June 9, 2022 Newsletter

Dear Friends,

Tangents: Happy Friday Eve.
Donald Duck, cartoon, b. June 9, 1934.
Cole Porter, composer, b. 1891.
Johnny Depp, actor, b. 1963.
1898: Hong Kong lease signed from Britain.

1940 Norway surrendered to the Nazis during World War II.  Go to article »

How a female Buddhist monk became one of Asia’s most revered chefs.  This vegetarian “temple cuisine” showcases the best of Korean produce.

Marble slab turns out to be an ancient yearbook.

A day in the life of a private chef in the Hamptons. (h/t Ale Lampietti).

PHOTOS OF THE DAY

A visitor looks at a projection of Guernica as part of The Picasso Century exhibition at the NGV International
CREDIT: Diego Fedele/AAP

Kayaks are moored at Lake Solina, a popular tourist destination
CREDIT: Darek Delmanowicz/EPA

An artist sketches the River Eden at the Horse Fair in Appleby, Cumbria, an annual gathering of Travellers
CREDIT: Owen Humphreys/PA
Market Closes for June 9^th, 2022

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1943, federal income tax withholding was implemented for the first time. Originally proposed by Beardsley Ruml, an executive at Macy’s department store who had encouraged shoppers to buy on the installment plan, withholding was called “pay as you go” and was coupled with an amnesty for the previous year’s taxes. 
Canada
By Geoffrey Morgan
(Bloomberg) — Canadian banks and oil companies led a broad sell-off in Toronto, in which every S&P/TSX Composite sector except for utilities.
The index dropped 1.1%, or 228.54 to 20,563.89, to its lowest closing level since May 26.
Toronto-Dominion Bank contributed the most to the index decline, decreasing 1.7%.
Energy Fuels Inc. had the largest percentage drop, falling 9.2%.
Today, 207 of 239 shares fell, while 30 rose; 10 of 11 sectors were lower, led by financials.
Insights
* In the past year, the index had a similar or greater loss 18 times. The next day, it declined nine times for an average 0.6% and advanced nine times for an average 0.5%
* This quarter, the index fell 6.1%, heading for the biggest decline since the first quarter of 2020
* So far this week, the index fell 1.1% * The index advanced 2.8% in the past 52 weeks. The MSCI AC Americas Index lost 6.5% in the same period
* The S&P/TSX Composite is 7.4% below its 52-week high on April 5, 2022 and 5.6% above its low on May 12, 2022
* The S&P/TSX Composite is down 2.2% in the past 5 days and rose 2.8% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 15.9 on a trailing basis and 12.9 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.8% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.33t
* 30-day price volatility fell to 19.52% compared with 20.05% in the previous session and the average of 19.93% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
* Financials | -77.6558| -1.2| 2/26
* Energy | -47.7704| -1.2| 1/32
* Materials | -31.0243| -1.2| 3/48
* Industrials | -18.8272| -0.8| 6/24
* Information Technology | -18.2277| -1.6| 1/15
* Communication Services | -9.9106| -1.0| 2/5
* Consumer Discretionary | -7.2363| -1.1| 1/13
* Real Estate | -6.4945| -1.2| 1/22
* Consumer Staples | -4.8205| -0.6| 2/9
* Health Care | -3.2937| -3.9| 0/8
* Utilities | 1.3884| 0.1| 11/5
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
* TD Bank | -19.8200| -1.7| -46.5| -3.8
* Shopify | -15.3700| -4.0| -17.2| -72.9
* Bank of Montreal | -9.9900| -1.6| 15.7| -1.1
* Thomson Reuters | 1.9880| 1.4| 15.2| -16.6
* Constellation Software | 5.5840| 2.2| -18.8| -17.8
* Nutrien | 9.1720| 2.2| 20.3| 19.2
US
By Stephen Kirkland and Peyton Forte
(Bloomberg) — US stocks fell for a second day with growth concerns in focus after Europe’s central bank became the latest to signal restrictive policies to combat inflation.
The dollar gained and Treasury yields rose.
Selling accelerated in the last hour of trading, with the S&P 500 closing down 2.4% in the biggest one-day drop in three weeks.
The tech-heavy Nasdaq 100 underperformed, with Apple Inc., Meta Platforms Inc. and Amazon.com Inc. down more than 3%.

