August 20, 2024 Newsletter

Dear Friends,

Tangents:
August 20^th, 1953 The Soviet Union publicly acknowledged it had tested a hydrogen bomb. Go to article >>
August 20^th, 1977: Voyager 2 is launched by NASA to study the outer planets and beyond, becoming one of the most successful space missions.

1942: Plutonium first weighed.
Eliel Saarinen, architect, b. 1873.

In pictures: The rare super blue moon
A super blue moon lit up the sky on Monday, creating a stellar sight for millions worldwide. View photos from the rare event.

Trump falsely suggests Taylor Swift endorsed him
Former President Donald Trump posted fake AI images of Taylor Swift and Swifties, falsely suggesting he has the singer’s support. 

A gold bar is now worth $1 million
Central banks — and investors — see the precious metal as a long-term, reliable store of value. Read why gold prices are soaring.

‘World’s most famous’ helipad on Burj al Arab turns 25
Beyond its basic function, this suspended helipad is better known as a location for legendary stunts and extravagant events

‘Spectacular silver treasure’ from Viking Age unearthed by college student on farm in Denmark
A metal detectorist found more than a half dozen pieces of silver jewelry while exploring farmland in Denmark. Read More.

‘Banana apocalypse’ could be averted thanks to genetic breakthrough
Fusarium wilt is threatening the global supply of bananas, but researchers might have found a way to control the disease. Read More.

Quantum data beamed alongside ‘classical data’ in the same fiber-optic connection for the 1st time
Scientists have transmitted quantum data and conventional internet data through the same fiber-optic channel for the first time. Read More.

What was the first animal on Earth?
Using fossil evidence and genetic dating, geneticists and paleontologists have backed strikingly different candidates for the world’s first animal. Read More.

‘Final parsec problem’ that makes supermassive black holes impossible to explain could finally have a solution
A new study helps solve the “final parsec problem” that has made supermassive black hole formation impossible to explain, pointing to a strange form of dark matter as the key.

