August 7, 2024, Newsletter

Dear Friends,

Tangents:
August 7, 1959: First photo ever of Earth from space.

1882: Hatfield-McCoy feud erupts.
August 7, 2008: Russia invades Georgia, eventually annexing the country 16 days later.
2009: Former Republican vice presidential candidate Sarah Palin accused President Barack Obama of proposing a “death panel” that would decide who receives treatment in his health care plan.  Go to article >>

The next world’s tallest building could be a 3,000-feet-high battery
Skyscrapers could soon have a new purpose: storing renewable energy. See renderings of the innovation here.

Thieves are still targeting Hyundai and Kia cars
After a rash of stolen cars, Hyundai and Kia’s new anti-theft software is showing results. But data shows thieves are still targeting some older models at an alarming rate.

MTV announces VMA nominations 2024
The nominations for MTV’s Video Music Awards were announced on Tuesday, and unsurprisingly, Taylor Swift leads among the pack.

‘A king will die’: 4,000-year-old lunar eclipse omen tablets finally deciphered
Tablets added to the British Museum’s collection many decades ago have finally been deciphered. Read More

‘Crazy idea’ memory device could slash AI energy consumption by up to 2,500 times
By performing computations directly inside memory cells, CRAM will dramatically reduce power demands for AI workloads. Scientists claim it’s a solution to AI’s huge energy consumption. Read More.

Huge cosmological mystery could be solved by wormholes, new study argues
The universe is expanding at an ever accelerating rate — and tiny wormholes that bore through the fabric of space-time might be to blame, a new study proposes.
Full Story: Live Science (8/7)

China ready to launch 1st satellite in constellation that will challenge Elon Musk’s Starlink
China plans to launch more than 100 satellites for its new “constellation” this year and thousands more by the end of the decade. Read More.

Earth from space: ‘Smoking terror’ volcano that destroyed city 400 years ago burps toxic cloud
A 2018 astronaut photo shows Nicaragua’s active Momotombo volcano spitting out a cloud of toxic gas and steam just a few years after its latest eruption. Read More.

PHOTOS OF THE DAY

Leba, Poland
A member of the Grupa Magnifica acrobatics club takes a leap on the beach by the Baltic sea
Photograph: Sergei Gapon/AFP/Getty Images

Edinburgh, UK
The massed pipes and drums create an anchor formation on the esplanade during the Royal Edinburgh Military Tattoo at Edinburgh Castle. This year the Royal Navy takes the helm of the show, called Journeys, with a celebration of nautical themes
Photograph: Jane Barlow/PA

​​​​​​​Taizhou, China
Farmers harvest gorgon fruit – the edible seeds of a giant water lily – in a pond
Photograph: AFP/Getty Images
Market Closes for August 7^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1990, The Wall Street Journal published market guru Joe Granville’s forecast that the stock market would crash within days. The Dow Jones Industrial Average barely budged, finishing the month at 2614 and soaring past 3200 by spring 1992.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the fourth day, dropping 0.5%, or 99.43 to 21,879.93 in Toronto.
The index dropped to the lowest closing level since June 28.
Today, materials stocks led the market lower, as 9 of 11 sectors lost; 175 of 226 shares fell, while 48 rose.
Brookfield Corp. contributed the most to the index decline, decreasing 4.2%.
OceanaGold Corp. had the largest drop, falling 7.1%.
Insights
* The index advanced 8.1% in the past 52 weeks. The MSCI AC Americas Index gained 14% in the same period
* The S&P/TSX Composite is 5.7% below its 52-week high on July 31, 2024 and 17.1% above its low on Oct. 27, 2023
* The S&P/TSX Composite is down 4.1% in the past 5 days and fell 0.8% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 17.8 on a trailing basis and 15.2 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$3.5t
* 30-day price volatility rose to 13.97% compared with 13.93% in the previous session and the average of 11.37% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Materials | -84.2335| -3.1| 2/50
Financials | -77.6661| -1.1| 7/19
Industrials | -25.7134| -0.9| 5/23
Consumer Staples | -17.6174| -1.8| 2/9
Consumer Discretionary | -10.6701| -1.4| 2/11
Real Estate | -7.1881| -1.5| 1/19
Utilities | -4.6058| -0.5| 2/13
Health Care | -0.7828| -1.2| 1/3
Communication Services | -0.3566| 0.0| 4/1
Energy | 25.9081| 0.7| 17/22
Information Technology | 104.5198| 6.3| 5/5
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
Brookfield Corp | -25.5600| -4.2| 32.4| 11.0
Agnico Eagle Mines | -13.6400| -3.8| 87.0| 36.7
Couche-Tard | -11.7900| -2.9| -10.3| 0.5
Canadian Natural Resources | 4.3450| 0.6| -31.7| 6.3
Suncor | 20.0400| 4.4| 136.1| 25.3
Shopify | 112.5000| 17.9| 186.8| -14.8
US
By Rita Nazareth
(Bloomberg) — The rapid slide in US stocks that followed a weak $42 billion sale of Treasuries underscored the fragility of global financial markets in the wake of historic volatility.
After an equity surge driven by the Bank of Japan’s dovish signals, the S&P 500 wiped out its gains.
Investors shunned the 10-year US bond auction, which drew a yield that was well above the pre-sale indicative level.
The weaker-than-expected demand signaled the recent rally may have run its course.
Treasuries also came under pressure as 17 blue-chip companies offered $31.8 billion of debt, the highest amount of US investment-grade issuance this year.
At Nationwide, Mark Hackett says the latest events have been a “masterclass” in how emotions can dominate the movement in markets, particularly when sentiment and positioning are nearly universally positive.
“Stocks remain vulnerable,” said Fawad Razaqzada at City Index and Forex.com.
“More evidence of a bottom is needed to excite the bulls again. Overall, sentiment remained cagey. Not many people were confident to buy this latest dip, especially with US CPI looming next week.”
Following a gain of almost 2% earlier in the session, the S&P 500 closed 0.8% lower.
Nvidia Corp. led losses in mega caps.
Super Micro Computer Inc. tumbled 20% on disappointing earnings.
In late trading Warner Bros.
Discovery Inc., the parent of CNN and TNT, plunged after posting a charge of $9.1 billion as it wrote down the value of its traditional TV networks.
Treasury 10-year yields rose six basis points to 3.95%.
The Japanese yen fell 2%.
Mexico’s peso led a rally in emerging markets, easing pressure on currencies that had been hammered as investors abandoned yen-funded bets on riskier assets.
Despite the correction, strategists at JPMorgan Chase & Co. say there’s little evidence that equities entered oversold territory like in October 2023, for example.
“On our calculations for the equity allocation at the global level to return to post-2015 average levels, equity prices would have to decline by a further 8% from here,” Nikolaos Panigirtzoglou and his colleagues wrote in a note Wednesday.
Earlier gains in stocks were fueled by Japan’s reassurance on the heels of massive swings in the country’s stock prices over the past week.
The moves were compounded by the view the Federal Reserve would cut rates more aggressively, prompting traders to rapidly unwind once-popular yen-funded carry trades —including crowded positions in US tech stocks.
The global unwinding of the carry trade triggered by the BOJ surprisingly more hawkish stance last week – that in turn strengthened the yen markedly – has eased considerably, according to Quincy Krosby at LPL Financial.
“Markets globally have felt a sigh of relief as the velocity of the unwinding eases, but the yen’s relationship to the dollar is also a key component of the carry trade calculus,” she noted.
“A softer dollar, driven by the markets perception that the Fed will soon initiate an easing cycle, should help support a stronger yen — a negative for the trade.”
Markets have been in a tailspin due to recent weak US data, but it’s still too soon to suggest the economy is heading for a downturn, according to Franklin Templeton Institute.
After a surge in Treasuries, “it makes sense” to take some profit, Stephen Dover wrote.
US Treasury yields are probably too low in the absence of “broad-based evidence that an acute deterioration is underway in either the labor market or in market function,” according to strategists at Goldman Sachs Group Inc.
“The case for a meaningful rally from here is that one (or both) of those risks materialize,” William Marshall and Bill Zu wrote. “Under more benign outcomes, we think the center of gravity for yields is likely to be above current levels across the curve, in relative parallel versus the forwards.”
To Will Compernolle at FHN Financial, Treasury yields are now comfortably higher than their Monday lows, projecting a sense of calm after financial markets went haywire at the beginning of this week.
“It’s too early to declare the chaos over, however, and Treasury yields could veer back lower during light August trading and a relative data vacuum the rest of this week,” he said.

