August 5th, 2025, Newsletter

Dear Friends,

Tangents:
August 5, 1914: The world’s first electric traffic light is installed in Cleveland, Ohio, based on James Hoge’s design patented later in 1918.
August 5, 1963: The United States, Britain and the Soviet Union signed a treaty in Moscow banning nuclear tests in the atmosphere, outer space and underwater. Go to article.

The mystery of Keanu Reeves’ missing watches
Six luxury timepieces were stolen from the “John Wick” actor in 2023. They’ve just been found — in Chile.

📸 Behind the scenes: Legendary music photographer Jim Marshall started taking pictures of the Grateful Dead in 1966. The resulting images are intimate and honest, reflecting the trust he built over the years. Take a look.

Michael J. Fox to appear on ‘Shrinking’
Harrison Ford, whose character on the Apple TV+ show also has Parkinson’s disease, described Fox’s presence on the set as “essential.”

4,000: That’s the age of a handprint that researchers discovered on a clay model used for offerings in an Ancient Egyptian tomb. 

Dormant volcano erupts in Russia for first time in around 500 years, days after magnitude 8.8 megaquake
Krasheninnikov volcano has erupted on Russia’s Kamchatka Peninsula. This is the second volcano to erupt in the region following the magnitude 8.8 megaquake on July 30. Read More.

Cosmic rays could help support alien life on worlds outside the ‘Goldilocks zone’
A new study suggests that cosmic radiation could potentially provide the energy to kick-start extraterrestrial life deep beneath the surface of icy worlds like Mars, Europa and Enceladus.  Read More.

Watch a pod of orcas pretending to drown one of their own in macabre training session
Footage from the BBC’s new nature series “Parenthood” shows orcas practicing an important blue whale-hunting technique on each other. Read More.

No-sugar sweetener erythritol may pose risk to cells in the brain, study finds — here’s what to know
A popular zero-calorie sweetener could injure cells in the brain’s blood vessels, a lab study finds. Here’s what we know so far. Read More.

PHOTOS OF THE DAY

Frankfurt, Germany
A Mercedes Unimog van sits beneath overgrown vegetation on a parking spot in Bad Vilbel
Photograph: Michael Probst/AP

Staritsa, Russia
A circus performer prepares for Karandash-Fest, a street festival in western Russia
Photograph: Pavel Bednyakov/AP

Whitby, UK
Miniature steam engines at a traction engine rally on the North Yorkshire coast
Photograph: Ian Forsyth/Getty Images
Market Closes for Aug 5^th, 2025

International Markets

Bonds

Currencies

Commodities

Market Commentary:
The goal is to turn data into information, and information, and information into insight. -Carleton S. Fiorina, “Carly”, b. 1954.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 2% at 27,570.08 in Toronto.
The move was the biggest since rising 2.5% on April 11 and follows the previous session’s decrease of 0.9%.
Today, materials stocks led the market higher, as all sectors gained; 179 of 212 shares rose, while 32 fell.
Shopify Inc. contributed the most to the index gain, increasing 7.1%.
Kinross Gold Corp. had the largest increase, rising 12.0%.

Insights
* In the past year, the index had a similar or greater gain two times. The next day, it declined 3% once and advanced 1.2% once
* The index advanced 24% in the past 52 weeks. The MSCI AC Americas Index gained 22% in the same period
* The S&P/TSX Composite is 0% below its 52-week high on July 30, 2025 and 27.3% above its low on Aug. 6, 2024
* The S&P/TSX Composite is up 0.6% in the past 5 days and rose 2% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 19.6 on a trailing basis and 17.4 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.6% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$4.37t
* 30-day price volatility rose to 9.38% compared with 7.40% in the previous session and the average of 6.34% over the past month

