July 30th, 2025, Newsletter

Dear Friends,

Tangents:
July 30, 1930: Uruguay defeats Argentina to win the first FIFA World Cup, hosted in Montevideo and watched by over 90,000 spectators.
July 30, 1975: Former Teamsters union president Jimmy Hoffa disappeared in suburban Detroit. (His remains have never been found.) Go to article.
1935: Paperback books introduced for the first time.

Emily Bronte, writer, b. 1818.
Henry Moore, sculptor, b.1848.
Henry Ford, industrialist, b. 1863.
Arnold Swarzenegger, actor, b.1947.

Russia earthquake: Magnitude 8.8 megaquake hits Kamchatka, generating tsunamis across the Pacific
The 8.8 magnitude megaquake is the joint-sixth largest earthquake ever recorded and the first tsunami waves have already hit Oahu, Hawaii. Read More.

4,000-year-old handprint discovered on ancient Egyptian tomb offering
Researchers have unveiled an ancient Egyptian handprint that was left on a soul house tomb offering 4,000 years ago. Read More.

400-mile-long chain of fossilized volcanoes discovered beneath China
Researchers recently discovered a huge chain of extinct volcanoes buried deep below South China that formed when two tectonic plates collided during the breakup of Rodinia,
around 800 million years ago. Read More.

Scientists use quantum machine learning to create semiconductors for the first time – and it could transform how chips are made
Researchers have found a way to make the chip design and manufacturing process much easier — by tapping into a hybrid blend of artificial intelligence and quantum computing.

Australia reverses course on YouTube
The country’s government has decided to include the world’s largest video platform in its ban on social media for children under 16.
Ozzy Osbourne’s last ride
The “Crazy Train” singer’s funeral procession will travel through Birmingham — his hometown in England — today.

Billy Joel sets the record straight
The 76-year-old singer has been in a few car accidents, but not for the reason many people believe.

A cabal of furry thieves snatch iPhones and other valuables from visitors to a temple in Bali—and trade them for mangos.

PHOTOS OF THE DAY

Cabarete, Dominican Republic
‘Tropic thunder (and lightning).’
Photograph: Jon Nakkerud

Faaborg, Denmark
‘A mural depicting the importance of water in this beautiful port town.’
Photograph: Robert Boon

Guanajuato, Mexico
‘A beautifully colourful hillside.’
Photograph: Alan Wright
Market Closes for July 30^th, 2025

International Markets

Bonds

Currencies

Commodities

Market Commentary:
If you would know the value of money, go and try to borrow some. –Benjamin Franklin, 1706-1790.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell 0.6% at 27,369.96 in Toronto.
The move was the biggest since falling 0.8% on May 21 and follows the previous session’s increase of 0.5%.
Today, materials stocks led the market lower, as 9 of 11 sectors lost; 154 of 212 shares fell, while 57 rose.
Intact Financial Corp. contributed the most to the index decline, decreasing 6.5%.
Capital Power Corp. had the largest drop, falling 6.9%.

Insights
* This month, the index rose 1.9%
* The index advanced 20% in the past 52 weeks. The MSCI AC Americas Index gained 18% in the same period
* The S&P/TSX Composite is at its 52-week high and 26.4% above, its low on Aug. 6, 2024
* The S&P/TSX Composite is little changed in the past 5 days and rose 1.9% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 19.6 on a trailing basis and 17.4 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$4.46t
* 30-day price volatility rose to 6.69% compared with 6.31% in the previous session and the average of 6.11% over the past month