In a widely anticipated move, the European Central Bank made no change to the deposit rate but prepared to hike by a quarter-point next month, and again by either that amount or more if inflation — which now exceeds 8% in the euro area — warrants a tougher stance.
“If the ECB are even considering an outsized rate hike, I think that sort of says quite a lot about how concerned central banks are and should be about levels of inflation,” Fiona Cincotta, senior market analyst at City Index, said by phone.  “Central banks are showing a willingness to act aggressively to get inflation back under control, and that is going to make the growth environment much more challenging.”
In corporate news, Tesla Inc. rose after the company said output of cars made in China more than tripled.
The stock later pared gains as US authorities announced they have expanded a probe into automaker’s Autopilot system.
Shares in State Street Corp. briefly spiked higher after the firm said it’s not pursuing any acquisition or business combination with Credit Suisse Group AG.
The dollar gained versus all of its major counterparts, except the yen in a sign of a pickup in demand for haven currencies.
In the debt market, Treasuries fell across most maturities in sympathy with European peers, with benchmark yields holding above 3%.
The rate on German government 10-year bonds jumped seven basis points after the ECB decision.
ECB policy makers have lagged global peers at the Federal Reserve, Bank of Canada and Reserve Bank of Australia which have embarked on aggressive campaigns to subdue runaway inflation this year, hiking in 50-basis point increments.
On the inflation front, data due Friday will be closely watched for clues on the Fed’s rate path.
The data is expected to show consumer prices picked up from a month ago, but eased slightly from a year earlier though stayed above 8%.
That will likely keep pressure on policy makers to stay the course on aggressive rate hikes.

* “With markets obsessively focused on the path of inflation, and gearing up for tomorrow’s CPI report, the ECB’s slow growth high inflation forecast has done little to ease fears of deepening stagflation,”  Quincy Krosby, chief equity strategist for LPL Financial, said. “Certainly there are clear signs that the economy is softening following the Fed’s launch of interest-rate hikes, but the question remains if inflation can be reined in deeply enough without damaging the core of the US economy — and corporate earnings as well.”
* “There’s a lot of sitting out and waiting. For the ones who believe things could be OK going forward, they are just waiting for some kind of confirmation of that so they can go back into the market,” Seema Shah, chief global strategist at Principal Global Investors, said in an interview. “And I think others who are really concerned are like, ‘I don’t want to get involved in a bear-market rally.’ So I think that is a moment of severe caution.”
* “There are wildly divergent opinions amongst economists and market participants as to the probability of a recession,” Matt Kishlansky, head of asset allocation at GenTrust, said in a note. “The most important point to make around the recession fears for me is that unlike some of the other recessions of our lifetimes, companies would be entering this one with their eyes wide open.”
* “To rein in surging prices the Fed has to increase rates, which can result in a recession,” Geir Lode, head of global equities at Federated Hermes, wrote in a note. “However, the pandemic-induced supply-chain shock and the Ukraine conflict are beyond the central bank’s control. In this environment we need to be lucky to avoid stagflation that could last for a long time.”

Oil wavered near $122 a barrel as a robust market for refined fuels around the world offset renewed lockdown in parts of Shanghai, its first major restrictions on movement since the financial hub exited a two-month shutdown at the start of June.
Key events to watch this week:
* US CPI, University of Michigan consumer sentiment Friday
* China CPI, PPI Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 2.4% as of 4 p.m. New York time
* The Nasdaq 100 fell 2.7%
* The Dow Jones Industrial Average fell 1.9%
* The MSCI World index fell 2.1%
Currencies
* The Bloomberg Dollar Spot Index rose 0.7%
* The euro fell 1% to $1.0613
* The British pound fell 0.4% to $1.2490
* The Japanese yen fell 0.1% to 134.44 per dollar
Bonds
* The yield on 10-year Treasuries advanced two basis points to 3.04%
* Germany’s 10-year yield advanced eight basis points to 1.43%
* Britain’s 10-year yield advanced eight basis points to 2.32%
Commodities
* West Texas Intermediate crude fell 0.6% to $121.36 a barrel
* Gold futures fell 0.4% to $1,849.70 an ounce
–With assistance from Farah Elbahrawy, Joanna Ossinger, Sunil Jagtiani, Vildana Hajric, Isabelle Lee, James Hirai, Tassia Sipahutar and Henry Ren.
Have a lovely evening.

Be magnificent!
As ever,

Carolann

The way to develop self-confidence is to do the thing you fear. -William Jennings Bryan, 1860-1925.

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