August 15, 2024 Newsletter

Dear Friends,

Tangents: Happy Friday Eve.

Assumption of the Blessed Virgin, Roman Catholic.

August 15, 1620: Mayflower sets sail from Southampton, England, with 102 Pilgrims on the way to settle in America.
August 15, 1947 India became independent after some 200 years of British rule.  Go to article >>
August 15, 1962: Marvel Comics introduces Spider-Man in issue #15 of Amazing Fantasy, written by Stan Lee with illustrations by Steve Ditko.

Napoleon Bonaparte, French Emperor, b. 1769.
Sir Walter Scott, poet, b. 1771
Julia Child, b. 1912

Archaeologists unearthed a beautiful and remarkably well-preserved mosaic that was “hidden for thousands of years” in northwestern England. Featuring fish and dolphins, it was found in a city almost as large as Pompeii during its heyday.

Rare Roman-era silver ingots depicting Constantine the Great seized from alleged black-market sale
A man allegedly tried to illegally sell three rare Roman-era silver ingots that his great-grandmother reportedly found in her garden years ago. Read More.

Perseid meteor shower rains ‘shooting stars’ over Stonehenge in glorious astrophotography image
A UK-based astrophotographer captured this stunning composite image of the Perseid meteor shower raining “shooting stars” over Stonehenge. Read More.

Tesla primed to sell AI-powered humanoid robots alongside its EVs in 2025. But will they be any good?
Telsa’s Optimus humanoid robot will be among the first such machines to flood our lives when it launches next year, with more set to follow. Read More.

‘Need to stop for a second’: Meteorologist has panic attack on air
An Australian meteorologist had a panic attack while live on air. See how his candid approach and support from co-hosts helped him manage the moment.

Is diet soda worse for you than regular?
Watch this video to learn the science behind erythritol — the sugar substitute often found in diet sodas.

North Korea will reopen to international tourism this winter
Having closed its borders to most tourism during the Covid-19 pandemic, North Korea is finally reopening to certain visitors, according to two tour companies with connections to the isolated country.

Apple pushes ahead with a tabletop robot.

What to know: The six-ton slab of sandstone at the center of England’s famous prehistoric monument was sourced 5,000 years ago from faraway Scotland, new research found.
How did it get there? It was either dragged over up to 600 miles of land (before the wheel was invented) or, more likely, taken by sea. But the finding raises new questions.
PHOTOS OF THE DAY
Barcelona, Spain
A boat sailing through stormy waters near the port
Photograph: Urbanandsport/NurPhoto/Rex/Shutterstock

Baltistan, Pakistan
Hikers walk the Passu Glacier, situated below the 7,500-metre-high Passu Peak within the Karakoram mountain range
Photograph: Anadolu/Getty Images

Brussels, Belgium
A 1,680 sq metre art nouveau-themed flower carpet, constructed by a team of 100 gardeners using hundreds of thousands of dahlias and begonias at Grand Place
Photograph: Yves Herman/Reuters
Market Closes for August 15^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1971: Alarmed at a 4.5% annual inflation rate, President Richard Nixon issued an executive order declaring a 90-day freeze on wages and prices. Within three years, inflation was at a record 12.2% and the nation was in the worst recession since 1929
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the sixth day, climbing 1.2%, or 272.71 to 23,032.72 in Toronto. The index advanced to the highest closing level since July 31.
Shopify Inc. contributed the most to the index gain, increasing 4.6%. First Quantum Minerals Ltd. had the largest increase, rising 7.8%.
Today, 185 of 226 shares rose, while 39 fell; 10 of 11 sectors were higher, led by financials stocks.
Insights
* In the past year, the index had a similar or greater gain 15 times. The next day, it advanced 12 times for an average 0.5% and declined three times for an average 0.9%
* So far this week, the index rose 3.2%, heading for the biggest advance since the week ended Nov. 3
* The index advanced 16% in the past 52 weeks. The MSCI AC Americas Index gained 24% in the same period
* The S&P/TSX Composite is 0.8% below its 52-week high on July 31, 2024 and 23.2% above its low on Oct. 27, 2023
* The S&P/TSX Composite is up 3.6% in the past 5 days and rose 1.2% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 18.6 on a trailing basis and 15.6 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.9% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.62t
* 30-day price volatility rose to 14.91% compared with 14.53% in the previous session and the average of 12.24% over the past month
================================================================
|Index Points | | Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 58.7374| 0.8| 25/2
Information Technology | 58.6353| 3.1| 10/0
Materials | 44.9684| 1.6| 36/15
Industrials | 43.3915| 1.4| 24/4
Energy | 29.0470| 0.7| 35/5
Consumer Staples | 15.1375| 1.5| 9/2
Consumer Discretionary | 14.1239| 1.8| 13/0
Utilities | 5.2954| 0.6| 10/5
Real Estate | 3.1056| 0.6| 17/3
Health Care | 0.6839| 1.0| 3/1
Communication Services | -0.4081| -0.1| 3/2
================================================================
| | |Volume VS| YTD | Index | | 20D AVG | Change Top Contributors |Points Move|% Change | (%) | (%)
================================================================
Shopify | 38.5300| 4.6| 4.8| -0.4
Canadian Natural | | | |
Resources | 13.6300| 1.8| 74.8| 16.3
Canadian Pacific | | | |
Kansas | 13.0400| 1.9| -28.2| 4.0
iA Financial | -0.9240| -1.4| -53.7| 10.0
Barrick Gold | -0.9810| -0.3| -26.1| 9.4
Rogers Communications | -1.0450| -0.7| -56.2| -12.6

