August 2, 2022 Newsletter

Dear Friends,

Tangents: Happy Tuesday.

August 2,1939:  Albert Einstein signed a letter to President Franklin D. Roosevelt urging creation of an atomic weapons research program.  Go to article »

On this day in 1990, Saddam Hussein invaded Kuwait. Over the next two-and-a-half months, the U.S. stock market lost 19% and many experts began to forecast a protracted bear market. Yet, just one year later, the stock market was up 27%.

Angelina Jolie’s daughter is headed to Spelman College.  Zahara Jolie-Pitt is headed to an HBCU in Atlanta. Check out the lovely photo Jolie shared of Zahara with her new Spelman sisters.

Doorbell ‘ringing’ bear:  Watch this doorbell cam footage of a bear casually walking up to a woman’s front door. U-bear eats? Is that you?

Solar storm from hole in the sun will hit Earth on Wednesday (Aug. 3):  High-speed solar winds from a “hole” in the sun’s atmosphere are set to hit Earth’s magnetic field on Wednesday (Aug 3.), triggering a minor G-1 geomagnetic storm.  Forecasters at the National Oceanic and Atmospheric Administration’s Space Weather Prediction Center (SWPC) made the prediction after observing that “gaseous material is flowing from a southern hole in the sun’s atmosphere,” according to spaceweather.com.  Full Story: Live Science (8/1) 

‘Ghost footprints’ left by ancient hunter-gatherers discovered in Utah desert:  Archaeologists recently stumbled upon a set of mysterious “ghost footprints” in the salt flats of a Utah desert.  These unusual ancient tracks get their eerie name not because they are from an ethereal realm, but due to their earthly composition: They become visible only after it rains and the footprints fill with moisture and become darker in color, before disappearing again after they dry out in the sun. Full Story: Live Science (8/2) 

Could we ever eradicate the flu?  For many people, catching the flu might not seem like that big of a deal — you might feel crummy, miss a few days of work or school, and then return to daily life. But this common illness causes tens of thousands of hospitalizations and deaths each year: Between 2010 and 2020, up to 342,000 people died of influenza in the U.S., according to the Centers for Disease Control and Prevention (CDC). During three out of the four flu pandemics in the past two centuries, including the 1918 influenza pandemic, that number jumped into the millions worldwide.  Ending this disease would prevent countless deaths. But is it possible to eradicate the flu?
Full Story: Live Science (8/1)

What is the birthday paradox?  Here’s a fun brain teaser: How large does a random group of people have to be for there to be a 50% chance that at least two of the people will share a birthday? The answer is 23, which surprises many people. How is this possible?  When pondering this question, known as the “birthday problem” or the “birthday paradox” in statistics, many people intuitively guess 183, since that is half of all possible birthdays, given how there are generally 365 days in a year. Unfortunately, intuition often fares poorly at this kind of statistical problem.  Full Story: Live Science (7/30) 

The longest-living animals on Earth:  The animal kingdom boasts some incredibly long lifespans that far exceed the average human’s. While humans may have an “absolute limit” of 150 years, this is just a blink of an eye compared with the centuries and millennia that some animals live through; and some animals can even stop or reverse the aging process altogether.  Although there are very long-living land animals (the oldest tortoise, for example, is nearly 190 years old), none of them make this list — the true age champions all live in water. From old to oldest, here are 10 of the longest-living animals in the world today.  Full Story: Live Science (7/30) 
PHOTOS OF THE DAY

Aerial picture released by Greenpeace showing smoke billowing from a fire in the Amazon forest in the municipality of Apui. The number of wildfires in the Brazilian Amazon increased by 8% in July 2022 compared with the same month last year
CREDIT: Christian Braga/Greenpeace/AFP/Getty Images

A polar bear is observed during the expedition of a Turkish scientific research team in the Arctic Ocean as many animals in the Arctic region faced the danger of extinction
CREDIT: Anadolu Agency/Getty Images

Artist Patricia Piccinini speaks during the press presentation of her exhibition. Patricia Piccinini: We are Connected features unique and bizarre hyperrealistic sculptures of animal-human hybrids
CREDIT: Roslan Rahman/AFP/Getty Images

