August 26th, 2025, Newsletter

Dear Friends.,

Tangents:
August 26, 1843: Charles Thurber receives a US patent for the first practical typewriter, designed specifically to assist the blind and nervous in writing.
August 26, 2003: Investigators concluded that NASA’s overconfident management and inattention to safety doomed the space shuttle Columbia as much as damage to the craft did. Go to article.

August 26, 1883: Krakatoa erupts; 36,000 killed.

Christopher Columbus, explorer, b. 1451.
Worried about having two copies of the ‘Alzheimer’s gene’?
A new study has discovered a way for people with this genetic makeup to lower their risk for dementia.

‘Hey batter, batter, batter, batter, swing, batter!’
Two old friends attended a baseball game last weekend. It was the perfect way to spend a day off.

The near-Earth asteroid Bennu contains stardust that is older than the solar system and clues about its violent history, three new studies of the asteroid’s sample materials show. Read More.

Unlike solar panels, solar thermoelectric generators can convert heat from any source into electricity. But poor efficiency has held the technology back – until now. Read More

PHOTOS OF THE DAY

Anglet, France
France’s Sam Piter competes in the night-surfing competition at Chambre d’Amour beach
Photograph: Gaizka Iroz/AFP/Getty Images

Bregaglia, Switzerland
A hiker pauses on a suspension bridge, previously closed because of mudslides, on a trail to the Swiss Alpine Club’s Sciora hut
Photograph: Gian Ehrenzeller/EPA

Yorkshire, England
A competitor prepares her pony for the Kilnsey show, which has marked the end of summer in the Dales since 1897
Photograph: Ian Forsyth/Getty Images
Market Closes for Aug 26^th,2025

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1919, the Coca-Cola Co. successfully sold shares to outsiders for the first time, as a syndicate of banks and brokers from around the country bought 417,000 shares to resell to retail investors at an initial offering price of $40. An earlier attempt at a stock offering in 1892 failed miserably.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 0.6% at 28,339.88 in Toronto.
The move follows the previous session’s decrease of 0.6%.
Today, financials stocks led the market higher, as 3 of 11 sectors gained; 100 of 211 shares rose, while 107 fell.
Bank of Nova Scotia contributed the most to the index gain, increasing 6.9%.
Energy Fuels Inc/Canada had the largest increase, rising 12.4%.

Insights
* This month, the index rose 4%
* The index advanced 21% in the past 52 weeks. The MSCI AC Americas Index gained 16% in the same period
* The S&P/TSX Composite is 0.2% below its 52-week high on Aug. 22, 2025 and 27.5% above its low on April 7, 2025
* The S&P/TSX Composite is up 1.9% in the past 5 days and rose 3.1% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 20.3 on a trailing basis and 17.8 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.5% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$4.53t
* 30-day price volatility fell to 10.01% compared with 10.12% in the previous session and the average of 9.05% over the past month

