June 12, 2024, Newsletter

Dear Friends,

Tangents:

On June 12, 1987, during a visit to the divided German city of Berlin, President Ronald Reagan publicly challenged Soviet leader Mikhail S. Gorbachev to ”tear down this wall.”  Go to article >>

June 12,1939: National Baseball Hall of Fame opened.
Baseball is 90% mental; the other half is physical.  -Yogi Berra.

Anne Frank, b. 1929.

James Webb telescope reveals ‘cataclysmic’ asteroid collision in nearby star system
The James Webb Space Telescope has caught a snapshot of two massive asteroids colliding in a nearby star system — and it could teach us about how common solar systems like our own are. Read More.

4,000-year-old ‘Seahenge’ in UK was built to ‘extend summer,’ archaeologist suggests
The construction of the monument and another beside it more than 4,000 years ago corresponds to a time of bitter cold. Read More.

Enormous deposit of rare earth elements discovered in heart of ancient Norwegian volcano
The Fen Carbonatite Complex may be Europe’s key to a secure rare-earth-element supply chain following the discovery of a huge deposit at the site. Read More.

How do people ‘wake up’ from comas?
People can stay in comas for weeks, months or even years. But what causes some of these patients to “wake up”? Read More.

‘Friends’ star recreates iconic 1984 moment with Bruce Springsteen
Courteney Cox famously appeared in Bruce Springsteen’s music video for “Dancing in the Dark,” jumping on stage to dance with The Boss. Now she has recreated the moment for TikTok.

Starbucks joins the value menu wars with a new discounted offer
The coffee chain rolled out a new “Pairings Menu” on Tuesday, which combines a drink and a breakfast item for a discount.

PHOTOS OF THE DAY
Wenchuan County, China
Giant panda Fu Bao, the first giant panda born in South Korea, sniffs flowers in her enclosure at the Wolong national nature reserve after returning to China
Photograph: Xinhua/Rex/Shutterstock

Nyon, Switzerland
Life-size paper figures made by Belgian artist Isabelle de Borchgrave are displayed during the exhibition Fantomes de Papier (Paper Ghosts). The 18th-century costumed silhouettes were made to mark the 300th birth anniversary of King Frederick II of Prussia
Photograph: Salvatore Di Nolfi/EPA

