July 31, 2023, Newsletter

Dear Friends,

Tangents: Happy Monday.

July 31, 1498: Christopher Columbus discovers the island of Trinidad on his third voyage.
July 31, 1914: The New York Stock Exchange closed due to the outbreak of World War I. Go to article >>
1790: US Patent Office opens.

Michelle Yeoh marries partner Jean Todt after 19-year engagement.  Oscar-winner Michelle Yeoh has married her longtime partner nearly two decades after the French businessman first proposed to her.

Bronny James plays piano days after cardiac arrest.  NBA star LeBron James shared this video of his son Bronny James playing a piano, days after the 18-year-old suffered cardiac arrest.

4,000-year-old cemetery discovered at future rocket launch site in UK.  Archaeologists think the burial site dates from about 4,000 years ago, during the Bronze Age. Read More

Spherical ‘minibrains’ to be grown on the International Space Station
An upcoming resupply mission to the International Space Station will include stem cells destined to be grown into tiny, 3D models of the human brain. Read More

PHOTOS OF THE DAY

Westerhausen, Germany: A sunflower labyrinth takes the shape of a horse’s head and flowing mane Photograph: Matthias Schräder/AP

Burbank, US: A bear sits in a whirlpool bath in the Californian city. Burbank police said officers responded to a sighting of a bear in the area and found it enjoying a short dip. The bear later climbed over a wall and headed to a tree behind the property, police said in a statement.  Photograph: AP

