August 3, 2022 Newsletter

Dear Friends,

Tangents:
August 3, 1987: The Iran-Contra congressional hearings ended with none of the 29 witnesses tying President Ronald Reagan directly to the diversion of arms-sales profits to Nicaraguan rebels.  Go to article »
August 3, 1946: America’s first theme park opens its doors in Santa Claus, Indiana, USA. At the time, there were no other US amusement parks with a central theme.
Martha Stewart, lifestyle maven, b. 1941.

Six tasks you’ve been putting off that you need to do now.  This article immediately shamed me. Time to schedule an oil change and a closet clean-out.

Stretching and range of motion exercises can slow cognitive decline as much as aerobic exercises.  They also keep your joints from sounding like a bowl of Rice Krispies in the morning.

Parts of the moon may provide stable temperatures for humans, researchers find.  Say no more. I’m putting my moon boots on as we speak and blowing this popsicle stand once and for all. 

Ancient ‘ritual bath’ and elite villa unearthed by Jerusalem’s Western Wall:  Archaeological excavations beside Jerusalem’s Western Wall have unearthed thousands of years of the city’s history — including an ornate 2,000-year-old villa with a private mikveh, or ritual bath.  The Western Wall is one of the holiest sites in Judaism and it’s visited by millions of worshipers and tourists each year. But visitors typically have to descend 142 steps or make a long detour around the city walls to reach the holy site.  Full Story: Live Science (8/2) 

Thousands of jellyfish swarm near Israel, mesmerizing images reveal:  Jellyfish are swarming in massive numbers in the Mediterranean Sea, close to the port city of Haifa in northern Israel.  The sea was “bedazzled with thousands of white dots,” according to The Jerusalem Post, which also reported that the swarm extended below the surface to depths of several hundred meters.  Full Story: Live Science (8/2) 

RIP, Vin Scully.
PHOTOS OF THE DAY

Water lilies in the gardens of the painter Claude Monet at sunrise
CREDIT: Lou Benoist/AFP/Getty Images

The Egyptian air force’s Silver Stars and South Korea’s Black Eagles aerobatic teams perform during the Pyramids air show
CREDIT: Amr Abdallah Dalsh/Reuters

Members of the Cracovia Danza ballet perform during the Feast of the Cloth Hall
CREDIT: Artur Widak/NurPhoto/Rex/Shutterstock

