August 13th, 2025, Newsletter

Dear Friends,

Tangents:
On Aug. 13, 1961, Berlin was divided as East Germany sealed off the border between the city’s eastern and western sectors in order to halt the flight of refugees. Go to article.
August 13, 1965: Teens, mostly girls, attempt to crash the Warwick Hoel, where the Beatles are staying ahead of their appearance on The Ed Sullivan Show.

Alfred Hitchcock, director, b. 1899.
Fidel Castro, Cuban President, b. 1926.

A plague mysteriously spread from Europe into Asia 4,000 years ago
Scientists now think they may know how.

Many of Hollywood’s summer hits share a common formula
They say familiarity breeds contempt, but that doesn’t appear to be the case at the box office this summer.

Ronaldo puts a ring on it!
The soccer great and his long-term partner announced their engagement on Instagram this week — and you gotta see the ring!

“I think it’s very notable that each and every one of the cities called out by the president has a Black mayor, and most of those cities are seeing historic lows in violent crime. In my city, in Baltimore, we have the fewest amount of homicides through this date, on record. That’s 50 years. A 50-year low.” — Baltimore Mayor Brandon Scott on President Trump’s criticism about violence in his city.

Meta AI takes first step to superintelligence — and Zuckerberg will no longer release the most powerful systems to the public
The Meta CEO believes that AI with the capacity to improve itself is the first step towards a technology that will transform humanity. Read More.

1,300-year-old skeletons found in England had grandparents from sub-Saharan Africa, DNA studies reveal
A DNA analysis of two people who lived in Britain in the seventh century reveals they had recent African ancestry. Read More.

Amazon rainforest is approaching ‘tipping points’ that could transform it into a drier savanna
Researchers caution that the Amazon rainforest could disappear in the next hundred years, due to the combined effects of climate change and deforestation, and a new model predicts how that could transpire. Read More.

‘Rogue waves’ can be 65 feet tall, but they aren’t ‘freak occurrences,’ data from North Sea reveals
Researchers have used lab models to study how rogue waves form, but these don’t always transfer over to the natural world.

James Webb telescope spots earliest black hole in the known universe, looking ‘as far back as you can practically go’
Astronomers using the James Webb telescope have zoomed in on a ‘Little Red Dot’ that existed just 500 million years after the Big Bang and found that it may contain the earliest known black hole in the universe.

PHOTOS OF THE DAY

Scharbeutz, Germany
Beachgoers sunbathe and cool off in the Baltic Sea during a heatwave
Photograph: Michael Probst/AP

Málaga, Spain
Volunteers at the Fuente de Piedra natural reserve walk across the lagoon at dawn to gather flamingo chicks before tagging them with identity rings
Photograph: Jon Nazca/Reuters

A tour de force!’: LensCulture Critics’ Choice awards – in pictures
Carlos Folgoso Sueiro (Spain): Beyond the Lake
Jim Casper, editor-in-chief of LensCulture says: ‘Carlos Folgoso Sueiro has created an immersive, cinematic, semi-mythical story about the place where he grew up, Galicia, and the people who inhabit it still, against all odds of survival. It’s a sad and romantic tale that touches on rural depopulation, droughts, neglect and resilience. All of the stunning photos are accompanied by compelling texts that explore many facets of life and struggles in Galicia. It’s a tour de force’
Market Closes for Aug 13^th, 2025

International Markets

Bonds

Currencies

Commodities

Market Commentary:
No man was ever wise by chance. -Lucius Annaeus Seneca, c. 4BCE-65 CE.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the third day, climbing 0.3%, or 72.16 to 27,993.43 in Toronto.
Today, financials stocks led the market higher, as 7 of 11 sectors gained; 125 of 211 shares rose, while 84 fell.
Toronto-Dominion Bank contributed the most to the index gain, increasing 1.6%.
Hudbay Minerals Inc. had the largest increase, rising 14.8%.

