May 24, 2023 Newsletter

Dear Friends,

Tangents:
May 24, 1976 Britain and France opened trans-Atlantic Concorde service to Washington. Go to article > 

1844:  First US telegraph line opens.
Bob Dylan, b. 1941.
Patti Labelle, b.1944.

James Webb telescope discovers gargantuan geyser on Saturn’s moon, blasting water hundreds of miles into space
The James Webb Space Telescope caught Saturn’s icy moon Enceladus spraying a “huge plume” of watery vapor far into space — and that plume may contain chemical ingredients for life.  Read More

2,000-year-old stone receipt discovered in Jerusalem
An ancient financial transaction from Jerusalem that was “set in stone” dates to the Early Roman period. Read More

Strange star system may hold first evidence of an ultra-rare ‘dark matter star’
In a distant star system, a sunlike star orbits an invisible object that may be the first example of a “boson star” made of dark matter, new research suggests. Read More

There wasn’t a party in sight earlier this month as the sun set over the Grand Hotel Son Net, in the rural village of Puigpunyent in Mallorca. Instead, as the stone buildings turned golden, the only soundtrack was the bleating of the sheep that lived on the estate. In the past year the island has been embracing its quieter side, playing up its stunning inland beauty to aspire beyond the package-tour and cruise sets. Work-from-anywhere warriors have begun making it their year-round home.
PHOTOS OF THE DAY

Toulouse, France
Asterion, a minotaur weighing 47 tonnes and 13 metres high made by La Machine street theatre company, moves through the Montaudran district of the city guided by a team of machinists
Photograph: Valentine Chapuis/AFP/Getty Images

Puebla, Mexico
Ash and molten rock are spewed from the Popocatépetl volcano, as authorities raise the warning level and prepare millions of residents for a possible evacuation.  Photograph: Rafael Duran/AFP/Getty Images