Index Points
Financials | 126.2156| 1.4| 15/9
Materials | 60.4270| 1.5| 40/8
Industrials | 37.2044| 1.1| 20/8
Health Care | -0.7653| -1.1| 0/3
Consumer Discretionary | -0.7713| -0.1| 4/4
Real Estate | -3.1654| -0.6| 2/17
Utilities | -5.1501| -0.5| 3/11
Communication Services | -6.9092| -1.0| 0/5
Information Technology | -7.9720| -0.3| 2/7
Consumer Staples | -11.4074| -1.1| 2/8
Energy | -17.7695| -0.4| 12/27
Scotiabank | 47.5100| 6.9| 312.9| 10.1
Bank of Montreal | 37.4000| 4.7| 63.0| 18.4
Canadian Pacific | Kansas | 24.5500| 3.7| 110.0| 1.4
Enbridge | -5.0350| -0.5| -24.2| 7.7
Constellation | Software | -10.7600| -1.7| 139.8| -1.2
Canadian Natural | Resources | -12.7600| -2.0| 125.5| -5.0
(MT Newswires):
A late rally brought up a narrow but fresh record close Tuesday for the Toronto Stock Exchange, which was buoyed by financial stocks after Bank of Montreal (BMO.TO) and Bank of Nova Scotia (BNS.TO) both beat forecasts with their fiscal third-quarter earnings earlier today, raising optimism their four peers can do the same over the next two days.
Despite mixed commodity prices, the resources heavy S&P/TSX Composite Index finished up 169.94 points, or 0.6%, to 28,339.88.
The index struck its prior record close of 28,333.13 last Friday.
Sectors were mixed, with the biggest gainers being Financials, up 1.4%, and Industrials, up 1.1%.
Both Health Care and Telecoms dropped about 1%.
Of commodities, gold traded higher late afternoon Tuesday as the dollar fell and haven buying rose after U.S. President Donald Trump said he is firing Federal Reserve Governor Lisa Cook as he continues to pressure the central bank to lower interest rates, even as inflation continues to run hot.
Gold for December delivery was last seen up $21.20 to US$3,438.70 per ounce, the highest since Aug.8.
But West Texas Intermediate crude oil closed lower, falling for the first session in five on high supply and a move away from risk assets.
WTI crude oil for October delivery closed $$1.55 to settle at US$63.25 per barrel, while October Brent crude was last seen down $1.51 to US$67.29.
The bank earnings season continues Wednesday with Royal Bank (RY.TO) at 6 a.m., eastern time, and National Bank (NA.TO) about 30 minutes later.
For RBC, National Bank is forecasting cash earnings per share (EPS) of $3.19 compared to a consensus $3.32.
The FactSet forecast is for $3.31.
Key themes National will be watching out for with RBC include whether the capital markets business benefits from a “booming” HY [high yield] market; whether whole/commercial loan losses have been “lumpy”; and whether the Canadian P&C segment remains an “under appreciated growth engine”.
The team at National Bank noted the consensus forecast for its own parent bank tomorrow is $2.69 per share.
Going into more detail on RBC, National Bank noted it was a “relative underperformer” during Q2 2025’s booming period for Capital Markets divisions.
Whereas peers generated nearly 40% PTPP [pre-tax pre-provision] growth, RY’s Capital Markets segment was flat. The bank’s trading revenues rose 21% Y/Y, compared to a peer average of around 50% Y/Y.
National noted management explained the divergence was a result of its over-indexing to rates and credit trading (which were down 8% Y/Y) compared to its relatively smaller equities/derivatives trading business (which was up nearly 75% Y/Y).
It also noted RY is investing in its other trading businesses and aims to achieve market share gains in the medium-term.
National said this quarter could be relatively stronger if the U.S.
High Yield market shows strength, where RY is a top 10 player.
It noted that average high yield spreads narrowed 20 bps during Q3 2025 compared to Q2.
On ‘lumpy” wholesale/commercial loan losses, during Q1 2025, RY reported $165 million impaired provision (and a +$1.5 bln addition to GIL) in the utility sector, which National Bank believes was Thames Water in the U.K.
It said another provision could be required as Thames water’s restructuring plans continue to evolve.
During Q2, National noted, RBC saw GIL additions in the U.S. CRE segment (via Capital Markets).
Additionally, the bank highlighted that the legacy HSBC commercial loan book is seeing some tariff related pressures and expects Canadian commercial loan losses to remain elevated in the near-term.
National Bank on RBC’s Canadian P&C segment, the bank’s largest segment, noted it has been a “strong performer” in 2025, with 12% PTPP growth during the first half of 2025 and 11% during Q2, both excluding the HSBC acquisition.
Key drivers, National said, include NIM expansion (+12 bps YTD) and strong operating leverage (+4% in Q2/25).
But it added: “While the segment overall has been impressive, what we believe is lacking is an update on HSBC Canada revenue synergies.”
According to National, while RBC has progressed well in terms of expense synergies (i.e., near 65% of the target run rate at the end of Q2), we have less clarity on how the acquisition has enhanced RY’s loan growth post-acquisition.
US
By Rita Nazareth
(Bloomberg) — The dollar fell alongside longer- dated Treasuries as Donald Trump’s push to remove Federal Reserve Governor Lisa Cook fueled concern about central bank independence and inflation risks.
Stocks bounced before Nvidia Corp.’s results.
While the moves were modest in listless summer trading, they underscored growing unease over political interference in monetary policy.
That could give Trump another chance to name someone to the Fed board as he repeatedly pressures officials to cut rates.
The slide in 30-year Treasuries followed losses in longer- dated debt from France and the UK, extending a drop that’s been driven by concerns about inflation and ballooning budget deficits.
A solid $69 billion sale of two-year notes added to gains in short-dated maturities.
The gap between five and 30- year yields is the widest since 2021.
While the dollar dropped just 0.2%, it underperformed most major currencies.
The S&P 500 added 0.4%, with Nvidia Corp. leading mega caps higher.
UnitedHealth Group Inc. slipped as an ongoing criminal probe was said to be broader than an inquiry into possible Medicare fraud.
Trump said he was prepared for a legal fight after he moved to oust Cook amid allegations she falsified mortgage documents.
The Fed, weighing in for the first time this week, said it would abide by any court decision in Cook’s legal challenge of her dismissal by Trump.
“Trump’s push to fire Cook has exacerbated concerns about the Fed’s independence,” said Ian Lyngen at BMO Capital Markets.
“While the price action in US rates has been largely contained to the recent range, many of the go-to hedges against an erosion of Fed independence outperformed on the news of Cook’s firing.”
Even as political headlines flare, investors remain anchored to a bullish market script: a likely September rate cut, resilient economic growth, and corporate earnings strong enough to keep equity sentiment afloat.
“An independent Fed remains the dominant framework,” said Dennis DeBusschere at 22V Research.
“There is no reason to go against that yet, but hedges are important.”
Read: New BIS Head Warns Against Questioning Central-Bank Independence “This issue likely to get kicked to the courts for resolution,” said Brad Bechtel at Jefferies.
“If it does go through, then clearly Trump has another seat to fill and that should then tip the board in his favor from a political alignment perspective.”
The Fed’s perceived independence from government whims is a bedrock assumption of US markets, and any change to that perception could weigh on US credit ratings.
S&P Global Ratings has recently warned that the nation’s credit rating could “come under pressure if political developments weigh on the strength of American institutions and the effectiveness of long-term policymaking or independence of the Federal Reserve.”
“We will continue to monitor rising political pressure on the Fed but expect its decision-making to remain guided by its mandate in the near term,” said Ulrike Hoffmann-Burchardi at UBS Global Wealth Management.
More specifically, she noted Chair Jerome Powell’s recent dovish signals at Jackson Hole that have reinforced market expectations for US rate cuts starting in September.
“Looking further ahead, the risk of a more politicized Fed could increase over the next 6-12 months, particularly if partisanship also grows among regional Fed presidents,” she noted.
“The pathway for political uncertainty to hit the US economy runs through the bond and currency markets, and so far, the moves there have not been large, noted Don Rissmiller at Strategas.
“So, we will focus on the economic data, which have weakened but appear to be trying to carve out a bottom in key sectors,” he added.
US orders for business equipment increased in July by more than projected, suggesting companies are moving forward on investment plans as uncertainty around trade and tax policy gradually diminishes.
Meantime, consumer confidence fell slightly in August as Americans worried more about their prospects of finding a job.
“Consumers don’t appear afraid, but perhaps restrained,” said Bret Kenwell at eToro.
“Corporate conference calls reveal what appears to be a resilient consumer, while retail sales echo similar reassurances.”
Fed Bank of Richmond President Tom Barkin said his forecast is for a modest adjustment in interest rates given what he expects will be little variation in economic activity over the remainder of the year.
As investors fret over signs of a slowing economy and lofty stock-market valuations, they are getting a bit of reassurance from Corporate America.
Among S&P 500 companies that adjusted their revenue views in the current quarter, 44% have raised them — the highest proportion since 2021, according to an analysis by Jefferies.
The share of outlook downgrades, at 14%, is the lowest in the firm’s data going back to 2015.
Meantime, volatility has vanished. Now hedge funds are betting the calm will last, shorting the Cboe Volatility Index, or VIX, at rates not seen in three years.
But such eerie calm and extreme positioning has historically foreshadowed a spike in turbulence and stock losses.
Hedge funds and large speculators were net short futures tied to the VIX by roughly 92,786 contracts in the week through Aug. 19 — a level last seen in September 2022, data from the Commodity Futures Trading Commission show.

