June 25th, 2025, Newsletter

Dear Friends,

Tangents:

June 25, 1950: The Korean War begins as North Korean troops cross the 38^th parallel.  The conflict draws in global powers and leaves Korea divided to this day.
June 25, 1951: The first commercial color telecast took place as CBS transmitted a one-hour special from New York to four other cities.  Go to article.

George Orwell, writer, b. 1903.
Carly Simon, musician, b. 1945.
George Michael, musician, b. 1963.

Liftoff!
Axiom Space Mission 4 departed from Kennedy Space Center in Florida overnight. The private mission includes a decorated former NASA astronaut and three spaceflight novices who will become the first people from India, Poland and Hungary to visit the International Space Station.

TV/film actor Joe Marinelli dies at 68
Marinelli was best known for playing cross-dressing mobster Bunny Tagliatti on “Santa Barbara” for more than 170 episodes. He won a Soap Opera Digest Award for his performance.

Teen idol Bobby Sherman dies at 81
Sherman had four Top 10 hits on the Billboard Hot 100 chart: “Little Woman,” “Julie, Do Ya Love Me,” “Easy Come, Easy Go,” and “La La La (If I Had You).”

Mars rover captures first close-up photos of giant ‘spiderwebs’ on the Red Planet
NASA’s Curiosity rover has snapped its first images of web-like “boxwork” features on the surface of Mars. The zig-zagging rocks could provide clues about the Red Planet’s watery past and whether it once harbored extraterrestrial life. Read More.

Alcohol-soaked star system could help explain ‘why life, including us, was able to form’
The Atacama Large Millimeter/submillimeter Array has detected methanol isotopes around a nearby star, which could help explain why the ingredients for life are present on Earth. Read More.

Some early-onset cancers are on the rise. Why?
The rates of certain early-onset cancers are on the rise. The reasons are complex, experts say. Read More.

Intrepid baby-faced robot dons a jetpack for its next adventure — becoming the first humanoid robot to fly
New footage shows an expressionless iRonCub MK3 robot taking off using four thrusters — two where its arms should be and two in a jetpack on its back. Read More.

PHOTOS OF THE DAY

Srinagar, India
A person rows a boat carrying lotus roots through Dal Lake
Photograph: Tauseef Mustafa/AFP/Getty Images

Seattle, US
Visitors walk past the Gum Wall in Pike Place Market. Sticking chewing gum around the Market theatre originated in the 1990s and has now become a tourist attraction
Photograph: Agustín Marcarian/Reuters

​​​​​​​Festivalgoers arrive for Glastonbury 2025,Glastonbury festival 2025 at Worthy Farm in the village of Pilton in Somerset, south-west England, has opened its gates.
Glastonbury’s founder, Michael Eavis, and his daughter Emily celebrate with festivalgoers at the opening of the gates on the first day of the festival
Photograph: Oli Scarff/AFP/Getty Images
Market Closes for June 25^th, 2025

International Markets

Bonds

Currencies

Commodities

Market Commentary:
The successful man is not so superior in ability as in action. –Roger Babson, 1875-1967.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell 0.6% at 26,566.32 in Toronto.
The move was the biggest since falling 0.8% on May 21 and follows the previous session’s increase of 0.4%.
Brookfield Corp. contributed the most to the index decline, decreasing 1.9%.
Brookfield Business Partners LP had the largest drop, falling 5.3%.
Today, 136 of 213 shares fell, while 75 rose; 9 of 11 sectors were lower, led by financials stocks.

Insights
* This quarter, the index rose 6.6%
* This month, the index rose 1.5%
* The index advanced 22% in the past 52 weeks. The MSCI AC Americas Index gained 12% in the same period
* The S&P/TSX Composite is 0.8% below its 52-week high on June 24, 2025 and 22.7% above its low on Aug. 6, 2024
* The S&P/TSX Composite is little changed in the past 5 days and rose 2.7% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 19 on a trailing basis and 17 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.7% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$4.32t
* 30-day price volatility rose to 6.52% compared with 6.18% in the previous session and the average of 6.95% over the past month

