August 15, 2023 Newsletter

Dear Friends,

Tangents:
August 15, 1947: India gains independence from British rule, marking the end of centuries of colonialism and the birth of a new nation.

2001: Astronomers announced the discovery of the first solar system outside our own – two planets orbiting a star in the Big Dipper.  Go to article >>

Napoleon Bonaparte, French Emperor, b. 1769.
T.E. Lawrence, writer, b. 1888.
Julia Child, b. 1912.

Women’s World Cup: Spain secures spot in World Cup final
Three teams remain standing in the Women’s World Cup after Spain defeated Sweden today in an exhilarating semifinal match. Spain now faces either Australia or England in Sunday’s final.

Belgian university launches literary course to analyze Taylor Swift lyrics
A Belgian university is offering a “Swifterature” course dedicated to analyzing the literary merit of Taylor Swift’s discography.

The ‘Lunar Codex’ aims to bring human art to the moon
Physicist and artist Samuel Peralta is aiming to expand on the moon’s art collection by sending up tens of thousands of works from around the world

2,000-year-old gold treasure from Iron Age tribe unearthed by metal detectorists in Wales
It is the first time that Iron Age currency has been found in the country. Read More.

Gene therapy injection into the brain causes alcohol use disorder to stop – in monkeys
A small, proof-of-concept study reveals the potential of a one-off gene therapy to treat people with alcohol use disorder. Read More.

The largest asteroid impact crater on Earth is lurking beneath Australia, new evidence suggests
Geophysical evidence suggests there is a massive, magnetized structure deep beneath Australia. Read More.

PHOTOS OF THE DAY

Swimming Pool by Seunggu Kim
Swimming Pool Riverside Park in Seoul, where tight construction and leisure coexist. This collective leisure implicitly shows Korean society by revealing fast-paced lifestyle and community-based trust.

Lairg, Scotland
Sheep farmers gather at Lairg auction for the great sale of lamb. Renowned as one of the biggest one-day livestock markets in Europe, the annual lamb sale returns to Sutherland’s Lairg market, where 15,000 sheep from the northern Highlands come together for auction.  Photograph: Jeff J Mitchell/Getty Images

Salvation by overall winner International Portrait Photographer of the Year 2023, Forough Yavari of Australia. Born in Iran during the Iranian revolution, her work focuses on the narrative behind the lives of women. Photograph: Forough Yavaori.
Market Closes for August 15^th, 2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1971, President Richard Nixon declared a 90-day freeze on wages and prices in an attempt to slow inflation, then running at an annual rate of about 4.5%. Within three years, inflation had accelerated to a record 12.2%.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the second day, dropping 1.9%, or 390.75 to 19,899.79 in Toronto.
The move was the biggest since falling 2% on Oct. 11.
Today, financials stocks led the market lower, as all sectors lost; 209 of 227 shares fell, while 17 rose.
Royal Bank of Canada contributed the most to the index decline, decreasing 2.2%.
Hudbay Minerals Inc. had the largest drop, falling 7.7%.
Insights
* In the past year, the index had a similar or greater loss three times. The next day, it declined after all three occasions
* The index declined 1.4% in the past 52 weeks. The MSCI AC Americas Index gained 2.5% in the same period
* The S&P/TSX Composite is 4.5% below its 52-week high on Feb. 2, 2023 and 11.3% above its low on Oct. 13, 2022
* The S&P/TSX Composite is down 1.5% in the past 5 days and fell 1.8% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 13.1 on a trailing basis and 14.1 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.4% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.21t
* 30-day price volatility rose to 11.71% compared with 10.16% in the previous session and the average of 10.48% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | -122.2753| -1.9| 3/26
Materials | -81.2191| -3.4| 1/49
Energy | -74.0926| -2.1| 0/39
Industrials | -45.9785| -1.6| 3/23
Information Technology| -16.6138| -1.1| 2/9
Communication Services| -13.4494| -1.7| 1/4
Utilities | -11.3952| -1.3| 1/15
Consumer Staples | -10.9842| -1.3| 1/10
Consumer Discretionary| -8.1245| -1.1| 3/11
Real Estate | -5.6315| -1.2| 2/19
Health Care | -1.0005| -1.6| 0/4
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
RBC | -27.5500| -2.2| -36.5| -2.6
TD Bank | -20.5000| -1.9| -12.6| -3.9
Canadian Natural Resources | -18.6500| -2.9| 30.2| 7.4
Cargo jet | 0.3800| 3.2| 62.1| -11.1
Quebecor | 0.3990| 1.1| 39.8| 11.1
Fairfax Financial | 0.4570| 0.3| -22.5| 41.3
US
By Emily Graffeo and Isabelle Lee
(Bloomberg) — The drop in US stocks deepened in the final hour of Tuesday trading amid signs the Federal Reserve’s fight with inflation was not yet done.
Shorter-dated US bonds gained as investors bought the dip.
The S&P 500 Index’s 1.2% drop sent the equities gauge below its average price over the last 50 days for the first time in more than three months, halting a streak of momentum that was by this measure the longest since September 2020.
“In the near-term, dips below 4450 can be bought while rallies up to 4550 should be faded,” Adam Crisafulli, analyst at Vital Knowledge, wrote of the benchmark’s drop. “The inability of the SPX over the course of several weeks to set new highs has steadily eroded psychology.”
US stocks sank after retail sales rose more than forecast, suggesting the economy can support higher rates and potentially dissuade decision makers from a policy pivot.
Financials weighed on the S&P 500 benchmark after a warning from Fitch that the ratings firm may downgrade larger lenders like JPMorgan Chase or Bank of America Corp., while Discover Financial Services was the worst performer after its chief executive officer resigned.
“The most recent data — retail sales — shows the economy is still hanging in pretty well,” Rhys Williams, chief strategist at Spouting Rock Asset Management, said by phone. “Clearly the economy is better than anybody expected six months ago.”
Williams is skeptical that inflation can be brought down, and remain at, the central bank’s 2% target rate this year.
Fed officials are also sounding a cautious note.
Minneapolis Fed President Neel Kashkari said at a conference Tuesday that while inflation has been coming down, “it’s still too high.”
In earnings, Home Depot Inc. beat the average analyst estimate, suggesting that US home improvement spending is performing slightly better than expected following an unprecedented boom during the pandemic.
More insight into the state of the consumer will come later this week when Target Corp. and Walmart Inc. are set to report.
Investors are growing wary that consumer-facing companies will be able to maintain their pricing power for much longer as the lagged effects of the Fed’s policy tightening take hold.
“Eventually — and I think we’ll see some of that now — those margins get eaten away,” Bob Doll, chief investment officer at Crossmark Global Investments, told Bloomberg Television. “Because companies can only raise prices so far, and you’re already seeing consumers begin to make noise and balk and stop buying some things.”
“We’ve been — since the first of the year — saying recession starts sometime between Labor Day and the end of the year,” he added. Doll is sticking with that prediction though he expects it to be a mild downturn.
Shorter-dated US Treasuries went higher as buyers stepped in amid a global bond selloff.
Options traders have been recalibrating bets to accommodate the possibility that interest rates and inflation will stay high for longer.
Yields on the 10-year reached 4.27%, the highest since October before paring gains while the two-year dipped after moving above 5%.

