July 10th, 2025, Newsletter

Dear Friends,

Tangents: Happy Friday Eve.  Full moon tonight.
July 10, 1940: The Battle of Britain begins as Germany launches air attacks on the UK, marking a pivotal air campaign of World War II.
July 10, 1985:  Coca-Cola Co., bowing to pressure from irate customers after the introduction of New Coke, said it would resume selling its old formula. Go to article
July 10, 1955: Rainbow Warrior sunk, Greenpeace.

John Calvin, founder Presbyterianism, b. 1509, Noyon, France.
Marcel Proust, writer, b. 1871,Neuilly, France.
Arthur Ashe, tennis player, b. 1943, Virginia, USA.

Ready to be moonstruck?
Keep your eyes on the horizon tonight to see the peak of July’s full buck moon.

‘I really don’t want them to go’ 
Japan’s panda town was booming. But the four bears at its local zoo really belong to China, and China wants them back.

8-year-old with rare, fatal disease shows dramatic improvement on experimental treatment
A child with a rare genetic disease that affects mitochondria is the first person to receive a new experimental treatment for the potentially life-threatening condition. Read More.

Extraordinary ‘sacrificial ass’ found with severed head from Bronze Age Israel
The nearly 5,000-year-old remains of a “sacrificial ass” and three other donkeys from a faraway land have been discovered under a Bronze Age house in Israel. Read More.

Dams around the world hold so much water they’ve shifted Earth’s poles, new research shows
Dam construction since 1835 has caused Earth’s poles to “wander” away from the planet’s rotational axis because of the massive weight of water reservoirs. Read More.

PHOTOS OF THE DAY

Igualada, Spain
Balloonists take part in the opening event of the 29th European balloon festival
Photograph: Enric Fontcuberta/EPA

York, England
An aerial view of this year’s York maze, which celebrates 30 years of Toy Story. The maze is the largest in the UK, made up of more than 1m maize plants in a 15-acre field
Photograph: Owen Humphreys/PA

Tottori, Japan
Visitors view a sand sculpture at the Tottori Sand Museum’s annual exhibition
Photograph: Buddhika Weerasinghe/Getty Images
Market Closes for July 10^th, 2025

International Markets

Bonds

Currencies

Commodities

Market Commentary:
We can guarantee cash benefits as far out and at whatever size you like, but we cannot guarantee their purchasing power. –Alan Greenspan, Fed Chairman 1987-2006, on funding Social Security to Senate Banking Committee 2/15/05), b. 1926.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the second day, climbing 0.4%, or 109.98 to 27,082.30 in Toronto.
Brookfield Corp. contributed the most to the index gain, increasing 2.0%.
Energy Fuels Inc/Canada had the largest increase, rising 16.3%.
Today, 128 of 213 shares rose, while 81 fell; 8 of 11 sectors were higher, led by financials stocks.

Insights
* So far this week, the index was little changed
* The index advanced 21% in the past 52 weeks. The MSCI AC Americas Index gained 12% in the same period
* The S&P/TSX Composite is at its 52-week high and 25% above its low on Aug. 6, 2024
* The S&P/TSX Composite is little changed in the past 5 days and rose 2.5% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 19.5 on a trailing basis and 17.2 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$4.36t
* 30-day price volatility fell to 5.77% compared with 5.81% in the previous session and the average of 6.30% over the past month