Insights
* The index advanced 24% in the past 52 weeks. The MSCI AC Americas Index gained 20% in the same period
* The S&P/TSX Composite is at its 52-week high and 25.9% above its low on April 7, 2025
* The S&P/TSX Composite is up 0.3% in the past 5 days and rose 3.6% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 20.1 on a trailing basis and 17.7 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.6% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$4.49t
* 30-day price volatility little changed to 9.73% compared with 9.73% in the previous session and the average of 7.41% over the past month

Index Points
Financials | 61.7650| 0.7| 13/11
Consumer Discretionary | 16.9592| 1.9| 9/0
Communication Services | 10.4884| 1.6| 5/0
Real Estate | 6.7224| 1.3| 18/1
Industrials | 5.4971| 0.2| 17/11
Materials | 1.7581| 0.0| 29/19
Energy | 0.9852| 0.0| 16/24
Health Care | -0.3784| -0.5| 1/2
Utilities | -0.8025| -0.1| 5/8
Consumer Staples | -12.2627| -1.2| 5/5
Information Technology | -18.5497| -0.6| 7/3
TD Bank | 19.6500| 1.6| -36.4| 34.0
RBC | 12.8700| 0.7| -47.1| 7.9
TC Energy | 8.6590| 1.7| -33.4| 4.9
Celestica | -10.5500| -4.4| 24.3| 112.0
Cameco | -12.0700| -3.7| 28.3| 40.8
Constellation | Software | -23.9500| -3.7| 102.4| 1.4
(MT Newswires):
The Toronto Stock Exchange made rose to a second-straight record close Wednesday as BMO said Canadian equities “remain well positioned to keep pace with the U.S.” and Desjardins noted the Bank of Canada left the door open for a rate cut next month to stimulate the economy.
Despite mixed commodity prices, the S&P/TSX Composite Index gained 72.17 points to 27,993.43, beating Tuesday’s previous record finish by 70 points.
Most sectors were higher, with Telecoms up 1.65% and Base Metals up near 1.3%.
Health Care was down 0.8%, after strong gains in recent days, while Information Technology was down 1%.
Among individual stocks, Gildan Activewear (GIL.TO) closed up $7.97, or 12%, to $75.62, after sealing a deal to acquire rival HanesBrands in a US$2.2 billion transaction.
Big picture, Brian Belski, Chief Investment Strategist at BMO Capital Markets, published his latest Canadian Strategy Snapshot entitled ‘Earnings Normalization Remains on Track’.
Bottom line for Belski, despite persistent trade rhetoric, BMO “remains steadfast” that Canada is “well positioned fundamentally”.
He said investors should remain focused on the broader fundamental normalization process that is well under way in BMO’s view.
In fact, Belski added, the Canadian earnings recovery that BMO has been highlighting since the middle of 2024 continues to trend toward a more normalized growth profile.
“Furthermore,” Belski said, “after a very short-lived trade induced negative revision cycle at the beginning of the year, revisions have now clearly shifted positive with S&P/TSX FY1 and FY2 bottom-up EPS estimates up almost 2% since bottoming at the end of June.
More importantly, profitability metrics have stabilized over the last few quarters and growth expectations have now accelerated back toward more normalized high single digits and is likely to reach the double-digit range by the end of the year.
Yes, from our perspective the normalization process remains firmly on track and Canadian equities remain well positioned to keep pace with the U.S.”
In economics, Desjardins noted the Bank of Canada published its ‘Summary of Deliberations’, an account on the deliberations of the BoC’s Governing Council leading to the monetary policy decision on July 30, 2025, when it left rates unchanged.
Desjardins Macro Strategist Tiago Figueiredo noted central bankers were dissuaded from delivering a 25-basis point cut in July, but he said the door “remains open” to resume easing later this year.
He added: “The resilience in economic activity and firmness in inflation both kept policymakers sidelined last month.
While economic activity slowed in Q2, at least part of that slump was tied to a pull-forward in activity earlier this year.
Consumption appeared to have increased in Q2, and most of the weakness in the labor market was concentrated in the sectors most reliant on trade.
On inflation, policymakers remained concerned that underlying inflation had risen, and risks were still skewed higher thanks to potential trade disruptions and tariffs.”
But, Figueiredo also noted, policymakers took some comfort in the fact that all three of their tariff scenarios kept headline inflation below 2.5%.
“Furthermore,” he said, “central bankers noted that there were no signs that inflation expectations had become de-anchored.”
Figueiredo noted there remained a diversity of views among Governing Council members.
Some policymakers believed that the “bank may have already provided sufficient support to aid in this transition.”
These members cited “lagged effects of monetary policy”, emphasizing the “risk that further easing might take effect only as demand was recovering, which could add to price pressures”.
Conversely, others noted that “further monetary policy support would likely be needed given the estimated amount and persistence of slack in the economy”.
Despite the diverging views, policymakers were aligned in reiterating that there may be a need for further easing “if a weakening economy put further downward pressure on inflation and the upward price pressures from the trade disruptions were contained”.
As a result, Figueiredo said, the latest iteration of the ‘Summary of Deliberations’ suggests we could see the BoC resume its easing cycle next month.
Desjardins continues to expect the BoC will cut its policy rate by 25 basis points in September.