Index Points
Materials | 203.8890| 5.6| 47/1
Information Technology | 118.3242| 4.4| 10/0
Financials | 103.5224| 1.2| 24/1
Energy | 43.9660| 1.0| 26/14
Industrials | 41.8620| 1.2| 22/7
Consumer Staples | 14.0553| 1.4| 9/1
Consumer Discretionary | 11.6011| 1.3| 9/0
Real Estate | 5.5387| 1.1| 17/1
Utilities | 3.5303| 0.3| 9/5
Health Care | 1.6813| 2.7| 3/0
Communication Services | 1.6739| 0.3| 3/2
Shopify | 98.2100| 7.1| 13.8| 14.5
Agnico Eagle Mines Ltd | 44.6200| 7.3| 78.2| 64.9
RBC | 25.5200| 1.5| -11.9| 3.9
TerraVest Capital | -1.1340| -6.5| 275.2| 39.7
Keyera | -1.2980| -1.9| 40.7| -2.5
Thomson Reuters | -2.2870| -0.9| -3.3| 19.2
(MT Newswires):
Canadian investors on Tuesday returned refreshed after a holiday long weekend by pushing the Toronto Stock Exchange up to a fresh record close, buoyed by data showing most Canadian exports to the United States remained duty free in June, even as National Bank warned the full impact of this year’s trade war is still to be seen.
Despite mixed commodity prices, the resources heavy S&P/TSX Composite Index ended the day up 549.65 points, or 2%, to 27,570.88, ending a three-day losing streak late last week that came after the index closed at a prior record 27,539.88 on July 29.
Most sectors were higher, led by Info Tech up 3% and then Health Care and Base Metals, both up 2.7%.
The Battery Metals Index was down near 0.7%.
As with most days of late, trade related comments and data were the main focus for investors.
Prime Minister Mark Carney had been keeping a pretty low profile since Aug. 1 when the Trump administration implemented a 35% tariff on Canadian goods entering the United States not already covered under the existing North American free trade agreement.
But Carney was shown on Canada’s CBC News on Tuesday afternoon taking questions in British Columbia on the federal government’s response to wildfires in that province and elsewhere, after detailing support for the Canadian softwood lumber industry.
During a press conference the Prime Minister said he has not spoken to U.S. President Trump in recent days, before adding they would speak when it makes sense to do so.
Carney was also asked would Canada impose retaliatory measures beyond those already in place and he noted 85% of trade with the U.S. right now is still tariff free.
The Prime Minister also announced federal government support for the Canadian softwood lumber industry with $700 million in loan guarantees and $500 million to help it diversify markets after the United States last month raised anti-dumping duties on imports of Canadian softwood.
In related data news, RBC noted Canada’s trade deficit widened to $5.9 billion in June from a $5.5 billion shortfall in May, but reportedly entirely due to a large “one-time high value” equipment imports from the United States to Newfoundland’s offshore oil production sector.
RBC said excluding a $2.1 billion jump in the equipment import component that contained those products, imports of goods would have declined by another 1.8% in June, and the trade deficit would have narrowed to $3.8 billion overall.
According to RBC, that large equipment purchase should not impact overall GDP estimates, saying the import increase will mechanically subtract from GDP, but should be offset by higher business equipment spending.
For RBC, the bottom line is that a “plunge” in Q2 Canadian export volumes is on track to substantially subtract from Canadian GDP in Q2 following a pre-tariff surge in Q1 when U.S. importers rushed to front-run tariffs.
But, the bank said, there was further “encouraging” evidence in June that an exemption for trade compliant with the USMCA/CUSMA free trade agreement is backstopping duty free access to the U.S. market for most Canadian exports.
RBC noted sector specific tariffs on U.S. imports from Canada of products like steel and aluminum and the non-U.S. content of finished motor vehicles are raising costs significantly for U.S. buyers, but the U.S.
Census Bureau reported 92% of Canadian exports to the U.S. crossed the border duty free in June, up slightly from 91% in May and 89% in April.
The bank also noted the average effective U.S. tariff rate on imports from Canada remained one of the lowest among U.S. trading partners at 2.4%, well-below the 8.9% average U.S. rate on all imports in June.
That effective tariff rate on imports from Canada will rise with an increase in the rate on products not compliant with the existing trade agreement between the two countries to 35% in August, up from 25% in June, but that increase applies to a relatively small share, RBC estimates near 6%, of exports to the United States that are not compliant.
“We,” RBC said, “continue to expect that current rules, if maintained as currently in place, would leave Canada with the lowest tariff rate of any major U.S. trade partner — putting Canadian exporters in a stronger relative position to compete for U.S. import market share than other countries.
The concern remains, though, that U.S. tariff hikes have been so large, and uncertainty so high surrounding their announcements, that U.S. economic growth will slow with negative implications for close U.S. trade partners like Canada.”
It added: “The total U.S. effective tariff rate on imports from all countries continued to rise in June, hitting its highest level since the 1940s, and there is early evidence that U.S. labour markets are softening as a result, particularly in the U.S. industrial sector where ties with the Canadian economy are extremely close.”
Meanwhile, Ethan Currie at National Bank, in noting the U.S. merchandise deficit continued to shrink in June, primarily the result of falling imports due to both earlier front-loading and higher costs in the form of tariffs.
With adjusted ‘reciprocal’ levies set to take hold starting Thursday, it’s no wonder two-way trade with the tariff capital of the world is dipping, he added.
Currie said while U.S.-assigned tariff rates have come down from their threatened April levels, they are still “massively inflated” relative to last year.
Indeed, he noted, the average effective tariff rate (AETR) resides at levels not seen since WWII.