PHOTOS OF THE DAYLiverpool, EnglandSenior paintings conservator Dave Crombie works on Echo and Narcissus by John William Waterhouse. Painted in 1903, it depicts the Roman myth in which Narcissus rejects the nymph Echo and falls in love with his own reflection
Photograph: Adam Vaughan/EPA
Erçek Lake, Turkiye
A pelican flies low over a flock of flamingoes
Photograph: Anadolu/Getty Images
A deep red supermoon in the path of a spotlight on the Eiffel Tower in Paris. The supermoon will appear full in the sky for three days.
Photograph: Christian Hartmann/Reuters
Market Closes for August 20^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1932: Franklin Delano Roosevelt kicked off his presidential campaign with a nine-point plan for helping the economy climb out of the Great Depression. Among the proposals: reforms of Wall Street underwriting and trading, increased regulation of commercial banks, a more aggressive role for the Federal Reserve, and a crackdown on utility companies. 
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell 0.3% at 23,037.44 in Toronto. The move was the biggest since falling 0.4% on Aug. 7 and follows the previous session’s increase of 0.3%.
Canadian Natural Resources Ltd. contributed the most to the index decline, decreasing 2.5%. Tilray Brands Inc. had the largest drop, falling 3.8%.
Today, 127 of 226 shares fell, while 94 rose; 9 of 11 sectors were lower, led by energy stocks.
Insights
* This month, the index fell 0.3%
* The index advanced 16% in the past 52 weeks. The MSCI AC Americas Index gained 27% in the same period
* The S&P/TSX Composite is 0.7% 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 1.9% in the past 5 days and rose 1.5% 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 15.7 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$3.67t
* 30-day price volatility little changed to 14.60% compared with 14.61% in the previous session and the average of 12.87% over the past month
================================================================
| Index Points | |Sector Name | Move | % Change | Adv/Dec
================================================================
Energy | -58.0411| -1.4| 8/33
Financials | -7.8278| -0.1| 11/15
Information Technology | -6.5186| -0.3| 1/9
Consumer Discretionary | -4.7899| -0.6| 7/6
Consumer Staples | -4.5020| -0.5| 4/7
Industrials | -3.4618| -0.1| 13/15
Utilities | -3.4360| -0.4| 7/8
Communication Services | -1.7914| -0.3| 2/3
Health Care | -1.1197| -1.7| 1/3
Real Estate | 0.9579| 0.2| 11/8
Materials | 11.5680| 0.4| 29/20
================================================================
| | |Volume VS| YTD|Index Points| | 20D AVG | Change Top Contributors | Move |% Change | (%) | (%)
================================================================
Canadian Natural Resources | -18.7300| -2.5| 150.7| 12.1
Suncor | -13.5700| -2.7| -7.5| 29.3
Cenovus Energy | -8.8460| -3.6| 32.0| 16.7
Wheaton Precious Metals | 4.6880| 1.8| -29.0| 28.5
Agnico Eagle Mines Limited/Limitee | 5.3040| 1.4| 6.8| 53.9
Fairfax Financial | 5.4100| 2.3| -24.8| 28.9
US
By Rita Nazareth
(Bloomberg) — Stocks struggled to make headway, following a furious rally that put the market within a striking distance of its all-time highs.
A drop in equities interrupted what would have been the S&P 500’s longest winning streak in 20 years. In stark contrast to the “extreme negative momentum” during the panic selling of early August, “euphoria” has taken hold. In only eight days, the US equity benchmark added almost 8%, with positioning returning to extended levels. Just last week, nearly $16 billion in new long bets were added to S&P 500 futures, according to Citigroup Inc.
In another sign that bullishness has been in overdrive, Bank of America Corp. clients doled out $2.7 billion for US equities during the best week of the year for the S&P 500 Index, with inflows led by so-called smart money. And Goldman Sachs Group Inc. said so-called trend followers are “no longer a headwind” and are expected to be buyers of equities this week — no matter how markets move.
“The momentum guys are driving the bus,” said Kenny Polcari at SlateStone Wealth. “Now the volumes have been trending lower as we move into the end of the month. Moves will be and are exaggerated as a result. And I think the recent rally is proof
of that exaggeration.”
At Miller Tabak, Matt Maley said it would be “healthy” if the equity market took a breather for a day or two.
“No market moves in a straight line,” he noted. The S&P 500 fell below 5,600. Nvidia Corp. — which had rallied almost 25% in six days — led losses in mega caps. Bank of America Corp. slumped after Warren Buffett’s Berkshire Hathaway Inc. sold more shares. Lowe’s Cos. cut its full-year guidance. Netflix Inc. hit a record high. Palo Alto Networks Inc. climbed on a bullish outlook and after boosting its buyback program.
Treasury 10-year yields declined six basis points to 3.81%.
The loonie trailed most of its major peers as inflation in Canada decelerated, cementing rate-cut wagers. Oil steadied, with traders monitoring developments in cease-fire talks for the war in Gaza.
Dan Wantrobski at Janney Montgomery Scott, says that he continues to anticipate ongoing stock-market strength on a near- term basis, but he remains on “high alert” for another, potentially bigger corrective wave moving through the August- October time frame.
“So what happens when everything and everyone is teed up to be bullish,” Wantrobski said. “From a timing perspective, we are headed into a window where there may be high probability for a liquidity event to occur — and the charts, trader positioning, and sentiment are all very vulnerable right now in our view. We smell a ‘bull trap’ ahead. But hope we’re wrong.” After the S&P 500 last closed at overbought levels on July 23, it quickly sold off and moved into “extreme” oversold territory in just 13 calendar days, according to Bespoke Investment Group. Just as fast as the S&P 500 moved into extreme oversold territory, though, it swung back to overbought levels nearly as fast.
“The market may usually take the stairs up and the elevator down, but in this case, it took the elevator both ways!” the Bespoke strategists said. Since World War II, there have only been 10 other periods when the S&P 500 moved from oversold levels down to extreme overbought levels and back to overbought levels in less than five weeks.
While the S&P 500’s consistency of positive returns was slightly better than normal, the magnitude of the returns relative to historical averages was mixed, Bespoke noted. Median one-, three-, and six-month returns were modestly better than
the long-term average, but the median one-year gain was well below the post-WWII average.
“While stocks have experienced breathtaking moves in the last month, we would caution against trying to read too much (good or bad) into the swiftness of the rebound,” the strategists concluded.
Momentum traders and a surge in corporate buybacks promise to drive a US stocks rally over the next four weeks, Goldman Sachs Group Inc.’s Scott Rubner said in a note dated Monday. Rubner, who correctly predicted a late summer correction and advised in late June to trim exposure in US stocks after July 4, has turned tactically bullish saying current positioning and flows “will act as a tailwind as sellers are out of ammo.”
“Strong price momentum and sharp rapid reversals as witnessed over the past month are a feature of modern financial markets, not a bug,” said Jason Draho at UBS Global Wealth Management. “This stems from the outsized market influence of the Fed, macroeconomic uncertainty, investor herd behavior, and the growing use of index-linked products to manage positioning.”
Aside from flows and positioning, the recent rally was also fueled by bets the Federal Reserve will signal it’s getting closer to cutting rates. Just days ahead of Jerome Powell’s speech in Jackson Hole, key US payrolls revisions is poised to
capture Wall Street’s attention.
Goldman Sachs Group Inc. and Wells Fargo & Co. economists expect the government’s preliminary benchmark revisions on Wednesday to show payrolls growth in the year through March was at least 600,000 weaker than currently estimated. While JPMorgan Chase & Co. forecasters see a decline of about 360,000, Goldman indicates it could be as large as a million.
“Our guess as to what is driving rates lower today/over the last week is the hyper focus on the payroll revisions,” said Dennis DeBusschere, founder of 22V Research. “People seem to be assuming a large downward revision would increase the odds of
more aggressive rate cuts signal at Jackson Hole. That seems fair. Also, it doesn’t mean recession odds go up.”
To Anthony Saglimbene at Ameriprise, continued progress on inflation, moderating but still healthy labor conditions, and economic updates that point to firm consumer trends likely allow the Fed to comfortably begin cutting its policy rate in September.
From a monetary policy perspective, whether it’s a 25 or 50-basis point cut next month isn’t really that important, he noted. What is important — and not lost on investors over the last week or so — is that updates on labor, services activity, inflation, and the consumer all point to a still healthy economic environment, but one that allows the Fed room to start easing monetary policy.
“This is how a soft landing starts, in our view. Of course, there is no guarantee the Fed will ultimately pull it off, but you need the conditions in place to start, and it looks like we finally have those conditions in place today, he said.