Corporate Highlights:
* The US Justice Department’s criminal division is digging into UnitedHealth Group Inc.’s prescription management services as well as how it reimburses its own doctors under an ongoing probe into the firm’s operations, according to people familiar with the matter.
* Apple Inc. plans to hold its big fall product launch on Sept. 9, when the company is expected to introduce an iPhone 17 lineup that includes a new skinnier version of its signature device.
* President Trump said that Meta Platforms Inc. is planning to spend $50 billion on its massive data center in rural Louisiana.
* US Commerce Secretary Howard Lutnick suggested the government is looking at the defense sector and other industries for potential stakes in companies after a deal that saw the US obtain a 10% share in chipmaker Intel Corp.
* Trump said Cracker Barrel Old Country Store Inc. should go back to its old logo after facing blowback for its new design.
* EchoStar Corp. has agreed to sell spectrum licenses to AT&T Inc. for about $23 billion in a deal that will help the company stay out of bankruptcy and fend off regulatory concerns about its airwave use.
* Eli Lilly & Co.’s experimental obesity pill helped patients lose 9.6% of their body weight in a trial that moves the company one step closer to a potential approval.
* Retail trading platform Interactive Brokers Group Inc. will be added to the S&P 500 later this week, replacing Walgreens Boots Alliance Inc. on the closely watched gauge of US stocks.
* Kroger Co. is laying off nearly 1,000 corporate employees as the grocery-store operator moves to trim costs and simplify its business following its failed deal with Albertsons Cos.
* Kohl’s Corp. is asking some vendors for more time to settle invoices, according to people with knowledge of the situation, as the ailing retailer adjusts its payment strategy amid efforts to execute a turnaround plan.
* South Korean firms announced a flurry of deals with US businesses, including $50 billion in agreements with Boeing Co. and GE Aerospace, after the nations’ leaders met in-person for the first time in Washington on Monday.
* Bank of Montreal topped estimates on stronger-than-expected performance at its US division as the lender works to improve the business’s prospects and loan-loss provisions came in lower than forecast.
* Bank of Nova Scotia topped estimates after posting strong performance in its Canadian and international banking units and higher overall revenue as it pursues a turnaround plan.
* Orsted A/S raced to reassure investors over a proposed 60 billion-krone ($9.4 billion) share sale, saying it will go ahead as planned and cushion the beleaguered Danish wind giant against any worst-case scenario.
* Ping An Insurance (Group) Co.’s profit fell 8.8% in the first half as investment returns were dented by stock market volatility and lower interest rates during China’s economic slowdown.

