July 19, 2022 Newsletter

Dear Friends,

Tangents:
July 19, 1983: The first three-dimensional reconstruction of a human head in a CT is published.
1980: The Summer Olympics began in Moscow with dozens of nations boycotting because of Soviet military intervention in Afghanistan.  Go to article »

Charles Mayo, surgeon, b.1865.
Edgar Degas, artist, b.1834.

World’s best restaurants for 2022 revealed.  Bon appétit, lovely readers. Here are the 50 best restaurants on the planet.

100 million-year-old dinosaur footprints found at restaurant.  Most people find annoying birds in restaurant courtyards… this lucky diner found dinosaur footprints

Massive waves wipe out wedding in Hawaii.  The ocean decided to make a splashing guest appearance… Watch the moment wedding attendees ran for cover in Kailua-Kona, Hawaii. 

Lake Mead dwindles, and a WWII-era ‘swamp boat’ emerges:  A World War II landing craft — the same type famous for its use on D-Day in 1944 — is the latest object to emerge from the declining waters of Lake Mead near Las Vegas.  Scientists say the lake’s level is at a record low, largely because of a long-term drought across the American Southwest — but human-induced climate change may be making the drought worse. Full Story: Live Science (7/19) 

Meteor impact left ‘uncorrectable’ damage to the Webb telescope’s mirror, new report shows:  Since launching on Dec. 25, 2021, NASA’s James Webb Space Telescope (JWST) has been pelted by at least 19 tiny space rocks — including one large one that left noticeable damage on one of the telescope’s 18 gold-plated mirrors.   In a sprawling new status report posted to the pre-print database arXiv.org, NASA researchers have shared the first images showing the extent of that damage. Seen on the C3 mirror in the lower right-hand corner of the image, the impact site appears as a single bright white dent besmirching the golden mirror’s surface. Full Story: Live Science (7/19) 

Mars’ oldest meteorite traced to strange double impact crater:  Researchers have traced the oldest known Martian meteorite to its exact origin point using artificial intelligence (AI), and the findings could help reveal what conditions on our solar system’s planets were like during their very first days.  The 11-ounce (320 grams) meteorite, officially dubbed Northwest Africa 7034 but commonly known as “Black Beauty,” is believed to have smashed into Earth roughly 5 million years ago. After being found in the Sahara Desert in 2011, its age was dated to just under 4.5 billion years old — making it the oldest Martian meteorite ever found on Earth.  Full Story: Live Science (7/19) 

PHOTOS OF THE DAY

Paddleboarders and kayakers turn out to watch the sunrise in North Tyneside
CREDIT: Owen Humphreys/PA

A woman cools herself with a fan near the Trevi fountain
CREDIT: Guglielmo Mangiapane/Reuters

A dead humpback whale washed up on Sharp Park beach. Its cause of death is as yet unknown, according to local media
CREDIT: Carlos Barría/Reuters
Market Closes for July 19^th, 2022

