August 23, 2023 Newsletter

Dear Friends,

Tangents:
August 23, 1949: The Soviet Union successfully detonates its first atomic bomb, becoming the second nuclear power in the world

2003: Former Roman Catholic priest John Geoghan, a convicted child molester, was killed by a fellow inmate in a Massachusetts prison.  Go to article >>

Newly discovered black hole ‘speed limit’ hints at new laws of physics
When supermassive black holes barrel toward collision, they can reach speeds of up to 1/10th the speed of light, new research suggests. Read More.

Europe’s oldest known village teetered on stilts over a Balkan lake 8,000 years ago
The village likely dates to the time of Europe’s first farmers, who arrived from Anatolia about 8,000 years ago. Read More.

Rare gold coins and cremated infants were possible sacrificial gifts to the ancient gods of Carthage.  Five gold coins unearthed from a temple in ancient Carthage depict the goddess Tanit and were likely left by wealthy worshippers alongside burials as an offering to deities.  Full Story: Live Science (8/22)

All of Neptune’s clouds have mysteriously disappeared, and the sun may be to blame
The disappearance of the gas giant’s clouds is tied to the sun’s 11-year cycle. Read More.

Why a vacation is good for you:  Science says a few idle days can give you a big mental boost — even before you take time off. Learn how vacations have direct benefits on your brain.

PHOTOS OF THE DAY

Durham, UK
People walk through a sunflower trail at East Grange Farm in Shincliffe.  Photograph: Owen Humphreys/PA

Narok county, Kenya
The Maa cultural festival inside the Maasai Mara national reserve.  Photograph: Thomas Mukoya/Reuters

Bursa, Turkey
Flamingos which have arrived at their wintering area of Bursa Kocaçay Delta after spending the summer in Italy’s Veneto region. Hundreds of flamingos fly along the Mediterranean coastline in flocks to return to their wintering areas.  Photograph: Anadolu Agency/Getty Images
Market Closes for August 23^rd, 2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1976, Vanguard launched the first retail index fund, to howls of derision. “The name of the game is to do the best and I can’t conceive of investment managers not even trying to do better than average,” Fidelity’s chairman said.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 1% at 19,879.79 in Toronto.
The move was the biggest gain since July 13 and follows the previous session’s decrease of 0.5%.
Shopify Inc. contributed the most to the index gain, increasing 5.0%.
Wesdome Gold Mines Ltd. had the largest increase, rising 7.2%.
Today, 178 of 227 shares rose, while 47 fell; 10 of 11 sectors were higher, led by financials stocks.
Insights
* In the past year, the index had a similar or greater gain 20 times.  The next day, it advanced 11 times for an average 0.7% and declined nine times for an average 0.8%
* This month, the index fell 3.6%
* The index declined 0.5% in the past 52 weeks. The MSCI AC Americas Index gained 6.8% in the same period
* The S&P/TSX Composite is 4.6% below its 52-week high on Feb. 2, 2023 and 11.2% above its low on Oct. 13, 2022
* The S&P/TSX Composite is little changed in the past 5 days and fell 3.2% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 13 on a trailing basis and 14 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$3.12t
* 30-day price volatility little changed to 10.88% compared with 10.88% in the previous session and the average of 10.73% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 60.1599| 1.0| 27/1
Information Technology | 47.8439| 3.3| 11/0
Materials | 40.5159| 1.7| 44/6
Industrials | 20.3983| 0.8| 20/6
Utilities | 9.7452| 1.2| 16/0
Real Estate | 7.8550| 1.7| 21/0
Consumer Staples | 7.6836| 0.9| 10/1
Consumer Discretionary | 6.0516| 0.8| 13/1
Communication Services | 2.0992| 0.3| 3/2
Health Care | 0.1213| 0.2| 2/2
Energy | -13.9119| -0.4| 11/28
================================================================
| | |Volume VS | YTD
| Index | | 20D AVG | Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
Shopify | 30.4800| 5.0| -7.6| 63.4
TD Bank | 10.2500| 1.0| -16.0| -4.9
Constellation Software | 9.1710| 2.5| -8.6| 33.2
ARC Resources | -2.2250| -2.6| 8.9| 8.2
Cenovus Energy | -3.8420| -1.5| 1.0| -2.7
Canadian Natural Resources | -4.0680| -0.6| 34.0| 9.8
US
By Rita Nazareth
(Bloomberg) — Stocks climbed the most since June, while bond yields fell after economic reports in both the US and Europe fueled bets that major central banks will pause their interest-rate hikes to prevent a recession.
In late-trading, a $200 billion exchange-traded fund tracking the Nasdaq 100 (QQQ) gained after Nvidia Corp.’s revenue forecast beat estimates.
Treasury two-year US yields, which are more sensitive to imminent policy moves, sank below 5% as data showed American business activity barely expanded on subdued customer demand.
The 10-year German rate also slid as a contraction of private-sector activity in the euro area intensified.
To Jennifer McKeown at Capital Economics, August’s flash Purchasing Managers’ indexes “strongly suggest that we are at or close to the peak in monetary tightening cycles.”
Another relevant economic signal came from the US mortgage industry, with applications for home purchases tumbling to an almost three-decade low.
Separate data showed new-home sales hit the highest in over a year — as a surge in mortgage rates kept inventory on the resale market extremely limited.
Traders also weighed a US government report saying that job growth in the year through March will probably be revised down by 306,000 — a smaller adjustment than some economists expected.
The advance in bonds Wednesday was also attributed to technical factors.
That’s after a Treasury selloff that recently drove 10-year yields to the highest since late 2007 on speculation that interest rates would remain elevated for longer to curb inflation — even if the Fed decides to pause its hiking campaign in September.
“The recent surge in bond yields has pushed up mortgage and corporate borrowing rates, contributed to the fall in stock prices, and generated upward pressures on the dollar,” said Krishna Guha, vice chairman at Evercore ISI. “The Fed will have to consider the tightening in financial conditions when setting rates in coming months, including the decision on whether to hike in September.”
The market is eagerly awaiting Jerome Powell’s speech Friday at the Kansas City Fed’s Jackson Hole Economic Policy Symposium for clues on the outlook for policy after officials last month lifted borrowing costs to the highest level in 22 years.
Until recently, the way forward had been clear: Keep raising interest rates to bring the fastest inflation in four decades under control.
Now, as inflation continues to cool, disagreements among policymakers are emerging over how much more work is left to do.
Powell will likely use his platform this week to outline how the Fed will assess whether rates should go higher and determine when it’s time to start cutting them.
Another event that will set the tone for markets is an assessment on the outlook for artificial intelligence and how that will shape stock-trader sentiment over the next few months.
That’s why the results from Nvidia, the company at the heart of the AI frenzy, are so relevant.
“There’s been an ongoing debate on whether Nvidia is even more important to the broad trajectory of markets than Fed Chair Powell’s comments from Jackson Hole on Friday,” said Quincy Krosby, chief global strategist at LPL Financial.
Investors also sifted through a batch of earnings from retailers.
Kohl’s Corp. and Urban Outfitters Inc. climbed on earnings that beat estimates while Abercrombie & Fitch Co. advanced after boosting its full-year outlook.
Foot Locker Inc. sank after cutting its full-year forecast and reporting results that fell short of Wall Street’s expectations amid concern over weakening spending patterns.