* The benchmark 10-year bond fell and the yield rose 5.5 basis points to 3.079%
* The S&P 500 Index advanced 1.6%
US
By Rita Nazareth
(Bloomberg) — Stocks climbed and bonds tumbled as data on retail spending and the labor market underscored the strength of the world’s largest economy, allaying fears the Federal Reserve would be risking a deeper slowdown.
As economic jitters abated, the S&P 500 extended a six-day rally to 6.6% — the best performance in such a span since November 2022. Walmart Inc. — a barometer of growth — jumped on a solid outlook. Treasury yields surged, with the move led by
shorter maturities. Data showed retail sales beat estimates while jobless claims hit the lowest since early July. Swap traders further reduced bets on aggressive Fed easing.
“We’re back to an environment where good news is good news and bad news is bad news,” said Bret Kenwell at eToro.
“Investors and consumers want inflation to go lower — but not at the expense of the economy. Today’s stronger-than-expected retail sales figure quiets some of the fears the US may be slipping into a recession.”
Given the recent worries about the labor market, the unemployment claims report was another positive. A weak US payrolls print earlier this month spurred concern the Fed has waited too long to cut rates. Thursday’s data should buy officials some time until the September meeting, Kenwell added.
“What hard landing?” said Aditya Bhave at Bank of America Corp. “The July retail sales data were consistent with our soft- landing economic outlook. We remain comfortable with our view that the Fed will cut rates only twice this year, by 25 basis points each, in September and December.”
US officials have been trying to use higher rates to ease inflation without causing the economy to contract — a scenario known as a “soft landing.” Fed Bank of St. Louis President Alberto Musalem said the time is approaching when it will be appropriate to cut rates. His Atlanta counterpart Raphael Bostic told the Financial Times he’s “open” to a reduction in September.
The S&P 500 climbed 1.6%. The Nasdaq 100 added 2.5%. The Russell 2000 of smaller firms climbed 2.5%. Wall Street’s “fear gauge” – the VIX – dropped to around 15. In late hours, Applied Materials Inc., the largest US maker of chip-manufacturing equipment, gave a sales forecast that met estimates.
Treasury 10-year yields rose eight basis points to 3.91%.
Traders trimmed bets on a jumbo September Fed cut, and they now see less than 100 basis points of cuts for 2024. The dollar gained.
“Hard, soft, bumpy? The market goes ‘to the mattresses’,” said Steve Sosnick at Interactive Brokers, referring to a line from the movie “The Godfather,” which means adopting a warlike stance. “All this discussion about whether our landing is hard or soft, combined with my wife and I needing a new mattress, has caused me to conflate the economy with bedding.”
“And in both cases, it really doesn’t matter,” Sosnick said. “If you’re tired enough, you’ll fall asleep anywhere. If you’re in a FOMO (Fear of Missing Out) and momentum-driven rally mode, you’ll buy stocks regardless of the reason. Today’s economic reports make the chances for aggressive rate-cutting more remote, but that doesn’t matter today.”
The retail sales numbers were a blowout versus consensus, but more importantly it should lay to rest (at least for the moment) all of the “doom and gloom” that was expressed at the beginning of this month, according to Chris Zaccarelli at Independent Advisor Alliance.
“This entire economic cycle has been a headscratcher from much higher-than-expected inflation to a much more resilient consumer than anyone could have forecast back in the dark days of 2020,” he noted. If the economy continues to be resilient – especially in conjunction with slowing inflation – then the Fed can begin a rate-cutting cycle without the economy entering recession and history shows this is an extremely positive environment for the stock market, he concluded.
To David Russell at Trade Station, investors fearing a potential recession or sharper slowdown have less to worry about.
“A soft landing is no longer a hope. It’s becoming a reality,” Russell said. “These numbers also suggest that recent market volatility wasn’t really a growth scare. It was just normal summer seasonality amplified by moves in the currency market.”
The market fallout from the “weak” early August US data was “disproportionate” and largely reflected the unwind of crowded positions in some markets, according to Jonas Goltermann at Capital Economics.
“As such, we are sticking to our optimistic forecasts for equity markets and “risky” assets more broadly,” he said.
At Ned Davis Research, Ed Clissold said that if markets continue to calm down, one indicator should give a bullish signal in the coming days, confirming that the bull market is intact.
One way to capture the volatility surge of earlier this month is through the VVIX — which measures the volatility of the VIX.
On Aug. 5, the gauge hit its highest level since March 2020. When the VVIX has fallen from such extremely high levels, the S&P 500 has rebounded sharply over the next few weeks, Clissold noted. The rally has continued for up to a year later, on average.
While calm has seemingly been restored to Wall Street, Deutsche Bank AG’s Christian Nolting says investors still need to gird against wild asset swings to come.
“We expect volatility to stay at higher levels due to seasonality and change in markets which are no longer priced to perfection,” said Nolting. Expectations have been reset after the once unstoppable equities rally stumbled on a weak jobs report and the “good news is now good news and bad news is bad news.”
To Jeff Roach at LPL Financial, the jobs market — and what it means for consumer spending — is a key factor in why the Fed is expected to start cutting interest rates next month, he said.
Measures of consumer sentiment have been subdued as the labor market cools and the presidential election nears, overshadowing progress in taming inflation.
“Investors should expect more volatility in the near term as the economic data likely give conflicting signals.”
Corporate Highlights:
* Autodesk Inc. continued to use a controversial sales strategy after promising investors it would stop and ignored internal warnings about the risks of doing so, according to previously unreported internal documents.
* Deere & Co., the world’s top tractor maker, reported better- than-expected results and affirmed its profit outlook as cost- cutting efforts help it weather a slumping farm economy.
* Nike Inc. surged after Pershing Square Capital Management LP disclosed a new stake in the world’s largest sportswear company.
* Seagram Co. heir Edgar Bronfman Jr. is close to making an offer for Paramount Global, setting off a potential bidding war for the film and TV company that owns CBS and MTV.
* Dell Technologies Inc. was added to the analyst focus list at JPMorgan Chase & Co., which cited an “attractive entry point.”
* Johnson & Johnson was twice blocked in New Jersey from getting bankruptcy protection from one of its units to resolve billions of dollars in cancer claims tied to baby powder use. For its third try, the company is eyeing Texas, home to what are widely considered more business-friendly courts.
* United Airlines Holdings Inc. Chief Executive Officer Scott Kirby, one of the biggest customers and biggest critics of Boeing Co., said the planemaker is “on the right path” under new CEO Kelly Ortberg and will recover sooner than expected from a series of safety missteps.