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 0.4%
* The Dow Jones Industrial Average rose 0.3%
* The MSCI World Index was little changed
* Bloomberg Magnificent 7 Total Return Index rose 0.4%
* The Russell 2000 Index rose 0.8%
* Nvidia rose 1.1%
* UnitedHealth fell 1.5%
Currencies
* The Bloomberg Dollar Spot Index fell 0.2%
* The euro rose 0.2% to $1.1640
* The British pound rose 0.2% to $1.3478
* The Japanese yen rose 0.2% to 147.45 per dollar
Cryptocurrencies
* Bitcoin rose 1.4% to $111,124.33
* Ether rose 5.6% to $4,597.34
Bonds
* The yield on 10-year Treasuries declined two basis points to 4.25%
* Germany’s 10-year yield declined three basis points to 2.72%
* Britain’s 10-year yield advanced five basis points to 4.74%
* The yield on 30-year Treasuries advanced two basis points to 4.90%
* The yield on 2-year Treasuries declined four basis points to 3.68%
Commodities
* West Texas Intermediate crude fell 2.3% to $63.33 a barrel
* Spot gold rose 0.7% to $3,389.59 an ounce

Have a lovely evening.

Be magnificent!
As ever,

Carolann
Whenever you see a successful business, someone once made a courageous decision. -Peter. F. Drucker, 1909-2005.

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 (Text Only)
Toll Free: 1.877.430.5895
Fax: 778.430.5828
www.carolannsteinhoff.com