Frankfurt, Germany
A light show illuminates the sky and the Main River during a test run of the city’s entertainment programme for the Euro 2024 soccer tournament
Photograph: Michael Probst/AP
Market Closes for June 12^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1928, more than 5 million shares traded hands on the New York Stock Exchange for the first time. President Calvin Coolidge’s announcement that he wouldn’t run again caused a selloff that caused many stocks to drop between $25 and $150 in price.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 0.3% at 21,961.55 in Toronto.
The move follows the previous session’s decrease of 0.8%.
Today, financials stocks led the market higher, as 8 of 11 sectors gained; 135 of 222 shares rose, while 84 fell.
Shopify Inc. contributed the most to the index gain, increasing 2.4%.
Canadian Western Bank had the largest increase, rising 68.3%.
Insights
* This quarter, the index fell 0.9%
* The index advanced 10% in the past 52 weeks. The MSCI AC Americas Index gained 24% in the same period
* The S&P/TSX Composite is 2.6% below its 52-week high on May 21, 2024 and 17.5% above its low on Oct. 27, 2023
* The S&P/TSX Composite is down 0.8% in the past 5 days and fell 1.6% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 17.8 on a trailing basis and 15.1 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.1% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.47t
* 30-day price volatility rose to 10.76% compared with 10.72% in the previous session and the average of 9.89% over the past month
================================================================
|Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 33.0208| 0.5| 18/9
Information Technology | 27.7949| 1.6| 9/1
Consumer Staples | 14.9071| 1.6| 4/7
Real Estate | 4.5394| 1.0| 17/3
Industrials | 3.9955| 0.1| 20/6
Communication Services | 1.0100| 0.1| 3/2
Materials | 0.9186| 0.0| 29/20
Health Care | 0.9048| 1.5| 4/0
Energy | -2.7532| -0.1| 16/23
Utilities | -3.9562| -0.5| 6/9
Consumer Discretionary | -6.1755| -0.8| 9/4
================================================================
| | | | YTD
|Index Points| | Volume VS | Change
Top Contributors | Move |% Change |20D AVG (%)| (%)
================================================================
Shopify | 17.5200| 2.4| 29.5| -12.9
Couche-Tard | 15.2500| 3.9| 45.1| 2.6
Canadian Western Bank | 11.4800| 68.3| 1,212.8| 35.7
Canadian Natural Resources | -5.7130| -0.8| 229.1| 11.8
Dollarama | -10.1300| -4.1| 68.5| 26.2
National Bank of Canada | -16.2700| -5.9| 154.0| 8.4
US
By Rita Nazareth
(Bloomberg) — Stocks hit fresh all-time highs as the Federal Reserve did little to alter Wall Street’s bets that interest rates will drop at least twice in 2024 — even after the central bank’s more-conservative outlook.
The S&P 500 topped 5,400 for the first time in its history, with Wednesday marking the 20-month anniversary of the bull market.
While Treasury yields did pare their slide after the central bank decision, Fed swaps are still pointing to rate cuts in both November and December.
The dollar retreated against all of its developed-world counterparts.
Fed officials penciled in just one rate cut this year and forecast more cuts for 2025, signaling no rush to reduce borrowing costs.
“The most-recent inflation readings have been more favorable than earlier in the year, however, and there has been modest further progress toward our inflation objective,” Chair Jerome Powell said.
“This is a nothing-burger Fed meeting,” said David Russell at Trade Station. “They know conditions are improving, but don’t need to rush with rate cuts. The strong economy is letting Jerome Powell wring inflation out of the system without hurting jobs. Goldilocks is emerging. Policymakers don’t want to jinx it.”
A few hours before the Fed decision, data showed the core consumer price index cooled to the slowest pace in more than three years.
In a session marked by strong trading volume, the S&P 500 rose almost 1%.
Big tech consolidated its leadership, with Tesla Inc. and Nvidia Corp. rallying at least 3.5%.
Gains were also fueled by blowout earnings from Oracle Corp., which soared 13%.
Lower bond rates also helped, with 10-year yields down nine basis points to 4.32%.
“Don’t put the cut before the horse,” said Bank of America Corp.’s Michael Gapen. “This Fed will be reactionary and will ease when the inflation data allow.”
Gapen retained his view for the first rate cut in December and a gradual easing cycle that ends with a terminal rate of 3.50-3.75%.
Officials on Wednesday voted unanimously to keep the benchmark federal funds rate in a range of 5.25% to 5.5% — a two-decade high first reached in July.
The Fed’s acknowledgement of “modest progress” towards the 2% inflation target likely stems from the disinflationary signals in May’s CPI data, according to Whitney Watson at Goldman Sachs Asset Management.
“The Summary of Economic Projections was hawkish as it implies only one cut — but the statement did acknowledge ‘modest’ progress on inflation,” said Jay Hatfield at Infrastructure Capital Advisors. “The press conference was neutral as this morning’s low inflation print was hard to ignore.”
Individual officials’ views on the best path forward for borrowing costs differed. The Fed’s “dot plot” showed four policymakers saw no cuts this year, while seven anticipated just one reduction and eight expected two cuts.
“These ‘dot plot’ projections likely don’t account for the latest May inflation data, which were softer than expected and reversed some of the heat we saw in the first quarter,” said Sonu Varghese at Carson Group. “We still think the odds are high
for two rate cuts in 2024 if the disinflation process continues, as we expect.”
“On net, while there was a modest surprise in this year’s median dot, we didn’t come away from this afternoon thinking much differently about the Fed,” said Michael Feroli at JPMorgan Chase & Co. “We continue to look for a first ease in November, and after this morning, perhaps see risks tilted a little more toward September than December.”
Powell said the officials welcomed the latest inflation figures, adding that he hopes for more reports like that. He said Wednesday’s figures had helped build their confidence on the trajectory of inflation but not enough to warrant rate cuts at this time.
To Krishna Guha at Evercore, the Fed chair is keeping the door very much open to a September cut — provided that the May downshift is broadly sustained in the next few months.
“Powell’s presser fine-tunes to a 1.5 cut signal — we still see thin baseline of two,” he noted.
“Jay was purposely noncommittal on giving any opinion on the timing of a possible cut,” said Peter Boockvar at The Boock Report.
“Whether they cut once or twice after 525 bps of rate increases since March 2022? Who cares? It’s what happens next year and if the cuts are aggressive, it will be because the economy deteriorates notably, more so than if inflation further slows.”
“Chair Powell provided a cautious view around the economic outlook, particularly for inflation and despite the better-than-expected news that we received on that front earlier today,” said Oscar Munoz and Gennadiy Goldberg at TD Securities.
“While on the surface the projections appear to have a hawkish tilt, the details suggest otherwise, in our opinion.”
They remain optimistic that the Fed will first ease rates at its September meeting, as we look for core personal consumption expenditures inflation to gradually moderate by then to a monthly pace that is consistent with a return to the inflation target.
“The Treasury market largely treated the June meeting as a placeholder, with the focus going forward likely to remain on economic data,” they added. “This should keep markets volatile around inflation and labor market data.
However, with 10-year rates slipping into a “bullish channel,” we continue to expect them to finish the year at 3.9%,” they added.

