, a contrast to the first day’s extreme heat
Photograph: Geoffrey Swaine/Shutterstock
Market Closes for June 2^nd, 2025

International Markets

Bonds

Currencies

Commodities

Market Commentary:
The great divide in politics, the divide between those who believe in a centrally controlled, planned economy and those who believe in a freely developing economy, does not skirt the frontiers of monetary policy, but runs slap through the middle.  Those who are thus divided on the other aspects of policy will also be divided on monetary policy. -1959 speech, J. Enoch Powell, 1912-1998.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite advanced slightly to 26,869.66 in Toronto.
Today, materials stocks led the market higher, as 6 of 11 sectors gained; 112 of 213 shares rose, while 99 fell.
Canadian Pacific Kansas City Ltd. contributed the most to the index gain, increasing 2.7%.
Bombardier Inc. had the largest increase, rising 21.4%.

Insights
* The index advanced 22% in the past 52 weeks. The MSCI AC Americas Index gained 14% in the same period
* The S&P/TSX Composite is at its 52-week high and 24.1% above its low on Aug. 6, 2024
* The S&P/TSX Composite is up 0.6% in the past 5 days and rose 1.8% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 19.2 on a trailing basis and 17.1 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$4.34t
* 30-day price volatility fell to 5.97% compared with 6.64% in the previous session and the average of 6.60% over the past month

