May 3, 2023 Newsletter

Dear Friends,

Tangents:
May 3, 1971: National Public Radio’s  1^rst News Broadcast.
May 3^rd, 1978: The Digital Equipment Corporation sends the world’s first spam email.  A representative sent our 600 emails and sold computers for $12 million.
May 3, 1988: The White House acknowledged that first lady Nancy Reagan had used astrological advice to help schedule President Ronald Reagan’s activities. Go to article >

Niccolò Machiavelli, b. 1469.
Golda Meir, Israeli prime minister, b. 1898.
James Brown, musician, b. 1928.

1st-century Buddha statue from ancient Egypt indicates Buddhists lived there in Roman times
Buddhists lived in Egypt during Roman times, a 1st-century Buddha statue found in Berenike suggests. Read More

Cosmic rays reveal 2,500-year-old subterranean burial in ancient Greek necropolis
Cosmic rays have revealed an underground Greek tomb in Naples, Italy. Read More

China’s malfunctioning Mars rover may have found evidence of recent water on the Red Planet
Data from China’s unresponsive Zhurong rover suggests that Mars had snow and frost as recently as 400,000 years ago. Read More

New ultrasound device helps powerful chemo reach deadly brain cancers, human trial shows
An implanted ultrasound-emitting device helped chemotherapy drugs safely pass into the brains of cancer patients. Read More

Scientists discover closest star-shredding black hole to Earth ever seen
Astronomers comparing maps of the universe uncovered the nearest example of a black hole devouring a star ever detected. Read More

Top 10 best cuisines in the world, according to CNN Travel.  Check out this list of appetizing cuisines.

Webb telescope detects mysterious water vapor in a nearby star system.  Astronomers detected water vapor around a rocky exoplanet located 26 light-years away from Earth. Here’s what it could mean.

PHOTOS OF THE DAY

Srinagar, India
A man steers his boat on a calm Dal Lake Photograph: Tauseef Mustafa/AFP/Getty Images

Tokyo, Japan: Participants carry a portable shrine through the streets during a local festival on Constitution Day
Photograph: Richard A Brooks/AFP/Getty Images