“While we await ‘hard’ data via customs revenues and trade balances to settle on the 2025 figure, we estimate that the U.S. AETR is above 15% according to current policy.
This number remains fluid as trade behaviour adjusts and presumably, countries with more favourable tariffs may see relatively more U.S. business,” Currie added.
Outside of reciprocal levies, and court rulings which could challenge the imposition of such under the International Emergency Economic Powers Act (IEEPA), sectoral tariffs remain very much in focus.
Fentanyl-related levies in Canada, Mexico, and China make trade deals for these partners a “unique case”, Currie noted.
“Thanks to the USMCA,” Currie said, “Canada’s exposure remains better than most, and the ‘headline’ 35% is not representative of the overall tariffs being paid.”
“Still,” he added, “we see punitive broad-based tariffs, if sustained, and associated uncertainty/volatility weighing on long-run domestic and global growth.
Clearly, this administration is more protectionist than Trump’s first time in office, which is clear when comparing customs duties. It’s also consistent with a stickier term premium.
However, it might not be so obvious when aligning equity and Greenback performance.
The full impact of this year’s trade war is still to be seen, in our view.”
Of commodities, gold prices rose on Tuesday as the dollar gave up early gains after the United States reported its trade deficit fell to a near two-year low in June as imports slowed.
Gold for December delivery was last seen up $7.50 to US$3,433.30 per ounce.
But West Texas Intermediate oil closed lower for a fourth day as traders focus on rising supply and weaker demand as growth slows.
WTI crude oil for September delivery closed down $1.13 to settle at US$65.16 per barrel, while October Brent oil was last seen down $1.06 to US$67.70.
US
By Rita Nazareth
(Bloomberg) — Stocks wiped out gains after data showed weakening US services amid sticky price pressures, raising concern about the Federal Reserve’s policy challenges.
Short-dated Treasuries underperformed.
Oil sank as Russia was said to mull an air-truce with Ukraine.
Following a rally that put S&P 500 on the brink of all-time highs, the equity benchmark lost steam.
A closely watched gauge of chipmakers slid more than 1%.
In late hours, Advanced Micro Devices Inc. gave a bullish revenue outlook.
A soft $58 billion sale of three-year notes kicked off a trio of US auctions this week.
The yield on 10-year Treasuries was little changed at 4.20%, while those on two-year notes rose four basis points to 3.72%“We expect further choppy trading to persist in the later stages of summer, especially as the path of interest-rate policy remains unknown and highly sensitive to incoming economic data,” said Chris Senyek at Wolfe Research.
The US services sector stagnated as firms — faced with tepid demand and rising costs — reduced headcount.
Data out last week showed weaker-than-expected jobs data while inflation-adjusted consumer spending barely rose.
“It is difficult to see how price pressures will stick if employment is cooling,” said Neil Dutta at Renaissance Macro Research.
“Demand is not going to be strong enough for households to absorb the price increase. This is why an insurance cut makes sense.”
President Donald Trump told CNBC that Treasury Secretary Scott Bessent said he did not want to be nominated to replace Jerome Powell as the next Fed chair.
Trump also said that US tariffs on semiconductor and pharmaceutical imports would be announced “within the next week or so.”
The Institute for Supply Management’s index of services declined last month to 50.1, below all estimates in a Bloomberg survey of economists.
The employment index contracted. The group’s measure of prices paid for materials and services climbed to the highest since October 2022.
To Ian Lyngen at BMO Capital Markets, the inflation component was more troubling.
Nonetheless, the payrolls report has still paved the way for a September rate cut, he noted.
“The ISM services survey highlights the challenges for the Fed in the coming months, with the activity and employment indicators weakening even as the prices paid index rose to a new cyclical high,” said Alexandra Brown at Capital Economics.
The latest labor data is weak enough for the Fed to justify cutting interest rates, said Ulrike Hoffmann-Burchardi at UBS Global Wealth Management.
Her firm’s base case remains that the US central bank will resume rate cuts at the September meeting, with a total of 100 basis points of easing by early 2026.
​​​​​​​
‘Sticky Inflation Signs’
“Traders are continuing to speculate on the time of the Fed’s next rate cuts with sticky inflation signs weighed against weakening economic indicators,” said Fawad Razaqzada at City Index and Forex.com.
He also noted the S&P 500 outlook could start to deteriorate in the near-term amid warnings over sky-high valuations against a backdrop of weakening economy.
“Should worries about overstretched valuations start to weigh on a few high-flying tech names, most of which have been supported by their latest earnings results, then the major indices could start to show bearish signs,” he said.
Fast-money investors will likely reach full exposure to US equities by September, which could prompt them to sell stocks as they become vulnerable to downside market shocks, according to Scott Rubner of Citadel Securities.
At Jefferies, Andrew Greenebaum says the Fed could be poised to trigger a stock-market regime change that sees smaller companies perform better than mega-cap tech.
Data going back to 1990 show that the S&P 500 Equal Weighted Index outperformed the traditional market-cap weighted version of the benchmark when the Fed is reducing rates.
Meantime, HSBC strategists boosted their year-end target for the S&P 500 to 6,400 points from 5,600, citing robust corporate earnings and easing policy uncertainty.
“The AI trade is powering the tech/AI cohort higher, while reduced policy uncertainty (namely tariffs) is fueling the ‘rest’ of the market,” the team led by Nicole Inui wrote.
“We have more confidence in the sustainability of the AI trade than further easing on policy uncertainty.”

