August 5, 2022 Newsletter
Tangents: Happy Friday.
August 5, 1962: American actress Marilyn Monroe is pronounced dead at 3:50 AM in her home from a drug overdose. Monroe died between 8:30 PM & 10:30 PM on August 4th. Her films grossed $200 million (equivalent to $2 billion in 2022) by the time of her death in 1962.
August 5, 2011 Standard & Poor’s lowered the United States’ AAA credit rating by one notch to AA-plus. Go to article »
Weird deep-sea worm looks like a luminous lump of spaghetti: A bizarre seafloor creature covered with luminous orange, spaghetti-like tentacles recently made its internet debut in newly released video footage. The unusual pom-pom-shaped creature is actually a type of segmented marine worm known as a polychaete, and it belongs to an appropriately named group: spaghetti worms. Full Story: Live Science (8/5)
Mass grave of Revolutionary War mercenaries and rare gold coin unearthed in New Jersey: Researchers at a Revolutionary War battlefield in New Jersey have unearthed a mass grave holding the remains of around a dozen Hessian mercenaries who died during the Battle of Red Bank in 1777. Volunteer diggers also unearthed a number of treasures, including weapons and a rare 1776 King George III gold guinea coin.
Full Story: Live Science (8/4)
PHOTOS OF THE DAY
Angela Crawford leans against a fence as the McKinney fire burns a hillside above her home in Klamath National Forest. Crawford and her husband stayed, as other residents evacuated, to defend their home from the fire.
CREDIT: Noah Berger/AP
Two children run through spray mist coming out of a hose in order to refresh at Karlsplatz Charles Square
CREDIT: Georg Hochmuth/APA/AFP/Getty Images
Mustafa-Ibn-Jameel has created a new world record by writing the Qur’an on a 500-metre-long paper scroll. It took him seven months
CREDIT: Anadolu Agency/Getty Images
Market Closes for August 5th, 2022
|Bonds||% Yield||Previous % Yield|
10 Year Bond
10 Year Bond
30 Year Bond
|WTI Crude Future||89.01||88.54|
On this day in 1997, the Taxpayer Relief Act of 1997 became Federal law, 136 years after Congress first created income taxes. One provision introduced the Roth IRA, which created new ways for middle-class Americans to accumulate tax-free savings.
By Ana Paula Barreto Pereira
(Bloomberg) — Canadian stocks rebounded Friday led by materials, financials, and industrials.
The S&P/TSX Composite rose for the third day, climbing 0.2%, or 43.09, to 19,620.13 in Toronto.
Canadian Natural Resources Ltd. contributed the most to the index gain, increasing 2.8%.
Ero Copper Corp. had the largest percentage increase, rising 9.8%.
Today, 118 of 238 shares rose, while 117 fell; 5 of 11 sectors were higher.
* So far this week, the index fell 0.4%
* The index declined 3.7% in the past 52 weeks. The MSCI AC Americas Index lost 8.5% in the same period
* The S&P/TSX Composite is 11.7% below its 52-week high on April 5, 2022 and 8% above its low on July 14, 2022
* S&P/TSX Composite is trading at a price-to-earnings ratio of 14.2 on a trailing basis and 12.1 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$3.13t
* 30-day price volatility fell to 15.77% compared with 16.55% in the previous session and the average of 18.89% over the past month
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
* Materials | 19.7591| 0.9| 23/28
* Financials | 16.4953| 0.3| 18/11
* Industrials | 16.3027| 0.6| 15/13
* Energy | 14.3487| 0.4| 30/7
* Health Care | 0.4808| 0.7| 3/3
* Utilities | -0.1518| 0.0| 5/11
* Consumer Discretionary | -0.4273| -0.1| 9/4
* Real Estate | -2.5464| -0.5| 3/20
* Communication Services | -3.0491| -0.3| 1/6
* Information Technology | -6.7930| -0.6| 9/5
* Consumer Staples | -11.3324| -1.4| 2/9
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
* Canadian Natural Resources | 14.5600| 2.8| 10.1| 25.8
* Canadian Pacific | 9.2280| 1.4| -16.6| 13.8
* Nutrien | 8.7010| 2.2| -33.0| 14.0
* Open Text | -5.5920| -5.6| 33.2| -15.8
* Couche-Tard | -6.6310| -2.0| -21.2| 8.1
* TC Energy | -14.0600| -3.2| 88.0| 8.0
By Isabelle Lee, Emily Graffeo and Elaine Chen
(Bloomberg) — US stocks notched a weekly gain after a surprisingly strong jobs report alleviated recession fears but cleared the path for the Federal Reserve to raise rates sharply at its next meeting.