Corporate Highlights:
* Johnson & Johnson will pay as much $1.7 billion for V-Wave Ltd., bolstering its development efforts to treat heart failure as it goes deeper into medical technology.
* Kroger Co. is selling $10.5 billion of bonds on Tuesday to help fund its acquisition of fellow grocer Albertsons Cos. In what will be one of the biggest corporate bond deals of the year.
* Patients taking Eli Lilly & Co.’s blockbuster weight-loss shot were 94% less likely to develop diabetes in a three-year study that illuminates the long-term health benefits of treating obesity.
* Alaska Air Group Inc. and Hawaiian Holdings Inc. are one step closer to finalizing their $1.9 billion merger after the US Justice Department decided against challenging it.
* Boeing Co. has paused flight tests of its 777X jetliner while it inspects the four-aircraft fleet for cracking in a crucial structural component that connects the hulking General Electric Co. engines to the plane’s wings.
* Edgar Bronfman Jr. formally submitted a $4.3 billion bid to take control of Paramount Global and quash an existing offer from Skydance Media, according to a person familiar with the proposal.

Key events this week:
* US Fed minutes, BLS preliminary annual payrolls revision, Wednesday
* Eurozone HCOB PMI, consumer confidence, Thursday
* ECB publishes account of July rate decision, Thursday
* US initial jobless claims, existing home sales, S&P Global PMI, Thursday
* Japan CPI, Friday
* Bank of Japan Governor Kazuo Ueda to attend special session at Japan’s parliament to discuss July 31 rate hike, Friday
* US new home sales, Friday
* Fed Chair Jerome Powell speaks at Jackson Hole symposium in Wyoming, Friday
Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.2% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.2%
* The Dow Jones Industrial Average fell 0.2%
* The MSCI World Index was little changed
Currencies
* The Bloomberg Dollar Spot Index fell 0.2%
* The euro rose 0.4% to $1.1125
* The British pound rose 0.3% to $1.3033
* The Japanese yen rose 0.8% to 145.35 per dollar
Cryptocurrencies
* Bitcoin rose 0.7% to $59,506.7
* Ether fell 0.5% to $2,602.83
Bonds
* The yield on 10-year Treasuries declined six basis points to 3.81%
* Germany’s 10-year yield declined three basis points to 2.22%
* Britain’s 10-year yield was little changed at 3.92%
Commodities
* West Texas Intermediate crude fell 0.4% to $74.04 a barrel
* Spot gold rose 0.4% to $2,515.22 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Isabelle Lee and Vildana Hajric.
Have a lovely evening.

Be magnificent!

As ever,

Carolann
What you do when you don’t have to determines what you will be when you can no longer help it. -Rudyard Kipling, 1865-1907.

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