July 12, 2024, Newsletter

Dear Friends,

Tangents: Happy Friday.

July12, 1690: Protestant forces led by William of Orange defeated the Roman Catholic army of James II at the Battle of the Boyne in Ireland. Go to article >>
July 12, 1920: The independent republic of Lithuania, having successfully expelled invading Soviet troops, signs a peace treaty with Russia.

Henry David Thoreau, author, b.1817.
Buckminster Fuller, inventor, b.1895.
Pablo Neruda, poet, b. 1904.

Time might be a mirage created by quantum physics, study suggests
Physicists have struggled to understand the nature of time since the field began. But a new theoretical study suggests time could be an illusion woven at the quantum level. Read More.

Paleo-Arabic inscriptions on rock were made by Prophet Muhammad’s unconverted companion, study finds
The writing is only the second confirmed inscription whose attribution connects to Muhammad. Read More.

Neanderthals didn’t truly go extinct, but were rather absorbed into the modern human population, DNA study suggests
Modern human DNA may have made up a surprisingly large amount of the Neanderthal genome, a new study finds. Read More.

New quantum computer smashes ‘quantum supremacy’ record by a factor of 100 — and it consumes 30,000 times less power
The 56-qubit H2-1 computer has broken the previous record in the “quantum supremacy” benchmark first set by Google in 2019. Read More.

Italian authorities confiscate almost $1 million in fake olive oil
The alleged criminals were stunned this week when authorities raided their facilities olive a sudden.

Australian museum admits that ‘Picassos’ hanging in restroom are fake
The Museum of Old and New Art has come clean: The Picasso paintings hanging in its women’s restroom were forged by one of its own curators.

Olympics receives backlash over its official car
Scientists and engineers say the vehicle selected to be the official car of the Paris Olympics “will damage the reputation” of the green Games.

A timeline of the 7-month-long Ambani mega-wedding
Today is the main ceremony of India’s most anticipated wedding of the year. The internet is awash with rumors of the performer lineup, but one thing is certain: There will be no expense spared.

PHOTOS OF THE DAY

A visitor take photos at Mesquite Flat Sand Dunes in Death Valley national park
Photograph: Mario Tama/Getty Images

Wentworth, Surrey
Backing on to the 17th green of the championship golf course is this family home with a south-facing garden.
Photograph: Nick Ayliffe/Knight Frank

​​​​​​​Atlantic dolphins leap out of the water off Ponta Delgada on São Miguel Island in the Azores archipelago, Portugal
Photograph: Darrin Zammit Lupi/Reuters
Market Closes for July 12^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1773, Jonathan’s Coffee House in London, where brokers had met for decades to smoke, drink and trade, was renamed the Stock Exchange.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the third day, climbing 0.6%, or 129.39 to 22,673.52 in Toronto.
Brookfield Corp. contributed the most to the index gain, increasing 2.4%.
Aritzia Inc. had the largest increase, rising 14.8%.
Today, 158 of 226 shares rose, while 63 fell; 9 of 11 sectors were higher, led by financials stocks.
Insights
* So far this week, the index rose 2.8%, heading for the biggest advance since the week ended Nov. 3
* The index advanced 13% in the past 52 weeks. The MSCI AC Americas Index gained 24% in the same period
* The S&P/TSX Composite is at its 52-week high and 21.3% above its low on Oct. 27, 2023
* S&P/TSX Composite is trading at a price-to-earnings ratio of 18.3 on a trailing basis and 15.5 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.58t
* 30-day price volatility fell to 11.10% compared with 11.28% in the previous session and the average of 11.02% over the past month
================================================================
|Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 50.3642| 0.7| 23/4
Materials | 30.5490| 1.1| 33/17
Industrials | 17.2634| 0.6| 22/6
Consumer Discretionary | 8.5357| 1.1| 10/3
Information Technology | 6.2599| 0.3| 7/2
Communication Services | 5.3893| 0.8| 4/0
Consumer Staples | 5.3096| 0.5| 9/1
Utilities | 4.1501| 0.5| 11/4
Real Estate | 3.3151| 0.7| 15/5
Health Care | -0.1238| -0.2| 2/2
Energy | -1.6206| 0.0| 22/19
================================================================
| | |Volume VS |
| Index | | 20D AVG |YTD Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
Brookfield Corp | 14.4800| 2.4| 4.6| 18.0
RBC | 12.0600| 0.8| 1.6| 13.1
TD Bank | 7.8020| 0.8| 44.0| -9.6
Cameco | -3.4320| -1.5| -6.8| 26.2
Shopify | -4.9020| -0.7| 72.9| -14.2
Canadian Natural Resources | -9.5900| -1.3| -49.8| 13.4
US
By Rita Nazareth
(Bloomberg) — Stocks finished higher as the latest economic data reinforced bets the Federal Reserve will cut rates in September.
In the last 30 minutes of Wall Street trading, the S&P 500 pared its advance.
Banks got hit at the start of the US earnings season, with results from Wells Fargo & Co., JPMorgan Chase & Co. and Citigroup Inc. failing to fuel industry momentum.
Tech mega-caps rebounded as a group, though Meta Platforms Inc. slid almost 3%.
Smaller firms kept climbing.
Equity traders brushed off a weak reading on consumer sentiment to focus on prospects for rate cuts that could ultimately benefit Corporate America.
Data also showed producer prices climbed slightly more than forecast — but categories used to calculate the Fed’s preferred inflation measure, the personal consumption expenditures price index, were not so bad.
“We continue to expect the Fed to join the global rate-cutting cycle in September, with 50 basis points of easing this year,” said Mark Haefele at UBS Global Wealth Management.
The S&P 500 rose to 5,615 — notching a 10th weekly gain in 12 weeks.
Nvidia Corp. led gains in big tech.
Tesla Inc. rallied a day after tumbling over 8%.
The Russell 2000 of small caps saw its best week since November.
Wells Fargo sank 6% after warning it won’t be able to whittle away costs as fast as forecast.
JPMorgan missed on a few key metrics like net interest income — despite posting record profit.
Citigroup said costs for the year are likely to be at the high end of the range previously provided.
Bank of New York Mellon Corp. jumped on better-than-expected NII.
As traders recalibrated their bets on rate cuts, Treasuries wiped out their 2024 losses this week.
US 10-year yields declined three basis points to 4.18% on Friday.
“A critical risk, however, lies in financial conditions loosening — a development that is already contributing to our real-time tracking measures pointing to July inflation of 0.3% m/m for headline and core,” said Jose Torres at Interactive
Brokers. “A continuation of these developments, which is my base case, will deter the Fed from dishing out its first cut of the cycle in September.”
To Krishna Guha at Evercore, the latest PPI release confirms June inflation is set to print very mild in the mid-teens month-on-month on the Fed’s preferred core PCE measure — putting US officials firmly on track to cut in September.
He also says this “new Fed phase” may sustain the stock-market breadth.
“We are now entering a new phase in which preemptive cuts (as opposed to reactive cuts driven by bigger rises in unemployment) can de-risk the forward growth outlook, he noted.
“Provided the Fed is not moving too slowly to arrest the underlying weakening of the economy, this de-risking of the forward growth outlook favors market breadth and cyclical sectors.”
One of the biggest questions about the market rotation of the previous session — which notably improved breadth — is whether or not it is a legitimate trend reversal of the last year and half — or yet another head fake, according to Dan Wantrobski at Janney Montgomery Scott.
“We will say at the outset that as far as the technicals are concerned, it cannot be confirmed that yesterday’s action was the beginning of a sustainable longer-term trend,” he noted.
“However, from a trading perspective, we do believe we can continue to see further rotation over the near term, as charts still point to the potential for mean reversion.”
One thing to keep in mind is that a “rotational” move is not the same as  a “broadening out” move, according to Matt Maley at Miller Tabak.
“We believe a ‘rotational’ move will do the exact opposite of what it did when investors were ‘rotating’ into the tech sector in a big way over the past 20 months:  It will drag the entire market lower with it — just like it has dragged the rest of the market higher with it since the fall of 2022,” he noted.
A highlight of this week was the big rebound in smaller firms — which have largely lagged the broader market and especially big tech names this year.
Quincy Krosby at LPL Financial says the Russell 2000 is viewed as an important barometer of potential interest-rate easing, but also a gauge for economic conditions.
“Historically, the Russell 2000 lags the market for three months following the first rate cut. The Fed normally cuts rates due to concerns about the economy and specifically the labor market,” Krosby noted. “The market would much prefer a rate cut predicated on inflation easing amid a solid economic landscape.”
The next few economic data points, in addition to earnings reports, should help clarify if small-cap performance is completely warranted, she concluded.
“Bulls withstood a barrage of data this week,” said Mark Hackett at Nationwide. “Market momentum remains relentless.  Several important hurdles have been cleared, making earnings the next likely market catalyst.”  