Index Points
Financials | -37.5275| -0.4| 11/14
Energy | -32.1982| -0.8| 9/31
Industrials | -28.1967| -0.8| 11/17
Consumer Staples | -19.4482| -1.9| 2/8
Information Technology | -13.8419| -0.5| 3/7
Consumer Discretionary | -7.4479| -0.8| 0/9
Utilities | -6.5663| -0.6| 3/12
Real Estate | -6.4512| -1.3| 3/16
Communication Services | -1.5780| -0.3| 2/3
Materials | 0.0715| 0.0| 28/19
Health Care | 0.8711| 1.3| 3/0
Brookfield Corp | -16.2400| -1.9| -26.4| 0.0
Enbridge | -12.1900| -1.3| -27.8| 0.0
Canadian Pacific Kansas | -11.9600| -1.7| 64.5| 2.7
Wheaton Precious Metals | 3.2980| 0.9| -24.8| 51.5
Barrick Mining | 3.3640| 1.0| -15.8| 28.4
Celestica | 5.7250| 3.6| 43.0| 54.1
(MT Newswires)
The Toronto Stock Exchange closed with a loss on Wednesday as investors took profits following yesterday’s record close, while concerns higher expenditures needed for defending Canada’s borders are going to substantially boost federal government spending substantially also weighed.
The S&P/TSX Composite index down 152.3 points to 26,566.32 falling off Tuesday record close of 26,718.62.
Most sectors were lower, but none by as much as 1%.
Health Care, up 1.4%, was the biggest gainer on the day.
Desjardins noted news reports Wednesday that Canadian Prime Minister Mark Carney has committed to increase federal defense spending to 5% of GDP by 2035.
This includes 3.5% of GDP in core defense expenditures and an additional 1.5% of GDP in defense-adjacent spending.
Today’s announcement follows last week’s commitment to reach the previous 2% of GDP NATO target by the end of the current fiscal year, up from an estimated 1.4% of GDP in 2024.
Randall Bartlett, Deputy Chief Economist at Desjardins, cited the Prime Minister as saying defense spending, which is already the government’s top spending item, could increase to $150 billion annually to meet the new NATO target.
Bartlett said this is a “reasonable estimate” of 3.5% of GDP in 2035, albeit under the assumption that there are minimal domestic economic spillovers.
He noted reaching 5% of GDP would increase spending to over $200 billion annually on defense and defense-adjacent expenditures in 2035.
“However,” Bartlett added, “our research found that the current NATO definition of what qualifies as a defence expenditure is very narrow, and current plans to categorize a wide range of federal government spending as military spending may be ambitious.”
According to Bartlett, planned increases in defense spending is likely to lead to significantly larger deficits, higher debt and increased issuance.
He noted with the federal government reducing personal and corporate income tax revenues, while at the same time increasing expenditures on other election priorities, much of this new spending will need to be debt financed.
Bartlett said that is unless the federal government raises revenues elsewhere, goes back on its commitment to leave major transfers to individuals and other levels of government untouched and/or can substantially reduce non-defense related Direct Program Expenses.
He noted the latter spending category was roughly $225 billion in the 2024-25 fiscal year, while about $125 billion was for operating expenses, of which roughly one third was for defense, and $100 billion for other transfers, such as Indigenous land claims. “Although ‘savings from increased government productivity’ are hoped to net substantial savings over the next four years, this is unlikely to be enough to offset the material increase in spending without meaningful public service staff reductions,” Bartlett added.
Bartlett noted sovereign yield curves steepened following the announcement of a higher NATO target, including for the Government of Canada (GoC).
Bartlett said: “Canada’s fiscal position is currently one of the most enviable among advanced economies, leaving some room for potential new spending.
However, the planned substantial increase in defence expenditures comes against the backdrop of similar plans among other NATO members.
With central government debt issuance expected to ratchet up globally over the next decade, notably in the U.S. to fund the tax cuts include in the Big Beautiful Bill, GoC bond yields may continue to rise as a result of both domestic and international factors.
This would further erode the federal budget balance by putting upward pressure on public debt charges while also raising borrowing costs for other levels of government, businesses and households.
If expenditures generate a significant boost to productivity and potential GDP, notably via R&D and dual infrastructure components, pressures on debt sustainability will be alleviated, but the extent to which these expenditures will ultimately convert into productive capacity and pay themselves back through the revenue line remains an open question.”
Of commodities, West Texas Intermediate crude oil closed higher on Wednesday after shedding more than US$10 per barrel in the prior two sessions as calming Middle East tensions cut into the commodity’s risk premium and traders again focus on supply and demand fundamentals.
WTI crude oil for August delivery closed up $0.55 to settle at US$64.92 per barrel, while August Brent crude was last seen up $0.66 to US$67.80.
Also, gold moved hgher later afternoon as the dollar was steady on Federal Reserve Chair Jerome Powell’s second day of congressional testimony.
Gold for August delivery was last seen up $15.90 to US$3,349.80 per ounce.
US
By Rita Nazareth
(Bloomberg) — Wall Street’s rally is showing some signs of fatigue on speculation stocks have run too far amid economic and geopolitical risks.
Longer-term Treasuries underperformed.
Oil bounced from its biggest two-day plunge since 2022.
The dollar hit a three-year low.
Just a few points away from its all-time high, the S&P 500 wavered.
The Nasdaq 100 edged up, with Nvidia Corp. at a record.
In late hours, Micron Technology Inc. gave an upbeat forecast.
The Russell 2000 lost 1.2%.
The yield gap between 30-year and five-year bonds is near levels last seen in 2021.
The curve steepening is a wager the Federal Reserve will cut rates eventually while concern about debt issuance will pressure longer-term maturities.
Traders kept a close eye on Fed Chair Jerome Powell’s second day of testimony on Capitol Hill after Fed officials left rates steady last week.
The Fed chief said the US central bank is still struggling to determine the impact of tariffs on consumer prices.
He also noted the US has the strongest economy in the world, and it makes sense to move slowly in times of uncertainty.
“If it were not for the uncertainty created by shifting trade policy, the Fed may have been able to cut interest rates this summer,” said Carol Schleif at BMO Private Wealth.
“The Fed’s pause on interest-rate cuts is tariff induced, and not necessarily reflective of economic progress.
We expect one to two cuts in 2025, starting most likely in September.”
Few times in history has the US market grappled with as many headwinds as it’s faced in 2025: a new president rejiggering the global order, sweeping tariffs and a bout of uncertainty stemming from Middle East headlines.
While stocks have still prevailed against all odds, the higher the S&P 500 goes, the louder the concern that its multiples are starting to look frothy.
“No market moves in a straight line,” said Matt Maley at Miller Tabak.
“The thought that it might have to take a short- term breather is not something that will create any serious nervousness in the marketplace in and by itself.”
On the geopolitical front, President Donald Trump said the US would hold a meeting with Iran next week but cast doubt on the need for a diplomatic agreement on the country’s nuclear program, citing the damage that American bombing had done to key sites.
His comments came on day two of a ceasefire between Israel and Iran, ending 12 days of conflict that threatened to escalate into a wider regional war and upend energy markets.
“The markets are pricing in that the worst of the Iran/Israel conflict is behind us,” said Schleif.
“Tariffs, trade, tax, inflation, employment and interest rates have a lot more sway on stocks right now.”
Meantime, JPMorgan Chase & Co. strategists are doubling down on their view that the US stock market is on track for a fresh record this year as the economy and consumers remain resilient despite policy uncertainty.
Absent any political or policy shocks, “we believe the path of least resistance to new highs will be supported by technology/artificial intelligence-led strong fundamentals, a steady bid from systematic strategies, and flows from active investors on dips,” strategists led by Dubravko Lakos-Bujas wrote.
As stocks hover near all-time highs, a senior Goldman Sachs Group Inc. trader warned that there are valid reasons to meet the latest gains with caution.
This is especially true of lower- quality parts of the market, where shares are being driven higher by short sellers forced to cover their positions, Louis Miller wrote.
“We flagged two weeks ago that the short squeeze the market was facing could provide an opportunity to press shorts lower, and we think that time is getting closer,” he wrote.
At Piper Sandler, Craig Johnson says he’s impressed by the overall resilience equity markets have displayed in the first two quarters of the year.
“The turbulent backdrop of tariff uncertainties, geopolitical tensions, a US debt downgrade, and mounting national debt has been a stiff headwind for investors,” he noted.
“However, looking forward to the second half of the year, we believe the technical setup remains constructive and the proverbial ‘glass half-full’ based on the weight of the technical evidence.”
In fact, the Nasdaq 100 not only closed at its first record since February on Tuesday but formed a “golden cross” in the process.
That’s when the 50-day moving average breaks above the 200-day moving average.
“Golden crosses are not something that most technicians highlight very often, but it is still a positive signal for momentum,” said Maley at Miller Tabak.
The last two times the tech-heavy gauge experienced a “golden cross,” the gauge saw big rallies before seeing another correction, he noted.