Corporate Highlights:
* Two Chinese nationals were arrested this week on charges they sent tens of millions of dollars’ worth of advanced AI chips made by Nvidia Corp. to China in violation of US export restrictions, according to authorities.
* Tesla Inc. continues to post steep sales declines in Europe, where the Elon Musk-led automaker is ceding significant share to China’s BYD Co.
* Amazon.com Inc. plans to make OpenAI’s new open artificial intelligence models available to customers, the first time the cloud computing giant has offered products from the leading AI startup.
* President Donald Trump accused two of the nation’s largest banks of rejecting his business, as his administration was preparing an executive order threatening financial institutions who refused to work with certain customers on ideological grounds.
** Trump told CNBC he had been “informed by my people” that JPMorgan Chase & Co. had asked him to close accounts he held for decades within 20 days, and that Bank of America Corp. declined his attempt to deposit more than $1 billion with their company.
* Rivian Automotive Inc. forecast a larger adjusted loss this year than the electric vehicle maker expected previously, citing recent changes to stringent fuel economy rules in the US that threaten a key source of revenue.
* Amgen Inc. boosted its 2025 guidance after quarterly results beat Wall Street’s estimates on the back of strong sales from older medicines such as the cholesterol-lowering drug Repatha.
* The Trump’s administration proposed a rule to allow more commercial drones to fly beyond an operator’s visual line of sight, a potential boon for companies such as Alphabet Inc.’s Wing unit and Walmart Inc. pushing to deliver packages by autonomous aircraft.
* Caterpillar Inc. has given investors annual guidance for the first time on how much tariffs will impact the maker of iconic yellow diggers and bulldozers this year, as the Trump administration’s trade war deepens.
* Pfizer Inc. raised its profit forecast for the year, with the drugmaker’s ongoing cost cuts helping to make up for a lack of expected sales growth.
* Marriott International Inc. reported second-quarter earnings that beat expectations as the company’s global footprint made up for softening US demand.
* Vertex Pharmaceuticals Inc.’s experimental pain drug failed to provide post-surgery benefits and US regulators said they didn’t see a path forward for broad use of its pill in treating a chronic pain condition.
* Taiwan prosecutors arrested six people suspected of stealing trade secrets from Taiwan Semiconductor Manufacturing Co., opening an investigation into a potential breach of national security involving a global tech industry linchpin.
Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.5% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.7%
* The Dow Jones Industrial Average fell 0.1%
* The MSCI World Index fell 0.2%
* Bloomberg Magnificent 7 Total Return Index fell 0.6%
* Philadelphia Stock Exchange Semiconductor Index fell 1.1%
* The Russell 2000 Index rose 0.6%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro was little changed at $1.1573
* The British pound was little changed at $1.3296
* The Japanese yen fell 0.4% to 147.61 per dollar
Cryptocurrencies
* Bitcoin fell 1% to $113,642.14
* Ether fell 3.5% to $3,571.97
Bonds
* The yield on 10-year Treasuries was little changed at 4.20%
* Germany’s 10-year yield was little changed at 2.62%
* Britain’s 10-year yield was little changed at 4.52%
* The yield on 2-year Treasuries advanced four basis points to 3.72%
* The yield on 30-year Treasuries declined two basis points to 4.77%
Commodities
* West Texas Intermediate crude fell 1.7% to $65.14 a barrel
* Spot gold rose 0.2% to $3,379.14 an ounce
Have a lovely evening.

Be magnificent!
As ever,

Carolann
Looking behind I am filled with gratitude; looking forward I am filled with vision.
looking upwards I am filled with strength; looking within I discover peace.
                            Quero Apache prayer

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