August 9, 2022 Newsletter

Dear Friends,

Tangents:
On Aug. 9, 1945, the United States exploded a nuclear device over Nagasaki, Japan, instantly killing an estimated 39,000 people. The explosion came three days after the atomic bombing of Hiroshima.  Go to article »

Also on this day, in 1969, actress Sharon Tate  and four others were murdered by followers of Charles Manson, leader of a communal religious cult know as the “Family.”
1974: Nixon resigns.

Where you can drink some of the rarest beers in the world.  Talk about raising the bar! This beer garden in North Carolina holds the world record for most drafts on tap. 

There’s a lot more to nothingness than you think.

The human brain is a perpetual prediction machine.

At the quantum level, reality is anything but solid.

The Loch Ness monster might be a giant eel. 

PHOTOS OF THE DAY

Lightning strikes through smoke from fuel storage tanks that exploded near Cuba’s supertanker port
CREDIT: Alexandre Meneghini/Reuters

A view of the abandoned Gamsutl village, Russia’s third oldest settlement, meaning ‘at the foot of the Khan’s tower’. Its complete absence of a population means Gamsutl is called a ‘ghost village’
CREDIT: Anadolu Agency/Getty Images

Moored boats look like they are branches of a tree, on the Shitalakshya River in Narayanganj
CREDIT: Mustasinur Rahman Alvi/Rex/Shutterstock