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1990, Wall Street set a new record as six IPOs were issued in a single day. The companies—Command Security, In-Store Advertising, MECA Software, Modtech Holdings, O’Charley’s and Wisconsin Pharmacal—raised a total of $100.4 million. 
Canada
By Geoffrey Morgan
(Bloomberg) — Canadian equities rose broadly as investors poured into riskier stocks including in the information technology and consumer discretionary sectors.
The S&P/TSX Composite rose for the third day, climbing 1.8%, or 342.09 to 18,937.71 in Toronto, marking the index’s biggest gain since June 24.
Today, financial stocks led the market higher, as 10 of 11 sectors gained; 207 of 238 shares rose, while 30 fell.
Toronto-Dominion Bank contributed the most to the index gain, increasing 2.9%.
West Fraser Timber Co. had the largest percentage increase, rising 14.7%..
Insights
* In the past year, the index had a similar or greater gain three times. The next day, it advanced after all three occasions
* The index declined 4% in the past 52 weeks. The MSCI AC Americas Index lost 9.6% in the same period
* The S&P/TSX Composite is 14.7% below its 52-week high on April 5, 2022 and 4.2% above its low on July 14, 2022
* The S&P/TSX Composite is up 1.4% in the past 5 days and was little changed in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 14.8 on a trailing basis and 11.5 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$2.98t
* 30-day price volatility rose to 20.41% compared with 19.48% in the previous session and the average of 19.71% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
* Financials | 132.7528| 2.3| 27/2
* Energy | 59.9924| 1.8| 35/3
* Industrials | 53.5883| 2.3| 28/1
* Materials | 32.2368| 1.6| 45/6
* Information Technology | 28.6206| 2.8| 13/1
* Consumer Discretionary | 14.9683| 2.3| 11/2
* Real Estate | 9.7629| 1.9| 23/0
* Communication Services | 6.9552| 0.7| 7/0
* Consumer Staples | 6.0252| 0.8| 8/3
* Health Care | 1.4271| 1.9| 5/2
* Utilities | -4.2411| -0.4| 7/8
================================================================
| | |Volume VS| YTD
| Index | | 20D AVG | Change
Top Contributors |Points Move|% Change | (%) | (%)
================================================================
* TD Bank | 29.0800| 2.9| 8.7| -15.5
* Royal Bank of Canada | 24.2100| 2.1| 63.9| -8.2
* Brookfield Asset Management | 19.8400| 3.4| -17.5| -21.1
* Brookfield Infrastructure | -1.4520| -1.0| -8.3| -6.1
* Fortis | -1.9060| -1.0| 21.5| -1.9
* Franco-Nevada | -5.1690| -2.4| -17.4| -8.7
US
By Stephen Kirkland and Vildana Hajric
(Bloomberg) — US stocks surged in a broad-based rally as investors assessed the outlook for earnings and as speculation grew that markets may have come close to bottoming out.
The S&P 500 defied the late-day reversal that has been a cornerstone of this volatile market, closing near session highs in its biggest one-day gain since June 24 as all 11 industry groups advanced.
The tech-heavy Nasdaq 100 outperformed major benchmarks, ending 3.1% higher, with mega caps Apple Inc. and Alphabet Inc. bouncing back from Monday’s losses.
Stocks favored by short sellers were among the biggest gainers on the day, suggesting that bearish traders were forced to cover positions moving against them.
In extended trading, Netflix Inc. gained after reporting second-quarter subscriber loss that was less than expected.
With the potential for earnings disappointments baked into markets, any upside surprises may lead to outsized gains.
Investors remain on high alert for signs that high inflation and monetary tightening are squeezing consumers and employment, with allocation to stocks plunging to levels last seen in October 2008 and exposure to cash surged to the highest since 2001, according to the latest Bank of America Corp.’s monthly fund manager survey.
“Earnings, so far, there’s been some caution and there’s been a little bit of dialing down of expectations, but I don’t think the worst-case scenarios are really in play anymore,” Shawn Cruz, head trading strategist at TD Ameritrade, said in an interview. “We’ve heard from the big banks, we’ve heard from IBM, we’ve heard from Johnson & Johnson, we’ve heard from enough companies that have had a big enough footprint that if there is something at the macro level severely impacting these businesses, it would have shown up in a lot of these earnings.”
On the earnings front, Hasbro Inc., the largest US toy company, gained after earnings beat analyst estimates, while International Business Machines Corp. fell as the tech company lowered its forecasts for free cash flow. Johnson & Johnson reversed early gains as it lowered its earnings and revenue forecast for the year.
In other company news, Twitter Inc. shares gained as a Delaware judge allowed the social media company to fast-track its lawsuit against Elon Musk, with the trial set to take place in October.
The dollar fell against all Group-of-10 peers except the
Treasuries traded lower, with the 10-year yield rising back to 3%.
Meanwhile, the euro rose to its highest level in about two weeks after Bloomberg News reported the European Central Bank may consider raising interest rates on Thursday by double the quarter-point outlined previously to counter worsening inflation.
Markets are pricing in about 38 basis points of tightening on Thursday, when the ECB is expected to raise rates for the first time in more than a decade.
That reflects about a 50/50 chance of a 50-basis point increase.
The ECB is under pressure to subdue inflation, but the potential for a Russian gas shutdown could plunge Europe into recession.
The European Union is preparing to tell members to cut gas consumption “immediately” to preserve supplies for winter, according to a report.
Gazprom PJSC was said to be poised to restart gas exports through the Nord Stream pipeline on Thursday at reduced capacity.
Elsewhere, oil rebounded, with West Texas Intermediate crude rising to $104 a barrel, while a rally in cryptocurrencies took Bitcoin out of a one-month-old trading range, up above $23,000. 
More market commentary:
* “Stocks have been beaten down,” Kristina Hooper, chief global market strategist at Invesco, wrote in a note. “That doesn’t mean we won’t see more downside for some stock markets around the world, especially given that earnings expectations are likely to be adjusted downward. But I believe we are far closer to the bottom than the top.”
* “There is a growing feeling in the market that the gradual and cautious normalization process the ECB started at the end of 2021 has been the wrong decision and that to make up for that slow and late,” wrote Fawad Razaqzada, market analyst at City Index. “Indeed, even until its June meeting, the ECB was pre-committing to a 25-basis point hike in July. But with the broad weakening of the euro helping to import more inflation in the eurozone, the ECB could surprise with a 50 bp hike.”
* “Sharp dollar pullback has boosted equities,” Christopher Murphy, co-head of derivatives strategy at Susquehanna International Group, wrote in a note. ”But the dollar rally was extended and due for a pullback (it can’t go up in a straight line) just like it was in late April. If the dollar pullback is temporary, the equity rally might be as well.”

Key events to watch this week:
* Earnings this week include Netflix, Tesla
* US Treasury Secretary Janet Yellen visits South Korea. Tuesday
* Reserve Bank of Australia releases July minutes. Tuesday
* UK Chancellor Nadhim Zahawi and Bank of England Governor Andrew Bailey speak at event. Tuesday
* Bloomberg Crypto Summit in New York. Tuesday
* Bank of Japan, European Central Bank rate decisions. Thursday
* Nord Stream 1 pipeline scheduled to reopen following maintenance. Thursday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 2.7% as of 4 p.m. New York time
* The Nasdaq 100 rose 3.1%
* The Dow Jones Industrial Average rose 2.4%
* The MSCI World index rose 2%
Currencies
* The Bloomberg Dollar Spot Index fell 0.5%
* The euro rose 0.8% to $1.0225
* The British pound rose 0.4% to $1.2000
* The Japanese yen was little changed at 138.22 per dollar
Bonds
* The yield on 10-year Treasuries advanced four basis points to 3.02%
* Germany’s 10-year yield advanced six basis points to 1.28%
* Britain’s 10-year yield advanced two basis points to 2.18%
Commodities
* West Texas Intermediate crude rose 1.3% to $103.96 a barrel
* Gold futures were little changed
–With assistance from Garfield Reynolds, Sunil Jagtiani, Ven Ram, Denitsa Tsekova, Cecile Gutscher, Emily Graffeo and Isabelle Lee.
Have a lovely evening.

Be magnificent!
As ever,

Carolann

A man thinks that by mouthing hard words he understands hard things. -Herman Melville, 1819-1891.

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