Corporate Highlights
* Esmark Inc. said it won’t make a takeover offer for US Steel Corp., citing the United Steelworkers’ support for a rival $7.25 billion bid from Cleveland-Cliffs Inc.
* WeWork Inc. is rounding up advisers for help with a restructuring as it struggles with a heavy debt load and poor financial performance, according to people with knowledge of the matter.
* Luxury builder Toll Brothers Inc. gained after reporting stronger-than-expected quarterly orders and raising its sales expectations as tight supplies of existing homes fueled demand for new ones.
* Advance Auto Parts Inc. climbed after naming a new chief executive officer and starting a strategic review of the business as it struggles to keep up with inflation.
* Grab Holdings Ltd. brought forward its profitability target after posting a narrower loss in the second quarter, buoyed by extensive cost cuts at the ride-hailing and food-delivery company. The shares rose.
* Peloton Interactive Inc. slumped after the fitness company gave a weak revenue forecast for the current quarter and said costs for a product recall were significantly more expensive than it anticipated.
* Mallinckrodt Plc plans to file bankruptcy for the second time in less than three years after battling business declines and struggling to keep up with payments on a $1.7 billion settlement resolving a wave of lawsuits accusing the drugmaker of fueling the US opioid epidemic.
Key events this week:
* US initial jobless claims, durable goods, Thursday
* Kansas City Fed’s annual economic policy symposium in Jackson Hole begins, Thursday
* Japan Tokyo CPI, Friday
* US University of Michigan consumer sentiment, Friday
* Fed Chair Jerome Powell, ECB President Christine Lagarde to address Jackson Hole conference, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 1.1% as of 4 p.m. New York time
* The Nasdaq 100 rose 1.6%
* The Dow Jones Industrial Average rose 0.5%
* The MSCI World index rose 1%
Currencies
* The Bloomberg Dollar Spot Index fell 0.3%
* The euro rose 0.2% to $1.0863
* The British pound fell 0.1% to $1.2718
* The Japanese yen rose 0.7% to 144.87 per dollar
Cryptocurrencies
* Bitcoin rose 2.9% to $26,603.63
* Ether rose 3.4% to $1,685.8
Bonds
* The yield on 10-year Treasuries declined 14 basis points to 4.18%
* Germany’s 10-year yield declined 13 basis points to 2.52%
* Britain’s 10-year yield declined 18 basis points to 4.47%
Commodities
* West Texas Intermediate crude fell 1.3% to $78.62 a barrel
* Gold futures rose 1% to $1,945.90 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Brett Miller, Tassia Sipahutar, Namitha Jagadeesh, Sagarika Jaisinghani and Isabelle Lee.
Have a lovely evening.

Be magnificent!
As ever,

Carolann
Sincerity is the single virtue that binds the divine and man in one. -Shinto teaching.

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