June 28, 2024, Newsletter

Dear Friends,

Tangents: Happy Friday.

June 28, 1846: The saxophone is patented.  Belgian musician Adolphe Sax developed the woodwind instrument typically made of brass.
June 28, 1997: Mike Tyson was disqualified for biting Evander Holyfield’s ear during their WBA heavyweight title fight in Las Vegas.   Go to article >>
June 28, 1969: Stonewall Riot, start of Gay Liberation movement.

Peter Paul Rubens, artist, b. 1577.
Jean-Jacques Rousseau, philosopher, b. 1712

Milky Way’s black hole ‘exhaust vent’ discovered in eerie X-ray observations
A gargantuan “exhaust vent” may be channeling hot gas away from the Milky Way’s supermassive black hole at millions of miles per hour — and filling up two enormous bubbles that tower over the galaxy. Read More.

2,000-year-old funerary urn found in Spain contains the world’s oldest known liquid wine
Scientists discovered the oldest known wine in liquid form inside a Roman-era tomb in Spain. Read More.

Predator or prey? This ‘switch’ in the brain toggles when you’re hunting or being hunted
The hypothalamus, a brain region that helps control our hormones and sleep cycles, is also responsible for our ability to switch between predator- and prey-like behavior. Read More.

‘Night vision lenses’ could give you power to see in the dark using simple eyeglasses
Super-slim night-vision tech could be within reach thanks to a new material breakthrough that can capture infrared and visible light at the same time. Read More.

Mystery ‘random event’ killed off Earth’s last woolly mammoths in Siberia, study claims
Woolly mammoths survived on Wrangel Island for 6,000 years after their mainland cousins had perished. A new genomic study has revealed that this final population likely died from a sudden, mysterious event. Read More.

Secret to lifelong memories sticking is molecular ‘glue’
A new study has uncovered the role that a specific molecule in the brain plays in maintaining long-term memory.  Full Story: Live Science (6/28)

This smiling robot has a face covered in ‘living’ skin
It may look creepy, but this tiny robot covered in living skin could mark a step forward in the quest to make robots more human-like.

Researchers reveal new analysis from precious asteroid sample
A sample from asteroid Bennu contains organic compounds usually found at midocean ridges on Earth, suggesting Bennu may have been part of an ancient ocean world.

Salty cream in your morning brew?
Read about the rise of salt coffee, one of many specialty drinks in Vietnam that now appear on menus around the world.

PHOTOS OF THE DAY

Walton-on-the-Naze, England
A man sunbathes in front of a row of beach huts. Brits are enjoying warmer temperatures this week, with highs reaching the low-30Cs
Photograph: Dan Kitwood/Getty Images

A herd of milu deer wander through the mudflats on the Tiaozini wetlands, on the east coast of China. The pink plant is seepweed, similar to samphire
Photograph: VCG/Getty Images

