August 21, 2024, Newsletter

Dear Friends,

Tangents:

August 21, 1878: The American Bar Association was founded in Saratoga, N.Y.  Go to article >>

Count Basie, bandleader, b. 1904.

Benigo Aquino, assassinated.
Wilt Chamberlain, basketball player, b. 1936.

Rare pre-Inca burials of 4 people found at ‘water cult’ temple in Peru
Archaeologists have found the skeletal remains of four people — two children, a teenager and an adult — at a site in Peru that predates the Incas. Read More.

Rare ‘moonbows’ light up night sky across US as blue supermoon rises — and you could still spot another one
At least two lunar rainbows, including a stunning “double moonbow,” have been spotted above the U.S. in the lead-up to the blue supermoon. And there is still a chance to see one of these elusive arches for yourself. Read More.

World’s oldest person, Maria Branyas Morera, dies at 117 years old
The supercentenarian, who was born in San Francisco in 1907, died “peacefully in her sleep” in Olot, Spain. Read More.

Huge 13,600-year-old mastodon skull and bones unearthed in Iowa
A team of archaeologists recently excavated the first well-preserved mastodon bones ever found in Iowa, including the prehistoric animal’s skull. Read More.

Jennifer Lopez and Ben Affleck are divorcing after two years
“Bennifer” is calling it quits … again. Here’s what we know about their split.

Billions of crabs vanished around Alaska. Scientists have evidence it will happen again
The decline of the Alaskan snow crab signals a wider ecosystem change in the Arctic, as oceans warm and sea ice disappears

PHOTOS OF THE DAY

1st place Travel
Sahara Surfing, Erg Chebbi, Northern Sahara, Morocco
Photograph: Khalid Mahmood

China, Beijing
Humanoid robots on display at the World Robot Conference
Photograph: Xinhua/REX/Shutterstock

​​​​​​​Shanghai, China
A man walks inside a high-rise glass window shopping mall
Photograph: Ying Tang/NurPhoto/Rex/Shutterstock
Market Closes for August 21^st, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day on August 21, 1754: William Murdock was born in Bellow Mill, near Cumnock in Ayrshire, Scotland. His invention of coal-gas lighting in 1792 marked a leap forward in human productivity and safety from lit buildings and streets.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 0.4% at 23,121.73 in Toronto.
The move follows the previous session’s decrease of 0.3%.
Shopify Inc. contributed the most to the index gain, increasing 1.5%.
Calibre Mining Corp. had the largest increase, rising 7.7%.
Today, 149 of 226 shares rose, while 74 fell; 9 of 11 sectors were higher, led by information technology stocks.
Insights
* This month, the index was little changed
* The index advanced 17% in the past 52 weeks. The MSCI AC Americas Index gained 27% in the same period
* The S&P/TSX Composite is 0.4% below its 52-week high on July 31, 2024 and 23.7% above its low on Oct. 27, 2023
* The S&P/TSX Composite is up 1.6% in the past 5 days and rose 1.9% 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$3.66t
* 30-day price volatility fell to 14.11% compared with 14.60% in the previous session and the average of 12.93% over the past month
================================================================
|Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Information Technology | 25.8219| 1.3| 9/1
Materials | 21.5136| 0.7| 39/12
Financials | 19.4843| 0.3| 19/8
Industrials | 15.8266| 0.5| 20/8
Real Estate | 5.9280| 1.2| 20/0
Consumer Discretionary | 4.1745| 0.5| 5/8
Communication Services | 0.9618| 0.1| 3/2
Health Care | 0.4825| 0.7| 3/0
Consumer Staples | 0.2906| 0.0| 8/2
Utilities | -0.5195| -0.1| 5/10
Energy | -9.6848| -0.2| 18/23
================================================================
| | |Volume VS | YTD
| Index | | 20D AVG | Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
Shopify | 13.1000| 1.5| -14.5| 0.4
Constellation Software | 10.3000| 1.8| -15.6| 30.9
TD Bank | 4.7050| 0.5| -31.1| -5.1
Canadian Natural Resources | -2.2470| -0.3| 94.8| 11.7
Enbridge | -3.2680| -0.4| -40.5| 11.2
TC Energy | -4.4220| -1.0| -27.2| 15.9
US
By Rita Nazareth
(Bloomberg) — Stocks climbed after dovish Federal Reserve minutes and a big downward revision of US payrolls reinforced bets policymakers will cut interest rates in September.
Almost every major group in the S&P 500 advanced, with the US benchmark gauge closing at a five-week high.
Shorter-term Treasuries outperformed, with two-year yields slumping almost 10 basis points before paring the move.
Traders are once again pricing in more than 1 percentage point worth of easing by the end of this year, starting next month.
In the run-up to Jerome Powell’s speech in Jackson Hole Friday, traders scoured minutes from the latest Fed policy meeting.
Several Fed officials acknowledged there was a plausible case for cutting rates at their July gathering before the central bank’s policy committee voted unanimously to keep them steady.
“The Fed minutes removed all doubt about a September rate cut,” said Jamie Cox at Harris Financial Group.
“The Fed’s communication strategy is to make its meetings less of a market moving event, and they are following the script to the letter.”
To Bret Kenwell at eToro, with a “vast majority” of Fed members viewing a September rate cut as appropriate before the disappointing monthly jobs report, it seems all but certain that the Fed will cut next month.
“The question isn’t whether the Fed will cut rates in September, but rather, how much will the Fed cut?” he said. “The market is currently pricing in greater odds of a 25 basis point cut rather than a 50 basis point cut, which seems like the more likely outcome at this point, provided the August jobs report isn’t a drastic disappointment.”
The S&P 500 rose to around 5,620. Target Corp. climbed 10% after ending a string of sales declines in the second quarter, citing improved discretionary spending.
Macy’s Inc. sank 13% on a bearish outlook.
Treasury 10-year yields fell one basis point to 3.79%.
Oil slumped as trend-following algorithmic sellers overlooked a bullish US stockpile report.
The Jackson Hole economic symposium kicks off Thursday — with Fed Chair Powell expected to speak on Friday morning.
And the S&P 500 is on pace to enter the event with the second strongest year-to-date performance since the year 2000, according to data compiled by Bespoke Investment Group.
While performance leading up to Jackson Hole has been positive this year, the index has risen only a third of the time during the symposium across these prior instances with an average decline of 1.37% over the few days it takes place, Bespoke said.
The index has also averaged declines the next day, week, and through the next Fed meeting.
That’s roughly a three-week period after the last day of the symposium.
With the Fed poised to cut rates from restrictive levels and still strong economic and earnings fundamentals, the environment remains supportive for stocks, according to Solita Marcelli at UBS Global Wealth Management.
Marcelli believes quality growth remains well placed to outperform.
Firms with competitive advantages and exposure to structural drivers should be better positioned to grow and reinvest earnings consistently, she noted.
While the annual revision to jobs growth wouldn’t usually impact trading, it got attention this time around due to the recent concern the labor market is cooling too much amid high rates.
The number of workers on payrolls will likely be revised down by 818,000 for the 12 months through March.
It was the largest downward revision since 2009.
“The main message from the revisions in my mind is reinforce just how ‘silly’ it is to let the next jobs number be the determinant in whether to go 25 or 50 in September,” said Neil Dutta at Renaissance Macro Research.
“What this revision data imply is that whatever the next jobs number is going to be, it’s probably lower in reality.”
Krishna Guha at Evercore says the big payroll revisions will reinforce the Fed’s assessment that the labor market has been softening under restrictive policy and that it will need to recalibrate rates in a timely manner to prevent this from extending further than desired.
All this favors a relatively “low bar” for 50 basis-point rate cuts.
The base case remains a string of 25 basis-point moves.
At Strategas, Don Rissmiller says the case for lower policy rates got stronger.
The Fed will need to validate this rate cut cycle – which likely means multiple cuts, he noted, pointing to Powell’s speech on Friday at Jackson Hole.
To Jennifer McKeown at Capital Economics, central bankers are unlikely to offer much forward guidance at the Jackson Hole symposium, preferring to stress their “data dependence.”
“Since most economies are expanding, inflation is easing back to target and financial markets have stabilized after the recession scare a few weeks ago, there is less pressure for them to steer markets than there has been around past events,” she noted. “But they risk keeping rates too high for too long.”