Corporate Highlights:
* Walt Disney Co. gave a mixed picture as it reported third-quarter results on Wednesday, with weakness at its famed theme parks offsetting its first-ever profit in streaming.
* Shopify Inc. reported second-quarter sales and profit that beat analysts’ estimates, showing that the Canadian e-commerce company is managing to navigate cautious consumer spending.
* CVS Health Corp. lowered its 2024 earnings outlook for the third straight quarter and announced cost-cutting measures to save $2 billion over several years as health-care expenses continue to soar.
* Ride-hailing company Lyft Inc. posted second-quarter bookings and issued an outlook that fell short of Wall Street’s expectations.
* Boeing Co. is redesigning the fuselage component that blew out of a nearly new 737 Max 9 aircraft mid-flight in January, as the plane maker seeks to draw lessons from the accident that has thrown it into crisis.
* Novo Nordisk A/S reported disappointing sales of its blockbuster weight-loss treatment Wegovy, a rare setback for the Danish drugmaker as it braces for more competition in the booming market.
* Rivian Automotive Inc. is sticking with a full-year vehicle production target unchanged from last year, but its chief executive officer expects output to grow in 2025 even with a plant shutdown looming.
* Brookfield Asset Management Ltd. said its assets under management rose to a record of approximately $1 trillion, and it reported profit that increased from a year ago but still missed analysts’ expectations.

Key events this week:
* Germany industrial production, Thursday
* US initial jobless claims, Thursday
* Fed’s Thomas Barkin speaks, Thursday
* China PPI, CPI, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.8% as of 4:04 p.m. New York time
* The Nasdaq 100 fell 1.2%
* The Dow Jones Industrial Average fell 0.6%
* The MSCI World Index fell 0.3%
Currencies
* The Bloomberg Dollar Spot Index rose 0.1%
* The euro was little changed at $1.0922
* The British pound was unchanged at $1.2691
* The Japanese yen fell 1.8% to 146.87 per dollar
Cryptocurrencies
* Bitcoin fell 3% to $54,848.88
* Ether fell 5.7% to $2,348.53
Bonds
* The yield on 10-year Treasuries advanced six basis points to 3.95%
* Germany’s 10-year yield advanced seven basis points to 2.27%
* Britain’s 10-year yield advanced three basis points to 3.95%
Commodities
* West Texas Intermediate crude rose 3% to $75.40 a barrel
* Spot gold fell 0.2% to $2,386.65 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Robert Brand, Sujata Rao and Winnie Hsu.
Have a lovely evening.

Be magnificent!
As ever,

Carolann
Integrity may be difficult to define, but what constitutes lack of integrity is of such seriousness as to disqualify a person for a managerial position. –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
Toll Free: 1.877.430.5895
Fax: 778.430.5828
www.carolannsteinhoff.com