Index Points
Financials | 51.9109| 0.6| 20/5
Industrials | 27.9437| 0.8| 20/9
Energy | 13.2951| 0.3| 20/18
Information Technology | 5.6114| 0.2| 4/6
Materials | 5.5887| 0.2| 30/18
Utilities | 3.7530| 0.4| 10/5
Communication Services | 3.0574| 0.5| 3/2
Real Estate | 1.7617| 0.4| 10/7
Health Care | -0.0462| -0.1| 1/2
Consumer Discretionary | -0.0868| 0.0| 6/3
Consumer Staples | -2.8185| -0.3| 4/6
Brookfield Corp | 17.4400| 2.0| -12.5| 5.7
Enbridge | 12.9500| 1.4| 88.4| -0.3
RBC | 10.2800| 0.6| 72.5| 5.2
Cameco | -3.5290| -1.2| 5.4| 31.0
Canadian Natural Resources | -4.6850| -0.7| -17.2| -2.1
Nutrien | -6.5180| -2.3| 42.4| 29.2
(MT Newswires)
The Toronto Stock Exchange closed at a fresh record high on Thursday, pushing back above the 27,000 marks on a strong performance for the metals sector amid uncertainty over the global outlook due to fluctuating U.S. tariff policies.
The S&P/TSX Composite Index closed 109.98 points to 27,082.30, topping the prior record of 27,036.16 set on July 4.
Most sectors moved higher, with Base Metals and Industrials leading the gainers, rising 7% and 4.3%, respectively, while Energy fell 1.4%.
The rise comes despite uncertainty over U.S. trade policies and the potential inflationary effect of the tariffs imposed by the U.S. President, as well as their impact on growth in Canada and internationally.
Derek Holt, head of capital market economics at Scotiabank, said the bank expects the U.S. Federal Reserve to keep its key interest rate at 4.5% for the rest of the year.
This forecast has held up well, Holt said, as markets have lowered expectations for rate cuts in 2025, from 100 basis points earlier this year to about 50 now.
Scotiabank still believes it will be hard for the Fed to justify any rate cuts soon but remains flexible given the uncertainty in the current policy environment.
Holt added he also expects the Bank of Canada (BoC) to also keep interest rates unchanged for the rest of the year.
Unlike the Fed, the BoC’s current policy rate of 2.75% already sits within its estimated “neutral” range of 2.25% to 3.25%.
This gives the BoC more flexibility in its decisions, although trade remains an important factor for the Canadian economy.
Despite some signs of economic slowdown over the past one-and-a-half years, inflation, especially the BoC’s preferred core measures, remains too high for rate cuts to be seriously considered, Holt noted, suggesting that other forces are keeping inflation elevated, even as the economy loses a bit of momentum, he said.
There are risks to growth that could help reduce inflation over time.
However, how much impact these risks have, especially from tariffs, depends on whether trade restrictions are temporary or permanent.
“It remains premature to judge this, given the Trump administration’s erratic ways, and therefore, easing pre-emptively ahead of greater slack cannot be done with confidence.
If temporary, then growth faces little to no sustained deviation from a baseline shock scenario.
If persistent, then greater disinflationary slack could emerge,” Holt said.
He added that fiscal policy might also play a role.
A “strongly expansionary” federal budget is expected this fall, which could boost the economy in ways like a rate cut.
The BoC is watching this closely.
With interest rates already at a neutral level, and the risk of doing too much stimulus if trade tensions fade, the BoC is likely being cautious to avoid repeating the mistake of overreacting, as happened in the aftermath of the pandemic.
West Texas Intermediate (WTI) crude oil fell for the first time in four sessions on Thursday on rising U.S. inventories and expectations capricious U.S. tariff policies are likely to slow global growth.
WTI oil for August delivery closed US$1.81 to settle at US$66.57 per barrel, while September Brent crude was last seen down US$1.56 to US$68.63.
Gold traded higher for a second day late afternoon on Thursday on haven demand and concerns over U.S. tariff policies even as the dollar and treasury yields rose.
Gold for August delivery was last seen up US$12.50 to US$3,333.50 per ounce.
US
By Rita Nazareth
(Bloomberg) — Relative calm enveloped Wall Street, with stocks rising as traders parsed a batch of corporate outlooks.
Treasuries bounced from session lows as a $22 billion sale of 30-year bonds showed appetite for longer-term debt despite concerns about the US deficit and the impacts of tariffs.
Just a few days ahead of the unofficial start of the earnings season that will bring results from big banks, an upbeat forecast from Delta Air Lines Inc. lifted the industry.
The S&P 500 hit a record, approaching 6,300.
Tesla Inc. jumped on plans to expand its Robotaxi service to California and Arizona.
Nvidia Corp.’s value topped $4 trillion.
The chipmaker’s chief Jensen Huang was said to meet with President Donald Trump before a planned trip to China.
Read: July’s 30-Year Treasury Auction Garners Record Direct Demand Treasury 10-year yields rose one basis point to 4.34%, while those on 30-year bonds were little changed at 4.86%.
Thursday’s debt auction was awarded at 4.889% vs a 4.890% when- issued yield at the 1 p.m.
New York time bidding deadline.
A drop in jobless claims in a period that included the Independence Day holiday was taken in stride.
The dollar wavered.
Markets are caught up in a mix of sometimes contradictory risks surrounding the tariff rollout, fiscal policy, and the outlook for the Federal Reserve.