Corporate Highlights:
* FedEx Corp. warned that its profit would be worse than expected this quarter and declined to offer guidance for the rest of the year.
* Cheerios maker General Mills Inc. offered an outlook for the fiscal year ahead that fell below investors’ expectations.
* The artificial-intelligence tailwinds that have driven the shares of Nvidia Corp. sharply higher the past few years show no signs of abating and could eventually push the chipmaker’s value to a market-topping $6 trillion, according to Loop Capital.
* Apple Inc. is poised to offer further App Store changes to appease European Union antitrust watchdogs who issued an ultimatum after doling out a €500 million ($580 million) fine.
* Alphabet Inc.’s Google is adding an artificial intelligence coding assistant to to ease the work of developers, aiming to catch up with rival products such as OpenAI’s Codex and Anthropic’s Claude Code.
* Bumble Inc. is cutting about one-third of its staff, months after founder Whitney Wolfe Herd returned as chief executive officer to overhaul the struggling dating app.
* Yum! Brands Inc., the operator of chains as KFC and Taco Bell, was upgraded to overweight from neutral at JPMorgan Chase & Co.
* Health and Human Services Secretary Robert F. Kennedy Jr.’s push to eliminate synthetic dyes from the US food supply gained more steam on Wednesday with Nestlé SA and Conagra Brands Inc. announcing separately that they will cut the additives in the future.
* Hims & Hers Health Inc. won’t back down from selling cheap weight-loss shots, its chief executive officer said one day after Novo Nordisk A/S abruptly ended its distribution partnership.
* Worldline SA, which describes itself as the largest European payment processor, cratered on reports that the company allegedly covered up fraud by some of its customers.
* Deutsche Boerse AG has added more banks to a potential $1 billion initial public offering of its governance data and analytics unit ISS Stoxx, according to people familiar with the matter, as it weighs whether to list a stake held by a private equity firm or buy it back.
* Shell Plc denied a Wall Street Journal report that it is in active talks about acquiring its London-based oil rival BP Plc.