Key events this week:
* Japan tertiary index, Friday
* US housing starts, University of Michigan consumer sentiment, Friday
* Fed’s Austan Goolsbee speaks, Friday
* Canada housing starts, Friday
Some of the main moves in markets:
Stocks
* The S&P 500 rose 1.6% as of 4 p.m. New York time
* The Nasdaq 100 rose 2.5%
* The Dow Jones Industrial Average rose 1.4%
* The MSCI World Index rose 1.3%
* Bloomberg Magnificent 7 Total Return Index rose 2.9%
* The Russell 2000 Index rose 2.5%
Currencies
* The Bloomberg Dollar Spot Index rose 0.2%
* The euro fell 0.4% to $1.0973
* The British pound rose 0.2% to $1.2855
* The Japanese yen fell 1.2% to 149.04 per dollar
Cryptocurrencies
* Bitcoin fell 3.5% to $57,066.81
* Ether fell 4.7% to $2,549.8
Bonds
* The yield on 10-year Treasuries advanced eight basis points to 3.91%
* Germany’s 10-year yield advanced eight basis points to 2.26%
* Britain’s 10-year yield advanced 10 basis points to 3.92%
Commodities
* West Texas Intermediate crude rose 1.2% to $77.94 a barrel
* Spot gold rose 0.3% to $2,455.50 an ounce
This story was produced with the assistance of Bloomberg
Automation.

–With assistance from John Viljoen and Richard Henderson.

Have a lovely evening.

Be magnificent!
As ever,

Carolann
In three words I can sum up everything I’ve learned about life: it goes on. –Robert Frost, 1874-1963.

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