Corporate Highlights:
* Apple Inc.’s vice president in charge of the App Store is leaving as the company reorganizes to respond to changes in global regulations.
* Ford Motor Co. is recalibrating its electrification strategy yet again, canceling plans for a fully electric sport utility vehicle in a shift that may cost the carmaker around $1.9 billion.
* Walmart Inc. raised about $3.6 billion by selling its stake in Chinese e-commerce firm JD.com Inc., winding down an eight-year partnership that appears to be paying diminishing returns amid a challenging landscape for Chinese tech giants.
* US coal producer Arch Resources Inc. agreed to merge with rival Consol Energy Inc. in a $2.3 billion deal aimed at creating a North American mining heavyweight to deliver the fuel around the world.

Key events this week:
* 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
* BOJ’s Kazuo Ueda to attend special session at Japan’s parliament to discuss July hike, Friday
* US new home sales, Friday
* Jerome Powell speaks in Jackson Hole, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.4% as of 4 p.m. New York time
* The Nasdaq 100 rose 0.5%
* The Dow Jones Industrial Average rose 0.1%
* The MSCI World Index rose 0.5%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro rose 0.2% to $1.1152
* The British pound rose 0.4% to $1.3090
* The Japanese yen rose 0.2% to 145.03 per dollar
Cryptocurrencies
* Bitcoin rose 4% to $61,664.01
* Ether rose 2.3% to $2,648.64
Bonds
* The yield on 10-year Treasuries declined one basis point to 3.79%
* Germany’s 10-year yield declined two basis points to 2.19%
* Britain’s 10-year yield declined two basis points to 3.89%
Commodities
* West Texas Intermediate crude fell 1.7% to $71.94 a barrel
* Spot gold was little changed

This story was produced with the assistance of Bloomberg Automation.

Have a lovely evening.

Be magnificent!

As ever,

Carolann
Pleasure is always derived from something outside you, whereas joy arises from within. -Eckhart Tolle, b.1948.

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
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www.carolannsteinhoff.com