Index Points
Materials | -77.1146| -2.1| 0/48
Financials | -57.2551| -0.6| 4/21
Information Technology | -17.6105| -0.6| 4/6
Energy | -8.3020| -0.2| 11/29
Industrials | -6.9902| -0.2| 13/15
Consumer Staples | -2.0016| -0.2| 1/9
Health Care | -1.4883| -2.2| 0/3
Communication Services | -1.0598| -0.2| 1/4
Consumer Discretionary | -0.4076| 0.0| 4/5
Real Estate | 0.6362| 0.1| 9/10
Utilities | 1.6755| 0.2| 10/4
Intact Financial | -24.6400| -6.5| 274.5| 9.1
Shopify | -13.8800| -1.0| 3.1| 11.3
Agnico Eagle Mines | Ltd | -11.0100| -1.8| -10.9| 51.8
Bank of Nova Scotia| 3.5710| 0.5| -21.0| 0.4
RBC | 4.5490| 0.3| -35.4| 3.3
TD Bank | 5.9020| 0.5| -28.5| 33.0
(MT Newswires):
(Includes commentary on the Bank of Canada from Macquarie Group)
The Toronto Stock Exchange dropped nearly 160 points from record high levels Wednesday, likely on some profit taking, but also as one economist suggested Bank of Canada officials “haven’t a clue what to do next” after they left the benchmark interest rate unchanged, as expected, today, while also leaving the door ajar for a possible rate cut to come this year.
The TSX closed down 169.92 points or 0.6% at 27,369.96.
This after it posted a record close of 27,539.88 on Tuesday.
Most sectors were lower, led by Base Metals (-3.2%) and Health Care (-2.6%).
Utilities made a modest gain.
It wasn’t just uncertainty around the outlook for rates that weighed on the TSX.
Trade uncertainties were also a negative factor.
On Wednesday afternoon, ahead of an August 1 deadline for a deal, U.S. President Donald Trump signed an Executive Order that adds a 50% tariff on certain copper imports from Friday.
But, according to Canada’s CBC News, the levy does not apply to copper concentrate, with Canadians accounting for 99% of all copper concentrate imported by its bigger North America neighbor.
This comes as tariffs on a range of Canadian product are slated to rise to 35% from 25% as of Friday, But the tariffs will not apply to goods that are compliant with the Canada-U.S. trade agreement, which is up for renewal next year.
Sectors including aluminum and steel, and autos, have been threatened with tariffs.
CBC cited RBC as saying near 90% of the value of Canadian exports to the U.S. qualify for an exemption from tariffs.
On rates, the BoC held the overnight rate steady for a third consecutive meeting, while leaving the door open to future cuts.
The overnight rate has remained at 2.75% since March, after seven consecutive rate cuts lowered it from last year’s peak of 5%.
For his part, Derek Holt, Vice-President & Head of Capital Markets Economics at Scotiabank, said a “lack of any useful forward guidance and continued avoidance of a base case forecast in favor of three scenarios now versus two back in the prior MPR [Monetary Policy Report] in April basically said they haven’t a clue what to do next”.
He added: “I don’t find we learned anything new whatsoever about the policy bias from this set of communications.”
Despite recent decisions to hold, RBC’s Claire Fan said past rate cuts from the BoC are likely still taking time to support the economy.
But with mortgage rates mostly stabilizing near or above origination back in 2020-2021 origination levels, the effect on households is more like easing off the brakes than pressing on the gas, she added.
“Today,” Fan said, “the car is in neutral, and the outlook is still hazy.
Tariffs in place today have been less severe than feared but Canada as one of the largest trade partners to the U.S., remains particularly vulnerable to protectionist U.S. trade policies.
In two days, the latest U.S. self-imposed trade negotiation deadline could result in escalated tariffs beyond today’s targeted but relatively limited levels.”
According to Fan, a significantly more negative outlook, one that resembles spring, remains a downside risk.
Fan said while the BoC projects inflation will rise in that kind of a scenario as tariff impacts outweigh economic weakness, further rate cuts would be appropriate if it became clear that the economy was sliding into recession.
“Barring such deterioration and following our base case, we expect the BoC will maintain current rates going forward,” she added.
David Doyle, head of economics at Macquarie Group, noted ongoing uncertainty and recent elevated underlying inflation readings featured prominently in the BoC’s decision.
He also noted forward guidance continued to suggest the potential for a cut ahead is still couched in data dependence.
“Looking ahead, the outlook is uncertain. Market pricing for cuts moderated slightly on the announcement and have been broadly lessening since late March,” Doyle said.
Doyle noted Governor Macklem struck a similar tone in his press conference as he did in June, emphasizing that elevated uncertainty means the BoC is putting more weight on risks and taking a shorter time horizon than usual.
He echoed the key forward guidance line from the statement, indicating that “if a weakening economy puts further downward pressure on inflation and the upward pressures from the trade disruptions are contained, there may be a need for a reduction in the policy interest rate.”
In describing the economy, he indicated that while excess supply has increased since January, there has been resilience thus far.
Macquarie’s forecast is that there will be greater economic weakness in the second half of 2025 than implied by the BoC’s current tariff scenario and a moderation in underlying inflation.
This leads it to anticipate about 50 bps in further cuts with these most likely to occur in October and December.
“Should growth hold in better than we anticipate and underlying inflation remain firm, however, the BoC is likely to continue to stay the course,” Doyle added.
Of commodities, gold moved lower midafternoon Wednesday ahead of the end to the two-day meeting of the Federal Reserve’s policy committee that, as expected, left U.S. interest rates unchanged, while reports showed the U.S. economy rose at a faster than expected pace in the second quarter.
Gold for December delivery was last seen down $27.70 to US$3,353.50 per ounce.
But West Texas Intermediate crude oil closed higher, climbing for a third session even as a report showed an unexpected rise in U.S. inventories.
WTI crude oil for September delivery closed up $0.79 to settle at US$70.00 per barrel, while September Brent oil was last seen up $0.68 to US$73.19. Price: 27369.96, Change: -169.92, Percent Change: -0.6
US
By Rita Nazareth and Lu Wang
(Bloomberg) — Wall Street’s hopes the Federal Reserve would signal imminent rate cuts went mostly unfulfilled Wednesday, with stocks and bonds down to cap an otherwise bumper month for risk assets.
In late hours, Microsoft Corp. and Meta Platforms Inc. jumped after their results.
An initially calm investor reaction was broken when Fed Chair Jerome Powell said no decision has been made about easing policy in September.
The US labor market “looks solid,” he said, while inflation remains above target, statements traders interpreted as working against the case for an imminent rate cut.
Equities erased gains, with the S&P 500 down 0.1%. US two- year yields climbed seven basis points to 3.93%.
While the concerted pullback in stocks and bonds looked mild, it marked tumbled as President Donald Trump’s tariffs excluded the refined metal.
While Trump has pressed for an immediate rate cut, investors in risk assets have largely tempered expectations for a Fed pivot anytime soon.
Instead, they’re leaning on resilient economic growth, an AI-fueled earnings boom, and the belief that tariffs will only trigger manageable goods inflation while leaving services inflation contained.
And even though declines in stocks and bonds reflected revisions to market expectations, they came amid another deliberate effort by Powell to characterize the central bank as in a good position to assess the economy as it develops.
Even as both he and the Fed’s communique signaled a slight slowdown in growth Powell repeatedly said policy makers have ample time to assess the impact of Trump’s evolving tariff policy and other data going forward.
The Federal Open Market Committee voted 9-2 on Wednesday to hold the benchmark federal funds rate in a range of 4.25%-4.5%, as they have at each of their meetings this year.
Governors Christopher Waller and Michelle Bowman voted against the decision in favor of a quarter-point cut.
“It appears the Fed will remain data dependent going into its next meeting,” said Bret Kenwell at eToro.
“To get that rate cut, the Fed will need to gain confidence that either inflation increases will be one-off and muted, or that inflation will continue to trend lower in the months and quarters ahead.
That’s assuming we don’t see a notable deterioration in the labor market.”
Money markets pared bets on rate reductions this year and traders now see a less than 50% chance of a cut in September.
The odds for a reduction in October dropped to around 85%, whereas it was fully priced-in before Powell began to speak.
“The next two months’ data will be pivotal, and we see a path to a resumption of the Fed’s easing cycle in the autumn should tariff inflation prove more modest than expected or the labor market show signs of weakness,” said Ashish Shah at Goldman Sachs Asset Management.
US companies stepped up hiring in July, though the pace remained consistent with weaker labor demand.
Private-sector payrolls increased by 104,000, according to ADP Research data.
The median economist estimate called for a 76,000 gain.
The July employment report due Friday from the Bureau of Labor Statistics, which includes government positions, is expected to show job growth moderated and unemployment rose.
Inflation-adjusted gross domestic product, which measures the value of goods and services produced in the US, increased an annualized 3% in the second quarter, according to preliminary government data out Wednesday.
As solid as the pace was, economic growth averaged 1.25% in the first half, a percentage point cooler than the pace for 2024.
The S&P 500, coming off its best streak of gains since 2020, is about to enter what has historically been its toughest stretch of the year.
Over the past three decades, the benchmark has performed the worst in August and September, losing 0.7% on average in each month, compared with a 1.1% gain on average across other months, data compiled by Bloomberg show.
Though equities have likely not peaked this year, we see limited upside given the historically high multiples at which market-leading stocks are trading, according to Chris Brigati at SWBC.
“We are entering a seasonal period of weakness for the market suggesting a fall pullback may be on the horizon before the next move toward higher stock prices in 2026,” he said.

