June 2, 2023 Newsletter

Dear Friends,

Tangents: Happy Friday.  Full moon this weekend – the “strawberry” moon.

June 2, 1692: Salem witch trials begin.
June 2, 1953: Queen Elizabeth II is crowned at Westminster Abbey in London, England.
1981: The Japanese video arcade game “Donkey Kong” made its U.S. debut.  Go to article > 

Marquis de Sade, b. 1740.

Americans’ pickleball obsession is only growing, thanks to celebs.

Madrid becomes the new Miami as rich Latin Americans flood Spain

Volkswagen reboots its groovy ’60s-era VW Bus.  Remember the hippie-era Volkswagen Bus? Well, it’s back — and it’s electric.

Mirra Andreeva continues meteoric rise by advancing to French Open third round.  At only 16, Andreeva is now the youngest player to reach the third round at the French Open since 2005.

Harrison Ford does not need anybody’s help getting off a horse.  Harrison Ford may be 80, but he wants everyone to know that he can still handle his own “Indiana Jones” stunts.

Repeated signals from the center of the Milky Way could be aliens saying hello, new study claims
Could intelligent aliens be lurking at the heart of the Milky Way? A new search for extraterrestrial life aims to find out by listening for radio pulses. Read More

Hidden tunnel and rooms unearthed under 1,500-year-old church in Istanbul
Archaeologists excavating beneath the ruins of an early Christian church have unearthed underground rooms and a tunnel from 1,500 years ago in the oldest part of Istanbul. Read More

Ancient Egyptian queen’s bracelets contain 1st evidence of long-distance trade between Egypt and Greece.  Bracelets found in the tomb of the ancient Egyptian queen Hetepheres I reveal new information about the trade networks that once linked the Old Kingdom to Greece.  Full Story: Live Science (6/1)

Shining rainbow rings around the sun photographed in Finland. What caused them?
Something was in the air recently when a photographer in Finland snapped a stunning shot of concentric rainbow-colored rings around the sun. Read More

PHOTOS OF THE DAY

London, UK
Emily Young’s Time Boy, carved from speleothem onyx, on display in St James’s Square. The piece is to be auctioned as part of the Christie’s Robin and Rupert Hambro collection and is estimated to fetch £200,000 to £300,000. Photograph: Guy Bell/Shutterstock.

Djado, Niger
An aerial view of the fortress of Djaba, which dates back more than 200 years.  Photograph: Souleymane Ag Anara/AFP/Getty Images.