Durban, South Africa
An early start for surfers as they wait between sets of waves to take their next ride in the warm Indian Ocean.  Photograph: Kim Ludbrook/EPA
Market Closes for May 24^th, 2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1937, the U.S. Supreme Court upheld the constitutionality of Social Security benefits in the landmark case of Helvering v. Davis. The court ruled, “Congress did not improvise a judgment when it found that the award of old age benefits would be conducive to the general welfare.”
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the second day, dropping 1.1%, or 218.32 to 19,927.69 in Toronto.
The move was the biggest since falling 1.5% on May 16.
Today, financials stocks led the market lower, as 9 of 11 sectors lost; 193 of 232 shares fell, while 38 rose.
Bank of Montreal contributed the most to the index decline, decreasing 3.9%. Filo Mining Corp. had the largest drop, falling 8.2%.
Insights
* This month, the index fell 3.4%
* The index declined 1.8% in the past 52 weeks. The MSCI AC Americas Index gained 3.7% in the same period
* The S&P/TSX Composite is 5.3% below its 52-week high on June 2, 2022 and 11.5% above its low on Oct. 13, 2022
* The S&P/TSX Composite is down 1.6% in the past 5 days and fell 3.6% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 13 on a trailing basis and 13.3 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.3% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.21t
* 30-day price volatility rose to 10.36% compared with 9.91% in the previous session and the average of 9.18% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | -112.2990| -1.8| 2/27
Materials | -54.2252| -2.2| 0/50
Industrials | -39.5593| -1.4| 3/24
Energy | -7.1010| -0.2| 16/24
Communication Services| -6.8736| -0.8| 0/5
Utilities | -4.9977| -0.5| 2/14
Real Estate | -4.2156| -0.9| 0/21
Consumer Discretionary| -4.1375| -0.6| 4/11
Health Care | -0.3784| -0.5| 2/4
Consumer Staples | 6.4776| 0.8| 7/4
Information Technology| 8.9733| 0.6| 2/9
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
Bank of Montreal | -22.6300| -3.9| 101.2| -8.0
RBC | -20.5000| -1.7| -23.5| -2.8
TD Bank | -19.3600| -1.9| 11.9| -7.4
Enbridge | 2.9540| 0.4| -53.4| -5.9
Cenovus Energy | 3.5510| 1.6| -32.5| -12.8
Shopify | 11.7100| 1.8| 119.0| 70.6
US
By Carly Wanna and Vildana Hajric
(Bloomberg) — US stocks followed equities in Europe and Asia lower on Wednesday amid growing pessimism over the global outlook.
The S&P 500 fell 0.9%, led by losses in financials and real estate, as US debt-limit talks hit a fresh impasse and minutes from the Federal Reserve showed split support for more interest-rate hikes.
In Europe, the Stoxx 600 slid the most in two months as UK inflation came in higher than expected.
And in Asia, China’s benchmark CSI 300 erased all its gains for the year as developers’ debt woes and a new wave of Covid added to worries over growth.
Luxury stocks including LVMH and Gucci owner Kering SA extended losses.
Chipmaker Analog Devices Inc. slid after a weak outlook on economic uncertainty.
And Citigroup Inc. fell after abandoning plans to sell its Mexican unit Banamex.
Federal Reserve officials at their May meeting were divided over whether further rate increases would be necessary to combat inflation, given the uncertainty of credit issues in the banking sector.
Meanwhile, talks between President Joe Biden’s team and representatives of House Speaker Kevin McCarthy showed little progress Wednesday, increasing the risk of a US default and possible recession.
Yields on short-dated Treasuries continued to push higher Wednesday, with investors demanding a higher premium on US debt with the highest risk of default.
Treasury Secretary Janet Yellen said the US was likely to start missing debt payments as soon as June 1.
As such, the yield on securities maturing June 6 pushed above 6.8% on Wednesday while those maturing May 30 are yielding around 3%.
“I’m starting to get the feeling that the Republicans don’t believe in Yellen’s ‘X-date’ and think they have the upper hand,” said Benjamin Dietrich, a portfolio manager at Lazard Asset Management LLC. “I think the risk is for no short-term solution and the S&P breaking lower. Also, the China surprise index collapse should be bad for risk sentiment.”
Minutes from the Fed meeting in May were widely expected to reveal concern over credit conditions, which could prompt officials to pause interest rate hikes in June.
Policymakers have been walking a fine line, trying not to tip the economy into a recession with its rate hikes in an attempt to clamp back inflation.
But if the US debt deal contains deep spending cuts or there is a default, economists project a US recession regardless.
“We are pessimistic on the economic outlook,” said Michael Krautzberger, head of EMEA fundamental fixed income at BlackRock International. “The potential volatility coming from the debt ceiling discussion as we approach the deadline is one of those reasons. We don’t expect a technical default but we do expect a last minute deal.”
There has been a wall of worry investors have had to climb.
JPMorgan Chase & Co.’s Chief Economist Michael Feroli said the odds of the US going past June 1are 25% and rising.
However, Nomura’s Charlie McElligott said he believes a “positive outcome” is getting closer, with traders selling in waves of profit-taking ahead of the Treasury secretary’s deadline.
“Any relief rally on a debt-ceiling ‘deal’ headline into the start of next week then has the potential to act as a local top for stocks for a bit, with most of the ‘wall of worry’ blood already squeezed from the stone,” McElligott said.
Key events this week:
* Fed issues minutes of May 2-3 policy meeting, Wednesday
* Bank of England Governor Andrew Bailey speaks, Wednesday
* US initial jobless claims, GDP, Thursday
* Interest rate decisions in Turkey, South Africa, Indonesia, South Korea, Thursday
* Tokyo CPI, Friday
* US consumer income, wholesale inventories, durable goods, University of Michigan consumer sentiment, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.9% as of 2:32 p.m. New York time
* The Nasdaq 100 fell 0.8%
* The Dow Jones Industrial Average fell 0.8%
* The MSCI World index fell 1%
Currencies
* The Bloomberg Dollar Spot Index rose 0.1%
* The euro was little changed at $1.0764
* The British pound fell 0.3% to $1.2376
* The Japanese yen fell 0.3% to 139.05 per dollar
Cryptocurrencies
* Bitcoin fell 3.5% to $26,274.12
* Ether fell 3.5% to $1,790.04
Bonds
* The yield on 10-year Treasuries advanced one basis point to 3.70%
* Germany’s 10-year yield was little changed at 2.47%
* Britain’s 10-year yield advanced six basis points to 4.21%
Commodities
* West Texas Intermediate crude rose 2% to $74.35 a barrel
* Gold futures fell 0.4% to $1,984.30 an ounce
This story was produced with the assistance of Bloomberg Automation.

Have a lovely evening.

Be magnificent!
As ever,

Carolann

What we play is life. -Louis Armstrong, Satchmo, 1901-1971.

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