Some of the main moves in markets:
Stocks
* The S&P 500 was little changed as of 4 p.m. New York time
* The Nasdaq 100 rose 0.2%
* The Dow Jones Industrial Average fell 0.2%
* The MSCI World Index fell 0.1%
* Bloomberg Magnificent 7 Total Return Index rose 0.5%
* The Russell 2000 Index fell 1.2%
Currencies
* The Bloomberg Dollar Spot Index fell 0.2%
* The euro rose 0.4% to $1.1659
* The British pound rose 0.4% to $1.3666
* The Japanese yen fell 0.2% to 145.24 per dollar
Cryptocurrencies
* Bitcoin rose 1.5% to $107,778.73
* Ether fell 0.7% to $2,432.97
Bonds
* The yield on 10-year Treasuries declined one basis point to 4.28%
* Germany’s 10-year yield advanced two basis points to 2.56%
* Britain’s 10-year yield was little changed at 4.48%
Commodities
* West Texas Intermediate crude rose 1.3% to $65.22 a barrel
* Spot gold rose 0.3% to $3,333.87 an ounce
Have a lovely evening everyone.

Be magnificent!
As ever,

Carolann
Get it down.  Take chances.  It may be bad, but it’s the only way you can do anything really good. –William Faulkner, 1897-1962.

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 (Text Only)
Toll Free: 1.877.430.5895
Fax: 778.430.5828
www.carolannsteinhoff.com