June 30, 2021 Newsletter

Dear Friends,

Tangents:
On June 30, 1971, the Supreme Court, in a 6-3 decision, freed The New York Times and The Washington Post to resume immediate publication of articles based on the secret Pentagon Papers on the origins of the Vietnam War. Go to article »
 
1937~The world’s first emergency telephone number (999) launched in London. 

Rejected at 10, 70-year-old woman is now a Yankee bat girl. (h/t Ellen Kominers)

$10,000 flute is back after a nine-year cab ride. (h/t Scott Kominers) 

‘Harry Potter and the Cursed Child’ will head to Broadway in November.  This continues the Potter spinoff series, “Harry Potter and the Inevitable Stage Production.” 

PHOTOS OF THE DAY

Troops in the mud at the Battle of the Somme. Colourised images of the Battle of the Somme have been revealed marking the conflict’s 105th anniversary
CREDIT: MEDIADRUMVWORLD.COM/ROYSTON LEONA
The Australian Army at the Battle of the Somme. Colourised images of the Battle of the Somme have been revealed marking the conflicts 105th anniversary.
CREDIT:MEDIADRUMWORLD.COM/ROYSTON LEONA

A young girl runs in a lavender field on June 29, 2021 in Sale San Giovanni, near Cuneo, Northwestern Italy.
CREDIT: MARCO BERTORELLO/AFP VIA GETTY IMAGES

A hungry bird bit off a bit more than it could chew as it struggled to swallow its fishy prey. This great cormorant was hunting on a lake in Kiskuns¡g National Park in Hungary when it caught a brown bullhead catfish in its beak.
CREDIT: THOMAS HINSCHE/SOLENT NEWS & PHOTO AGENCY
Market Closes for June 30^th, 2021

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1938, in a move the New York Stock Exchange had resisted for a decade, William McChesney Martin was elected the NYSE’s first paid, independent president. In a striking sign that he took his independence seriously, Martin immediately sold his stake in his own brokerage firm and auctioned off his seat on the exchange.
His starting salary: $48,000.
Canada
By Aoyon Ashraf
(Bloomberg) — Canada’s main stock exchange scored its best first half since the financial crisis of more than a decade ago, helped by investors piling into value and cyclical equities as the economy revives.
The S&P/TSX Composite index climbed about 16% so far this year, outpacing the S&P 500 and MSCI World Indexes.
     The benchmark last climbed more than 15% in the first half of a year in 2009, coming out of the financial crisis of 2008.
Some of the best-performing sectors in Canada this year were energy and financials — both of which are beneficiaries of the global economy reopening after the pandemic driven downturn –and make up about 44% of the Canadian benchmark.
“The first half of 2021 has largely gone according to script – Value and Quality factor styles have somewhat outperformed the market,” said CIBC’s strategist Ian de Verteuil in a note. If the market continues to expect better economic growth and higher interest rates, the two investing strategies should continue to outperform, he added.
The TSX energy index outperformed all the sectors this year, climbing more than 30%, driven by oil’s rebound from a pandemic low and by rotation into value stocks.  Enerplus Corp., Tourmaline Oil Corp. and MEG Energy Corp. were the top three performers within the energy sector, and among top five overall within the index.  Copper producer Capstone Mining Corp. and cannabis stock Organigram Holdings Inc. were the other two top five outperformers within the benchmark.
     All of the stocks climbed more than 100% in the first half of 2021.
Health care stocks were the second best performers, led by pot stocks.
     The tech index, which only accounts for about 11% weight within the TSX, was the third best performer, led by BlackBerry Ltd amid meme-stock mania.
This gradual migration higher for equities is unlikely to reverse any time soon as investors are not ready to sell value stocks yet, according to Canaccord Genuity’s portfolio Strategist Martin Roberge.  “A key takeaway from our virtual roadshow with clients is that many find equity markets overvalued, but very few are willing to jump ship since value stocks are not expensive enough, in their view.” Roberge said that value stocks in Canada could be seen as cheap using price-to-book basis, but expensive on price-to-cash flow multiples. However, “the valuation of value stocks in Canada is no roadblock to higher S&P/TSX levels.”
–With assistance from Michael Bellusci.
By Bloomberg Automation:
     (Bloomberg) — The S&P/TSX Composite declined slightly to 20,165.58 in Toronto. The move follows the previous session’s increase of 0.1 percent.
Shopify Inc. contributed the most to the index decline, decreasing 1.4 percent. Altus Group Ltd/Canada had the largest drop, falling 4.1 percent.
Today, 101 of 231 shares fell, while 126 rose; 6 of 11 sectors were lower, led by information technology stocks.
Insights
* This quarter, the index rose 7.8 percent
* This month, the index rose 2.2 percent
* The index advanced 30 percent in the past 52 weeks. The MSCI AC Americas Index gained 40 percent in the same period
* The S&P/TSX Composite is 0.6 percent below its 52-week high on June 16, 2021 and 31.6 percent above its low on June 30, 2020
* The S&P/TSX Composite is unchanged in the past 5 days and rose 2.2 percent in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 23.3 on a trailing basis and 17 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.6 percent on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.17t
* 30-day price volatility fell to 7.00 percent compared with 7.21 percent in the previous session and the average of 8.56 percent over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Information Technology | -29.4595| -1.3| 1/10
Financials | -16.0322| -0.3| 13/15
Industrials | -7.7251| -0.3| 16/14
Real Estate | -4.5296| -0.7| 5/20
Consumer Discretionary | -2.2358| -0.3| 7/6
Utilities | -1.5467| -0.2| 3/12
Health Care | 0.2224| 0.1| 3/7
Communication Services | 2.4339| 0.2| 6/1
Consumer Staples | 9.4760| 1.3| 8/5
Energy | 15.4260| 0.6| 16/7
Materials | 28.5158| 1.2| 48/4
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
Shopify | -20.3400| -1.4| -14.1| 26.1
Brookfield Asset | | | |
Management | -15.4300| -2.4| 63.0| 21.1
Canadian National | -5.0790| -0.8| 1.1| -6.5
Suncor Energy | 4.6080| 1.5| -46.3| 39.1
Nutrien | 6.2670| 2.2| 53.1| 22.6
Couche-Tard | 8.7790| 3.5| 59.2| 5.0
US
By Rita Nazareth and Vildana Hajric
(Bloomberg) — The end of one of the best first halves for stocks since 1998 was marked by small moves and slow trading.
Solid economic data tempered concern about high valuations and the spread of a more contagious coronavirus variant, with the S&P 500 closing slightly higher.
The gauge notched its longest streak of monthly gains since August and has rallied 14% in 2021.
The Dow Jones Industrial Average outperformed major benchmarks on Wednesday, and the Nasdaq 100 fell.
     Treasuries, which have surprisingly beaten the world’s biggest bond markets since the Federal Reserve’s hawkish tilt in June, rose.
Investors are assessing hopes for an imminent return to normalcy amid worries that runaway inflation or further Covid-19 restrictions could derail the economic rebound. Interestingly enough, companies that stand to benefit the most from a recovery in activity — like energy, industrial and financial shares – rose on Wednesday, beating the tech giants that had fueled the stay-at-home trade.

