May 2, 2023 Newsletter

Dear Friends,

Tangents:
May 2, 1945: The Soviet Union announced the fall of Berlin and the Allies announced the surrender of Nazi troops in Italy and parts of Austria. Go to article >
1997: Tony Blair becomes British Prime Minister, ending 18 years of Conservative Party reign.  Blair’s Labor Party achieved a landslide victory in the general elections.  Many of his early fans were bitterly disappointed when he supported the US invasion of Iraq in 2003.

Leonardo da Vinci, d. 1519.
Benjamin Spock, pediatrician, b. 1903.
1611: King James Bible published.

Met Gala: Best looks from the red carpet: Are cat prosthetics the new couture? Take a look at some of the most stunning and over-the-top outfits from “fashion’s biggest night.”

Double hoard of Viking treasure discovered near Harald Bluetooth’s fort in Denmark
Silver coins and jewelry unearthed from a field on the Jutland peninsula in Denmark are revealing new insight into the reign of the Viking king Harald Bluetooth. Read More

In rare attack, 30 orcas ‘badly wounded’ 2 adult gray whales in California
Stunning new video shows a pod of orcas attacking two adult gray whales in California’s Monterey Bay, in a rare case of predation. Read More

Surges of activity in the dying human brain could hint at fleeting conscious experiences
In their last minutes of life, some people’s brains generate a surge of surprisingly organized-looking electrical activity that may reflect consciousness. Read More

A 19th-Century woman predicted global warming. (h/t Mark Gongloff)
PHOTOS OF THE DAY

Taizhou, China: Tourists walk on Ruyi Bridge in the Shenxianju scenic area in Zhejiang province. Photograph: VCG/Getty Images

Kent, UK:  An owl flies over a meadow after a night of hunting for food Photograph: Anadolu Agency/Getty Images

Turgo, Indonesia:  Mount Merapi, a volcanic mountain, spews lava as it erupts. Merapi is known as one of the most active volcanoes in Indonesia, with an eruption occurring every two to five years.
Photograph: Garry Lotulung/NurPhoto/Shutterstoc
Market Closes for May 2^nd, 2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1985, E.F. Hutton pleaded guilty to 2,000 felony counts of mail fraud and wire fraud. It agreed to pay over $10 million in fines and disgorged profits. With its finances crippled and reputation in tatters, the Wall Street brokerage was bought up by Shearson Lehman Brothers in 1987.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the second day, dropping 1%, or 207.54 to 20,407.56 in Toronto.
Today, energy stocks led the market lower, as 8 of 11 sectors lost; 158 of 232 shares fell, while 70 rose.
Royal Bank of Canada contributed the most to the index decline, decreasing 2.2%.
Colliers International Group Inc. had the largest drop, falling 9.7%.
Insights
* The index declined 1.4% in the past 52 weeks. The MSCI AC Americas Index lost 1.9% in the same period
* The S&P/TSX Composite is 3.8% below its 52-week high on May 4, 2022 and 14.2% above its low on Oct. 13, 2022
* The S&P/TSX Composite is little changed in the past 5 days and rose 1.5% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 13.2 on a trailing basis and 13.5 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.2% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.29t
* 30-day price volatility rose to 8.64% compared with 8.04% in the previous session and the average of 11.07% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Energy | -123.1393| -3.5| 0/40
Financials | -109.0414| -1.8| 5/24
Industrials | -14.3602| -0.5| 12/14
Real Estate | -9.9591| -2.0| 0/21
Utilities | -3.7977| -0.4| 5/10
Communication Services| -2.1151| -0.2| 0/4
Consumer Staples | -0.8853| -0.1| 5/6
Health Care | -0.5731| -0.8| 2/4
Consumer Discretionary| 2.3666| 0.3| 4/10
Information Technology| 3.8047| 0.3| 5/7
Materials | 50.1429| 1.9| 32/18
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
RBC | -28.2100| -2.2| -30.1| 3.3
Canadian Natural Resources | -27.9300| -4.5| -43.2| 3.7
Suncor Energy | -18.7500| -4.8| 78.4| -7.4
Wheaton Precious Metals | 9.9240| 4.8| 56.3| 31.4
Agnico Eagle Mines | 11.8000| 4.6| 2.9| 12.6
Barrick Gold | 15.0500| 4.8| 24.9| 16.2
US
By Rita Nazareth
(Bloomberg) — Just a day after Wall Street breathed a sigh of relief with the rescue of First Republic Bank, a selloff in US regional lenders fueled renewed anxiety over financial stability, sinking stocks across the board and spurring a flight to the safest corners of the market.
For many traders, the timing couldn’t be worse.
On the eve of the Federal Reserve decision, multiple volatility halts in PacWest Bancorp and Western Alliance Bancorp were seen as disturbing.
Both shares were down at least 15%.
The financial industry weighed heavily on the S&P 500, which sank almost 2% at one point before trimming losses.
Bearish hedge-fund traders were present in the bout of selling that erupted Tuesday and later prompted long-only investors to sell too, according to a note from John Flood, a partner
at Goldman Sachs Group Inc.
“Wall Street is quickly hitting the sell button as banking turmoil appears it is not going away anytime soon,” said Ed Moya, senior market analyst at Oanda. “Risk appetite did not stand a chance as traders focused on lingering doubts over the regional banks, rising recession odds, and growing risks that the US could default on its debt next month.”
All of these factors combined are only deepening a sense of uneasiness among investors about the Fed’s conundrum.
In addition to the financial strains stemming from bank failures, officials remain caught between stubbornly high inflation and data pointing to an economic downturn — such as Tuesday’s JOLTS record of job openings that fell to lowest in nearly two years.
To make matters worse, there’s brewing angst over the US debt ceiling — which only adds to the whole discussion on whether the Fed should pause after hiking in May to prevent a more severe economic recession.
While swaps are still pricing in a quarter-point Fed rate increase on Wednesday, traders have trimmed their bets on a further rate hike — while amping up wagers on cuts before the year is over.
With all those elements in play, it shouldn’t come as a surprise that bonds got heavily bid Tuesday — especially after the selloff of the previous session.
Two-year yields, which are more sensitive to imminent Fed moves, plunged as much as 21 basis points to below 4%.
Meantime, Treasury bill yields for June topped 5% in the wake of a warning from Treasury Secretary Janet Yellen that the US government could run into debt-ceiling limitations as soon as the start of next month.