​​​​​​​Glastonbury, UK
Festivalgoers at day two of the festival
Photograph: Leon Neal/Getty Images
Market Closes for June 28^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 2001, the U.S. Court of Appeals for the District of Columbia shot down portions of a blockbuster ruling that Microsoft was an illegal monopoly.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell 0.3% at 21,875.79 in Toronto.
The move was the biggest since falling 0.4% on June 19 and follows the previous session’s increase of 0.7%.
Cameco Corp. contributed the most to the index decline, decreasing 5.0%.
First Quantum Minerals Ltd. had the largest drop, falling 7.2%.
Today, 110 of 226 shares fell, while 113 rose; 9 of 11 sectors were lower, led by materials stocks.
Insights
* This quarter, the index fell 1.3%
* This month, the index fell 1.8%
* So far this week, the index rose 1.5%, heading for the biggest advance since the week ended May 10
* 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 3% below its 52-week high on May 21, 2024 and 17% above its low on Oct. 27, 2023
* S&P/TSX Composite is trading at a price-to-earnings ratio of 17.7 on a trailing basis and 15 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$3.49t
* 30-day price volatility fell to 11.02% compared with 11.27% in the previous session and the average of 10.63% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Materials | -30.0057| -1.1| 15/36
Energy | -18.7911| -0.5| 18/21
Consumer Staples | -6.2942| -0.7| 2/9
Industrials | -5.9837| -0.2| 16/12
Utilities | -5.7016| -0.7| 7/8
Information Technology | -2.2330| -0.1| 5/5
Financials | -1.5974| 0.0| 20/7
Communication Services | -0.5985| -0.1| 2/3
Health Care | -0.2142| -0.3| 2/2
Real Estate | 2.1887| 0.5| 18/2
Consumer Discretionary | 2.8749| 0.4| 8/5
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
Cameco | -10.8100| -5.0| -0.1| 17.8
First Quantum Minerals | -6.9320| -7.2| 38.8| 65.6
Restaurant Brands | 2.7200| 1.3| -51.3| -6.9
Bank of Montreal | 3.9750| 0.7| 56.6| -12.4
Enbridge | 5.7950| 0.8| 2.9| 2.0
US
By Rita Nazareth
(Bloomberg) — The stock market rally faded in the final stretch of a solid quarter, with traders keeping a close eye on any news regarding the US presidential race and remaining cautious ahead of Sunday’s elections in France.
Traders are rearranging their positions in the aftermath of the debate between Joe Biden and Donald Trump.
Biden’s shaky performance boosted sentiment around Trump’s odds for securing a second term in the White House.
Private prisons and health-insurance firms — some of the groups that would potentially win from another Trump presidency — rallied, while renewable energy and pot stocks sank.
Treasury curve-steepening also followed the presidential debate.
“There is no spin for President Joe Biden’s performance last night during his debate with former President Donald Trump,” said Libby Cantrill at Pacific Investment Management Co.
“For markets, the biggest takeaway from last night is that deficits will remain high and tariffs are likely going up, especially if Trump gets elected; the question is when this will be priced-into markets,” she noted.
JPMorgan Chase & Co.’s Marko Kolanovic says the S&P 500 will falter in coming months in the face of mounting headwinds, from a slowing economy to downward earnings revisions.
The gauge is poised to plunge to 4,200 by year-end, a roughly 23% drop.
After gaining almost 1% earlier Friday, the S&P 500 fell to around 5,460.
Long-term Treasuries largely underperformed shorter maturities.
Bonds had earlier gained as inflation data bolstered bets on Federal Reserve rate cuts.
The dollar edged lower Friday, while capping its sixth-straight week of gains — the best streak since February.
The US presidential election and its aftermath promises investors big market swings in the second half of the year, says Goldman Sachs Group Inc.’s Scott Rubner.
“I would be looking to trim exposure up here post July 4th,” Rubner wrote.
Andrew Brenner at NatAlliance Securities reiterated his comment that a Trump victory in the debate would put pressure on the long-end of the bond market.
“Again, we don’t like talking about politics, but everyone believes Trump won the debate on a weak performance from Biden,” he said. “Fears of what tariffs, lack of concern for the deficit (both parties), and continued fear of increasing Treasury issuance, will do for the curve… Steepen it out… That is what we have seen today…”
To rate strategists at Barclays Plc watching the presidential debate Thursday night, the trade was clear: buy inflation hedges in the US Treasury market.
With Trump appearing more likely to unseat Biden in the November election, the market should “be pricing in a considerable risk of higher-than-target inflation in the coming years, and this is from a starting point of our thinking they already offered structural value,” Barclays strategists Michael Pond and Jonathan Hill said in a note.
Stocks are heading into the second half having gained almost 15% this year.
Historically, a strong first half tends to be followed by above-average second-half returns, according to Adam Turnquist at LPL Financial.
“While elevated valuations, overbought conditions, and underwhelming market breadth point to a potential pause ahead, seasonal trends suggest momentum could continue in the second half,” he noted.
The S&P 500 has followed up a positive first-half return with an average second-half gain of 6%, Turnquist added.
Furthermore, when first-half gains were 10% or higher, the index posted average gains of 7.7% in the second half, with 83% of occurrences producing positive results.
Earlier in the session, traders kept a close eye on economic data.
US consumer sentiment declined by less than initially estimated on expectations inflationary pressures will moderate.
The Fed’s preferred measure of underlying US inflation decelerated. Household spending rebounded and incomes showed solid growth, offering some hope that price pressures can be tamed without lasting damage to consumers.
“From the market’s perspective, today’s PCE report was near perfect,” said David Donabedian at CIBC Private Wealth US. “The Fed’s favorite inflation indicator not only showed inflation was moving towards the Fed’s inflation target, but that the economy is resilient. Consumer spending was on the rise and take-home pay was also up after a couple of sluggish months.”
To Seema Shah at Principal Asset Management, while the inflation data is a relief and will be welcomed by the Fed, the policy path is not yet certain.
“A further deceleration in inflation, ideally coupled with additional evidence of labor market softening, will be necessary to pave the way for a first rate cut in September,” she noted.
Fed Bank of San Francisco President Mary Daly told CNBC said the latest inflation data indicates monetary policy is working, but said it’s too early to tell when it will be appropriate to lower borrowing costs.
Earlier Friday, her Richmond counterpart Thomas Barkin said the inflation battle still hasn’t been won, and the US economy is likely to remain resilient as long as unemployment remains low and asset valuations high.
“The soft inflation data will build the case that the Fed can start cutting rates in the coming months,” said Jeffrey Roach at LPL Financial. “As long as incomes grow at a healthy clip, consumers will keep spending. The key is the labor market and so now, we should shift our attention to next week’s nonfarm payroll release for a fresh look into the job market.”
The timing of the first rate cut matters because bonds rally in anticipation of that cut, according to Joe Kalish at Ned Davis Research.
“Any second half bond market outlook is contingent on Fed policy,” he said. “The timing of the first rate cut has historically been important for the bond market, as yields tend to peak 2-3 months before the first rate cut.”