Corporate Highlights:
* Palo Alto Networks Inc. agreed to buy CyberArk Software Ltd. in a cash-and-stock deal valuing the Israeli cybersecurity company at about $25 billion.
* Humana Inc. raised its profit guidance for the year, bucking a trend in the US health insurance industry after most other companies cut their forecasts in recent months.
* Harley-Davidson Inc. said tariffs crimped profits in the second quarter as high borrowing costs sapped demand and forced the motorcycle manufacturer to cut production.
* Kraft Heinz Co. used price increases to help offset volume declines as the company continues a strategic review of its brands.
* Hershey Co. lowered its full-year profit guidance in part on tariff costs but is hopeful that the Trump administration will offer relief for products, like cocoa, that can’t be grown in the US.
* Starbucks Corp. sales and profit fell more than anticipated, signaling that a plan to revive growth by speeding up service and making cafes more welcoming has yet to bear fruit.
* Visa Inc., the world’s biggest payments network, left its earnings outlook unchanged for the rest of the fiscal year.
* SoFi Technologies Inc., a provider of consumer financial services, said it’s selling $1.5 billion of stock.
* Tesla Inc. agreed to buy $4.3 billion worth of US-built batteries from LG Energy Solution Ltd., a person familiar with the matter said, in a deal that should eventually boost the carmaker’s slowing energy storage business.
* Airbus SE reported a bigger-than-expected cash outflow in the first half as a shortage of engines for its bestselling A320neo jet delayed deliveries of new aircraft.
* Bunge Global SA’s second-quarter profits fell to the lowest in seven years as lingering uncertainty over tariffs and US biofuel policy continued to pressure crop traders and processors.

