July 30, 2024, Newsletter

Dear Friends,

Tangents:

July 30, 1921: Insulin is first isolated as a pancreatic extract by Canadian scientists Sir Frederick G. Banting and Charles H. Best.
1945: The USS Indianapolis, which had just delivered key components of the Hiroshima atomic bomb to the Pacific island of Tinian, was torpedoed by a Japanese submarine; 880 men lost their lives. Go to article >>

1935: Paperback books introduced.
Emily Bronte, author, b. 1818.
Henry Moore, sculptor, b.1848.
Henry Ford, industrialist, b. 1863.
Arnold Schwarzenegger, b.1947.

Google’s Olympics ad went viral for all the wrong reasons
To critics online, this Google advertisement appeared to be the latest example of a Big Tech company being disconnected from real people.

Dog’s unlikely friendship delights the internet
A chihuahua and a postman have amassed thousands of followers after the dog’s owner started posting their daily ritual.

Drop bears: The true history of a fake Australian animal
Many countries have a creature that is rumored to exist but is never seen. In Australia, legend has it that creepy koalas drop unexpectedly from trees.

Identity of 2,200-year-old skeleton in ‘Tomb of Cerberus’ is a mystery
Archaeologists have found a shrouded skeleton that was buried around 2,200 years ago in a tomb with extravagant murals. Read More.

China’s Chang’e 5 rover detects hints of water on the moon
The hydrated molecules were found inside a rock sample retrieved by China’s Chang’e 5 mission in 2020. Read More.

Hydrogen-powered VTOL aircraft makes record 523-mile journey — and lands with 10% of its fuel left in the tank
An air taxi has completed the first forward flight of a hydrogen-fueled aircraft capable of vertical takeoff and landing — and it broke a distance record in the process. Read More

PHOTOS OF THE DAY

Afyonkarahisar, Turkey
Flamingos feed at Lake Eber at sunset, which is along a migration route. The lake, which looks like a meadow in places due to the density of reed and straw grass and various aquatic plants growing in the region, is home to various bird and fish species
Photograph: Anadolu/Getty Images
Paris, France
A young Brazilian fan cools off in front of the Eiffel Tower on day four of the Olympic Games
Photograph: Ryan Pierse/Getty Images

​​​​​​​Beijing, China
People shelter from a rainstorm as the area is issued with a warning for extreme weather
Photograph: Pedro Pardo/AFP/Getty Images
Market Closes for July 30^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1914, stock exchanges in Berlin, Rome and Vienna shut after Austria declared war on Serbia and World War I kicked off. Investors panicked in New York: General Motors plunged 34%and Bethlehem Steel dropped 14%. The Dow Jones Industrial Average tumbled 6.9% on immense volume.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 0.2% at 22,824.67 in Toronto.
The index advanced to the highest closing level since July 22 after the previous session’s decrease of 0.2%.
Toronto-Dominion Bank contributed the most to the index gain, increasing 2.2%.
Filo Corp. had the largest increase, rising 8.8%.
Today, 129 of 226 shares rose, while 93 fell; 8 of 11 sectors were higher, led by financials stocks.
Insights
* This month, the index rose 4.3%, heading for the biggest advance since November 2023
* The index advanced 11% in the past 52 weeks. The MSCI AC Americas Index gained 18% in the same period
* The S&P/TSX Composite is 0.7% below its 52-week high on July 16, 2024 and 22.1% above its low on Oct. 27, 2023
* The S&P/TSX Composite is little changed in the past 5 days and rose 4.3% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 18.4 on a trailing basis and 15.6 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$3.62t
* 30-day price volatility little changed to 10.32% compared with 10.32% in the previous session and the average of 11.02% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 28.5215| 0.4| 17/10
Energy | 19.2782| 0.5| 27/13
Consumer Staples | 6.6934| 0.7| 8/2
Materials | 5.5081| 0.2| 29/22
Utilities | 4.9869| 0.6| 11/4
Communication Services | 3.8670| 0.6| 3/2
Health Care | 1.3046| 2.0| 4/0
Real Estate | 0.1529| 0.0| 14/5
Consumer Discretionary | -0.7539| -0.1| 5/8
Industrials | -1.7189| -0.1| 8/20
Information Technology | -22.7379| -1.3| 3/7
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
TD Bank | 21.5500| 2.2| -9.5| -4.5
RBC | 11.9600| 0.8| -35.3| 14.9
Enbridge | 10.4000| 1.4| 42.1| 8.1
First Quantum Minerals | -2.6730| -3.3| -1.5| 47.5
Shopify | -7.9440| -1.1| -22.8| -20.5
Constellation Software | -14.0900| -2.4| 63.5| 29.3
US
By Rita Nazareth
(Bloomberg) — A selloff in some of the world’s largest technology companies sent stocks down ahead of key central bank decisions.
Bonds and gold climbed amid a flare-up in geopolitical risks.
Oil remained lower.
Renewed tech weakness weighed on the S&P 500 — with Nvidia Corp. tumbling — even as most of the index’s shares gained.
After an over $2-trillion Nasdaq 100 wipeout, waded through Microsoft Corp.’s results for clues on the outlook for artificial intelligence.
The shares sank 7% in late hours.
The numbers will set the scene for reports from other heavyweights this week, with markets also gearing up for Wednesday’s Federal Reserve decision.
“If the Fed does not signal a September rate cut, markets could get a bit ugly given recent tech weakness — especially if earnings underwhelm,” said Tom Essaye at The Sevens Report.
While the Fed is expected to hold benchmark rates at the highest level in more than two decades, traders will be closely watching for any hints that the start of policy easing is near.
In the run-up to the announcement, data showed US consumer confidence rose on an improved outlook for the economy and job openings beat forecasts.
The S&P 500 fell to around 5,435.
The Nasdaq 100 slid 1.4%.
A gauge of the “Magnificent Seven” mega caps sank 2%.
The Russell 2000 of small firms rose 0.3%.
CrowdStrike Holdings Inc. plunged on a report Delta Air Lines Inc. hired an attorney after a tech outage.
Procter & Gamble Co. sank on a sales miss.
JetBlue Airways Corp. soared on a turnaround plan.
Treasury 10-year yields dropped three basis points to 4.14%.
West Texas Intermediate crude hovered near $75.
Israel’s military struck Beirut, aiming at a Hezbollah commander, in response to a rocket attack on Saturday in the Golan Heights.
The yen rose.
Bank of Japan Governor Kazuo Ueda will be under intense scrutiny Wednesday when he unveils his plans for quantitative tightening and delivers a decision on the policy interest rate.
Recent yen weakness has done more harm than good for the Japanese economy, according to Japan’s newly appointed top foreign exchange official.
*BOJ BOARD MEMBERS TO DISCUSS RAISING RATES TO 0.25%: NHK Goldman Sachs Group Inc. Chief Executive Officer David Solomon told CNBC that one or two Fed rate cuts later this year are looking increasingly likely.
That’s after predicting just two months ago there would be no rate reductions in 2024.
Aside from tech earnings, the continuing broadening of this year’s stock market rally hangs on what the Fed does and says about rates on Wednesday.
Signs of cooling inflation have made traders step up their rotation out of big tech — and into everything from small-capitalization stocks to value plays.
If the Fed is about to begin a rate reduction cycle, stock bulls have history on their side.
In the six prior hiking cycles, the S&P 500 has risen an average 5% a year after the first cut, according to calculations by the financial research firm CFRA.
What’s more, the gains also broadened, with the small-cap Russell 2000 Index climbing 3.2% 12 months later, CFRA’s data show.
To Bank of America Corp.’s Savita Subramanian, the S&P 500 has probably already logged the gains it will see this year, but the benchmark still presents ample opportunities for investors.
While neutral on the index overall, she says there’s potential for strong returns in a few areas: among dividend payers, “old school” capital-expenditure beneficiaries like infrastructure, construction and manufacturing stocks, and other themes that don’t revolve around artificial intelligence.
“In mid-2023, sentiment was deeply negative and our toolkit suggested that the direction of economic and earnings surprises was more likely positive than negative,” Subramanian wrote.
“Today, sentiment is neutral and positive surprises are ebbing.”

