October 12, 2022 Newsletter

Dear Friends,

Tangents: Carolann is away from the office today, I will be writing the newsletter on her behalf.

On Oct. 12, 2000, the Navy destroyer Cole was attacked in an al-Qaeda suicide bombing while in port in Aden, Yemen, killing 17 sailors and injuring dozens more. Go to article »

Actor William Shatner shares what it’s like traveling to space. “Everything I had expected to see was wrong,” Shatner wrote in a new biography. Learn about the actor’s life-changing experience aboard a suborbital space tourism flight.

Video shows volcano eruption in Italy. Watch the moment a volcano erupted on the Italian island of Stromboli. Thankfully, no injuries were reported.

In ‘bizarre behavior,’ New Zealand penguins lay one egg, reject it, and then lay another. Now, scientists know why. Researchers have cracked the case of why erect-crested penguins in New Zealand reject their first-laid eggs. These penguins, which mate in monogamous pairs, lay an egg only to abandon it in favor of a second egg, which they then incubate until it hatches. Laying eggs is energy intensive, and so this behavior is highly unusual in birds, but a study published Oct. 12 in the journal PLOS One offers new insight into the odd practice.

PHOTOS OF THE DAY

The Liceu Grand theatre filled with balloons as part of an art installation by the Brazilian artist Flavia Junqueira
Photograph: Josep Lago/AFP/Getty Images

Members of the Zebras programme, an initiative of volunteers who help educate drivers and pedestrians on road safety, head off to work
Photograph: Luis Gandarillas/Anadolu Agency/Getty Images

Ekaterina watches as two Alpine ibex spar for supremacy. It was near the end of a spring day trip with her family that she spotted the fight. The two ibex clashed horns and continued to trade blows while standing on their hind legs like boxers in a ring. In the early 1800s, after centuries of hunting, fewer than 100 Alpine ibex survived in the mountains on the Italy–France border. Successful conservation measures mean that, today, there are more than 50,000. Pian della Mussa, Piedmont, Italy
Photograph: Ekaterina Bee/Wildlife Photographer of the Year
Market Closes for October 12, 2022

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1990, the great bull market of the 1990s began, as the Dow Jones Industrial Average edged up 9.90 points to close at 2407.92. Stocks would more than quadruple over the next ten years.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite declined slightly to 18,206.28 in Toronto.
Today, energy stocks led the market lower, as 4 of 11 sectors lost; 82 of 236 shares fell, while 150 rose.
Cameco Corp. contributed the most to the index decline and had the largest move, decreasing 13.5%.
Insights
* This year, the index fell 14%, heading for the worst year in at least 10 years
* The index declined 11% in the past 52 weeks. The MSCI AC Americas Index lost 19% in the same period
* The S&P/TSX Composite is at its 52-week low and 18% below its high on April 5, 2022
* The S&P/TSX Composite is down 6% in the past 5 days and fell 8.9% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 12.3 on a trailing basis and 11.2 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$2.91t
* 30-day price volatility fell to 21.90% compared with 22.29% in the previous session and the average of 17.57% over the past mont
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Energy | -28.2078| -0.8| 13/24
Utilities | -21.7843| -2.5| 0/16
Industrials | -14.0977| -0.6| 15/12
Communication Services | -10.4373| -1.2| 1/6
Health Care | 2.2467| 3.0| 7/0
Consumer Discretionary | 4.5107| 0.7| 10/4
Information Technology | 4.8526| 0.5| 9/5
Real Estate | 6.0054| 1.3| 22/0
Consumer Staples | 11.0798| 1.5| 11/0
Financials | 11.9064| 0.2| 20/9
Materials | 23.5312| 1.1| 42/6
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
Cameco | -13.1700| -13.5| 246.3| 11.7
Enbridge | -6.2750| -0.9| 41.0| -0.3
Canadian Pacific | -5.9550| -1.0| -20.1| 1.9
Shopify | 4.5750| 1.6| -35.1| -79.4
RBC | 5.6660| 0.5| -12.5| -11.6
Bank of Montreal | 6.2710| 1.2| -12.4| -14.7
US
By Stephen Kirkland and Peyton Forte
(Bloomberg) — US stocks fell with investors bracing for Thursday’s reading on consumer prices. Treasuries gained, while UK markets were roiled once again by confusion over the country’s policies.
The S&P 500 slipped into the red in the final minutes of trading, capping six days of losses to close at the lowest level since November 2020 and surpassing the previous low on Sept. 30.
Equities faded a brief rally after minutes from the Federal Reserve’s last meeting suggested some officials may consider calibrating the pace of rate increases. The consumer price reading will be the last major data point before the central bankers meet next month.
“The market is waiting for the CPI print tomorrow more than it was waiting for minutes,” according to Sarah Hunt of Alpine Woods Capital Investors. “There may be a little hint of relief on the ‘calibrate’ statement, but I think that with the speed of hikes so far it would be irresponsible not to have some sort of possible slowdown coming in hikes, even if it isn’t a cessation in hikes.”
Data Wednesday showed prices paid to US producers rose in September by more than expected ahead of a key measure of consumer inflation due Thursday that’s set to return to a four-decade high.
Comments by Minneapolis Fed chief Neel Kashkari earlier Wednesday reaffirmed policy makers’ commitment to the current rate-hike path, saying the bar for a pivot away from monetary policy tightening is “very high.”

