May 31s, 2023, Newsletter

Dear Friends,

Tangents:
May 31, 1990: The sitcom “Seinfeld” premiered on NBC. Go to article > 
1910: Union of South Africa declares its independence from the United Kingdom.

Venice authorities discover why canal turned fluorescent green.  Given all the fluorescent things it could have been, this is quite a relief.

This is the world’s first 3D-printed, cultivated fish fillet.  Mmm, science is delicious.

Air New Zealand to weigh passengers before they board the airplane.  What an innovative way to make air travel even more stressful!

The Tunguska event was the biggest asteroid impact in recorded history. How did it vanish without a trace?
During the Tunguska event, over 8 million trees covering an area of 830 square miles were flattened when an asteroid entered Earth’s atmosphere. Read More.

2,700-year-old petroglyphs depicting people, ships and animals discovered in Sweden
About 40 ancient rock carvings have been found on a former rocky island in Sweden. Read More.

What is the speed of light?
Light is faster than anything else in the known universe, though its speed can change depending on what it’s passing through. Read More

PHOTOS OF THE DAY

Caracas, Venezuela
Wild blue and yellow macaws (Ara araurana). Bird enthusiasts in the city feed the parrots and protect their nests as well as help them adapt to the urban environment. Wednesday is World Parrot Day.
Photograph: Anadolu Agency/Getty Images

During the spectacular solar event the sun sets in alignment with the Manhattan streets, from east to west
Photograph: Ed Jones/AFP/Getty Images