Index Points
Materials | 34.4994| 1.0| 30/16
Industrials | 20.4242| 0.6| 18/11
Communication Services | 14.5637| 2.4| 4/1
Consumer Discretionary | 13.6944| 1.5| 8/1
Health Care | 1.0995| 1.6| 1/2
Real Estate | 0.6106| 0.1| 9/10
Utilities | -3.8692| -0.4| 7/8
Energy | -5.6625| -0.1| 22/18
Consumer Staples | -10.4696| -1.0| 2/8
Information Technology | -15.9218| -0.6| 3/7
Financials | -36.4367| -0.4| 8/17
Canadian Pacific Kansas | 18.9800| 2.7| 4.4| 6.7
Canadian Natural Resources | 18.4500| 2.9| -80.6| -0.7
Bombardier | 15.1700| 21.4| 543.0| 47.3
RBC | -13.4400| -0.8| 30.4| 2.8
Enbridge | -13.7100| -1.5| 4.2| -0.3
Waste Connections | -22.4100| -4.9| 169.9| -1.9
(MT Newswires)
The Toronto Stock Exchange eked out its second-straight record high on Wednesday, as investors returned from the Canada Day holiday and bid up commodity issues on rising prices.
The S&P/TSX Composite Index closed up 12.55 points to close at 26,869.66, topping the prior record close of 26,857.12 struck Monday.
Among sectors, Base Metals and Telecoms were the biggest gainers, up 3.6% and 2.6%, respectively, along with Health Care, up 1.8%.
Information Technology was the biggest decliner, down 0.6%.
In a Tuesday note, Sohrab Movahedi, Managing Director, Financials Research at BMO Capital Markets, said that in the first half of 2025, Canadian bank stocks outperformed the broader S&P/TSX Composite Index by 136 basis points.
Historically, when Canadian banks have outperformed the market in the first half of the year, they have gone on to beat it for the full year 96% of the time.
All six major Canadian banks delivered positive total returns in early 2025, and Toronto-Dominion Bank (TD.TO) was the top performer, with a total return of 34.4%, beating both the overall market and the Canadian bank index, the note said.
“We reiterate our view of limited re-rating opportunities at the Canadian banks and expect the higher return-on-equity banks, namely National Bank of Canada, Royal Bank of Canada, and Canadian Imperial Bank of Commerce, to retain their relative valuation gains for the foreseeable future,” Movahedi added.
Of commodities, West Texas Intermediate crude oil closed higher on Wednesday, even as a report showed an unexpected rise in U.S. inventories last week and OPEC+ added another large tranche of new supply to the market.
WTI crude oil for August delivery closed up $2.00 to settle at US$67.45 per barrel, while September Brent crude was last seen up $2.02 to US$69.13.
Gold went higher for a third-straight session late afternoon on Wednesday, as the dollar edged down.
This came a day after touching the lowest in more than three years amid worries over rising U.S. fiscal deficits after the Senate passed a controversial budget bill and a report showed an unexpected drop in U.S. private sector hiring last month.
Gold for August delivery was last seen up $19.20 to US$3.369.00 per ounce.
US
By Rita Nazareth
(Bloomberg) — A rally in several big techs fueled gains in stocks, with the market extending its advance as President Donald Trump said he reached a trade deal with Vietnam.
Treasuries fell as a selloff in UK bonds underscored deficit worries.
The dollar was steady.
Following earlier losses driven by weak jobs data, the S&P 500 rose to fresh all-time highs.
Nike Inc. climbed alongside other apparel and footwear companies amid hopes the latest US trade deal will avert a potential supply-chain catastrophe.
Tech megacaps led gains, with Tesla Inc. jumping 5% as a drop in sales was seen as better than feared.
Marvell Technology Inc. slid about 2.5% on a report that Microsoft Corp. is scaling back its ambitions for AI chips to overcome delays.
Longer-dated Treasuries underperformed, following moves in the UK, where concerns about Chancellor of the Exchequer Rachel Reeves’ future reignited questions over the nation’s fiscal position.
Investors have raised similar concerns in the US, where the Senate passed Trump’s sweeping tax and spending bill.
In the run-up to the jobs report, economists forecast employers added 110,000 jobs in June — the fewest in four months — amid a slight rise in the unemployment rate to 4.3%.
The Bureau of Labor Statistics report is due Thursday, a day earlier than usual because of the Independence Day holiday.
Data Wednesday showed employment at US companies fell for the first time in over two years.
Despite signs of a downshift, Federal Reserve Chair Jerome Powell has repeated the labor market remains solid.
Policymakers have refrained from lowering interest rates this year as they wait to see the impact of tariffs on inflation.
“One of the reasons the Fed has been able to be patient before cutting rates was because the job market was holding up so well, so if that were to change, then the Fed may be forced to move earlier than they would like,” said Chris Zaccarelli at Northlight Asset Management.
Following the ADP Research’s private payrolls data, traders added to wagers on at least two rate reductions this year, with the first coming in September.
If the upcoming jobs report shows further weakness, traders reckon the Fed could move up cuts.
“The ADP report increased the odds of a downside surprise in Thursday’s nonfarm payroll release,” said Jeff Roach at LPL Financial.
“Investor jitters could be a catalyst for a drop in yields tomorrow if the jobs report is weaker than expected.
I expect a weaker-than-consensus report, increasing the odds the Fed cuts three times this year.”
A survey conducted by 22V Research showed investors are watching US payrolls more than normal this time and expect a weaker print.
Among the respondents, 44% expect the reaction to the data will be “mixed/negligible”, 41% said “risk-off” and only 15% “risk-on.”
“Even a modestly underwhelming print versus the current +110,000 headline consensus would likely be dismissed as already priced in at current levels,” said Ian Lyngen and Vail Hartman at BMO Capital Markets.
“It would likely take a sub-50,000 headline payrolls figure to get the market decidedly in bond- bullish mode.”
A single disappointing payrolls print alone wouldn’t be enough to drive a July Fed move, they said.
Meantime, while stock buyers have stormed back into the market over the past couple of months, Zaccarelli at Northlight Asset Management says he’d be cautious right now because valuations are high, the economy is slowing its pace of expansion and it’s possible that we’ve reached full employment.
Sentiment has been supportive of the rebound in US stocks, but the outlook for valuations and earnings suggests the rally is getting overbought from a fundamental perspective, according to RBC Capital Markets strategists led by Lori Calvasina.
“Overall conditions in US equities didn’t seem frothy quite yet but were headed down that path,” they wrote.
“If we do end up getting some inflation pressure or broader economic potholes from tariffs or the Fed doesn’t cut after all, we think it will come as a negative surprise to many investors.”
As stocks snapped back from the throes of April’s tariff selloff, a Barclays Plc measure of the market’s “irrational exuberance” has seen a swift jump.
The one-month average on the proprietary gauge has swung back into the double-digits for the first time since February — reaching levels that have signaled extreme frothiness in the past.
“Just when a bit of panic set into the minds of some investors, stocks turned seemingly on a dime and gained back all that was lost and then some,” said Scott Wren at Wells Fargo Investment Institute.
“Our feel is that stocks are ahead of themselves, and we are looking to trim positions in overvalued markets and sectors.”
Bloomberg Intelligence’s Market Pulse gauge approached manic levels in June, hinting that the market’s record run is in jeopardy of becoming overheated.
“Historically, markets have cooled after such sentiment peaks,” said BI’s Gillian Wolff.

