August 12, 2022 Newsletter

Dear Friends,

Tangents: Happy Friday.
August 12, 1981: IBM introduced its first personal computer, the model 5150.  Go to article »
1676: King Philip assassinated.
1851: Sewing machine invented.
Georg Soros, b. 1930.

In an eerie twist, volatile weather and heat-induced drought are unearthing glimpses of lost archaeological treasures and forgotten history.

20 of the most beautiful small towns in Italy.  I can almost hear the sound of my luggage rolling through the airport. Check out this photo gallery to see some of the most beautiful Italian villages. 

Half of all teens say they use the internet ‘almost constantly’.  Social media platforms are rapidly unveiling new features to take on their competitors, causing users to become even more attached. Here’s a friendly reminder for the weekend: less scrolling, more living.

PHOTOS OF THE DAY

This year’s last supermoon rises above the statue of the ancient Greek god Poseidon
CREDIT: Valérie Gache/AFP/Getty Images

A horse in a parched field. According to Météo France, it was warmer in Nîmes than in Cairo in July with average maximum temperatures of 36C
CREDIT: Aventurier Patrick/ABACA/Rex/Shutterstock

People look on as the vessel Shabab Oman II, a fully-rigged training ship of the Royal Navy of Oman, arrives into Portsmouth harbour. The ship is a blend of the traditional and modern with state of the art computerised communication systems and navigation equipment, but from the wooden decking upwards, the ship is traditional in terms of her sails and rigging
CREDIT: Andrew Matthews/PA

