May 20th, 2025,Newsletter

Dear Friends,

Tangents:

May 20, 1873: Levi Strauss and Jacob Davis invent blue jeans, which become one of the most popular types of trousers worldwide.
May 20, 1927: First Trans-Atlantic flight, Charles Lindbergh.
May 20, 1932: Amelia Earhart Atlantic crossing
May 20, 1939: Regular trans-Atlantic air service began as a Pan American Airways plane took off from Port Washington, N.Y., bound for Europe. 
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Henri Rousseau, artist, b. 1844.
Honoré de Balzac, writer, b.1799

Who can believe it?
Zak Starkey and The Who have parted ways for the second time in a month. Although guitarist Pete Townshend implied in his statement that the split was mutual, Starkey claimed he had been “fired” from the legendary band.

Denzel Washington gets a surprise at Cannes
The two-time Academy Award-winning actor was surprised with an honorary Palme d’Or right before the screening of “Highest 2 Lowest,” his new film with long-time collaborator Spike Lee.

Viking Age women may have wielded weapons when pregnant, sagas and ancient artifacts hint.

‘It epitomises the strangeness of Sutton Hoo’: 6th-century bucket found at Anglo-Saxon ship burial holds human cremation

Venus may be geologically ‘alive’ after all, reanalysis of 30-year-old NASA data reveals

PHOTOS OF THE DAY

London, UK
Chelsea pensioner Peter Wilson poses with a floral installation of a punk sporting a mohawk hairstyle, made of pampas grass, tropical blooms and preserved leaves by Ricky Paul Flowers at the Chelsea flower show
Photograph: Tolga Akmen/EPA

Santa Cruz, Bolivia
Men dressed as human statues take part in a parade during the Long Night of Museums
Photograph: Juan Carlos Torrejon/EPA

London, UKA
woman dressed as a mushroom walks through a rose garden at the RHS Chelsea flower fhow
Photograph: James Manning/PA
Market Closes for May 20^th, 2025