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.1% as of 4 p.m. New York time
* The Nasdaq 100 rose 0.2%
* The Dow Jones Industrial Average fell 0.4%
* The MSCI World Index fell 0.3%
* Bloomberg Magnificent 7 Total Return Index was little changed
* The Russell 2000 Index fell 0.5%
Currencies
* The Bloomberg Dollar Spot Index rose 0.8%
* The euro fell 1.1% to $1.1424
* The British pound fell 0.8% to $1.3246
* The Japanese yen fell 0.6% to 149.40 per dollar
Cryptocurrencies
* Bitcoin fell 0.5% to $116,904.97
* Ether fell 0.1% to $3,759.86
Bonds
* The yield on 10-year Treasuries advanced five basis points to 4.37%
* Germany’s 10-year yield was little changed at 2.71%
* Britain’s 10-year yield declined three basis points to 4.60%
* The yield on 2-year Treasuries advanced seven basis points to 3.93%
* The yield on 30-year Treasuries advanced four basis points to 4.89%
Commodities
* West Texas Intermediate crude rose 1.7% to $70.40 a barrel
* Spot gold fell 1.7% to $3,270.81 an ounce
Have a lovely evening.

Be magnificent!
As ever,

Carolann
You can’t build a reputation on what you are going to do. -Henry Ford, 1863-1947.

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)
Toll Free: 1.877.430.5895
Fax: 778.430.5828
www.carolannsteinhoff.com