Market Closes for August 9^th, 2022

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1974, President Richard M. Nixon, crippled by the Watergate scandal, resigned. The Dow Jones Industrial Average dropped by 1% to 777.30.
Canada
By Ana Paula Barreto Pereira
(Bloomberg) — Canadian equities tumbled, dragged down by technology stocks as investor concern over a global recession grows.
The S&P/TSX Composite fell 0.5% at 19,578.30 in Toronto, ending a 4-day gain.
The loss follows the previous session’s increase of 0.2%.
On Tuesday, 7 of 11 sectors lost; 151 of 238 shares fell, while 84 rose.
Shopify Inc. contributed the most to the index decline, decreasing 7.5%.
Nuvei Corp. had the largest percentage drop, falling 21%.
Insights
* The index declined 4.2% in the past 52 weeks. The MSCI AC Americas Index lost 8.9% in the same period
* The S&P/TSX Composite is 12% below its 52-week high on April 5, 2022 and 7.8% above its low on July 14, 2022
* The S&P/TSX Composite is up 0.4% in the past 5 days and rose 2.9% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 14 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$3.14t
* 30-day price volatility fell to 14.7% compared with 14.9% in the previous session and the average of 18.3% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
* Information Technology | -52.9874| -4.5| 1/13
* Financials | -24.9566| -0.4| 8/21
* Industrials | -14.8787| -0.6| 9/20
* Consumer Staples | -11.3410| -1.4| 1/10
* Health Care | -6.1354| -8.0| 0/7
* Consumer Discretionary | -5.0353| -0.7| 3/10
* Real Estate | -2.8140| -0.5| 9/13
* Utilities | 4.0311| 0.4| 11/5
* Communication Services | 4.3607| 0.5| 4/3
* Energy | 6.9309| 0.2| 22/15
* Materials | 11.9667| 0.5| 16/34
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
* Shopify | -30.0600| -7.5| -8.2| -72.8
* Couche-Tard | -7.8110| -2.4| -6.1| 5.2
* TD Bank | -6.1420| -0.6| -71.0| -14.6
* Canadian Natural Resources | 3.3410| 0.6| -6.3| 27.0
* Barrick Gold | 3.9240| 1.5| 172.3| -12.0
* Nutrien | 14.5100| 3.5| 7.2| 19.7
US
By Rita Nazareth
(Bloomberg) — Stocks retreated as a downbeat outlook from another giant chipmaker added to recession fears, with many traders unwilling to make any risky bets before Wednesday’s pivotal inflation reading.
A rally that drove the S&P 500 up more than 10% from its June lows hit a wall amid a fourth straight day of losses.
The Nasdaq 100 underperformed after Micron Technology Inc.’s warning provided more evidence of the collapsing demand for chips.
All 30 companies in the Philadelphia Semiconductor Index fell, with the gauge down 4.6%.
The surge in meme shares like Bed Bath & Beyond Inc. and GameStop Corp. sputtered.
Investors turned more cautious ahead of July’s consumer-price index, which is forecast to cool a bit while still remaining at high levels.
The report will come on the heels of recent jobs figures underscoring solid wage growth and US productivity data highlighting another surge in labor costs that could further complicate the Federal Reserve’s efforts to tame inflation.
“A hotter-than-anticipated CPI report will pressure markets this week. An in-line report could be taken in stride as investors have priced in a 75 basis point move by the Fed” in September, wrote Lindsey Bell, chief markets and money
strategist for Ally. “Either way, we still have to get through another jobs report, more inflation data, and Jackson Hole before we get to the Fed’s September meeting. It could be a volatile several weeks ahead.”
Timing the peak in inflation isn’t easy, especially after June’s CPI print turned out to be hotter than expected, but being right in doing so has brought investors a hefty return.
Those buying the S&P 500 at major inflation peaks going back to 1940 have seen the index post an average rally of 16% in the next 12 months, according to data compiled by Leuthold Group.
A big caveat is: the price-to-earnings ratio has averaged 12.7 in prior instances on a normalized basis, compared with above 20 now.
Highly optimistic analyst recommendations are flashing a warning signal for stocks, according to Citigroup Inc. strategists led by Robert Buckland.
An index of global sell-side ratings “is back to peak bullishness levels reached in 2000 and 2007, after which global equities halved,” they wrote.
Strategists from Morgan Stanley and Goldman Sachs Group Inc. have already warned that analysts’ expectations are unrealistic.
Meanwhile, JPMorgan Chase & Co.’s Marko Kolanovic, one of Wall Street’s staunchest bulls, said investors should modestly trim stock holdings after equities outpaced other assets amid receding recession fears.
“Near the mid-June lows, we discussed that we would not be selling equities given markets were already pricing in a lot of bad news. However, with the strong equity rebound since then and our view that the near-term upside is capped, the risk/reward appears less favorable,” said Keith Lerner, chief market strategist at Truist Advisory Services.
Among other corporate highlights, Novavax Inc. plummeted as the drugmaker slashed its revenue forecast on disappointing demand for its Covid-19 vaccine that trailed competitors getting to market.
Boeing Co. delivered 23 of its 737 Max jetliners and three freighters in July, down from 51 total commercial aircraft shipments in June.
Elsewhere, Bitcoin resumed its slump, ending a four-day winning streak as volatility continued to whipsaw the crypto world.
What to watch this week:
* US CPI data, Wednesday
* Chicago Fed President Charles Evans and his Minneapolis counterpart Neel Kashkari due to speak, Wednesday
* US PPI, initial jobless claims, Thursday
* San Francisco Fed President Mary Daly is interviewed on Bloomberg Television, Thursday
* Euro-area industrial production, Friday
* US University of Michigan consumer sentiment, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.4% as of 4 p.m. New York time
* The Nasdaq 100 fell 1.1%
* The Dow Jones Industrial Average fell 0.2%
* The MSCI World index fell 0.5%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro rose 0.1% to $1.0208
* The British pound was little changed at $1.2073
* The Japanese yen fell 0.1% to 135.13 per dollar
Bonds
* The yield on 10-year Treasuries advanced three basis points to 2.79%
* Germany’s 10-year yield advanced two basis points to 0.92%
* Britain’s 10-year yield advanced two basis points to 1.97%
Commodities
* West Texas Intermediate crude fell 0.1% to $90.63 a barrel
* Gold futures rose 0.3% to $1,811.10 an ounce
–With assistance from Andreea Papuc, Sunil Jagtiani, Srinivasan Sivabalan, Cecile Gutscher, Isabelle Lee, Natalia Kniazhevich, Rich Miller and Bailey Lipschultz.
Have a lovely evening.

Be magnificent!
As ever,

Carolann

Whoever is happy will make others happy. –Anne Frank, 1929-1945.

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