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Economy is a great source of revenue. -Seneca, c.4 BCE-65 AD.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the 10th day, climbing 0.3%, or 83.7 to 26,055.63 in Toronto.
Agnico Eagle Mines Ltd. contributed the most to the index gain, increasing 5.3%.
New Gold Inc. had the largest increase, rising 8.6%.
Today, 130 of 217 shares rose, while 82 fell; 8 of 11 sectors were higher, led by materials stocks.
Insights
* This month, the index rose 4.9%
* The index advanced 16% in the past 52 weeks. The MSCI AC Americas Index gained 12% in the same period
* The S&P/TSX Composite is at its 52-week high and 21.4% above its low on June 17, 2024
* The S&P/TSX Composite is up 2.1% in the past 5 days and rose 7.7% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 19.5 on a trailing basis and 16.4 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$4.19t
* 30-day price volatility fell to 21.38% compared with 22.12% in the previous session and the average of 29.42% over the past month
Canadian investors took up where they had left off last Friday, returning from the holiday weekend by pushing the Toronto Stock Exchange higher for a tenth-straight session and to yet another record close on Tuesday.
The S&P/TSX Composite Index closed up 83.7 points tp 26,055.63.
The biggest gainers were Telecoms, up 0.45%, followed by Utilities, up 0.62%.
Information Technology and Health Care, down 1.41% and 2.08% respectively, were the biggest decliners.
According to Dow Jones Market Data, FactSet Tuesday’s gains add to the largest one week point gain for the TSX since the week ending Sept. 13, 2024.
As of last Friday, the TSX was up for six consecutive weeks, and up 2,778.46 points or 12% over that period.
This is the largest six-week percentage gain since the week ending Dec. 11, 2020 and longest winning streak since the week ending Oct. 18, 2024, when the market rose for six straight weeks.
Also as of last Friday, the TSX was up 1,018.41 points, or 4.1%, over the prior nine trading days, the largest nine-day point and percentage gain since Friday, May 2, 2025.
It is also the longest winning streak since Jan. 24, 2025, when the market rose for nine straight trading days.
Month-to date the TSX was as of Friday up 4.55%, and year to date up 1243.99 points or 5%.
Tuesday’s gains on the resources heavy index came in spite of mixed commodity prices and as veteran economist David Rosenberg noted Canada’s CPI data earlier in the session “came in hotter than expected and put the BoC [Bank of Canada] into a bit of a bind” in terms of its decision on whether or not to cut its benchmark interest rate in June.
According to Rosenberg, the inflation numbers were a surprise given Canada’s “wobbly economy replete with employment loss and widening spare capacity in the labor market”.
He noted the headline non-seasonally adjusted number was minus 0.1% month over month versus the minus 0.2% consensus estimate and while the year over year headline inflation rate did recede to plus 1.7% from plus 2.3% in March, this came in “a tad” above the plus 1.6% market expectation.
The problem, Rosenberg said, was an acceleration in the core median inflation rate to a rise of 3.2% year-over-year from 2.9% in March and beating estimates for a 2.9% rise, while noting the core-trim barometer “hooked up” to 3.1% year-over-year from 2.8% in March (consensus at Rosenberg Research 2.8%).
On a sequential basis, both rose an outsized plus 0.4% month-over-month.
Rosenberg said while the removal of the consumer carbon tax allowed for a seasonally-adjusted fall of 0.2% month-over-month print on the headline, it was disappointing to see the core ex-food & energy index jump more than plus 0.3% month-over-month, which it has done in four of the past five months.
“This place the BoC in a bit of a box,” he added, while also noting the plus 0.4% month-over-month spike in the key CPIX measure (excludes the eight most volatile components as well as indirect taxes), which was the sharpest increase since April 2023.
For its part, National Bank noted while headline inflation at 1.7% versus the forecasted 1.6% might seem minor, the bank said it “masks a more significant trend: economists likely underestimated the deflationary impact of the carbon tax removal”.
National Bank said core inflation measures might concern the BoC, with both the median and trimmed CPI rising 0.4% month over month, pushing their annual rates above the central bank’s 3.0% upper target.
“Given signs of economic deterioration and sticky inflation in the data, some may fear we are entering a period of stagflation that would make the central bank less eager to ease policy further,” the bank wrote.
But despite these inflationary pressures, National Bank said the broader economic picture suggests in its view limited risk of sustained inflation.
“For instance,” it added, “few firms reported capacity constraints in Q1, implying that the recent rise in inflation is a temporary anomaly and there is minimal risk of persistent domestic inflation.
Additionally, the economy is already showing numerous signs of strain including private corporations slashing jobs.
With the economy already facing excess supply and as retaliatory tariff measures are relatively limited, this is not the moment for the Bank of Canada to fixate on inflation, a lagging indicator, but rather to focus on fostering conditions that sustain economic growth.”
National continues to anticipate a cut in the policy rate to 2.0% by the end of the year.”
RBC noted it had been stressing the risks were skewed to 0-2 rate cuts instead of more and that the bar for terminal pricing to move below 2.25%, which is its estimate, would continue to be high.
Its roadmap said that if CPI saw a “+0.3% m/m or higher on monthly core and it definitely leans to a hold”.
Indeed, RBC said today, with core measures averaging a “chunky” 0.37% monthly gain in April, the BoC will have a tough time justifying a cut in June after pausing in April.
Of commodities, West Texas Intermediate crude oil closed lower as the price remains rangebound amid a weakening global economy and rising supply, though stalled talks between Iran and the United States are easing fears of yet more new barrels coming to market.
WTI oil for June delivery closed down $0.13 to settle at US$62.56 per barrel, while July Brent crude was last seen down $0.10 to US$65.44.
But gold traded higher for a second day late afternoon on Tuesday as the dollar weakens following last week’s downgrade of the U.S. credit rating by Moody’s Ratings.
Gold for June delivery was last seen up $63.10 to US$3,296.60 per ounce, remaining under the April 21 record of US$3,425.30 per ounce.