Mies, Switzerland:  Mayeul van den Broek pilots the SP80 sailboat during a traction test on Lake Geneva, ahead of an attempt to break the world sailing speed record next year in the south of France. Developed with the support of the Swiss Federal Institute of Technology Lausanne (EPFL), the sleek vessel aims to reach 80 knots (148 km/h) using only wind power. Started by three sailing enthusiasts, the project team now has about 50 members including students and recent EPFL graduates, with an average age of only 23.  Photograph: Fabrice Coffrini/AFP/Getty Images.
Market Closes for July 31^st, 2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1914: With war raging in Europe, the New York Stock Exchange closed. It stayed shut for another four and a half months to allow the chaotic market to settle.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the second day, climbing 0.5%, or 107.27 to 20,626.64 in Toronto.
The index advanced to the highest closing level since April 28.
TC Energy Corp. contributed the most to the index gain, increasing 4.4%. Tilray Brands Inc. had the largest increase, rising 9.6%.
Today, 155 of 228 shares rose, while 71 fell; 7 of 11 sectors were higher, led by materials stocks.
Insights
* This month, the index rose 2.3%
* The index advanced 4.7% in the past 52 weeks. The MSCI AC Americas Index gained 11% in the same period
* The S&P/TSX Composite is 1% below its 52-week high on Feb. 2, 2023 and 15.4% above its low on Oct. 13, 2022
* The S&P/TSX Composite is little changed in the past 5 days and rose 2.3% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 13.5 on a trailing basis and 14.6 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.3% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.25t
* 30-day price volatility rose to 10.58% compared with 10.54% in the previous session and the average of 10.66% over the past month
================================================================
|Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Materials | 40.7295| 1.7| 44/6
Energy | 33.5528| 1.0| 26/12
Information Technology | 23.6380| 1.5| 10/1
Financials | 16.8686| 0.3| 16/13
Real Estate | 3.2313| 0.7| 16/5
Health Care | 1.3184| 2.1| 2/2
Consumer Staples | 0.4552| 0.1| 6/5
Utilities | -0.2918| 0.0| 11/5
Consumer Discretionary | -1.3017| -0.2| 8/7
Communication Services | -3.8519| -0.5| 1/4
Industrials | -7.0873| -0.3| 15/11
================================================================
| | |Volume VS |
| Index | | 20D AVG |YTD Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
TC Energy | 14.3800| 4.4| -3.6| -12.4
Shopify | 14.1000| 1.9| -20.9| 89.5
TD Bank | 11.2700| 1.0| 14.6| -0.8
Restaurant Brands | -1.8070| -0.8| -30.6| 15.3
Intact Financial | -4.0210| -1.7| 6.0| -0.1
Canadian Pacific Kansas | -9.3120| -1.3| 20.7| 7.5
US
By Rita Nazareth
(Bloomberg) — Stock traders refrained from making big bets in the final day of July as concern about an overheated market resurfaced amid a rally that drove the S&P 500 to its longest streak of monthly gains since August 2021.
Wall Street has looked past concern about an earnings recession as data bolstered hopes on a soft landing despite the Federal Reserve’s rate hikes.
While many investors are betting the great tech rally that drove this year’s advance in equities has staying power, there’s a growing view the sector is due for a breather — which could weigh on the broader market.
To Matt Maley at Miller Tabak + Co., investors need to be careful about extrapolating what we’ve seen this year in stocks, and it’s essential to have a backup plan for when the “FOMO rally” fades or “some compelling cracks” start to form.
He’s among those betting broad equity averages will see limited upside over the next couple of months.
“Is merely ‘avoiding a recession’ really enough to push the stock market a lot higher from its expensive level?” said Maley.
“Investors need to be careful about trying to squeeze every last penny out of this rally in the stock market over the coming days and weeks given that many of the best stocks are quite expensive.”
The S&P 500 edged higher to around 4,590, hovering near a 16-month high.
The mega-cap space also saw subdued action, with Apple Inc. and Amazon.com Inc. due to report earnings in the coming days.
The Nasdaq 100 notched its longest streak of monthly gains since August 2020.
Treasury 10-year yields traded close to 3.95% while the dollar was little changed.
Traders took a Fed survey of lending officers in stride.
As hinted by Chair Jerome Powell, the central bank said financial institutions reported tighter standards and continued weak demand for loans in the second quarter, extending a trend that began before recent stresses in the banking sector emerged.
The stock market has been seasonally more muted in August, but if history is any guide, the S&P 500 could see more gains after a five-month winning run.
In the prior 37 such streaks since 1928, the gauge extended gains into a sixth month almost 80% of the time, according to Bespoke Investment Group.
Signs are beginning to point to capitulation among bearish institutional investors, economists and Wall Street strategists as market returns and economic data continue to defy expectations, said Mark Hackett, chief of investment research at Nationwide.
Citigroup Inc.’s Scott Chronert has joined the list of prognosticators who have revisited their gloomy outlooks in recent weeks.
He raised his 2023 year-end call for the US stock gauge to 4,600 and to 5,000 by mid-2024.
“The near-term hurdles we envisioned headed into Q3 are now behind,” Chronert wrote in a note to clients. “The new targets reflect increased probability of a soft landing in our scenario approach.”
Morgan Stanley’s Michael Wilson, one of the few Wall Street strategists to see last year’s equities rout coming, has been among the market’s leading pessimists throughout 2023.
But on Monday, after months of soaring stocks, he changed his tone and now sees the rally running further.
Nationwide’s Hackett reckons that while earnings picture has been mixed, the challenges companies have endured – stubborn inflation, weak markets, and sluggishness internationally – are no longer headwinds.
“Now, we’re not only seeing tailwinds heading into 2024, but we’re getting less disruptive reactions in the stock market following earnings reports. These are very encouraging signs that a lot of the emotion that was driving markets has subsided,” Hackett added.
Indeed, US firms beating profit estimates hasn’t been as impressive a feat as it once was.
Companies whose earnings outpaced analysts’ expectations for the second quarter are still underperforming the S&P 500 Index by the most in 18 years on the day after results, according to Goldman Sachs Group Inc. strategists led by David Kostin.
“With lackluster earnings ‘beats’ mostly below historical averages, any breakaway from this sideways market will require additional fuel,” said Robert Teeter at Silvercrest Asset Management.
In corporate news, Exxon Mobil Corp. climbed as Bloomberg News reported it’s in talks with Tesla Inc., Ford Motor Co. and other automakers about supplying them with lithium.
SoFi Technologies Inc. surged 20% as the online bank raised its revenue guidance, citing benefits from deposit growth and lower funding costs on loans.
Yellow Corp., which hauls about 15% of major companies’ so-called less-than-truckload shipments, soared after ceasing operations and told union leaders that it plans to file for bankruptcy following years of financial struggles.
Traders also waded through the latest remarks from central bank officials.
Fed Bank of Chicago President Austan Goolsbee said Monday that data showing slower inflation is “fabulous news,” but he hasn’t yet decided on whether to support pausing rate hikes at the next policy meeting.
Over the weekend, his Minneapolis counterpart Neel Kashkari said the inflation outlook is “quite positive,” though the central bank’s aggressive monetary tightening campaign will likely result in some job losses and slower growth.
Elsewhere, the yen dropped after the Bank of Japan announced an unscheduled bond-purchase operation to tamp down rates after adjusting policy on Friday to allow benchmark yields to climb as high as 1%. The purchases are another reminder that Japan’s slow retreat from ultra-loose monetary policy brings a heightened risk of volatility.
Key events this week:
* Reserve Bank of Australia policy decision, Tuesday
* Eurozone S&P Global Eurozone Manufacturing PMI, unemployment, Tuesday
* US construction spending, ISM Manufacturing, job openings, light vehicle sales, Tuesday
* China Caixin Services PMI, Thursday
* Eurozone S&P Global Eurozone Services PMI, PPI, Thursday
* Bank of England rate decision, Thursday
* US initial jobless claims, productivity, factory orders, ISM Services, Thursday
* Eurozone retail sales, Friday
* US unemployment rate, non-farm payrolls, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.2% as of 4 p.m. New York time
* The Nasdaq 100 was little changed
* The Dow Jones Industrial Average rose 0.3%
* The MSCI World index rose 0.2%
Currencies
* The Bloomberg Dollar Spot Index rose 0.2%
* The euro fell 0.2% to $1.0995
* The British pound fell 0.1% to $1.2834
* The Japanese yen fell 0.8% to 142.25 per dollar
Cryptocurrencies
* Bitcoin fell 0.3% to $29,172.15
* Ether fell 0.5% to $1,856.3
Bonds
* The yield on 10-year Treasuries was little changed at 3.96%
* Germany’s 10-year yield was little changed at 2.49%
* Britain’s 10-year yield declined two basis points to 4.31%
Commodities
* West Texas Intermediate crude rose 1.6% to $81.86 a barrel
* Gold futures rose 0.2% to $2,004 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Brett Miller, Richard Henderson, John Viljoen, Vildana Hajric and Isabelle Lee.

Have a lovely evening.

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