August 23, 2024, Newsletter

Dear Friends,

Tangents: Happy Friday.
August 23, 1775: Britain’s King George III proclaimed the American colonies in a state of open rebellion.  Go to article >>.

August 23, 1966: NASA’s Lunar Orbiter 1 captures Earth’s first photos from the Moon, a pivotal moment in space exploration and our view of Earth’s place in the universe.

1927: Sacco and Vanzetti executed.
Keith Moon, drummer, b.1946.
1977: First human-powered flight.

Ultra-thin solar ‘coating’ can turn phone cases and EVs into mini power generators
Cheap and flexible perovskite solar cells could revolutionize solar power, making it easier than ever to power the world with sunlight. Read More.

Remains of 14th-century gauntlet discovered in Oslo’s medieval harbor
Archaeologists excavating Oslo’s medieval harbor have unearthed the remnants of a 14th-century gauntlet. Read More.

Rare ‘doomsday fish’ said to bring earthquakes spotted in California days before LA quake
Beachgoers found a rare oarfish off California two days before an earthquake, mirroring folklore that says the deep-sea creatures are “doomsday fish.” Read More.

Some black holes have a ‘heartbeat’ — and astronomers may finally know why
A tiny fraction of known black holes emit X-ray signals that resemble a human “heartbeat.” Now, new research may finally explain the strange phenomenon. Read More.

Weird mystery waves that baffle scientists may be ‘everywhere’ inside Earth’s mantle
Structures that scatter seismic waves deep in Earth’s mantle seem to be everywhere researchers look. Read More.

How an indigenous community is using apps to protect the Amazon
Matsés communities in the Amazon rainforest are embracing digital technology to help protect their traditional way of life. Watch the video here

PHOTOS OF THE DAY

A young Icelander releases a puffling from a cliff in Vestmannaeyjar, an archipelago to the south of Iceland. Thousands of pufflings are rescued by locals in an annual tradition as they become misguided by city lights during their first flight
Photograph: Micah Garen/Getty Images

Fish explore a coral reef in a “rahui” or restricted area in Tahiti, French Polynesia
Photograph: Carlos Barría/Reuters