Corporate Highlights:
* Broadcom Inc., a chip supplier for Apple Inc. and other big tech companies, rallied in late trading after its latest results and annual forecast topped estimates, lifted by robust demand for artificial intelligence products.
* Virgin Galactic Holdings Inc. shares tumbled after the company’s board of directors agreed to a 1-for-20 reverse stock split aimed at maintaining the stock’s listing on the New York Stock Exchange.
* The GameStop Corp. calls that Keith Gill — known online as “Roaring Kitty” — purported to own traded huge volumes late Wednesday as the firm’s shares dove in the final stretch of trading.
* Caterpillar Inc. hiked its dividend by about 8% and added $20 billion to its share buyback program after seeing strong performance from its division best known for making iconic yellow heavy-duty machinery.
* FedEx Corp. plans to cut as many as 2,000 jobs in Europe, the latest move by the package-delivery giant to streamline its global workforce and rein in costs.
* A second major Southwest Airlines Co. investor has joined the call for a shakeup in the carrier’s board and executive leadership team, upping the pressure for change.

Key events this week:
* Eurozone industrial production, Thursday
* US PPI, initial jobless claims, Thursday
* Tesla annual meeting, Thursday
* New York Fed President John Williams moderates a discussion with Treasury Secretary Janet Yellen, Thursday
* Bank of Japan’s monetary policy decision, Friday
* Chicago Fed President Austan Goolsbee speaks, Friday
* US University of Michigan consumer sentiment, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.8% as of 4 p.m. New York time
* The Nasdaq 100 rose 1.3%
* The Dow Jones Industrial Average was little changed
* The MSCI World Index rose 0.9%
Currencies
* The Bloomberg Dollar Spot Index fell 0.2%
* The euro rose 0.6% to $1.0806
* The British pound rose 0.4% to $1.2797
* The Japanese yen rose 0.2% to 156.84 per dollar
Cryptocurrencies
* Bitcoin rose 0.3% to $67,515.01
* Ether rose 1.2% to $3,528.95
Bonds
* The yield on 10-year Treasuries declined nine basis points to 4.32%
* Germany’s 10-year yield declined nine basis points to 2.53%
* Britain’s 10-year yield declined 14 basis points to 4.13%
Commodities
* West Texas Intermediate crude rose 0.6% to $78.34 a barrel
* Spot gold rose 0.2% to $2,321.36 an ounce

This story was produced with the assistance of Bloomberg Automation.

Have a  lovely evening.

Be magnificent!
As ever,

Carolann
How far you go in life depends on your being tender with the young, compassionate with the aged, sympathetic with the striving,
and tolerant of the weak and strong.  Because someday in your life you will have been all of these. -George Wahington Carver, c.1964-1943.

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