Investors are navigating a hawkish Federal Reserve, a slowdown in China and flare-ups across emerging markets after a record first half in stock markets.
A devaluation in Argentina and Russia’s emergency rate hike on Tuesday to stem the ruble’s slide added to the risk-off sentiment.

Still, Bank of America’s latest global survey of fund managers found investors the least pessimistic on stocks since February of last year, before the Fed began one of the most aggressive tightening cycles in decades.
They increasingly expect no recession at all within the next 18 months, and a “soft landing” in the next 12 months remains the base case, BofA strategists led by Michael Hartnett wrote in a note.
Crude futures dropped to the lowest in a week as the prospect of a slowing economy in China weighed on sentiment.
In currencies, the British pound was the best performer in the Group of 10 as investors weighed the prospect of an outsized interest-rate hike after wage growth accelerated to the strongest pace on record.
The focus later this week will be on UK inflation data due Wednesday, followed by minutes from the Fed’s July policy meeting, as traders seek clues on central banks’ next moves. 
Some of the main moves in markets:
Stocks
* The S&P 500 fell 1.2% as of 4 p.m. New York time
* The Nasdaq 100 fell 1.1%
* The Dow Jones Industrial Average fell 1%
* The MSCI World index fell 1%
Currencies
* The Bloomberg Dollar Spot Index rose 0.1%
* The euro was little changed at $1.0904
* The British pound rose 0.1% to $1.2702
* The Japanese yen was little changed at 145.55 per dollar
Cryptocurrencies
* Bitcoin fell 0.8% to $29,145.5
* Ether fell 0.9% to $1,825.93
Bonds
* The yield on 10-year Treasuries advanced two basis points to 4.21%
* Germany’s 10-year yield advanced three basis points to 2.67%
* Britain’s 10-year yield advanced two basis points to 4.59%
Commodities
* West Texas Intermediate crude fell 1.9% to $80.96 a barrel
* Gold futures fell 0.5% to $1,934.30 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Lu Wang, Cecile Gutscher, Michael Mackenzie, Sagarika Jaisinghani and Tassia Sipahutar.
Have a  lovely evening.

Be magnificent!
As ever,

Carolann
Compassion is the basis for all morality. –Arthur Schopenhauer, 1788-1860.

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