July 6, 2023, Newsletter

Dear Friends,

Tangents: Happy Friday Eve.

1964: Malawi gains its independence from Britain.  Between 1953 and 1963, the Southeast African country was part of a British controlled federation called Federation of Rhodesia and Nyasaland.  After dissolution of the federation and independence, Nyasaland changed its name to Malawi.

2003: Former ambassador Joseph Wilson, in a New York Times op-ed, disputed President George W. Bush’s statement that Iraq had sought uranium in Africa, saying he had found no evidence to support the claim when the CIA asked him to investigate. Go to article >>

Dalai Lama, Tibetan leader, b. 1935.

Mushroom-shaped superplume of scorching hot rock may be splitting Africa in 2
Strange, never-before-seen movements in the East Africa Rift Valley appear to be driven by super-heated rock from deep beneath Earth’s surface.  Read More.

Antarctic sea ice reached ‘record-smashing low’ last month
Antarctic sea ice levels reached record-breaking lows last week — and this “extraordinary behavior” could mark the start of its long-term decline.  Read More.

Sunspot numbers hit 20-year high, indicating the sun is fast approaching its explosive peak
The number of sunspots in June was higher than any month during the current or previous solar cycles. Read More.

Las Vegas illuminates the world’s largest spherical structure.  The otherworldly sphere was fully illuminated for the first time this week. Watch its dramatic debut here.

Turkey seeks return of ‘stolen’ statue.  Turkish authorities say a statue on display at a museum in Denmark was stolen from their country decades ago.
PHOTOS OF THE DAY

Moquegua, Peru: The Ubinas volcano expels columns of smoke and ash more than 5km high. The council of ministers of Peru has declared a 60-day state of emergency for nearby districts.  Photograph: EPA

Pamplona, Spain: Revellers celebrate during the Chupinazo rocket, to mark the official opening of the San Fermín fiestas.  Photograph: Álvaro Barrientos/AP

New York, USA:  A 90% illuminated waning gibbous moon rises over 42nd Street, as seen from Weehawken, New Jersey
Photograph: Gary Hershorn/Getty Images
Market Closes for July 6^th, 2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1785, the U.S. 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 1.5%, or 293.2 to 19,810.69 in Toronto. The move was the biggest since falling 1.6% on March 15.
Shopify Inc. contributed the most to the index decline, decreasing 3.4%. Aritzia Inc. had the largest drop, falling 5.8%.
Today, 199 of 229 shares fell, while 28 rose; all sectors were lower, led by financials stocks.

