August 11, 2023 Newsletter

Dear Friends,

Tangents:  Happy Friday.

August 11, 1786: Captain Francis Light establishes the British  colony of Penang in Malaysia.
1965: Watts Riot, Los Angeles.
1998: British Petroleum purchased Amoco for $49 billion, in what was the largest industrial takeover in history, at that moment in time.  Go to article >>

Alex Haley, writer, b.1921.
‘Wrinkle in space-time’ enables James Webb to capture stunning image of most distant star ever detected
The ancient star Earendel is more than twice as hot as the sun and around a million times brighter. Read More

Mars is spinning faster, and scientists aren’t sure why
Data from NASA’s InSight mission shows that Mars’s rotation is speeding up and its days are growing slightly shorter. Read More

Bizarre ‘demon’ particle found inside superconductor could help unlock a ‘holy grail’ of physics
The transparent, chargeless quasiparticle could shed more light on the underlying mechanics of superconductivity. Read More

‘Quantum superchemistry’ observed for the 1st time ever
A new type of chemistry performed at very cold temperatures on very small particles enables quick, precise reactions. Read More

The world’s largest cruise ship is polarizing opinion.  The Icon of the Seas is provoking strong emotions online. Many travelers are impressed by the ship’s vibrant colors and extraordinary size, but others compared it to “being stuck on a floating Walmart.”

The Emmys have a new date.  TV’s biggest awards event has been postponed to January 2024 in light of the ongoing writers’ and actors’ strikes in Hollywood.

PHOTOS OF THE DAY

Bristol, UK
Hot air balloons fly during a mass launch at the annual Balloon Fiesta.  Photograph: Toby Melville/Reuters.

Dartford, UK
A woman photographs statues of Mick Jagger and Keith Richards, who met as teenagers at the town’s train station in 1961 and formed the Rolling Stones a year later.  Photograph: Carl Court/Getty Images