Milan, Italy
Clarinet player Sergio del Mastro and oboe player Omar Zoboli open a concert among the spires of the Duomo di Milano.  Photograph: Matteo Corner/EPA
Market Closes for June 2^nd, 2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1987: President Reagan tapped an economic consultant named Alan Greenspan to replace the renowned Paul Volcker as chairman of the Federal Reserve.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the second day, climbing 1.8%, or 352.38 to 20,024.63 in Toronto.
The move was the biggest since rising 3.3% on Nov. 10.
Today, financials stocks led the market higher, as all sectors gained; 185 of 232 shares rose, while 42 fell.
Royal Bank of Canada contributed the most to the index gain, increasing 2.0%.
Hudbay Minerals Inc. had the largest increase, rising 7.6%.
Insights
* In the past year, the index had a similar or greater gain eight times. The next day, it advanced five times for an average 1.1% and declined three times for an average 1.1%
* This quarter, the index fell 0.4%
* So far this week, the index rose 0.5%, heading for the biggest advance since the week ended April 21
* The index declined 4.8% in the past 52 weeks. The MSCI AC Americas Index gained 1.6% in the same period
* The S&P/TSX Composite is 4.8% below its 52-week high on June 2, 2022 and 12% above its low on Oct. 13, 2022
* S&P/TSX Composite is trading at a price-to-earnings ratio of 13.1 on a trailing basis and 13.6 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$3.13t
* 30-day price volatility rose to 12.75% compared with 11.42% in the previous session and the average of 9.89% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 125.2021| 2.1| 26/3
Energy | 90.6356| 2.7| 38/2
Industrials | 59.4824| 2.2| 25/2
Consumer Discretionary | 16.8448| 2.3| 12/2
Utilities | 13.6610| 1.5| 15/1
Information Technology | 12.4741| 0.8| 10/2
Materials | 11.4619| 0.5| 21/28
Real Estate | 10.3090| 2.2| 20/1
Consumer Staples | 9.5437| 1.1| 9/0
Communication Services | 2.2630| 0.3| 4/1
Health Care | 0.5048| 0.7| 5/0
================================================================
| | |Volume VS | YTD
| Index | | 20D AVG | Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
RBC | 23.7700| 2.0| -7.5| -2.5
Enbridge | 21.8000| 3.2| -11.8| -5.0
TD Bank | 20.3700| 2.1| -20.7| -10.0
Barrick Gold | -3.0590| -1.1| 18.0| 0.1
Wheaton Precious Metals | -4.0490| -2.1| -9.6| 15.1
Franco-Nevada | -4.0600| -1.5| 7.2| 7.4
US
By Rita Nazareth
(Bloomberg) — The relentless rally in big tech, options positioning and bets on a Federal Reserve pause following a mixed jobs report put stocks on the verge of a bull market.
An advance of about 1.5% for the S&P 500 extended the benchmark’s surge from its October low to nearly 20%.
A gauge of mega-caps like Tesla Inc. and Apple Inc. saw its sixth straight week of gains — the longest winning run in almost two years.
Broadcom Inc. climbed after predicting that sales tied to artificial intelligence will double this year.
As stocks gained, Wall Street’s “fear gauge” plummeted to its lowest level since February 2020.
The CBOE Volatility Index, or VIX, dropped below 15 from an average of 23 in the past year.
The risk-taking mode also drove the Russell 2000 index of small caps — the home of several regional banks — up about 3.5%.
“The impressive run for equities continues to drive retail investors into the market,” said Mark Hackett, chief of investment research at Nationwide. “Investors have spent much of the past three years obsessed by the Fed, inflation, and payrolls, though volatility around those reports has settled, reflecting a less emotional market. This is bullish, as less reactivity is a sign of a healthy market.”
To Andrew Brenner at NatAlliance Securities, the melt-up in equities has a lot to do with one thing: positioning.
“Options traders were off sides,” Brenner said. We think they will get back next week, “and the rally will run out of steam,” he added.
Indeed, the stock advance doesn’t mean the market isn’t facing headwinds, according to Quincy Krosby, chief global strategist at LPL Financial.
Among the risks, she cites the potential ramifications of the deluge of Treasury notes — approximately $1 trillion — to be auctioned as the US department replenishes its general account following a debt-limit deal.
“That the Fed has telegraphed that June 14 is off the table for a rate hike no doubt reflects its concerns regarding the potential for increased market volatility stemming from dissipating liquidity,” Krosby said. “Still, today’s across-the-board rally confirms that the market doesn’t see an impending recession despite the incessant calls for one.”
Signs of labor-market slackening in May despite a pickup in hiring could strengthen the argument from Chair Jerome Powell and other officials that they should take more time to assess incoming data and the evolving outlook before raising rates again.
Wall Street’s reaction to the latest jobs report showed bets that another Fed hike is likely in the bag — but that wouldn’t necessarily happen in June.
Two-year yields, which are more sensitive to imminent central bank moves, jumped 15 basis points to 4.5%.
Swaps are pricing almost a quarter-point hike across the next two Fed meetings.
But indicating a less than 50% chance of that happening this month.
“The key question now is: can they wait until July or does this monster payrolls number trigger another burst of urgency?” said Seema Shah, chief global strategist at Principal Asset Management. “Perhaps the report details, with the unemployment rate rising and average hourly earnings growth slowing, tilts the decision to July.”
The Fed should be open to raising interest rates by a half percentage point in July if it opts to hold off from tightening this month, former Treasury Secretary Lawrence Summers said.
“We are again in a situation where the risks of overheating the economy are the primary risks that the Fed needs to be mindful of,” the Harvard University professor said in an interview with Bloomberg Television’s David Westin on Friday.
Some of the main moves in markets:
Stocks
* The S&P 500 rose 1.4% as of 4 p.m. New York time
* The Nasdaq 100 rose 0.7%
* The Dow Jones Industrial Average rose 2.1%
* The MSCI World index rose 1.5%
Currencies
* The Bloomberg Dollar Spot Index rose 0.2%
* The euro fell 0.5% to $1.0708
* The British pound fell 0.6% to $1.2450
* The Japanese yen fell 0.8% to 139.97 per dollar
Cryptocurrencies
* Bitcoin rose 1.4% to $27,251.37
* Ether rose 2.1% to $1,908.83
Bonds
* The yield on 10-year Treasuries advanced 10 basis points to 3.69%
* Germany’s 10-year yield advanced six basis points to 2.31%
* Britain’s 10-year yield advanced four basis points to 4.16%
Commodities
* West Texas Intermediate crude rose 2.7% to $71.98 a barrel
* Gold futures fell 1.5% to $1,965.20 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Emily Graffeo, Isabelle Lee and Peyton Forte.
Have a wonderful weekend everyone.

Be magnificent!
As ever,

Carolann
The art of being wise is the art of knowing what to overlook. –William James, 1842-1910.

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