Corporate Highlights:
* Nike Inc.’s management team, led by Chief Executive Officer John Donahoe, is facing growing criticism from Wall Street as a prolonged sales slump sparked the stock’s biggest rout since the company went public in 1980.
* Uber Technologies Inc. and Lyft Inc. agreed to a series of worker benefits to resolve a longstanding state lawsuit in Massachusetts that challenged drivers’ employment status as independent contractors, putting a stop to the companies’ bid to take the issue before voters in November.
* Rite Aid Corp. has been cleared to exit bankruptcy after winning court approval on a restructuring plan that’s poised to save the ailing pharmacy chain from liquidation by handing control of the business to key creditors.
* Microsoft Corp.’s $13 billion investment into OpenAI Inc. is set to come under added scrutiny from European Union’s antitrust watchdogs, who are poised to quiz rivals about the AI firm’s exclusive use of Microsoft’s cloud technology.
* Nokia Oyj has agreed to buy Infinera Corp. in a $2.3 billion deal that will expand the company’s networking products for data centers and increase its presence in the US, a potentially key source of growth as the boom in artificial intelligence drives demand for server capacity.

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.4% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.5%
* The Dow Jones Industrial Average fell 0.1%
* The MSCI World Index fell 0.3%
Currencies
* The Bloomberg Dollar Spot Index fell 0.1%
* The euro was little changed at $1.0710
* The British pound was little changed at $1.2641
* The Japanese yen was little changed at 160.92 per dollar
Cryptocurrencies
* Bitcoin fell 2.2% to $60,082.15
* Ether fell 1.8% to $3,377.67
Bonds
* The yield on 10-year Treasuries advanced 11 basis points to 4.39%
* Germany’s 10-year yield advanced five basis points to 2.50%
* Britain’s 10-year yield advanced four basis points to 4.17%
Commodities
* West Texas Intermediate crude fell 0.3% to $81.53 a barrel
* Spot gold fell 0.2% to $2,324.07 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Jessica Menton, Alexandra Semenova, Felice Maranz, Carmen Reinicke and Emily Forgash.

Have a wonderful weekend everyone.

Be magnificent!
As ever,

Carolann
Men will not accept truth at the hands of their enemies, and truth is seldom offered to them by their friends. –Alexis de Tocqueville, 1805-1859.

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