Trump’s flurry of new warnings has\-done little to rattle trading as they did when the “reciprocal tariffs” were announced in April, with investors focusing on the overall extension of the deadline to Aug. 1.
Speaking in Dublin, JPMorgan Chase & Co.’s chief Jamie Dimon warned markets are complacent on tariffs.
He also said it is important that an agreement is reached between the European Union and the US, adding that a tariff framework “needs to get done.”
“There’s zero chance we’ll have tariff clarity by Aug. 1, which makes a July rate cut impossible,” said Tom Essaye of The Sevens Report.
“The practical impact of this consistently delayed tariff policy is to reduce the chances of a September rate cut, which could leave rates higher for longer and increase the chances of an economic slowdown.”
Read: Fed’s Waller Says Balance Sheet Can Drop to About $5.8 Trillion Fed Bank of St. Louis President Alberto Musalem said he sees upside risks to inflation, but it’s too early to know whether tariffs will have a persistent impact on prices.
His San Francisco counterpart Mary Daly said she still views two rate cuts as likely this year and sees a greater chance that the price effects from tariffs may be more muted than anticipated.
Policymakers have held borrowing costs steady this year, but a divide has emerged over how many rate cuts officials expect in 2025.
Fed officials will meet next July 29-30.
Based on pricing in futures contracts, traders currently expect the central bank to slash rates twice this year.
“While there will likely be no shortage of announcements coming out of the White House in the coming weeks, it’s unlikely the new August 1 deadline will be the end of the tariff story,” -said Daniel Skelly, head of Morgan Stanley’s Wealth Management Market Research & Strategy Team.
And with a new earnings season around the corner, investors may want to focus on stocks with the potential for upside surprises in profits and cash flow, while also diversifying into international stocks, commodities, energy infrastructure, and hedge funds, he noted.
“More tariff clarity should emerge as trade talks continue,” said Mark Haefele at UBS Global Wealth Management.
“Declines in policy uncertainty have historically been positive for stocks, and we think US trade policy will move toward greater stability in the second half of the year.”
Read: ‘The Worst Is Past’ Must Be the Message This Earnings Season “The remarkable resilience of the US consumer – and in turn US companies – was the hero of the first half,” said Kristy Akullian, head of iShares Investment Strategy, Americas.
“Going into Q2 earnings season, stocks could get an added boost from low expectations.”
Wall Street expects very little from S&P 500 companies this earnings season, forecasting just 2% growth and a margin dip for the second quarter, according to Bloomberg Intelligence’s Gina Martin Adams and Wendy Soong.
“While it’s a very low bar — indeed, the weakest growth in two years — the market may still need confirmation that profit momentum will only get better in the second half,” they said.
“Our guidance model suggests earnings should easily clear consensus, reinforcing the case for a recovery narrative to take hold.”
Risk assets are set to remain supported, with lower sensitivity to tariffs and the second-quarter reporting season as key catalysts, HSBC strategists led by Max Kettner said.
They recommend increasing the overweight to equities further, now with a preference for the US.
“Aside from still supportive investor positioning, we think the bearish narrative on the Q2 reporting season is misplaced,” they said.
“The weaker USD, improved company guidance, and low expectations are more than sufficient for positive surprises.
Following this week’s renewed tariff announcements, any cuts to these rates would likely be taken as positive too.”
A noticeable shift has been reshaping US equities in the month of July: Some of the biggest laggards from the first half are now outperforming, while the year’s early winners are falling out of favor.
Investors are taking profits and pivoting into underperforming sectors, fueling a reversal that’s turned energy — one of the biggest losers in the S&P 500 Index in the first six months of the year — into July’s top gainer, according to data compiled by Bloomberg. Meanwhile, communication services have swung from second-best gainer in the first half to the worst performer this month.
Investors should stay away from a one-sided allocation to either defensive or cyclical stocks, according to Goldman Sachs Group Inc. strategists including Ryan Hammond.
“While the overall technical trend remains positive for US equities, our proprietary cycle analysis currently implies a window of potential volatility to open beginning in late-July and lasting into October,” said Dan Wantrobski at Janney Montgomery Scott.
“Our work does not call for a structural downturn/secular bear market to start this year, but it does suggest that we could see more corrective periods.”
Wantrobski also noted that bullish sentiment and positioning are elevated, charts are overbought, seasonality looms ahead in the coming weeks, and headline risk remains high in this environment.
“It’s been a steady climb, with several tailwinds lifting sentiment along the way,” said Fawad Razaqzada at City Index and Forex.com.
“But with uncertainty over the US trade policy lingering, the US markets are in need of a fresh catalyst for the next leg up, you’d feel.”
Consequently, Razaqzada says investors shouldn’t be surprised if we see a bit of consolidation or a retracement from fresh highs.