Market Closes for August 12^th, 2022

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1920, Charles Ponzi was arrested for financial fraud in Boston after taking in more than $6 million from thousands of investors. He repaid each $1,000 invested with $1,500 just 90 days later—but only by taking more money from newcomers or, as a judge later put it, “robbing Peter to pay Paul.” Such pyramid arrangements were forever afterwards known as “Ponzi schemes.”
Canada
By Ana Paula Barreto Pereira
(Bloomberg) — Canadian equities soared Friday amid a strong earnings season and signs of easing inflation in the US.
The S&P/TSX Composite closed at its highest in two months, climbing 0.9%, or 187.93 points, to 20,179.81 in Toronto.
Toronto-Dominion Bank contributed the most to the index gain, increasing 1.3%.
Aurora Cannabis Inc. had the largest percentage increase, rising 9.3%.
Today, 175 of 238 shares rose, while 61 fell; all sectors were higher, led by financials stocks.
* So far this week, the index rose 2.9%
* The index declined 1.7% in the past 52 weeks. The MSCI AC Americas Index lost 5.9% in the same period
* The S&P/TSX Composite is 9.2% below its 52-week high on April 5, 2022 and 11.1% above its low on July 14, 2022
* S&P/TSX Composite is trading at a price-to-earnings ratio of 13.6 on a trailing basis and 12.5 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.2t
* 30-day price volatility fell to 14.78% compared with 15.17% in the previous session and the average of 17.85% over the past month
================================================================
|Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
* Financials | 66.2996| 1.0| 22/7
* Materials | 45.6732| 2.0| 45/6
* Industrials | 29.8570| 1.2| 28/1
* Information Technology | 11.2867| 1.0| 9/5
* Consumer Staples | 7.5613| 0.9| 7/4
* Communication Services | 7.1412| 0.7| 7/0
* Energy | 6.2565| 0.2| 17/20
* Real Estate | 5.3330| 1.0| 18/5
* Utilities | 4.5795| 0.4| 9/6
* Consumer Discretionary | 2.6426| 0.4| 8/5
* Health Care | 1.2980| 1.8| 5/2
================================================================
| | |Volume VS |
| Index | | 20D AVG |YTD Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
* TD Bank | 14.0300| 1.3| 32.3| -10.9
* Royal Bank of Canada | 11.1200| 0.9| -55.4| -4.6
* Bank of Montreal | 11.0100| 1.8| -21.2| -2.6
* Saputo | -0.8660| -1.5| -32.6| 17.2
* Vermilion Energy | -1.0920| -2.9| 20.4| 104.5
* Fairfax Financial | -1.8470| -1.8| 85.8| 5.1
US
By Rita Nazareth
(Bloomberg) — Stocks finished the week on solid footing, with traders assessing whether an inflation slowdown could soon make the Federal Reserve reduce the pace of its most-aggressive tightening campaign in decades and prevent a hard landing.
Defying the crowd of skeptics who dubbed the rebound a bear-market rally, short-covering or unwinding of hedges, the S&P 500 notched its fourth straight week of gains — the longest winning run since November — with big tech leading gains Friday.
The gauge recouped half of its losses from January through June, topping the so-called 50% Fibonacci retracement level.
It’s now sitting about 1.5% below its 200-day average — a threshold crossed by the Russell 2000 gauge of small caps.
As equities pushed higher, Wall Street’s fear gauge crumbled.
The CBOE Volatility Index slumped back below 20, the average level since its inception.
The VIX notched its eighth straight week of declines, the longest such stretch since 2019.
Meantime, the S&P 500’s 14-day relative strength index (RSI) topped 70 — which is seen by some traders as one indication of an overbought market.
The next few weeks will be crucial in determining the sustainability of the rally.
With the earnings season almost over, economic reports mixed at best and many Fed speakers unwilling to sound too dovish, some analysts see the chances of a breather.
To Matt Maley at Miller Tabak, stocks are indeed getting overbought on a very-short-term basis, so a decline or sideways move “would not be the worst development in the world.”
For now, flows have been robust. Global equity funds lured $7.1 billion in the week through Aug. 10, Bank of America Corp. strategists led by Michael Hartnett wrote, citing EPFR Global data.
Bond funds had an intake of $11.7 billion, while $4.3 billion was pulled out of cash.
“The music hasn’t stopped,” said Matt Bartolini, State Street Global Advisors’ head of SPDR Americas Research. “The labor market continues to be positive, earnings growth continues to be positive. So largely, if there is a recession, it’s going to be relatively shallow.”
Lindsey Bell, chief markets and money strategist at Ally, said the market’s about to enter what is often considered a “sketchy period.”
“Historically, September and October are notoriously volatile, sometimes featuring big stock market drops,” she wrote. “After a more than 10% rally since mid-June, a bearish seasonal trend is good reason to temper expectations. I expect this market to continue to be reactionary and driven by headlines until we have more clarity on where exactly inflation is headed as we approach 2023.”
Data Friday showed US consumer sentiment climbed to a three-month high on firmer expectations about the economy and personal finances.
Inflation expectations were mixed, with consumers boosting their longer-term views for prices slightly, while reducing their year-ahead outlook for costs.
Fed Bank of Richmond President Thomas Barkin was the latest official to call for continued rate increases, while acknowledging that this week’s inflation figures were encouraging.
His San Francisco counterpart Mary Daly told Bloomberg Television that the slowdown in price pressures may mean it’s appropriate for the central bank to slow the pace of hikes to 50 basis points in September– but noted the fight
against inflation is far from over.
“The Fed is unlikely to claim victory until inflation reaches target, but recent data support our view that peak Fed hawkishness is behind us,” Bank of America strategists wrote in a note to clients.

Some of the main moves in markets:
Stocks
* The S&P 500 rose 1.7% as of 4 p.m. New York time
* The Nasdaq 100 rose 2.1%
* The Dow Jones Industrial Average rose 1.3%
* The MSCI World index rose 1.1%
Currencies
* The Bloomberg Dollar Spot Index rose 0.2%
* The euro fell 0.6% to $1.0261
* The British pound fell 0.6% to $1.2137
* The Japanese yen fell 0.3% to 133.48 per dollar
Bonds
* The yield on 10-year Treasuries declined five basis points to 2.84%
* Germany’s 10-year yield advanced two basis points to 0.99%
* Britain’s 10-year yield advanced five basis points to 2.11%
Commodities
* West Texas Intermediate crude fell 2.4% to $92.03 a barrel
* Gold futures rose 0.6% to $1,817.60 an ounce
–With assistance from Sunil Jagtiani, John Viljoen, Sagarika Jaisinghani, Vildana Hajric, Emily Graffeo, Isabelle Lee, Enrique Roces and Lu Wang.
Have a wonderful weekend everyone.

Be magnificent!
As ever,

Carolann

The first test of a truly great person is humility. –John Ruskin, 1819-1900.

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
Fax: 778.430.5828
www.carolannsteinhoff.com