Index Points
Materials | 115.2105| 3.4| 44/5
Consumer Staples | 13.6853| 1.4| 10/0
Industrials | 9.8482| 0.3| 15/13
Utilities | 6.2272| 0.6| 11/3
Energy | 2.4860| 0.1| 19/22
Communication Services | 2.3419| 0.4| 4/0
Consumer Discretionary | 1.5379| 0.2| 4/6
Financials | 0.1653| 0.0| 13/10
Health Care | -0.8498| -1.3| 1/3
Real Estate | -3.9572| -0.8| 5/14
Information Technology | -62.9955| -2.4| 4/6
Wheaton Precious Ltd | 28.0100| 5.3| 9.1| 39.4
Metals | 18.0500| 5.2| -16.1| 42.7
Barrick Mining | 12.8400| 4.3| -34.1| 16.6
Suncor | -7.2470| -1.7| 8.7| -4.4
Brookfield Corp | -14.3900| -1.7| 27.3| -0.6
Shopify | -58.6700| -4.4| -12.6| -3.2
USA
By Rita Nazareth
(Bloomberg) — Wall Street’s rally took a breather on Tuesday, with stocks falling as traders awaited fresh catalysts after a six-day run that put the S&P 500 up almost 20% from its April lows.
The US equity benchmark lost steam following an $8.6 trillion surge to around “overbought” levels.
A slide in its most-influential group – big tech – weighed on trading, with Alphabet Inc. down 1.5% amid the company’s developer conference.
Tesla Inc. was the only megacap gaining as Elon Musk said he’s committed to leading the electric-vehicle giant five years from now.
Long-term Treasury yields climbed as fractious US budget negotiations kept focus on the growth in deficit spending.
President Donald Trump is growing frustrated with demands to significantly boost the cap on the state and local tax deduction, according to a senior administration official, signaling a deadlock as Republicans aim to quickly pass a giant tax-cut bill.
Despite the pullback in stocks, May is shaping up as surprisingly strong for the S&P 500.
Markets have calmed after months of turmoil as hopes grow that a tariff blitz unleashed by Trump will be less severe than expected.
Still, investors are scouring charts for clues on whether the advance can persist, with the gauge near levels that some technicians view as a sign of overheating.
“There is little question that the momentum in the equity market is quite strong.
That said, the market is getting overbought near-term, so it could see a breather at any time,” said Matt Maley at Miller Tabak.
“However, unless that breather turns out to be a serious reversal, a retest of those all-time highs soon is very possible.”
The S&P 500 fell 0.4%.
The Nasdaq 100 slid 0.4%.
The Dow Jones Industrial Average lost 0.3%.
The yield on 10-year Treasuries advanced three basis points to 4.48%.
A dollar gauge slipped 0.2%.
Risks such as tariff uncertainty, softening economic data and fiscal headwinds challenge the sustainability of the recent equity rebound, JPMorgan Chase & Co. strategists including Tony SK Lee wrote in a note.
“We expect volatility ahead as investors contend with uncertainty on several fronts,” said Solita Marcelli at UBS Global Wealth Management.
“Further progress seems necessary for trade deals to last.
Trump’s tax cuts could add pressure to the bond market.
The Federal Reserve is likely to resist rate cuts in the near term while economic headwinds mount.” Fed Reserve Bank of St.
Louis President Alberto Musalem said tariffs will likely weigh on the US economy and weaken the labor market.
Musalem said the Fed can deliver a “balanced response” to both inflation and employment as long as Americans’ outlook on future prices remains anchored at the central bank’s 2% target.
The bond-market revolt against Washington’s fiscal largess is far from over, according to Garda Capital Partners’ Tim Magnusson, who says a rapid increase in yields is likely the only thing that will motivate Congress to rein in the deficit.
“The bond market is going to have the final say on what happens fiscally,” Magnusson said in an interview at the firm’s New York office.
Lawmakers “are going to get tested more — 5% is not the final line in the sand.”
Meantime, currency options traders are now more pessimistic than they’ve ever been about the dollar’s path over the next year, according to one commonly-cited measure of investor sentiment.
One-year risk reversals — a gauge of how expensive it is to buy versus sell a currency in the options market — fell to minus 28 basis points in favor of puts over calls for the Bloomberg Dollar Spot Index.
That mark is the most negative level on record, according to data compiled by Bloomberg going back to 2011, surpassing even a level briefly hit at the outset of pandemic-driven market gyrations five years ago.

Corporate Highlights:
* Alphabet Inc.’s Google will offer “AI mode” in search to all US users, part of an effort to bring products to market faster and keep pace with new rivals in the artificial intelligence age.
* Apple Inc. is preparing to allow third-party developers to write software using its artificial intelligence models, aiming to spur the creation of new applications and make its devices more enticing.
* Home Depot Inc. maintained its guidance for the fiscal year as US sales ticked up, a sign that consumer spending has held up despite economic turbulence.
* Nippon Steel Corp.’s $14.1 billion bid for United States Steel Corp. is more important than ever as tariffs and rising Chinese exports reshape the global market for the metal, according to a top executive at the Japanese firm.
* US shale oil output hasn’t peaked and can expand, but not if prices are near $50 a barrel, according to the chief executive officer of oil giant ConocoPhillips.
* Venezuela released an American citizen on the same day the US was set to give Chevron Corp. another 60-day waiver to operate in the country, part of a push by President Nicolas Maduro’s government and some voices in the Trump administration to improve ties.
* Victoria’s Secret & Co. announced a shareholder rights plan after an investor began acquiring a substantial amount of stock in the lingerie retailer.

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 0.4%
* The Dow Jones Industrial Average fell 0.3%
* The MSCI World Index was little changed
* Bloomberg Magnificent 7 Total Return Index fell 0.6%
* The Russell 2000 Index was little changed
Currencies
* The Bloomberg Dollar Spot Index fell 0.2%
* The euro rose 0.3% to $1.1279
* The British pound rose 0.2% to $1.3387
* The Japanese yen rose 0.2% to 144.56 per dollar
Cryptocurrencies
* Bitcoin rose 1.3% to $106,876.97
* Ether fell 0.9% to $2,497.06
Bonds
* The yield on 10-year Treasuries advanced three basis points to 4.48%
* Germany’s 10-year yield advanced two basis points to 2.61%
* Britain’s 10-year yield advanced four basis points to 4.70%
Commodities
* West Texas Intermediate crude fell 0.2% to $62.56 a barrel
* Spot gold rose 2% to $3,293.99 an ounce

Have a lovely evening.

Be magnificent!

As ever,
Carolann
Doing your best at this moment  puts you in the best place for the next moment. -Oprah Winfrey, b. 1954.

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