Market Closes for August 2^nd, 2022

International Markets

Bonds

Currencies

Commodities

Market Commentary:
If you destroy a free market you create a black market.  If you have ten thousand regulations you destroy all respect for the law. –Winston Churchill, 1874-1965.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell 1% at 19,505.33 in Toronto.
The move was the biggest since falling 1.5% on July 14 and follows the previous session’s increase of 1.2%.
TC Energy Corp. contributed the most to the index decline,  decreasing 3.4%.
First Quantum Minerals Ltd. had the largest drop, falling 8.3%.
Today, 176 of 238 shares fell, while 61 rose; 8 of 11 sectors were lower, led by energy stocks.
Insights
* The index declined 3.9% in the past 52 weeks. The MSCI AC Americas Index lost 8.9% in the same period
* The S&P/TSX Composite is 12.2% below its 52-week high on April 5, 2022 and 7.3% above its low on July 14, 2022
* The S&P/TSX Composite is up 2.1% in the past 5 days and rose 3.4% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 14.8 on a trailing basis and 12 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.1% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.15t
* 30-day price volatility fell to 17.12% compared with 17.23% in the previous session and the average of 19.26% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
* Energy | -70.8273| -1.9| 7/31
* Materials | -50.0148| -2.3| 12/39
* Financials | -45.8625| -0.7| 6/23
* Industrials | -21.1270| -0.8| 8/21
* Communication Services | -11.4798| -1.2| 0/7
* Real Estate | -9.0614| -1.7| 4/19
* Consumer Staples | -2.8995| -0.4| 1/10
* Consumer Discretionary | -0.1668| 0.0| 5/8
* Utilities | 0.0617| 0.0| 6/9
* Health Care | 1.9882| 2.9| 5/2
* Information Technology | 21.8032| 2.0| 7/7
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
* TC Energy | -15.4800| -3.4| -21.7| 12.2
* Nutrien | -14.7800| -3.6| -3.2| 11.2
* Enbridge | -12.2900| -1.5| 230.6| 14.6
* National Bank of Canada | 1.7620| 0.9| -28.2| -6.0
* Restaurant Brands | 4.1280| 2.8| -26.8| -8.0
* Shopify | 31.4000| 8.9| 26.7| -72.1
US
By Emily Graffeo and Natalia Kniazhevich
(Bloomberg) — US Treasuries sank and stocks dropped after Federal Reserve officials signaled the central bank is still intent on raising rates until inflation is under control.
Treasury yields rose across the curve, with 10-year rates climbing as much as 20 basis points to 2.77%.
The yen, which was on track for its fifth daily gain, fell as the dollar snapped four days of losses amid a sudden turnaround in risk sentiment.
The S&P 500 dropped for the second straight day as Nancy Pelosi’s arrival in Taiwan prompted China to announce missile tests, even as she said her visit did not alter longstanding US policy in the region.
The Nasdaq 100 also ended the day down.
Both indexes swung between gains and losses throughout the session as markets remained on edge with geopolitical tensions simmering and commentary from Fed officials making it apparent that a policy pivot was less likely.
Stocks started August on the back foot after posting their best month since 2020 in July.
Investors have been keeping an eye out for hawkish comments from Fed officials about the need for higher rates to restrain elevated inflation.
While San Francisco Fed President Mary Daly said on Tuesday that the Fed is “nowhere near” done with its efforts to tamp down on inflation, Chicago Fed President Charles Evans said he expects the pace of rate hikes will start to slow later in the year.
“The Fed is not likely to announce they’re letting up on the brakes at this point,” said Ellen Gaske, economist at PGIM Fixed Income. “They are still seeing inflation numbers that have not started to recede.”
Cleavland Fed President Loretta Mester echoed this, saying that she wants to see “very compelling evidence” that month-to-month price increases are moderating before declaring that central bank has been successful in curbing inflation.
Corporate earnings also continued to roll in, impacting stocks.
Caterpillar Inc. slumped after a slowdown in China weakened its business.
That weighed on the Dow Jones Industrial Average, which was lower for the day.
Shares of Uber Technologies Inc. soared as much as 18% after the firm reported second-quarter revenue that beat the average analyst estimate.
Fresh economic data kept investors on their toes.
Recent data showed that US job openings in June fell to a nine-month low, a sign of moderating demand for labor as economic pressures mount.
The job market has been a bright spot in an economy otherwise losing momentum and possibly heading toward a recession.
Goldman Sachs Group Inc. strategists led by Cecilia Mariotti said it was too soon for stock markets to fade the risks of a recession on expectations of a pivot in the Fed’s hawkish policy.
JPMorgan Chase & Co. strategists, on the other hand, said the outlook for US stocks is improving for the second half of the year on attractive valuations.
Pelosi’s trip has created a fresh pressure point for investors already dealing with the prospects of a US recession, worldwide rate hikes and inflation that risks becoming entrenched as Russia’s war in Ukraine exacerbates food
shortages.
“The Taiwan story fits into the broader risk-off theme,” said Mark McCormick, global head of FX strategy at TD Securities. “It raises concerns about global growth issues, especially if geopolitical tensions and knock-effects exacerbate
inflationary concerns. In turn, that forces central banks to keep fighting inflation in spite of the clear deceleration of global growth.”
This week’s MLIV Pulse survey is asking about your outlook for corporate bonds, mergers and acquisitions and health of US corporate balance sheets through the end of the year.
It takes one minute to participate in the MLIV Pulse survey, so please click here to get involved anonymously. 
What to watch this week:
* St. Louis Fed President James Bullard is due to speak, Tuesday
* OPEC+ meeting on output, Wednesday
* US factory orders, durable goods, ISM services, Wednesday
* BOE rate decision, Thursday
* US initial jobless claims, trade, Thursday
* Cleveland Fed President Loretta Mester due to speak, Thursday
* US employment report for July, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.7% as of 4:01 p.m. New York time
* The Nasdaq 100 fell 0.3%
* The Dow Jones Industrial Average fell 1.2%
* The MSCI World index rose 0.1%
Currencies
* The Bloomberg Dollar Spot Index rose 0.8%
* The euro fell 0.9% to $1.0170
* The British pound fell 0.7% to $1.2168
* The Japanese yen fell 1.1% to 133.09 per dollar
Bonds
* The yield on 10-year Treasuries advanced 19 basis points to 2.76%
* Germany’s 10-year yield advanced four basis points to 0.82%
* Britain’s 10-year yield advanced six basis points to 1.87%
Commodities
* West Texas Intermediate crude rose 0.4% to $94.27 a barrel
* Gold futures fell 0.5% to $1,778.70 an ounce
–With assistance from Vildana Hajric, Isabelle Lee, Michael Msika, Jordan Yadoo and Cecile Gutscher.
Have a lovely evening.

Be magnificent!

As ever,

Carolann

The cautious seldom err or write good poetry.
                  –Message in a fortune cookie at a Chinese Restaurant (given to Howard Marks).

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