Corporate Highlights:
* Apple Inc. climbed after Jefferies raised its recommendation on the tech giant to hold from underperform.
* Intel Corp. slid after Reuters reported CEO Lip-Bu Tan is exploring a potential strategy shift in its foundry business that would entail no longer marketing certain chipmaking technology to external customers, citing people familiar.
* OpenAI has agreed to rent a massive amount of computing power from Oracle Corp. data centers as part of its Stargate initiative, underscoring the intense requirements for cutting- edge artificial intelligence products.
* Microsoft Corp. began job cuts that will impact about 9,000 workers, its second major wave of layoffs this year as it seeks to control costs while ramping up on artificial intelligence spending.
* Wall Street’s largest lenders boosted their dividends after passing this year’s Federal Reserve stress tests, a hurdle that regulators made easier to clear by softening some of the requirements laid out in previous years.
* Health insurer Centene Corp. shocked investors when it withdrew its profit outlook on precipitously rising risks from Affordable Care Act plans, sending shares plummeting.
* The US Justice Department urged a judge in Texas to accept a proposed settlement agreement reached with Boeing Co. that would allow the planemaker to avoid a criminal charge in a longstanding case over two fatal crashes of its 737 Max jets.
* Bombardier Inc. jumped after the Quebec-based private jet- maker announced a $1.7 billion aircraft order with an anonymous client.
* Rivian Automotive Inc. produced about half as many electric vehicles as Wall Street expected in the second quarter prior to the launch of 2026 model year vehicles later this month.

Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.5% as of 4 p.m. New York time
* The Nasdaq 100 rose 0.7%
* The Dow Jones Industrial Average was little changed
* The MSCI World Index rose 0.4%
* Bloomberg Magnificent 7 Total Return Index rose 1.3%
* The Russell 2000 Index rose 1.3%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro was little changed at $1.1802
* The British pound fell 0.8% to $1.3634
* The Japanese yen fell 0.1% to 143.62 per dollar
Cryptocurrencies
* Bitcoin rose 3.5% to $109,709.03
* Ether rose 7.7% to $2,602.84
Bonds
* The yield on 10-year Treasuries advanced four basis points to 4.28%
* Germany’s 10-year yield advanced nine basis points to 2.66%
* Britain’s 10-year yield advanced 16 basis points to 4.61%
Commodities
* West Texas Intermediate crude rose 2.7% to $67.21 a barrel
* Spot gold rose 0.6% to $3,358.31 an ounce

Have a lovely evening.

Be magnificent!
As ever,

Carolann
You’re as old as the risks you take. In many ways, aging is not the process of growing old, but rather the slow death of becoming overly protective, scared and worried about losing what you have.  Youth is found in the energy of going for it, taking the risk, and trusting that you’ll figure it out along the way. -James Clear, b. 1986.

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