July 6, 2022 Newsletter

Dear Friends,

Tangents:
1928: The first full-length all-talking (with dialogue) motion picture, Lights of New York, released by Warner Bros., premieres in New York City.
1854: Republican party formed.

Dalai Llama, Tibetan Leader, b.1935.
Frida Kahlo, artist, b.1935.
Beatrix Potter, author, b.1866

Scientists discover what looks like a road deep in the ocean. (h/t Scott Kominers).

Carlos Santana is ‘doing well’ after collapsing during a concert.  “Get well” messages are pouring in for the 74-year-old musician after he suffered heat exhaustion while performing in Michigan on Tuesday. 
 
Japanese tea house lets visitors drink from $25,000 antique bowls.  This sounds like a lovely experience… until you think about what would happen if you dropped an 18th century, $25,000 bowl.

What is Paris syndrome?   Paris, the capital of France, is awash with history; it’s home to the Eiffel Tower, Arc de Triomphe, Notre-Dame Cathedral and the Louvre, the world’s most-visited museum.
Yet, despite the city’s wealth of cultural hotspots, architectural delights and superb restaurants (it currently has over 90 Michelin one-star eateries) some tourists find themselves unable to enjoy a trip to Paris. A small percentage of those who venture to The City of Light experience “Paris syndrome,” a psychological condition with symptoms including nausea, vomiting, hallucinations and increased heart rate.
But what, exactly, is Paris syndrome? Who tends to be affected by it, and why?  Full Story: Live Science (7/5) 

PHOTOS OF THE DAY

Models pose with horses as they wear creations from Franck Sorbier’s haute couture fall/winter 2022-2023 during a fashion show
CREDIT: Lewis Joly/AP

The sun sets over the Baltic sea as holidaymakers watch from the beach
CREDIT: Krzysztof Zatycki/Zuma Press Wire/Rex/Shutterstock

A youngster stands underneath Gaia, a seven-metre diameter recreation of planet Earth, by artist Luke Jerram, on display as part of the launch of the Hartlepool Waterfront festival
CREDIT: Ian Forsyth/Getty Images