More market comments
* “Should tomorrow’s CPI print come in above what the market is expecting, today’s somewhat blasé reaction to the minutes, and the PPI report, could be tested, particularly by bond yields,” said Quincy Krosby, chief global strategist at LPL Financial. “If rates on the 10-year Treasury inches closer to 4%, and the 2-Year Treasury follows suit, the market could have a rough day before the market turns its focus towards a broad reading of bank earnings and guidance.”
* “There was a lot of negativity and worry out there. I think the minutes allow investors to walk back their fears a bit,” said Mike Zigmont, head of trading and research at Harvest Volatility Management.
* “The silver lining was that some Fed participants did acknowledge that further tightening would have to be monitored in the context of the uncertain global environment, which is a nod to the bulls,” said Joe Gilbert, portfolio manager at Integrity Asset Management.
* “Prices remain elevated so it shouldn’t be a surprise to see producer goods and services rise,” Mike Loewengart, head of model portfolio construction at Morgan Stanley Global Investment Office, wrote. “No doubt the Fed still has its work cut out for them, and if tomorrow’s CPI read is hot, don’t be surprised to see some investors come to grips with how long the road to tamer inflation may be.”
On the corporate front, PepsiCo Inc. jumped the most in more than two years after lifting its forecast for the year on the back of better-than-estimated third-quarter profit as drink and snack sales buck inflation. Moderna Inc. surged after Merck & Co. said it would exercise an option to work in partnership with the biotech on a messenger RNA cancer vaccine. The reporting season will kick off in earnest Friday with results from banks including JPMorgan Chase & Co. and Citigroup Inc.
A selloff in long-maturity UK debt gathered pace after the Bank of England damped hopes it would extend its bond-buying support into next week. The yield on 30-year gilts surged above 5%, nearing levels that just last month drew the central bank’s intervention, before easing again after the BOE snapped up billions in its daily operations.
Elsewhere,  oil in New York dropped below $88 a barrel on slowdown fears. OPEC trimmed projections for the amount of crude it will need to pump this quarter, while Russia’s President Vladimir Putin said any energy infrastructure in the world is at risk after the explosions on the Nord Stream pipelines. NATO Secretary General Jens Stoltenberg urged alliance members to step up supplies of air defense systems to Ukraine, condemning Russian strikes. In China, Shanghai is quietly shutting down schools and a raft of other venues as officials try to rein in a flareup that’s hit the financial hub.
Key events this week:
* Earnings this week include: JPMorgan Chase & Co., Citigroup Inc., Morgan Stanley, BlackRock Inc., Delta Air Lines Inc., UnitedHealth Group Inc., U.S. Bancorp, Wells Fargo & Co.
* FOMC minutes for September meeting, Wednesday
* Fed’s Michelle Bowman and Neel Kashkari speak
* ECB’s Christine Lagarde speaks
* US CPI, initial jobless claims, Thursday
* G-20 finance ministers and central bankers meet, Thursday
* China CPI, PPI, trade, Friday
* US retail sales, business inventories, University of Michigan consumer sentiment, Friday
* BOE emergency bond buying is set to end, Friday
Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.3% as of 4 p.m. New York time
* The Nasdaq 100 was little changed
* The Dow Jones Industrial Average was little changed
* The MSCI World index fell 0.3%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro was little changed at $0.9702
* The British pound rose 1.1% to $1.1093
* The Japanese yen fell 0.7% to 146.84 per dollar
Cryptocurrencies
* Bitcoin rose 0.7% to $19,145.69
* Ether rose 1.2% to $1,297.45
Bonds
* The yield on 10-year Treasuries declined five basis points to 3.89%
* Germany’s 10-year yield advanced two basis points to 2.31%
* Britain’s 10-year yield was little changed at 4.44%
Commodities
* West Texas Intermediate crude fell 2.5% to $87.11 a barrel
* Gold futures fell 0.3% to $1,681.30 an ounce

–With assistance from Lu Wang, Richard Henderson, Brett Miller, Tassia Sipahutar, Michael Msika, Abigail Moses, Vildana Hajric and Emily Graffeo.
Have a wonderful evening everyone.

Be magnificent.
As ever,

Isabel

Do not seek to follow in the footsteps of the wise; seek what they sought. -Matsuo Chuemon Munefusa, 1644 –1694

Assistant to Carolann Steinhoff

Queensbury Securities Inc.,
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Suite 340A, 730 View St.,
Victoria, B.C. V8W 3Y7

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