The S&P 500 suffered a decline on Friday after falling as much as 1.1% during the session.
But the index and the Nasdaq 100 wrapped up their third straight week of gains, the longest winning streak since April.
Treasuries sank, with the 10-year yield around 2.83%, after climbing nearly 26 basis points since Monday.
The strong jobs report on Friday validated the Fed’s view of a resilient economy that can withstand additional interest-rate hikes.
Traders have now recalibrated expectations for Fed policy, with a hike of three-quarters of a percentage point the more likely scenario at the September meeting as the central bank battles inflation.
A handful of Fed officials his week reiterated the central bank’s resolve to bring down high prices.
Among them is Fed St Louis President James Bullard, who has said he favors a strategy of front-loading big interest-rate hikes.
That stance has likely strengthened after Friday’s job report, ruling out the possibility of a dovish pivot that Fed Chair Jerome Powell hinted at last week.
“This jobs report is consistent with an inflationary boom,” said Neil Dutta, head of economics at Renaissance Macro Research. “The Fed has a lot more work to do and in an odd way, that the Fed needs to get more aggressive in pushing up rates, makes the hard-landing scenario more likely.”
Here’s what else Wall Street is saying about the jobs
Win Thin, global head of currency strategy at Brown Brothers Harriman & Co: “Odds of a 75 basis point move next month have shot up, as they should. We still get one more jobs report before the September FOMC but barring a disaster, I think 75 bp then is a done deal.”
Eric Theoret, global macro strategist at Manulife Investment Management: “For the Fed, this report confirms the need to continue tightening and also endorses much of this week’s Fedspeak that sought to jawbone rate expectations. For markets, the report may pose a challenge for rate-sensitive equities like tech which had recently been leading in terms of sector performance.”
Seema Shah, chief strategist at Principal Global Investors: “All the jobs lost during the pandemic have now been regained. But while that is positive news, markets will take today’s number as a timely reminder that there is significantly more Fed hiking still to come. Rates are going above 4% — today’s number should put to bed any doubters.”
Peter Boockvar, chief investment officer at Bleakley Financial Group: “This was a great number with the obvious big upside in hirings but when this is happening at the same time GDP is declining, it means productivity is plunging. Also, as the pace of firing is at the highest level in nine months, this pace of hiring is just not sustainable.”
Keith Lerner, co-chief investment officer at Truist Advisory Services: “Some of the conviction levels around recession are somewhat less. And I think that’s offsetting the other side of the equation which is, OK, that means the Fed will have to be more aggressive. So that’s why you’re netting this out to be a flat day because it really comes down to people questioning their confidence that we were in a recession, which was the primary reason why we were down.”
Corporate earnings, combined with thin liquidity that’s common in the summer, took the stock market on a ride this week.
Many firms beat expectations and proved they could handle high inflation and a gloomy economic outlook.
But investors have resumed shunning global stocks in favor of bonds, according to Bank of America Corp. strategists, who say it’s time to step back from US equities after July’s rally.
US-China tension also remained among the uncertainties clouding the outlook.
China announced it would halt cooperation with the US in a number of areas — including working-level talks on climate change and defense — after US House Speaker Nancy Pelosi’s trip to Taiwan this week.
China also sent warships across the Taiwan Strait’s median line, a day after likely firing missiles over the island.
West Texas Intermediate rose to near $90 a barrel, but remains on track for its biggest weekly decline since April.
Gold fell and Bitcoin gained.
Some of the main moves in markets:
* The S&P 500 fell 0.2% as of 4:02 p.m. New York time
* The Nasdaq 100 fell 0.8%
* The Dow Jones Industrial Average rose 0.2%
* The MSCI World index rose 0.3%
* The Bloomberg Dollar Spot Index rose 0.7%
* The euro fell 0.7% to $1.0178
* The British pound fell 0.8% to $1.2068
* The Japanese yen fell 1.6% to 135.03 per dollar
* The yield on 10-year Treasuries advanced 14 basis points to 2.83%
* Germany’s 10-year yield advanced 15 basis points to 0.96%
* Britain’s 10-year yield advanced 16 basis points to 2.05%
* West Texas Intermediate crude fell 0.2% to $88.36 a barrel
* Gold futures fell 0.9% to $1,791.10 an ounce
–With assistance from Cecile Gutscher, Michael McKee, Sagarika Jaisinghani, Vildana Hajric and Olivia Rockeman.
Have a wonderful weekend everyone.
Time is a sort of river of passing events, and strong is its current; no sooner is a thing brought to sight than it is swept by and another takes its place,
and this too will be swept away. –Marcus Aurelius, 121 AD-180 AD.
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
Toll Free: 1.877.430.5895