Of commodities, gold futures edged higher late afternoon on Wednesday as the dollar and yields fell, but the metal remains rangebound since touching a record high last month.
Gold for December delivery was last seen up $8.40 to US$3,407.40 per ounce, sticking under the July 22 record high of US$3,501.80.
But West Texas Intermediate crude oil closed at a 10-week low as another major forecasting agency warned global inventories are on the rise amid higher supply while a report showed an unexpected hike in U.S. inventories last week.
WTI crude closed down $0.52 to US$62.55 per barrel, the lowest since June 2, while October Brent oil was last seen down $0.49 to US$65.63.
US
By Rita Nazareth
(Bloomberg) — Wall Street traders kept piling into bets that the Federal Reserve will soon be able to cut interest rates, with stocks hitting all-time highs and Treasury yields falling alongside the dollar.
Just a day after a report showed benign inflation data, traders fully priced in a quarter-point Fed reduction in September, with some wagers pointing to a jumbo-sized move.
Market expectations for policy easing also gained fuel after Treasury Secretary Scott Bessent’s remarks that “we could go into a series of rate cuts here, starting with a 50 basis-point rate cut in September.”
About 420 shares in the S&P 500 rose.
While the index only eked out a gain amid weakness in most mega caps, Apple Inc. and Amazon.com Inc. rallied.
The Russell 2000 of small firms jumped 2%.
The Dow Jones Industrial Average added 1%.
In late hours, Cisco Systems Inc. gave a lukewarm outlook.
Two-year yields dropped five basis points to 3.68%.
Fed policymakers last month kept their benchmark at a target range of 4.25% to 4.5%.
Bessent said officials might have cut rates if they’d been aware of the revised data on the labor market that came out a couple of days after the latest meeting.
“As the labor market continues to weaken, we think the US central bank will resume interest rate cuts next month, with 25- basis-point cuts at each meeting through January 2026 for a total of 100 basis points,” said Ulrike Hoffmann-Burchardi at UBS Global Wealth Management.
President Donald Trump said he may name the next Fed chair “a little bit early” and added that he was down to three or four potential candidates as he looks for a successor to Jerome Powell.
“As the market continues to digest the shift in the trajectory of the real economy following the combination of July’s inflation and employment data, it follows intuitively that the question has become: how large of a cut should Powell deliver?” said Ian Lyngen at BMO Capital Markets.
“We don’t expect a 50 basis-point move, although we certainly see scope for a meaningful probability of one to be priced in during the coming weeks,” he added.
After a “not as bad as it could have been” consumer price index, the equity market is now in full “easing expectation” mode, noted Sam Stovall at CFRA.
“We still project 25 basis-point cuts to the Fed funds target range at the September and December Federal Open Market Committee meetings, with a pause in October,” he said.
To Rick Rieder at BlackRock, while the latest inflation report was a bit stronger than we have seen over the prior few months, it was lower than many have feared.
Rieder also noted he’s still heartened by the trajectory of some core areas of inflation that are running at lower levels than in the prior few years.
“As a result, we expect the Fed to begin cutting rates in September, and it could be justified cutting the Funds rate by 50 basis points, to get it more aligned with longer-term inflationary expectations and some of the productivity enhancement we are seeing across multiple industries,” he said.
“Stocks are seeing another boost higher as tariff fears are less than expected, earnings are strong, and prospects for a fall Federal Reserve rate cut are rising,” said Rich Mullen at Pallas Capital Advisors.
“While we believe it still makes sense to stay invested, much of this year’s stock gains are likely already in.”
Mullen noted that inflation has been tame, and while many businesses have been able to avoid passing on higher costs to consumers, there are still questions on how much longer this trend can last.
The big risk for the Fed is the possibility that inflation spikes suddenly from tariffs, he said.
“Just because the inflation data has remained calm, doesn’t mean it can’t spike in the future,” Mullen said.
To Mark Hackett at Nationwide, the path of least resistance for the market is higher as the S&P 500 broke out of the recent trading range.
“Retail investors are increasingly validated in the buy- the-dip approach, given the speed of the recovery from the recent selloff, potentially creating a self-fulfilling prophecy the next time the market experiences a minor selloff,” he said.
The latest reading on consumer prices showed underlying US inflation accelerated in July — but the cost of tariff-exposed goods didn’t rise as much as feared.
A report on producer prices due Thursday will offer insights on additional categories that feed directly into the Fed’s preferred price gauge — which is scheduled for later this month.
“Tariff-related costs are still being absorbed by corporate profit margins rather than passed on to consumers, giving the Fed room to pivot without sparking inflationary risk,” said Fawad Razaqzada at City Index.
Some companies have been holding off on price increases for fear that consumers will pull back on spending, which will heighten interest for Friday reports on retail sales and consumer sentiment.

