August 31, 2021 Newsletter

Dear Friends, 
Tangents:

1896~Gold discovered, Klondike.
On Aug. 31, 1997, Britain’s Princess Diana died in a car crash in Paris at age 36.  Go to article »

A fake Banksy NFT sold for $336,000. (h/t Scott Kominers)

A Roman priest’s remains were found preserved in Pompeii

Too much or too little sleep could harm your brain.  Hey brain, could you be a little less particular? We’re trying our best out here.

Coffee prices haven’t been this high in 4 years.  Your coffee has to go through a lot to get to your tired mouth every morning, and right now it’s hitting a few snags along the way.
 
 Have you made a life-changing decision during the pandemic? CNN wants to know about it.  Come all ye divorcé/es, career-changers, new parents and cross-country movers. Tell us about it here. 

PHOTOS OF THE DAY

Mel Smothers plays the violin while stuck in traffic with evacuees as residents attempt to flee the Caldor fire in South Lake Tahoe, California
CREDIT: JOSH EDELSON/AFP VIA GETTY IMAGES

U.S. Army Major General Chris Donahue, commander of the 82nd Airborne Division, steps on board a C-17 transport plane as the last U.S. service member to leave Hamid Karzai International Airport in Kabul, Afghanistan
CREDIT: US ARMY VIA REUTERS

Bird Photographer of the Year Awards 2021  Nicolas Reusens from Spain, Silver Award winner in the  Birds in Flight category
CREDIT: NICOLAS REUSENS

People attend ‘The Great Exhibition 2021: SCIENCE’ created by artistic collaboration Luxmuralis, at Lichfield Cathedra
CREDIT: REUTERS/ANDREW BOYERS

Market Closes for August 31^st, 2021

International Markets

Bonds

Currencies

Commodities

Market Commentary:
     On this day in 1998, the Dow Jones Industrial Average lost 512.61 points, its second-worst point drop ever (but not even in the top 20 losses by percentage). The front page of The New York Post screamed: KISS YOUR ASSETS GOODBYE! By year end, the Dow was 21.8% higher.
Canada
By Aoyon Ashraf
(Bloomberg) — Canada’s main stock index rose for a seventh straight month in August, the longest winning streak since 2017, as technology shares continued their torrid gains. The S&P/TSX Composite index gained 1.5% this month, helped by strong performances by tech stocks including Shopify Inc.  The benchmark was flat on Tuesday but rose 83% since hitting pandemic low on March 2020.  The S&P/TSX Composite Information Technology index rose 5.8% in August, climbing to highest levels since Jan. 2001. Payments companies Nuvei Corp. and Lightspeed POS Inc. led the monthly advance within the tech index, both of which posted better-than-expected revenue in the second quarter.  In fact, a rebound in corporate earnings might have caught investors and analysts by surprise, which likely have contributed to the bullish rally for the index. “With first and second quarter earnings now behind us, it has become abundantly clear that earnings estimates and revisions across the board have struggled to keep pace with the breadth and depth and pure unadulterated strength of the current earnings recovery,” BMO’s Chief Investment Strategist Brian Belski wrote in a note. He also raised the price target for TSX 7.3% higher for this year, to 22,000 from his previous estimate of 20,500 and expects the “epic positive surprise cycle” likely to continue for the next few quarters.
On the flip side, the natural resources sectors were the worst performers this month as investors sold the materials and energy stocks. Gold miner New Gold Inc. was the worst performer within the materials, in August, after the company lowered its guidance. Within the energy sector, natural gas producer Keyera Corp. posted the worst monthly return, after its second quarter earnings disappointed the investors. On the M&A front, Canadian National Railway Co. was dealt a potentially fatal blow in its $30 billion effort to acquire Kansas City Southern as U.S. regulators rejected a plan to use a voting trust to make the purchase. The setback could prod Kansas City Southern to rethink Canadian National’s offer and send the U.S carrier back into the arms of Canadian Pacific Railway Ltd. CN Rail stock rose 7.4% on the news, while CP Rail shares tumbled 6.3% in Toronto. Meanwhile, the Canadian dollar fell slightly on Tuesday, after Canada’s economy unexpectedly stalled through spring and early summer, raising questions about the resiliency of the nation’s economy. The country’s Gross domestic product fell at an annualized 1.1% pace from April to June. Economists in a Bloomberg survey were anticipating a 2.5% expansion. 

By Bloomberg Automation:
     (Bloomberg) — The S&P/TSX Composite declined slightly to 20,582.94 in Toronto. Shopify Inc. contributed the most to the index decline, decreasing 1.3 percent. Canadian Pacific Railway Ltd. had the largest drop, falling 4.6 percent. Today, 103 of 229 shares fell, while 122 rose; 7 of 11 sectors were lower, led by financials stocks.