“While we expect stock markets will ultimately thrive in the reflationary environment of strong, above-trend growth and ample liquidity conditions, it won’t be a smooth ride,” said Candice Bangsund, vice president and portfolio manager at Montreal-based Fiera Capital Corp. “The next phase of the bull market may exhibit more frequent bouts of volatility.” Dallas Fed President Robert Kaplan said the tapering of asset purchases, which he hopes will start “soon,” should run smoother this time around as investors already know that a move is being discussed. His Atlanta counterpart Raphael Bostic noted the U.S. has “actually fully recovered” from the pandemic on a gross domestic product basis, but “it is going to take some time to get back” on employment.
Elsewhere, oil advanced, with investors awaiting a key meeting between OPEC+ producers that may reveal a collective output hike as a stalemate in Iranian nuclear talks drags on.
Here are some events to watch in the markets this week:
* China’s President Xi Jinping will deliver a speech as the nation marks the 100th anniversary of the founding of the Chinese Communist Party Thursday
* OPEC+ ministerial meeting Thursday
* ECB President Christine Lagarde speaks Friday
* The U.S. jobs report is due Friday

These are some of the main moves in markets:
Stocks
* The S&P 500 rose 0.1% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.1%
* The Dow Jones Industrial Average rose 0.6%
* The MSCI World index fell 0.2%
Currencies
* The Bloomberg Dollar Spot Index rose 0.3%
* The euro fell 0.3% to $1.1859
* The British pound was little changed at $1.3833
* The Japanese yen fell 0.5% to 111.08 per dollar
Bonds
* The yield on 10-year Treasuries declined two basis points to 1.45%
* Germany’s 10-year yield declined four basis points to -0.21%
* Britain’s 10-year yield declined two basis points to 0.72%
Commodities
* West Texas Intermediate crude rose 0.8% to $73.53 a barrel
* Gold futures rose 0.4% to $1,770.60 an ounce
–With assistance from Andreea Papuc, Yakob Peterseil and Lu Wang.

Have a lovely evening.

Be magnificent!
As ever,

Carolann

A problem is a chance for you to do your best. –Duke Ellington, 1899-1974.

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