Manhattanhenge occurs at about the same time on two consecutive days in May and again in July. Usually the dates fall around Memorial Day and a week or so after Independence Day
Photograph: William Volcov/Shutterstock
Market Closes for May 31^st, 2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1919, the New York Stock Exchange closed its doors for the day, so that frenzied clerks could clear the paperwork from a tumultuous month during which volume regularly exceeded a then-astonishing 1.5 million shares a day.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the second day, dropping 0.8%, or 167.46 to 19,572.24 in Toronto.
The index dropped to the lowest closing level since March 24.
Today, financials stocks led the market lower, as 8 of 11 sectors lost; 144 of 232 shares fell, while 86 rose.
Royal Bank of Canada contributed the most to the index decline, decreasing 1.4%.
Ero Copper Corp. had the largest drop, falling 9.0%.
Insights
* This month, the index fell 5.2%
* The index declined 5.6% in the past 52 weeks. The MSCI AC Americas Index was little changed in the same period
* The S&P/TSX Composite is 7% below its 52-week high on June 2, 2022 and 9.5% above its low on Oct. 13, 2022
* The S&P/TSX Composite is down 1.8% in the past 5 days and fell 5.2% 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 3.4% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.15t
* 30-day price volatility rose to 11.22% compared with 11.04% in the previous session and the average of 9.61% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | -64.9057| -1.1| 7/22
Energy | -45.7827| -1.4| 10/30
Industrials | -37.3280| -1.3| 4/23
Communication Services | -10.6754| -1.3| 0/5
Consumer Discretionary | -9.6170| -1.3| 4/11
Consumer Staples | -2.2233| -0.3| 4/6
Health Care | -0.7990| -1.1| 3/3
Utilities | -0.1204| 0.0| 8/8
Materials | 0.4052| 0.0| 30/19
Real Estate | 0.5995| 0.1| 10/11
Information Technology | 2.9898| 0.2| 6/6
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
RBC | -16.1700| -1.4| 2.5| -4.6
Shopify | -12.2100| -1.9| 5.8| 65.2
Canadian Natural Resources | -10.2300| -1.8| 97.9| -2.7
Cameco | 4.5080| 4.1| 280.8| 23.1
Wheaton Precious Metals | 4.8030| 2.6| 341.2| 16.3
Constellation Software | 12.8600| 3.5| 233.0| 33.7
US
By Rita Nazareth
(Bloomberg) — Treasury yields dropped after some Federal Reserve officials signaled a potential pause in interest-rate hikes as early as June.
Two-year rates, which are more sensitive to imminent Fed moves, slumped seven basis points to 4.38%.
The S&P 500 pared losses while remaining below 4,200.
Some of the big tech names that have led the recent rally lost traction — with Nvidia Corp. down 4%.
The SPDR S&P Regional Banking ETF slumped 3%, with traders sifting through Federal Deposit Insurance Corp.’s remarks that the number of lenders with weaknesses increased in the first quarter.
Fed Governor Philip Jefferson signaled the central bank is inclined to keep interest rates steady at its next meeting in June to give policymakers more time to assess the economic outlook, but such a decision wouldn’t mean hikes are finished.
His remarks were echoed by Philadelphia Fed President Patrick Harker, who said: “I think we can take a bit of a skip for a meeting.”
Policymakers are carefully assessing how their tightening campaign over the past 14 months, which brought interest rates to a range of 5% to 5.25% from near zero, is affecting the economy.
The US showed signs of cooling in recent weeks as hiring and inflation eased slightly, the Fed said in its Beige Book survey of regional business contacts.
Earlier in the day, equities extended losses as the Labor Department’s so-called JOLTS report showed vacancies at employers unexpectedly surged to over 10 million.
The figures reinforced speculation the Fed would have room for another interest-rate hike by July — boosting the odds of a hard landing.
Earlier figures from China and Europe also added to concerns about a downturn.
“We’re facing quite a lot of headwinds: firstly, the China growth story, clearly that’s been a major disappointment. On top of that, there’s a risk of a US recession, and for the euro region, there’s a likelihood that they’re facing stagnation,” Jane Foley, head of currency strategy at Rabobank, said on Bloomberg Television. “So you’ve got a pretty disappointing outlook for growth, not an environment where you really want to be piling en masse into high-risk assets.”
The NYSE FANG+ Index of mega-caps like Tesla Inc. and Microsoft Corp. halted a four-day advance, while heading toward its best month since January with a 17% surge.
While many on Wall Street say that doesn’t mean the enthusiasm for the sector will fade, there’s been growing concern about the fact that other industries haven’t been able to catch up in a meaningful way.
“Much of this year’s stock market rally has been driven by only a few technology stocks, and this is not a dynamic that is typically seen at the start of bull markets,” said Robert Schein, chief investment officer, Blanke Schein Wealth Management. “We need the participation of other sectors, and narrow market breadth is not sustainable over the long term.”
Schein expects the outsized performance of big tech to be tempered in the coming quarters.
While the combination of a debt-ceiling deal and a Fed pause could propel the market higher, any strength would be short-lived as investors start pricing in lower earnings estimates, he noted.
“If one is realistic, we believe that it is hard to argue that the rest of the stock market can catch-up to the big-cap tech sector, with a credit crunch looming in the US and the growth in China fading in a serious manner,” said Matt Maley, chief market strategist at Miller Tabak.
To Jonathan Krinsky at BTIG, equities remain “extremely vulnerable” as the market heads into the last month of the quarter.
“By now, everyone is well aware of the market’s breadth problem, and we think June will show the risks when the weak remain weak, and the strong unwind lower,” Krinsky added.
In other corporate news, Hewlett Packard Enterprise Co. tumbled 7% after projecting revenue for the current quarter that fell short of analysts’ estimates.
Advance Auto Parts Inc. plunged 35% on a bearish outlook.
American Airlines Group Inc. dropped 0.5% even after boosting its profit forecast.
Traders also watched the latest developments in US debt-ceiling negotiations, with Republican and Democratic leaders expressing confidence that compromise legislation to avert a catastrophic US default will pass the House of Representatives Wednesday night on the backs of moderates.
“Those planning for a relief rally following the passage of the debt ceiling increase may be disappointed,” said Mark Hackett, chief of investment research at Nationwide. “The next move higher for equities will require improving data and a shift in investor confidence.”
Elsewhere, the US dollar rose, making commodities priced in the currency more expensive for international investors.
West Texas Intermediate crude deepened its slide below $70 a barrel.
ICE Brent futures were also lower.
The crypto rebound is also losing steam, leaving Bitcoin on course for its worst month since the FTX exchange collapsed in November last year.
The roughly 8% drop in May is Bitcoin’s first monthly retreat of 2023.
Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.4% as of 2:29 p.m. New York time
* The Nasdaq 100 fell 0.3%
* The Dow Jones Industrial Average fell 0.3%
* The MSCI World index fell 0.7%
Currencies
* The Bloomberg Dollar Spot Index rose 0.2%
* The euro fell 0.6% to $1.0675
* The British pound rose 0.2% to $1.2436
* The Japanese yen rose 0.4% to 139.29 per dollar
Cryptocurrencies
* Bitcoin fell 2.5% to $27,076.01
* Ether fell 2% to $1,866.03
Bonds
* The yield on 10-year Treasuries declined six basis points to 3.63%
* Germany’s 10-year yield declined six basis points to 2.28%
* Britain’s 10-year yield declined six basis points to 4.18%
Commodities
* West Texas Intermediate crude fell 2% to $68.08 a barrel
* Gold futures rose 0.4% to $1,985.10 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Isabelle Lee, Carly Wanna and Peyton Forte.

Have a lovely evening.

Be magnificent!
As ever,

Carolann
Sometimes, carrying on, just carrying on, is the superhuman achievement. -Albert Camus, 1913-1960.
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