Lake Ohrid, Albania
Divers search the area after archaeologists from the University of Bern confirmed that the Palafitte settlement of Lin dated back to 5,800-6,000BC, making it the oldest lakeside village in Europe ever discovered. The village is believed to have consisted of houses built on stilts above the lake’s surface or in areas regularly flooded by rising waters.  Photograph: Adnan Beci/AFP/Getty Images
Market Closes for August 11^th, 2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the third day, climbing 0.3%, or 64.76 to 20,407.64 in Toronto.
The index advanced to the highest closing level since Aug. 1.
Enbridge Inc. contributed the most to the index gain, increasing 0.8%. Altus Group Ltd/Canada had the largest increase, rising 16.1%.
Today, 146 of 227 shares rose, while 75 fell; 8 of 11 sectors were higher, led by energy stocks.
Insights
* So far this week, the index rose 0.8%
* The index advanced 2.1% in the past 52 weeks. The MSCI AC Americas Index gained 5.4% in the same period
* The S&P/TSX Composite is 2.1% below its 52-week high on Feb. 2, 2023 and 14.2% above its low on Oct. 13, 2022
* S&P/TSX Composite is trading at a price-to-earnings ratio of 13.3 on a trailing basis and 14.4 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.3% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.22t
* 30-day price volatility fell to 10.58% compared with 10.62% in the previous session and the average of 10.49% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Energy | 34.2762| 1.0| 38/2
Materials | 23.2533| 1.0| 34/14
Industrials | 17.9908| 0.6| 18/7
Financials | 9.5990| 0.2| 21/7
Real Estate | 2.9398| 0.6| 10/10
Consumer Staples | 2.4914| 0.3| 5/6
Health Care | 0.6379| 1.1| 3/0
Communication Services | 0.1775| 0.0| 1/4
Utilities | -5.0405| -0.6| 7/9
Consumer Discretionary | -9.6654| -1.3| 2/12
Information Technology | -11.9656| -0.8| 7/4
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
Enbridge | 5.8110| 0.8| -8.6| -6.7
Franco-Nevada | 5.5340| 2.2| -5.9| 4.0
TD Bank | 5.2540| 0.5| -61.2| -1.6
Canadian Tire | -3.4310| -5.5| 116.5| 10.8
Magna Intl | -4.1160| -2.8| 184.8| 1.2
Shopify | -13.6800| -2.2| -48.9| 58.0
US
By Rita Nazareth
(Bloomberg) — A renewed slide in tech mega-caps and mixed economic data left stocks struggling to find direction on Friday.
Bond yields rose.
In a choppy trading session, the S&P 500 closed with a small loss.
The Nasdaq 100 notched its longest weekly losing streak this year, hovering near 15,000.
It last closed below that mark in June.
Nvidia Corp. — which has more than tripled in 2023 — extended a four-day decline to almost 10%.
The Dow Jones Industrial Average posted a mild gain.
There’s little question the stock market has lost a lot of its upside momentum, according to Matt Maley, chief market strategist at Miller Tabak + Co.
“As we move closer to the usually volatile September/October timeframe, it does seem like the ‘dippers’ are losing some of their strength,” Maley noted. “This does not mean that the stock market will roll over in a serious manner over the next month or two, but it does raise the odds of a correction in the not-too-distant future.”
Earlier Friday, the US equity benchmark came closer to its 50-day moving average, a technical level that could portend further losses if breached during a market decline.
Still, with stocks pressing moderately toward oversold territory on a short-term basis, the path lower wouldn’t be a straight and narrow one, according to Dan Wantrobski at Janney Montgomery Scott.
That means stocks are soon poised to attempt “another oversold rally effort,” he noted.
Bill Gross, the one-time bond king, said stock and Treasury bulls are wrong as both markets are “overvalued.”
The former chief investment officer of Pacific Investment Management Co. told Bloomberg Television that the fair value of the 10-year Treasury yield is about 4.5%, compared with the current level of 4.16%.
Early this month, a key market indicator that has been described as possibly the “most important number in finance” tumbled to its lowest since 2004, worrying investors that it was sending a bearish signal. Yet, history shows that despite the extreme move, the typically ominous sign is instead pointing to more gains.
The plunge in the equity risk premium — which measures the difference between the earnings yield on the S&P 500 and the current rate on 10-year Treasury notes — signal stocks are getting overvalued relative to bonds.
But a Bloomberg Intelligence analysis found that the gauge is now at a level where returns for the S&P 500 historically averaged in high single digits over a 12-month horizon.
Meantime, Friday’s economic reports did little to alter swap market bets that the Federal Reserve will pause its interest-rate hikes next month — with traders continuing to expect the central bank will also refrain from claiming victory over inflation.
Consumer inflation expectations as measured by the University of Michigan unexpectedly fell in early August, despite higher gasoline and grocery costs.
Meantime, producer
prices grew last month by more than expected, primarily due to increases in certain service categories.
Treasuries are on course for a record year of inflows as investors chasing some of the highest yields in months pile into cash and bonds, according to Bank of America Corp. strategists led by Michael Hartnett.
Cash funds attracted $20.5 billion and investors poured $6.9 billion into bonds in the week through August 9, they wrote in a note, citing data from EPFR Global.
Meanwhile, US stocks had their first outflow in three weeks at $1.6 billion.
Elsewhere, UK bond yields climbed on data showing the British economy delivered its strongest quarterly growth in more than a year, a surprising show of resilience that will keep pressure on the Bank of England to raise rates further.
Oil posted its longest streak of weekly gains since mid-2022 as multiple reports forecasting increased demand gave a fresh boost to a rally built on increased supply-disruption risks and extended Saudi production cuts.

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.1% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.7%
* The Dow Jones Industrial Average rose 0.3%
* The MSCI World index fell 0.5%
Currencies
* The Bloomberg Dollar Spot Index rose 0.1%
* The euro fell 0.3% to $1.0947
* The British pound rose 0.2% to $1.2699
* The Japanese yen fell 0.1% to 144.96 per dollar
Cryptocurrencies
* Bitcoin fell 0.2% to $29,362.46
* Ether fell 0.4% to $1,842.1
Bonds
* The yield on 10-year Treasuries advanced six basis points to 4.17%
* Germany’s 10-year yield advanced nine basis points to 2.62%
* Britain’s 10-year yield advanced 16 basis points to 4.53%
Commodities
* West Texas Intermediate crude rose 0.4% to $83.12 a barrel
* Gold futures fell 0.2% to $1,945.70 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Rob Verdonck, Richard Henderson, Alex Nicholson and Cecile Gutscher.

Have a wonderful weekend everyone.

Be magnificent!

As ever,

Carolann
If you realized how powerful your thoughts are, you would never think a negative thought.  –Peace Pilgrim, 1908-1981.

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
Toll Free: 1.877.430.5895
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www.carolannsteinhoff.com