Insights
* This month, the index rose 1.5 percent
* The index advanced 25 percent in the past 52 weeks. The MSCI AC Americas Index gained 30 percent in the same period
* The S&P/TSX Composite is 0.6 percent below its 52-week high on Aug. 31, 2021 and 33.5 percent above its low on Oct. 30, 2020
* The S&P/TSX Composite is little changed in the past 5 days and rose 1.5 percent in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 19.3 on a trailing basis and 16.2 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.5 percent on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.24t
* 30-day price volatility fell to 5.98 percent compared with 6.63 percent in the previous session and the average of 8.44 percent over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
* Financials | -42.5734| -0.7| 10/18
* Information Technology | -14.1491| -0.6| 10/2
* Consumer Staples | -5.5114| -0.7| 4/7
* Energy | -5.1266| -0.2| 14/9
* Consumer Discretionary | -1.1285| -0.1| 3/9
* Utilities | -0.9566| -0.1| 4/12
* Real Estate | -0.4485| -0.1| 9/16
* Communication Services | 2.1460| 0.2| 4/3
* Health Care | 3.9630| 1.7| 7/2
* Materials | 16.7525| 0.7| 37/15
* Industrials | 34.9884| 1.4| 20/10
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
* Shopify | -19.9900| -1.3| 29.4| 34.0
* Canadian Pacific | -19.1900| -4.6| 892.2| -1.8
* Royal Bank of Canada | -14.6000| -1.1| 24.8| 23.9
* Franco-Nevada | 3.4620| 1.4| 22.9| 15.3
* Barrick Gold | 4.7100| 1.5| 15.6| -11.4
* Canadian National | 50.2500| 7.4| 520.1| 6.0

US
By Rita Nazareth and Elaine Chen
(Bloomberg) — The stock-market euphoria abated in the last trading day of August as investors assessed whether lofty valuations can withstand the unwinding of pandemic-era stimulus. The S&P 500 edged lower, while European shares fell on signals the region’s central bank will start discussing a reduction of bond purchases. A decline in financial firms weighed on sentiment after Bloomberg News reported Wells Fargo & Co. risks regulatory action over the pace of restitution. Data Tuesday showed a slide in consumer confidence and the biggest jump in home prices in more than 30 years. American equities still notched their seventh straight monthly advance — the longest winning streak since January 2018 — amid a tonic of strong corporate profits and moderate monetary policy. As the tapering debate heats up at a time when a coronavirus resurgence is delaying re-openings in some parts of the world, there’s been concern about an overstretched stock market. The S&P 500 is currently trading near its highest valuation levels since 2000.“Markets are taking a little bit of a breather,” said Cliff Hodge, chief investment officer at Cornerstone Wealth.
     After making it through strong economic data and stellar corporate earnings, “markets are now trying to grapple with: well, what’s next?” Fourteen streaks of seven months or longer for the S&P 500 have occurred during the past 60 years, according to data compiled by Bloomberg. History points to three outcomes for the gauge after reaching such milestones. Five of them ended in the next month as the index fell. Another four were followed by gains of no more than 3.2% before the streaks ended. The other five delivered advances of 9.7% or more before they concluded — including the most recent streak, which lasted 10 months and ran through January 2018. Corporate insiders, whose buying correctly signaled the bear-market bottom in March 2020, are not afraid of chasing the record-setting rally. More than 1,000 executives and officers have snapped up shares of their own firms this month — the most since May of last year, according to data compiled by the Washington Service.  
Some corporate highlights:
* Zoom Video Communications Inc. tumbled after the stay-at-home darling gave a sales forecast that fell short of some analysts’ estimates.
* Chinese gaming-related stocks listed in the U.S. rebounded from Monday’s drop, with NetEase Inc. and Bilibili Inc. rallying.
* Moderna Inc. climbed after a study showed its Covid-19 vaccine generated more than double the antibodies of a similar shot made by Pfizer Inc. and BioNTech SE.
* Allbirds Inc. is moving ahead with an initial public offering as it expands beyond the wool trainers that have become the unofficial footwear of Silicon Valley.
Here are some key events to watch this week:
* OPEC+ meeting on output Wednesday
* Euro zone manufacturing PMI Wednesday
* U.S. jobs report Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.1% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.1%
* The Dow Jones Industrial Average fell 0.1%
* The MSCI World index was little changed
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro was little changed at $1.1807
* The British pound was little changed at $1.3749
* The Japanese yen was little changed at 110.01 per dollar
Bonds
* The yield on 10-year Treasuries advanced three basis points to 1.30%
* Germany’s 10-year yield advanced six basis points to -0.38%
* Britain’s 10-year yield advanced 14 basis points to 0.71%
Commodities
* West Texas Intermediate crude fell 1% to $68.50 a barrel
* Gold futures rose 0.3% to $1,817.40 an ounce
–With assistance from Sunil Jagtiani, Cecile Gutscher, David Wilson and Vildana Hajric.
Have a lovely evening.
 
Be magnificent!
As ever,

Carolann
How far that little candle throws his beams!  So shines a good deed in a naughty world. -William Shakespeare, 1564-1616.
 
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