London, UK
Donna Werner from the US, a royal superfan, shows off her handmade hat on the Mall before this weekend’s coronation Photograph: Maja Smiejkowska/Reuters
Market Closes for May 3^rd, 2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1999, the Dow Jones Industrial Average closed above 11000 for the first time, just 24 trading days after breaking the 10000 mark. The index ended the day at 11014.69.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the third day, dropping 0.3%, or 52.87 to 20,354.68 in Toronto.
The index dropped to the lowest closing level since April 10.
Today, energy stocks led the market lower, as 8 of 11 sectors lost; 119 of 232 shares fell, while 109 rose.
Canadian Natural Resources Ltd. contributed the most to the index decline, decreasing 2.0%.
Aritzia Inc. had the largest drop, falling 20.8%.
Insights
* The index declined 2.6% in the past 52 weeks. The MSCI ACVAmericas Index lost 3% in the same period
* The S&P/TSX Composite is 4% below its 52-week high on May 4, 2022 and 13.9% above its low on Oct. 13, 2022
* The S&P/TSX Composite is little changed in the past 5 days and rose 0.4% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 13.3 on a trailing basis and 13.6 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$3.25t
* 30-day price volatility fell to 8.41% compared with 8.64% in the previous session and the average of 10.95% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Energy | -27.2816| -0.8| 7/32
Consumer Discretionary | -11.4362| -1.5| 4/11
Information Technology | -10.3763| -0.8| 5/7
Consumer Staples | -6.4450| -0.7| 3/8
Financials | -4.8822| -0.1| 14/15
Materials | -4.2366| -0.2| 27/21
Communication Services | -1.1977| -0.1| 2/3
Real Estate | -0.6057| -0.1| 10/11
Industrials | 0.0586| 0.0| 18/9
Health Care | 1.0006| 1.4| 5/0
Utilities | 12.5202| 1.3| 14/2
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
Canadian Natural Resources | -11.7700| -2.0| -28.3| 1.7
Thomson Reuters | -8.8300| -4.5| 102.9| 10.1
Nutrien | -8.3130| -2.5| -8.9| -7.6
Brookfield Infrastructure | 5.2870| 3.6| 3.8| 15.0
Enbridge | 5.7690| 0.8| 175.0| 0.1
Canadian Pacific Kansas | 6.5270| 1.0| -27.4| 6.4
US
By Rita Nazareth
(Bloomberg) — Wall Street’s excitement about a potential pause in the Federal Reserve’s aggressive tightening campaign wasn’t enough to keep the stock rally going, with Jerome Powell dashing hopes on interest-rate cuts for now.
The bond market isn’t buying that.
Swap contracts continued to imply a significant easing in monetary policy before the end of 2023.
Treasury two-year yields sank as much as 12 basis points to around 3.85% while the dollar notched a back-to-back slide.
“Potential Fed pause, but no Fed pivot yet,” said Jason Pride at Glenmede. “The Fed is telegraphing that additional monetary tightening may or may not occur, but rate cuts do not yet appear to be on the table. The Fed’s leadership is working hard to thread the needle between telegraphing too much tightening while also not agreeing with the market’s rate cut narrative.”
After the usual back-and-forth of Fed days, the S&P 500 wiped out a rally that approached 1% at one stage to finish near session lows.
The Fed raised rates by another quarter-point Wednesday to a target range of 5% to 5.25%, the highest level since 2007.
The vote was unanimous, and the Federal Open Market Committee omitted a line from its previous statement in March that said it “anticipates that some additional policy firming may be appropriate.”
More Comments:
* Callie Cox at eToro: “The Fed is dropping hints that we’re nearing the end of the rate hike cycle, even though it wants to maintain some wiggle room in case inflation stops slowing. It’s a fair concern. The good news? If this is the last hike, the S&P 500 has risen a year after six out of the last 9 hiking cycles. But in the three times stocks didn’t climb after hikes, it was because of a recession or market crisis. History doesn’t tell us much, other than the Fed better not screw this up.”
* David Russell at TradeStation: “The Fed took another step back from its super-hawkish stance by saying they need to determine future policy. They’re setting up a potential pivot by outlining a series of reasons to pause. Given developments in the banking sector and slowing inflation, there’s more chance this was the last hike.”  
* Ronald Temple at Lazard: “No surprises here. The FOMC struck an appropriate balance between taming inflation while avoiding exacerbating stress in the banking system. Assuming banking issues subside, additional rate hikes may be needed, but it’s time for a pause to allow the full effects of tightening to work its way through the economy.”
* Gregory Faranello at AmeriVet Securities: “The change is language was consistent with our view, and historically the evolution over the prior few meetings, signals the end of a tightening cycle.”
* Peter Boockvar, author of the Boock Report: “It’s just about time to call a time-out, which implies the game/fight against inflation is still ongoing, but at least they can sit back and determine ‘the extent to which additional policy firming may be appropriate to return inflation to 2% over time’.”
* Florian Ielpo at Lombard Odier Asset Management: “The Fed is walking a tight line, but it seems to know what it is doing. This should be comforting to markets and investors.  This is probably not the end of a volatility fixed income world, but its main enemy (surprise jumbo hikes) is going away, and this is step 1 to significantly better perspective. From an equity perspective, settling rates is probably a good thing, all the more as the earnings season was still showing a resilient economy.”

Key events this week:
* 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 0.7% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.6%
* The Dow Jones Industrial Average fell 0.8%
* The MSCI World index fell 0.2%
Currencies
* The Bloomberg Dollar Spot Index fell 0.4%
* The euro rose 0.5% to $1.1053
* The British pound rose 0.7% to $1.2552
* The Japanese yen rose 1.1% to 135.03 per dollar
Cryptocurrencies
* Bitcoin fell 1.3% to $28,321.04
* Ether was little changed at $1,869.67
Bonds
* The yield on 10-year Treasuries declined seven basis points to 3.35%
* Germany’s 10-year yield declined one basis point to 2.25%
* Britain’s 10-year yield advanced three basis points to 3.70%
Commodities
* West Texas Intermediate crude fell 4.9% to $68.14 a barrel
* Gold futures rose 1% to $2,043.60 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Namitha Jagadeesh and Michael Mackenzie.
Have a lovely evening.

Be magnificent!
As ever,

Carolann

All men who have turned out worth anything have had the chief hand in their own education. –Sir Walter Scott, 1771-1832.
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