Market Closes for July 6^th, 2022

International Markets

Bonds

Currencies

Commodities

Market Commentary
On this day in 1785, Congress declared that “the money unit of the United States of America be one dollar.”
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the second day, dropping 0.6%, or 104.5 to 18,729.66 in Toronto.
The index dropped to the lowest closing level since June 23.
Canadian Natural Resources Ltd. contributed the most to the index decline, decreasing 5.9%.
Tamarack Valley Energy Ltd. had the largest drop, falling 6.9%.
Today, 146 of 238 shares fell, while 88 rose; 7 of 11 sectors were lower, led by energy stocks.
Insights
* The index declined 7.7% in the past 52 weeks. The MSCI AC Americas Index lost 14% in the same period
* The S&P/TSX Composite is 15.7% below its 52-week high on April 5, 2022 and 1.1% above its low on July 5, 2022
* The S&P/TSX Composite is down 2.6% in the past 5 days and fell 10% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 14.6 on a trailing basis and 11.3 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.2% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.02t
* 30-day price volatility fell to 19.49% compared with 19.60% in the previous session and the average of 19.99% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
* Energy | -81.0288| -2.4| 2/36
* Consumer Discretionary | -11.1735| -1.8| 2/11
* Consumer Staples | -9.8023| -1.3| 1/10
* Information Technology | -8.7728| -0.8| 8/6
* Materials | -5.9487| -0.3| 19/30
* Communication Services | -5.1166| -0.5| 3/4
* Health Care | -0.0192| 0.0| 4/3
* Utilities | 0.1817| 0.0| 5/11
* Real Estate | 0.2595| 0.1| 11/12
* Financials | 1.0342| 0.0| 17/11
* Industrials | 15.8864| 0.7| 16/12
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
* Canadian Natural Resources | -31.4200| -5.9| 12.2| 17.8
* Shopify | -10.2300| -2.9| 224.1| -75.3
* Suncor Energy | -8.6700| -2.1| -26.6| 34.1
* Fairfax Financial Holdings | 4.6080| 4.4| 2.6| 10.2
* Royal Bank of Canada | 6.5410| 0.5| -9.1| -6.5
* Canadian Pacific | 8.4590| 1.4| 2.8| 2.7
US
By Isabelle Lee and Elaine Chen
(Bloomberg) — US stocks rose for the third straight day as investors parsed economic data that hinted at slightly slower growth, prompting some to brush off the hawkish stance that the Federal Reserve reiterated in its June meeting minutes as outdated.
The S&P 500 ended the session up 0.4% after swinging between gains and losses as investors digested a flurry of data.
The tech-heavy Nasdaq 100, whose members have been more sensitive to the rise in bond yields, also rose.
The two- and 10-year US Treasury yield curve remained inverted throughout the day.
The dollar held onto its gains.
Oil dropped below $100 a barrel.
All eyes were on the Fed as it revealed details of its June meeting on Wednesday afternoon.
Fed officials agreed last month that interest rates may need to keep rising for longer to prevent higher inflation from becoming entrenched, even if that slowed the US economy, the minutes showed.
But traders on Wednesday also grappled with economic data which pointed to a slight deceleration in the pace of growth, spurring some to discern that the Fed’s minutes don’t reflect the current reality of the economy.
Since the last Fed meeting, “the economic data, the inflation data and the bond market response has turned much more dovish,” said Jim Paulsen, chief investment strategist at the Leuthold Group. “All of that is suggesting that really what the Fed thought 30 days ago is not that meaningful at the moment.”
Data released Wednesday showed that US job openings dipped slightly in May but remained near a record, pointing to resilient demand for labor even as optimism about the economy’s prospects dim.
Growth in the US services sector also eased in June to a more than two-year low as orders softened amid ongoing hiring challenges and capacity constraints.
But not all investors are convinced that the Fed’s reiterated stance has little bearing on what’s to come.
“Indeed, the minutes reflected a Fed that is concerned about inflation and expectations and even though they believe that inflation could stay high for a while and growth risks are skewed to the downside, they talk about the potential of an even more restrictive policy in time,” said Priya Misra, global head of rates strategy at TD Securities. “This is hawkish relative to a market that has increasingly become convinced that the Fed is about to blink on hikes due to an imminent recession.”
Despite recent fluctuations in the stock market, volatility is still far off levels usually observed during other powerful bear markets.
The Cboe VIX Index hasn’t crossed the 40 points mark since the latest selloff began, something unseen over the past two decades.
The odds of a US recession in the next year are now 38%, according to latest forecasts from Bloomberg Economics.
Bond traders are penciling in a policy turnaround by the Federal Reserve, with current hawkishness giving way to interest-rate cuts in the middle of 2023.
Some investors saw additional hints of this in the Fed’s minutes.
“What got my attention was the reference to a potential pause at year-end,” said Cliff Hodge, chief investment officer at Cornerstone Wealth. “This is new, and extremely important.  They were already thinking about where the appropriate level is to stop tightening policy in June, before the spate of economic data really deteriorated.”
Central banks around the world have been tightening monetary policy to contain consumer prices.
But a renewed spike in China’s Covid cases and a worsening gas crisis in Europe are signals that a worldwide slowdown is on the horizon despite these efforts.
Bitcoin fell again, wobbling around the $20,000 level.

What to watch this week:
* EIA crude oil inventory report, Thursday
* Fed Governor Christopher Waller, St. Louis Fed President James Bullard, scheduled to speak, Thursday
* ECB account of its June policy meeting, Thursday
* US employment report for June, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.4% as of 4 p.m. New York time
* The Nasdaq 100 rose 0.6%
* The Dow Jones Industrial Average rose 0.2%
* The MSCI World index fell 0.5%
Currencies
* The Bloomberg Dollar Spot Index rose 0.4%
* The euro fell 0.8% to $1.0187
* The British pound fell 0.2% to $1.1925
* The Japanese yen was little changed at 135.87 per dollar
Bonds
* The yield on 10-year Treasuries advanced 12 basis points to 2.93%
* Germany’s 10-year yield advanced three basis points to 1.21%
* Britain’s 10-year yield advanced four basis points to 2.09%
Commodities
* West Texas Intermediate crude fell 1.1% to $98.43 a barrel
* Gold futures fell 1.4% to $1,739.60 an ounce
–With assistance from Tassia Sipahutar, Sunil Jagtiani, Jan-Patrick Barnert, Srinivasan Sivabalan, Emily Graffeo and Peyton Forte.

Have a lovely  evening.

Be magnificent!
As ever,

Carolann

To love means loving the unlovable.  To forgive means pardoning the unpardonable.
Faith means believing the unbelievable.  Hope means hoping when everything seems hopeless. –G.K. Chesterton, 1874-1936.

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