Corporate Highlights:
* Pfizer Inc. raised its profit expectations for the year, citing new cancer drugs, as it seeks to dig out of a Covid-related hole in sales.
* Merck & Co. got hit as light sales of its Gardasil HPV vaccine in China dimmed quarterly profit and sales that beat Wall Street estimates.
* SoFi Technologies Inc. raised its forecast for this year’s profit and revenue as the fintech benefits from both its newer technology businesses and its trademark lending operation.
* Archer-Daniels-Midland Co. and AGCO Corp. plunged as disappointing earnings heightened concerns about a slowdown in the farming sector after several boom years.
* Airbus SE has initiated a wholesale review of its ailing space business, with Chief Executive Officer Guillaume Faury saying he’s weighing all possibilities about the future of the subsidiary after it racked up close to $1 billion in charges in the first half.
* L’Oréal SA reported sluggish sales growth in the second quarter as the world’s biggest maker of beauty products suffered from weakness in China.
* BP Plc maintained the pace of share buybacks and increased its dividend as strong second-quarter earnings from pumping crude offset weakness in other parts of the business.
* Grifols SA, the Spanish pharmaceutical company hit by a short seller attack this year, said it overstated the value of its stake in a Chinese firm and reported an accounting adjustment of €457 million ($494 million).

Key events this week:
* Eurozone CPI, Wednesday
* Bank of Japan policy decision, Wednesday
* US ADP employment change, Wednesday
* Fed rate decision, Wednesday
* Meta Platforms earnings, Wednesday
* Eurozone S&P Global Eurozone Manufacturing PMI, unemployment, Thursday
* US initial jobless claims, ISM Manufacturing, Thursday
* Amazon, Apple earnings, Thursday
* Bank of England rate decision, Thursday
* US employment, factory orders, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.5% as of 4 p.m. New York time
* The Nasdaq 100 fell 1.4%
* The Dow Jones Industrial Average rose 0.5%
* The MSCI World Index fell 0.3%
* Bloomberg Magnificent 7 Total Return Index fell 2%
* The Russell 2000 Index rose 0.3%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro was little changed at $1.0811
* The British pound fell 0.2% to $1.2832
* The Japanese yen rose 0.5% to 153.26 per dollar
Cryptocurrencies
* Bitcoin fell 2.1% to $65,939.38
* Ether fell 1.5% to $3,272.72
Bonds
* The yield on 10-year Treasuries declined three basis points to 4.14%
* Germany’s 10-year yield declined two basis points to 2.34%
* Britain’s 10-year yield was little changed at 4.04%
Commodities
* West Texas Intermediate crude fell 0.9% to $75.09 a barrel
* Spot gold rose 1% to $2,407.48 an ounce

This story was produced with the assistance of Bloomberg Automation.
Have a lovely evening.

Be magnificent!
As ever,

Carolann
First say to yourself what you would be; and then do what you have to do. –Epictetus, c.50 AD- c.135 AD.

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