Market Closes for August 3^rd, 2022

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1811, Elisha Graves Otis was born on a farm outside Halifax, Vt. He went on to invent the elevator brake, making skyscrapers practical. Otis demonstrated his innovation at the Crystal Palace exposition in New York in 1854, when he rode an elevator several dozen feet into the air and an assistant chops the hoisting cable with an axe—and the elevator did not fall.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 0.2% at 19,545.94 in Toronto.
The move follows the previous session’s decrease of 1%.
Shopify Inc. contributed the most to the index gain, increasing 10.8%.
Bausch Health Cos. had the largest increase, rising 13.4%.
Today, 114 of 238 shares rose, while 122 fell; 6 of 11 sectors were higher, led by financials stocks.
Insights
* The index declined 4% in the past 52 weeks. The MSCI AC Americas Index lost 8.1% in the same period
* The S&P/TSX Composite is 12% below its 52-week high on April 5, 2022 and 7.6% above its low on July 14, 2022
* The S&P/TSX Composite is up 3% in the past 5 days and rose 3.6% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 14.8 on a trailing basis and 12 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.1% 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 fell to 17.09% compared with 17.12% in the previous session and the average of 19.16% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
* Financials | 70.7642| 1.2| 24/5
* Information Technology | 59.4350| 5.2| 13/1
* Industrials | 19.8875| 0.8| 21/8
* Consumer Discretionary | 5.9727| 0.9| 8/5
* Real Estate | 4.9546| 0.9| 20/2
* Health Care | 1.9653| 2.8| 5/2
* Consumer Staples | -0.1960| 0.0| 3/8
* Communication Services | -4.9719| -0.5| 3/4
* Utilities | -7.1613| -0.7| 4/12
* Materials | -27.8406| -1.3| 8/42
* Energy | -82.1869| -2.3| 5/33
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
* Shopify | 41.3200| 10.8| 15.4| -69.1
* Royal Bank of Canada | 19.9200| 1.6| -31.0| -5.9
* TD Bank | 13.6600| 1.3| -55.1| -13.5
* Cenovus Energy | -12.3300| -6.0| -3.4| 44.4
* Suncor Energy | -15.5900| -3.7| 21.4| 30.5
* Canadian Natural Resources | -21.3200| -3.9| -42.1| 25.2
US
By Vildana Hajric, Isabelle Lee and Natalia Kniazhevich
(Bloomberg) — US stocks snapped a two-day decline as corporate earnings and economic data came in better than expected.
Treasuries trimmed losses as traders priced in further interest-rate hikes from the Federal Reserve.
Solid reports from Moderna Inc. and PayPal Holdings Inc. pushed the Nasdaq 100 up as much as 3%, taking it to a level last seen in May.
The S&P 500 closed up 1.6%.
“Now that we’re 70% through the earnings reporting season, we can clearly say that it’s not the earnings Armageddon that many had feared,” said Art Hogan, chief market strategist at B. Riley Wealth. “That’s important.”
The Treasury 10-year yield pushed past 2.80% before falling to 2.70% later in day as investors recalibrated expectations for the Fed’s rate-hike path.
Recent data also eased concerns of a broader economic slowdown as growth in the US services sector unexpectedly strengthened to a three-month high in July.
Treasuries had rallied last week after Chair Jerome Powell  signaled that the pace of future increases may slow later this year, boosting the odds for cuts next year in market-implied measures.
But several Fed leaders have since said the central bank is far from done with tightening and remains laser-focused on tamping down price gains that are the hottest in four decades.
“If there is a change in tone by Fed members, it is similar to a parent that is finally telling the kids that you’ve had enough candy, no more,” wrote Peter Boockvar, chief investment officer at Bleakley Financial Group. “For decades the Fed always gave the markets more candy, especially when the kids cried out for it. Now, the kids are going to have to do without as long as inflation is at the very unsatisfactory levels that it’s pacing at, even with an expected fall.”
Markets are also somewhat calmer as US-China tensions simmered after House Speaker Nancy Pelosi left Taiwan.
Her visit had provoked an angry response from China, and markets were on the edge ahead of her arrival on Tuesday.
US stocks roared on Wednesday after a session with many twists and turns the previous day.
But equities trading doesn’t reflect the headwinds confronting the market, according to Goldman Sachs Group Inc. strategist Sharon Bell.
“There’s a little bit of complacency in there and markets are not fully taking into account the risks,” Bell said in an interview with Bloomberg TV.
Seeing riskier areas of the equity market reprice higher even as some earnings estimates get slashed indicates that investors may be overly optimistic, said Emily Roland, co-chief investment strategist at John Hancock Investment Management.
“In this environment, we would rebalance into quality companies and sectors that have strong balance sheets and more durable profitability,” she said.
“This is not the right time to emphasize cyclical areas or ones that have a greater need for capital.”
Roland considers tech stocks that meet certain profitability and return metrics “higher quality.”
She would deemphasize consumer discretionary, financials, and industrials, she said.
Thin liquidity during the summer lull also tends to magnify small market moves, said April LaRusse, head of investment specialists at Insight Investments.
“Sometimes that can make it look more exciting than it probably really is,” she said.
The Cboe VIX Index also shows price swings are usually prevalent in the summer and early autumn.
August and September are historically the two worst months for the S&P 500 Index.
Oil fell after a brief rally as traders mulled the lack of relief for oil markets and a poor demand outlook.
The dollar pared gains after hitting a one-week high.  
What to watch this week:
* BOE rate decision, Thursday
* US initial jobless claims, trade, Thursday
* Cleveland Fed President Loretta Mester due to speak, Thursday
* US employment report for July, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 1.6% as of 4 p.m. New York time
* The Nasdaq 100 rose 2.7%
* The Dow Jones Industrial Average rose 1.3%
* The MSCI World index fell 0.8%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro was little changed at $1.0169
* The British pound fell 0.2% to $1.2149
* The Japanese yen fell 0.6% to 133.94 per dollar
Bonds
* The yield on 10-year Treasuries declined five basis points to
* Germany’s 10-year yield advanced five basis points to 0.87%
* Britain’s 10-year yield advanced four basis points to 1.91%
Commodities
* West Texas Intermediate crude fell 3.7% to $90.97 a barrel
* Gold futures fell 0.4% to $1,782.10 an ounce
–With assistance from John Viljoen and Emily Graffeo.
Have a lovely evening.

Be magnificent!

As ever,

Carolann

You know more than you think you know and less than you want to know. –Oscar Wilde, 1854-1900.

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