Insights
* In the past year, the index had a similar or greater loss 12 times. The next day, it declined seven times for an average 0.8% and advanced five times for an average 1.3%
* So far this week, the index fell 1.7%
* The index advanced 5.8% in the past 52 weeks. The MSCI AC Americas Index gained 14% in the same period
* The S&P/TSX Composite is 5% below its 52-week high on Feb. 2, 2023 and 10.8% above its low on Oct. 13, 2022
* The S&P/TSX Composite is little changed in the past 5 days and fell 1.2% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 12.9 on a trailing basis and 13.7 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.5% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.18t
* 30-day price volatility rose to 11.72% compared with 11.08% in the previous session and the average of 11.57% over the past month
================================================================
| Index Points | |Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | -100.4076| -1.6| 4/24
Energy | -52.5167| -1.6| 2/38
Materials | -44.2902| -1.9| 2/48
Information Technology| -36.7137| -2.3| 1/10
Industrials | -21.1731| -0.8| 8/18
Consumer Staples | -14.1275| -1.7| 1/10
Utilities | -9.6516| -1.1| 1/15
Real Estate | -5.7761| -1.2| 2/19
Communication Services| -5.1788| -0.6| 2/3
Consumer Discretionary| -2.5555| -0.3| 5/10
Health Care | -0.8188| -1.6| 0/4
================================================================
| | |Volume VS| YTD|Index Points | | 20D AVG | ChangeTop Contributors | Move | % Change | (%) | (%)
================================================================
Shopify | -24.5000| -3.4| 49.4| 75.8
TD Bank | -22.5400| -2.1| 129.2| -7.1
Brookfield Corp | -16.9400| -3.8| 38.6| 0.0
Toromont Industries| 0.9740| 1.6| 39.5| 12.2
Thomson Reuters | 1.7710| 1.0| -8.0| 16.0
Magna Intl | 3.8900| 2.8| 10.1| 1.4
* The benchmark 10-year bond fell and the yield rose 7 basis points to 3.485%
* The S&P 500 Index declined 0.8%
US
By Peyton Forte and Isabelle Lee
(Bloomberg) — US stocks fell for a second day in a row amid a spike in Treasury yields after surprisingly strong private hiring data. Traders are preparing for Friday payroll
numbers to gauge the Federal Reserve’s next move.
The S&P 500 and Nasdaq 100 benchmarks both fell after figures published Thursday by the ADP Research Institute showed US companies added the most jobs in over a year in June, underscoring the ongoing strength of the labor market. Swap contracts linked to future policy decisions almost fully priced in a quarter-point increase by July 26 and showed a growing likelihood of an additional hike by year end.
Stocks on the move included Exxon Mobil Corp., which fell after forecasting a $4 billion hit to earnings, while some of the year’s best performers, including Nvidia Corp. and Tesla Inc., slid.
Treasury yields rose across the curve after the ADP report and extended their climb after data showing the service sector expanded in June at the fastest pace in four months. The policy sensitive two-year rate climbed above 5% to a 16-year high before the move faded, while the 10-year rose to 4.08% for the first time since March.
Private payrolls increased 497,000, more than double the median estimate in a Bloomberg survey of economists. Separate data from Challenger, Gray & Christmas Inc. showed the pace of job cuts by US employers slowed in June.
The numbers stunned Wall Street. “The strength of the US labor market is almost unbelievable and this should further push out any concept of a possible recession in the US,” said Scott Ladner, chief investment officer at Horizon Investments. “But, it should also push out of the market any hopes of a Fed rate cut during 2023.”
The report was “literally off the charts relative to what was expected,” according to Peter Boockvar, chief investment officer of Bleakley Financial Group. “This jobs report squares with nothing in the survey data, nor the claims figures and from what companies themselves have been saying about hiring intentions, especially with the lackluster growth in the economy.”
Dallas Fed President Lorie Logan voiced her concerns that inflation was still running too hot and more rate hikes were needed at an event in New York Thursday. Stocks have been losing ground after a strong first half of the year as continued hawkishness from central banks dampens hopes of a soft landing for the global economy.
“The selloff is driven by the idea that the economy is a freight train that can’t be stopped and that the Fed is going to have to work even harder,” said David Donabedian, chief investment officer of CIBC Private Wealth US. “And you certainly see that in the bond market, where you have an even more dramatic reaction.”
Friday’snonfarm payrolls and unemployment reports may provide further clues on the Fed’s policy path. Economists surveyed by Bloomberg are expecting figures to moderate, though it remains to be seen if that will be enough to steer the central bank away from another rate increase. Earlier this week, minutes from the Fed’s June meeting showed division among policymakers over the decision to pause rate hikes, with the voting members on track to take rates higher later this month.
Next week, the big banks will usher in second quarter earnings with reports from Citigroup Inc. and JPMorgan Chase & Co.
Despite the uncertainties, there’s a number of ways to participate in equities right now, according to Liz Ann Sonders, chief investment strategist at Charles Schwab, who said she has been particularly “factor-focused.”
“We think focusing on those quality-based factors with span both on the growth factor side of things and the value factor side of things is the way to approach what you are doing inside your equity allocation,” she told Bloomberg TV.
Meanwhile, a gauge of the dollar strengthened while Bitcoin and gold slipped. Treasury Secretary Janet Yellen touched down in Beijing on Thursday to attempt to further repair the relationship between the world’s two largest economies.

Key Events This Week:
* US unemployment rate, nonfarm payrolls, Friday
* ECB’s Christine Lagarde addresses an event in France, Friday

Some of the main moves in markets today:

Stocks
* The S&P 500 fell 0.8% as of 4:02 p.m. New York time
* The Nasdaq 100 fell 0.8%
* The Dow Jones Industrial Average fell 1.1%
* The MSCI World index fell 1.2%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro rose 0.3% to $1.0887
* The British pound rose 0.3% to $1.2740
* The Japanese yen rose 0.4% to 144.10 per dollar
Cryptocurrencies
* Bitcoin fell 0.4% to $30,340.2
* Ether fell 1.2% to $1,887.2
Bonds
* The yield on 10-year Treasuries advanced 11 basis points to 4.04%
* Germany’s 10-year yield advanced 15 basis points to 2.63%
* Britain’s 10-year yield advanced 17 basis points to 4.66%
Commodities
* West Texas Intermediate crude rose 0.1% to $71.88 a barrel
* Gold futures fell 0.6% to $1,916.30 an ounce
This story was produced with the assistance of Bloomberg Automation.

–With assistance from Carly Wanna, Vildana Hajric, Richard Henderson, John Viljoen, Namitha Jagadeesh and Sagarika Jaisinghani.
Have a lovely evening.

Be magnificent!
As ever,

Carolann
It is impossible to defeat an ignorant man in argument. –William G. McAdoo, 1863-1941.

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