Corporate Highlights:
* Treasury Secretary Scott Bessent said the recent deal to allow Nvidia Corp. and Advanced Micro Devices Inc. to resume lower-end AI chip sales to China, on the condition they give the US government a 15% cut of the related revenue, could serve as a model for others.
* Apple Inc. is plotting its artificial intelligence comeback with an ambitious slate of new devices, including robots, a lifelike version of Siri, a smart speaker with a display and home-security cameras.
* Top US chip-equipment supplier Applied Materials Inc. was sued by a rival in China over what that company characterized as trade secret theft, a further escalation in the technology war between the world’s two largest economies.
* Amazon.com Inc. plans to offer same-day grocery delivery in 2,300 cities by the end of the year, more than doubling the current number and marking its latest attempt to muscle into the $1 trillion grocery industry led by its top retail competitor Walmart Inc.
* Tesla Inc. is looking to hire someone to test its driver- assistance technology on the streets of New York City, suggesting the carmaker could be looking to expand its ride- hailing services to the largest US metropolis.
* Oracle Corp. is cutting jobs in its closely watched cloud unit, the latest company taking steps to control costs amid heavy spending on AI infrastructure.
* Tencent Holdings Ltd. promised prudence in AI spending despite faster-than-anticipated growth across its gaming and advertising businesses, suggesting the company intends to adopt a more measured approach to artificial intelligence development than many of its global rivals.
* A union representing workers at Boeing Co.’s St. Louis-area defense factories urged US lawmakers from Missouri to intervene and nudge the plane maker to reach a deal.
* Bullish jumped 84% from the IPO price after the digital-asset exchange operator and owner of media outlet CoinDesk raised $1.1 billion in an initial public offering.
* Gildan Activewear Inc. agreed to buy US underwear maker Hanesbrands Inc. — aiming to double its annual sales — for about $2.2 billion in cash and stock.
* Webtoon Entertainment Inc. announced a partnership with Walt Disney Co. that will bring iconic characters such as Marvel’s Spider-Man and Luke Skywalker of Star Wars to its platform.
What Bloomberg Strategists say…
“Increased talk of a potential half-point Fed cut in September is turning into a double shot for risk assets — boosting risk appetite while promising easier financial conditions ahead. Layered on top of a post-CPI volatility crush, that’s helping drive the SPX towards 6,500 into Friday’s August options expiration.”
—Michael Ball, Macro Strategist, Markets Live

Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.3% as of 4 p.m. New York time
* The Nasdaq 100 was little changed
* The Dow Jones Industrial Average rose 1%
* The MSCI World Index rose 0.5%
* Bloomberg Magnificent 7 Total Return Index fell 0.3%
* The Russell 2000 Index rose 2%
Currencies
* The Bloomberg Dollar Spot Index fell 0.2%
* The euro rose 0.2% to $1.1700
* The British pound rose 0.5% to $1.3574
* The Japanese yen rose 0.3% to 147.46 per dollar
Cryptocurrencies
* Bitcoin rose 2.2% to $122,794.7
* Ether rose 2.6% to $4,742.67
Bonds
* The yield on 10-year Treasuries declined five basis points to 4.23%
* Germany’s 10-year yield declined six basis points to 2.68%
* Britain’s 10-year yield declined four basis points to 4.59%
* The yield on 2-year Treasuries declined five basis points to 3.68%
* The yield on 30-year Treasuries declined five basis points to 4.83%
Commodities
* West Texas Intermediate crude fell 0.6% to $62.76 a barrel
* Spot gold rose 0.3% to $3,358.02 an ounce
Have a lovely evening.

Be magnificent!
As ever,

Carolann
Pretty much all the honest truth-telling there is in the world is done by children. -Oliver Wendell Holmes, 1809-1894.

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