Corporate Highlights:
* AT&T Inc. said on Friday that hackers stole a cache of six months’ worth of mobile-phone customer data, disclosing for the first time a cybersecurity breach that was massive in its scope and potential risks to national security.
* Boeing Co. has notified some 737 Max customers in recent weeks that aircraft due for delivery in 2025 and 2026 face additional delays, another reminder that production of its cash-cow jetliner faces a long road to recovery.
* Amazon.com Inc.’s artificially intelligent shopping assistant, Rufus, is now available to all US customers following five months of testing with a subset of consumers.
* Deutsche Lufthansa AG cut its profit outlook for the full year and warned that breaking even at its namesake German unit will be “increasingly challenging” as it grapples with higher unit costs and falling ticket prices.
* Novo Nordisk A/S’s Ozempic was linked to lower rates of dementia and a range of other mental problems in a University of Oxford study that raises expectations about the diabetes drug’s potential ancillary benefits.
* Samsung Electronics Co.’s largest union is now calling on employees at one of the company’s most advanced AI memory chip plants to walk off the job, switching tactics after their campaign for higher pay showed signs of losing steam.
* Taiwan Semiconductor Manufacturing Co.’s $420 billion equity rally this year will get a valuation test next week when it reports earnings, with analysts expecting the chipmaker to raise full-year sales forecasts.

Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.6% as of 4 p.m. New York time
* The Nasdaq 100 rose 0.6%
* The Dow Jones Industrial Average rose 0.6%
* The MSCI World Index rose 0.6%
Currencies
* The Bloomberg Dollar Spot Index fell 0.4%
* The euro rose 0.3% to $1.0906
* The British pound rose 0.5% to $1.2986
* The Japanese yen rose 0.6% to 157.85 per dollar
Cryptocurrencies
* Bitcoin rose 0.2% to $57,641.16
* Ether was little changed at $3,118.81
Bonds
* The yield on 10-year Treasuries declined three basis points to 4.18%
* Germany’s 10-year yield advanced three basis points to 2.50%
* Britain’s 10-year yield advanced three basis points to 4.11%
Commodities
* West Texas Intermediate crude fell 0.4% to $82.25 a barrel
* Spot gold fell 0.2% to $2,411.64 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Cecile Gutscher.
Have a wonderful weekend everyone.

Be magnificent!
As ever,

Carolann
Don’t count the days, make the days count. -Muhammad Ali, 1942-2016.

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