​​​​​​​Hai ‘an, China
Villagers row buckets to pick water chestnuts in eastern China’s Jiangsu province
Photograph: Costfoto/NurPhoto/Rex/Shutterstock
Market Closes for August 23^rd, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1976, Vanguard launched First Index Investment Trust, the first retail index fund, to howls of derision. As Fidelity Chairman Edward C. Johnson III said that day, “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.” Now known as the Vanguard 500 Index Fund, it today ranks among the largest mutual funds in the world.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 1.1% at 23,286.08 in Toronto.
The move was the biggest since rising 1.2% on Aug. 15 and follows the previous session’s decrease of 0.4%.
Today, financials stocks led the market higher, as 10 of 11 sectors gained; 198 of 226 shares rose, while 24 fell.
Brookfield Corp. contributed the most to the index gain, increasing 3.4%.
Denison Mines Corp. had the largest increase, rising 12.8%.
Insights
* In the past year, the index had a similar or greater gain 17 times. The next day, it advanced 14 times for an average 0.7% and declined three times for an average 0.9%
* This month, the index rose 0.8%
* So far this week, the index rose 1%
* The index advanced 17% in the past 52 weeks. The MSCI AC Americas Index gained 26% in the same period
* The S&P/TSX Composite is at its 52-week high and 24.6% above its low on Oct. 27, 2023
* S&P/TSX Composite is trading at a price-to-earnings ratio of 18.7 on a trailing basis and 15.9 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 rose to 14.22% compared with 13.98% in the previous session and the average of 13.12% over the past month
================================================================
|Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 87.7638| 1.2| 23/4
Energy | 48.8929| 1.2| 41/0
Materials | 35.3055| 1.2| 43/7
Industrials | 29.0726| 0.9| 24/4
Information Technology | 22.7261| 1.2| 8/1
Real Estate | 8.4052| 1.7| 19/1
Utilities | 6.4854| 0.7| 13/2
Consumer Discretionary | 5.1992| 0.6| 11/1
Communication Services | 4.1470| 0.6| 4/1
Health Care | 1.0435| 1.6| 4/0
Consumer Staples | -0.4087| 0.0| 8/3
================================================================
| | |Volume VS |
| Index | | 20D AVG |YTD Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
Brookfield Corp | 21.8600| 3.4| -31.9| 24.8
RBC | 17.7000| 1.2| -30.7| 16.5
Shopify | 14.6200| 1.7| 16.8| -0.3
Intact Financial | -1.1220| -0.4| -20.5| 23.9
Couche-Tard | -3.3020| -0.8| -5.7| 0.3
Restaurant Brands | -4.4880| -2.1| 12.7| -8.2
US
By Rita Nazareth
(Bloomberg) — Stocks rallied across the board and bond yields tumbled, with Jerome Powell giving its clearest signal yet that the Federal Reserve will start cutting rates in September.
While Wall Street had already priced in the start of policy easing next month, Powell’s comments that the “time has come” validated those views.
Now there are plenty of other aspects in his Jackson Hole speech that shouldn’t be overlooked.
For one, the Fed chief acknowledged recent progress on inflation.
Then there’s the fact the he sees the economy growing at a “solid pace” — which provides reassurance after the recent growth scare.
But it was actually his emphasis on the “cooling labor market” that got the attention of many market observers.
Basically, it was seen as an indication the Fed will do whatever it can to avoid a pronounced slowdown.
“The market should be happy with this speech because it wasn’t hawkish in any way, gave the green light for 25 basis-point rate cuts — and left the door open for even larger cuts if that becomes necessary,” said Chris Zaccarelli at Independent Advisor Alliance.
To be sure, bigger cuts could also be a warning sign for equities as they could indicate a rush prevent an economic contraction.
“It is important at this time to take a balanced approach to investing and neither plan for an imminent recession, nor chase risk and get complacent just because the Fed will be lowering rates in less than a month,” Zaccarelli noted.
Absent from Powell’s speech was any specific discussion of the destination for the federal funds rate at the end of this easing cycle or the pace of rate cuts along the way, noted Richard Clarida at Pacific Investment Management Co.
“The details are yet to come into focus, but for the Fed, the direction of travel seems clear,” said Clarida, also a former Fed vice chair.
The August jobs report will likely be significant in the “25 versus 50” discussion, he said.
The S&P 500 rose over 1%, with every major group gaining.
Treasuries climbed across the curve, and the two-year yield broke below 4%.
The dollar lost 1%. Swap traders are now pricing over 100 basis points of easing this year, which implies a reduction at every remaining policy meeting through December, including one jumbo 50-basis-point cut.
“Here comes the punchbowl,” said David Russell at TradeStation.  Jerome Powell came out swinging today with a litany of dovish signals.  He drove the point home with a clear call for adjusting policy.  This keeps a tailwind at the market’s back into year-end, making it harder to expect a retest of this month’s lows.”
To Krishna Guha at Evercore, while Powell did not explicitly reference the “size” of cuts, “pace” incorporates the possibility of moving faster than 25 basis points per meeting.
“Powell has rung the bell for the start of the cutting cycle,” said Seema Shah at Principal Asset Management. “Powell has not pre-committed to a 50 basis-point cut. But make no mistake, if the labor market shows signs of further cooling, the Fed will cut with conviction.”
Neil Dutta at Renaissance Macro Research noted that the word “gradual” was missing from his speech. Unlike some of the recent Fed speakers, Powell is not removing the optionality of doing large moves as policy adjusts, he said.
“The strike price on the fabled ‘Powell Put’ is now rising,” Dutta added.
A labor market softening more so than previously thought should spur faster and steeper interest-rate cuts by the Fed, according to the latest Bloomberg monthly survey of economists.
That should leave the federal funds rate 75 basis points lower by the end of this year from its current level — the July survey only saw 50 basis points of easing — followed by a quicker pace of reductions into 2026.
While many had their eyes peeled on Powell’s speech at the Jackson Hole symposium, to Morgan Stanley’s Michael Wilson, the jobs data in early September will be of even bigger importance.
“It’s about the labor data, period — that’s what’s going to dictate what the Fed does, they’ve said that,” Wilson, the bank’s chief US equity strategist, said in an interview with Bloomberg Television. “And that’s what the market is going to trade off of.”

Corporate Highlights:
* Apple Inc. is planning to hold its biggest product launch event of the year on Sept. 10, when the company will unveil the latest iPhones, watches and AirPods, according to people familiar with the situation.
* McKesson Corp. is in advanced talks to buy a controlling stake in Florida Cancer Specialists & Research Institute, a privately-held operator of oncology clinics, according to people familiar with the matter.
* Slowing sales at Topgolf Callaway Brands Corp.’s namesake driving ranges and a hefty debt load that threatens to frighten off buyers spurred Raymond James to slash the company’s rating.
* Workday Inc. surged after executives said the software company would sharply increase profitability over the next three years.
* Cava Group Inc. soared after raising its full-year outlook after posting second-quarter results that beat expectations, the latest indicator that diners see good value in fast-casual restaurants.

Some of the main moves in markets:
Stocks
* The S&P 500 rose 1.15% as of 4 p.m. New York time
* The Nasdaq 100 rose 1.2%
* The Dow Jones Industrial Average rose 1.1%
* The MSCI World Index rose 1.2%
Currencies
* The Bloomberg Dollar Spot Index fell 1%
* The euro rose 0.7% to $1.1190
* The British pound rose 0.9% to $1.3208
* The Japanese yen rose 1.4% to 144.29 per dollar
Cryptocurrencies
* Bitcoin rose 4.8% to $63,612.73
* Ether rose 4.7% to $2,747.76
Bonds
* The yield on 10-year Treasuries declined five basis points to 3.80%
* Germany’s 10-year yield declined two basis points to 2.22%
* Britain’s 10-year yield declined five basis points to 3.91%
Commodities
* West Texas Intermediate crude rose 2.6% to $74.91 a barrel
* Spot gold rose 1% to $2,510.04 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Alex Nicholson, Robert Brand and Lynn Thomasson.

Have a wonderful weekend everyone.

Be magnificent!
As ever,

Carolann
We can either make ourselves miserable, or we make ourselves strong.  The amount of work is the same. -Carlos Castaneda, 1925-1998.

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