Corporate Highlights:
* Tesla Inc. will hold its annual shareholder meeting Nov. 6, the company said in a new filing with the Securities and Exchange Commission.
** Elon Musk said his AI startup’s chatbot will be coming to Tesla vehicles.
* Apple Inc. is planning an ambitious pipeline of new products for release during the first half of 2026, including a new low- end iPhone, multiple iPads and upgraded Macs.
* Delta Air Lines Inc. reinstated a profit outlook for the year and said travelers are coming back, prompting its stock to surge amid a fresh sense of confidence in the beaten-down US consumer.
* Conagra Brands Inc. pointed to rising costs from US tariffs as the packaged food company forecast profit for this fiscal year below Wall Street’s expectations.
* Levi Strauss & Co. raised its revenue outlook, with the maker of 501 jeans expecting sales growth to outweigh the impact of President Donald Trump’s tariffs.
* Ralph Lauren Corp. Chief Executive Officer Patrice Louvet said demand for its signature clothing such as cable-knit sweaters remains strong, even as the fashion industry is buffeted by tariffs and an economic slowdown.
* Helen of Troy Ltd. tumbled after the consumer-products company reported net sales for the first quarter that missed the average analyst estimate and issued a weaker-than-expected forecast for the second quarter.
* Ferrero International SA agreed to acquire WK Kellogg Co. for an enterprise value of $3.1 billion, pushing the Italian family- owned candy business further into the lucrative US market.
* US regulators approved Moderna Inc.’s Covid vaccine for children, but for a narrower group than before.
* Autodesk Inc. is weighing an acquisition of rival engineering- software provider PTC Inc., according to people familiar with the matter.
* Taiwan Semiconductor Manufacturing Co.’s revenue rose a better-than-anticipated 39% in the June quarter, buoying expectations for a sustained post-ChatGPT boom in AI spending.

Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.3% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.2%
* The Dow Jones Industrial Average rose 0.4%
* The MSCI World Index rose 0.2%
* Bloomberg Magnificent 7 Total Return Index rose 0.6%
* The Russell 2000 Index rose 0.5%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro fell 0.2% to $1.1695
* The British pound was little changed at $1.3576
* The Japanese yen was little changed at 146.25 per dollar
Cryptocurrencies
* Bitcoin rose 2.4% to $113,381.15
* Ether rose 2.9% to $2,817.59
Bonds
* The yield on 10-year Treasuries advanced one basis point to 4.34%
* Germany’s 10-year yield advanced three basis points to 2.70%
* Britain’s 10-year yield declined two basis points to 4.60%
* The yield on 30-year Treasuries was little changed at 4.86%
Commodities
* West Texas Intermediate crude fell 2.2% to $66.88 a barrel
* Spot gold rose 0.3% to $3,324.63 an ounce
Have a lovely evening.

Be magnificent!

As ever,

Carolann
Life is a succession of lessons which must be lived to be understood. -Ralph Waldo Emerson, 1803-1882.

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)
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www.carolannsteinhoff.com