Corporate Highlights:
* Morgan Stanley is preparing a fresh round of job cuts amid a renewed focus on expenses as recession fears delay a rebound in dealmaking.
* Uber Technologies Inc. reported earnings that beat analysts’ estimates, showing that consumers continue to spend more on rides and food takeout.
* Pfizer Inc.’s profit and revenue outpaced analysts’ expectations as demand for its pandemic products persisted.
* Marriott International Inc. reported earnings that beat expectations as consumer demand for vacations continued to make up for slower business travel.
* Tesla Inc. has slightly raised prices of its Model 3 sedan and Model Y sports utility vehicle in the US and China, as the electric vehicle pioneer continues to tweak its pricing policy.
Key events this week:
* ADP employment, S&P global US services PMI, ISM services, Wednesday
* Fed Chair Jerome Powell holds news conference following rate decision, Wednesday
* US initial jobless claims, trade balance, Thursday
* European Central Bank rate decision, followed by ECB President Christine Lagarde’s news conference, Thursday
* US unemployment, nonfarm payrolls, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 1.2% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.9%
* The Dow Jones Industrial Average fell 1.1%
* The MSCI World index fell 0.9%
Currencies
* The Bloomberg Dollar Spot Index fell 0.2%
* The euro rose 0.3% to $1.1007
* The British pound fell 0.2% to $1.2476
* The Japanese yen rose 0.7% to 136.48 per dollar
Cryptocurrencies
* Bitcoin rose 3.8% to $28,722.16
* Ether rose 3.5% to $1,870.91
Bonds
* The yield on 10-year Treasuries declined 15 basis points to 3.42%
* Germany’s 10-year yield declined five basis points to 2.26%
* Britain’s 10-year yield declined five basis points to 3.67%
Commodities
* West Texas Intermediate crude fell 5.4% to $71.56 a barrel
* Gold futures rose 1.7% to $2,026.60 an ounce
This story was produced with the assistance of Bloomberg Automation.

Have a lovely evening.

Be magnificent!
As ever,

Carolann
The first rule is to keep an untroubled spirit.  The second is to look things in the face and know them for what they are.  Vex not thy spirit at the course of things; they heed not thy vexation.  How ludicrous and outlandish is astonishment at anything that may happen in life. –Marcus Aurelius, 121 AD-180 AD.

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