October 19, 2023, Newsletter

Dear Friends,

Tangents: Happy Friday Eve.
On Oct. 19, 1987, the stock market crashed as the Dow Jones Industrial Average plunged 508 points, or 22.6 percent in value – its second biggest percentage drop.  Go to article >>

John Le Carre, b. 1931.

See inside a $50M Miami penthouse
The developers behind the Waldorf Astoria Miami spared no expense with this 13,000-square-foot, sky-high residence. See inside the penthouse that’s set to become one of the most expensive units in the city.

Sydney Opera House at 50: See what Australia’s best-known building could have looked like
The unmistakable design for the Sydney Opera House was just one of 233 entries in an international competition. Here are some of the proposals that didn’t make the cut.

Scientists finally solve mystery of why Europeans have less Neanderthal DNA than East Asians
Modern Europeans have a smaller proportion of Neanderthal genes in their genomes than East Asians do. New research suggests the reason lies at the feet of migrating early farmers. Read More.

Stash of ‘eye-catching’ Bronze Age jewelry discovered by metal detectorist in Swiss carrot field
Archaeologists have dated Bronze Age artifacts unearthed in Switzerland to roughly 1500 B.C.  Full Story: Live Science (10/18)

Strange elements unknown to science may lurk in the hearts of asteroids, new study suggests
Naturally occurring superheavy elements beyond those listed in the periodic table could potentially explain why asteroid 33 Polyhymnia is so dense, new research suggests. Read More.

Scientists propose ‘missing’ law for the evolution of everything in the universe
The “law of increasing functional information” says that complex systems in nature evolve to become more complex.  Full Story: Live Science (10/18)

Only 1% of chemicals in the universe have been discovered. Here’s how scientists are hunting for the rest.
Most chemical compounds are still unknown to science. How many new ones can we make by combining elements from the periodic table?  Read More.
PHOTOS OF THE DAY

Leuk, Switzerland
Employees of the Swiss electricity producer and supplier CKW, part of Axpo, install solar panels in a satellite dish at the Leuk Teleport and Data Centre.  Photograph: Denis Balibouse/Reuters.

Inle Lake, Myanmar
Buddhists row in front of four sacred Buddha images placed on a golden barge during the festival of Phaung Daw Oo Pagoda in Shan State.  Photograph: Sai Aung Main/AFP/Getty Images.

Bordeaux, France
Visitors view the exhibition ‘Tintin, The Immersive Adventure’ at the Bassins des Lumières.  Photograph: Moritz Thibaud/Abaca/Shutterstock.
Market Closes for October 19^th, 2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 This day in 1987 was Black Monday, as the Dow lost 22.6% (the worst daily loss on record), to close at 1738.74. Traders on Wall Street watched in shocked silence as prices plunged faster and farther than anyone alive has ever seen.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the second day, dropping 0.5%, or 101.89 to 19,348.81 in Toronto.
The index dropped to the lowest closing level since Oct. 6.
Brookfield Corp. contributed the most to the index decline, decreasing 2.6%. Lithium Americas Corp. had the largest drop, falling 12.7%.
Today, 142 of 227 shares fell, while 79 rose; 9 of 11 sectors were lower, led by financials stocks.
Insights
* This year, the index was little changed, heading for the worst year since 2022
* So far this week, the index fell 0.6%
* The index advanced 3.6% in the past 52 weeks. The MSCI AC Americas Index gained 15% in the same period
* The S&P/TSX Composite is 7.2% below its 52-week high on Feb. 2, 2023 and 4.5% above its low on Oct. 21, 2022
* The S&P/TSX Composite is down 0.8% in the past 5 days and fell 4.3% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 14.7 on a trailing basis and 13.8 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$3.09t
* 30-day price volatility little changed to 14.26% compared with 14.25% in the previous session and the average of 13.85% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | -57.4103| -1.0| 2/26
Industrials | -13.6308| -0.5| 5/21
Information Technology | -8.7994| -0.6| 4/7
Utilities | -8.2803| -1.1| 4/11
Real Estate | -7.5964| -1.7| 2/19
Materials | -6.6892| -0.3| 27/22
Consumer Staples | -4.8021| -0.6| 2/9
Health Care | -1.5915| -2.7| 0/3
Consumer Discretionary | -0.3070| 0.0| 6/8
Communication Services | 0.7368| 0.1| 2/2
Energy | 6.4869| 0.2| 25/14
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
Brookfield Corp | -11.5900| -2.6|n/a | 0.5
Shopify | -10.9500| -1.8|n/a | 51.2
Sun Life Financial | -7.6690| -2.8|n/a | 2.0
Constellation Software | 3.8020| 1.0|n/a | 38.0
National Bank of Canada | 4.0150| 2.0|n/a | -2.9
Restaurant Brands | 5.0840| 2.6|n/a | 3.3
US
By Rita Nazareth
(Bloomberg) — Volatility gripped Wall Street as traders kept a close eye on any signs of a potential escalation of the Middle East conflict, while weighing Jerome Powell’s remarks for clues on the policy outlook.
After multiple twists and turns, the S&P 500 notched its third straight loss.
A US base in Syria was targeted by drones, while a US destroyer intercepted cruise missiles and drones in Yemen, incidents that caused minor injuries but prompted fresh concerns that Israel’s war with Hamas may spark a wider conflict.
Tesla Inc. sank over 9% on disappointing results.
Treasury 10-year yields approached 5%, while two-year rates fell after Powell said the Federal Reserve will proceed carefully with rate hikes, while citing evidence that policy isn’t “too tight.”
Swaps trimmed the implied odds of another Fed rate increase to just under 50%, and priced a start to cuts in July, compared with September previously.
“Jay Powell is putting to bed any chance of a Nov. 1 rate hike. As to not let markets get carried away though, he left the door open for more rate hikes,” said Peter Boockvar, author of the Boock Report. “Short rates are falling as they are likely done, but the rise in long rates is proving again that they are losing their grip on that part of the market.”
“The Fed is not yet convinced about where inflation will settle over the next few quarters, which means that the committee will not pre-commit,” said Jeffrey Roach, chief economist for LPL Financial. “Each meeting will be a live meeting.”
Powell also said he recent run-up in bond yields appears to be mostly due to rising term premiums, “and so the type that tightens financial conditions, rather than the type of move the Fed needs to follow through on,” said Krishna Guha, vice chairman of Evercore.
“He agreed that ‘at the margin’ this could substitute for the need for the Fed to raise rates further,” Guha noted. “But his comments lacked any urgency to lean against the rise in yields.”
Fed Bank of Chicago President Austan Goolsbee said he’s hopeful the US is able to avoid a recession despite rapid and steep interest-rate hikes over the past 18 months.
He emphasized the need for the Fed to ensure inflation was on track to ease to its 2% goal and for inflation expectations to stay anchored.
Thursday’s economic reports were mixed.
Applications for US unemployment benefits dropped to the lowest level since January as the labor market kept powering ahead.
Sales of previously owned US homes fell to the lowest level since 2010 as affordability worsened even further.
Elsewhere, a system “incident” halted trading in hundreds of shares on the London Stock Exchange for the final 80 minutes of Thursday’s session.

Corporate Highlights
* Netflix Inc. surged after posting its best quarter for subscriber growth in years.
* American Airlines Group Inc. topped expectations for profit even as its forecast for the rest of the year fell short.
* Union Pacific Corp. reported profit that topped analysts’ estimates, which had been adjusted down in the last month, as the railroad leaned on efficiency to make up for lower carloads and higher labor costs.
* AT&T Inc. raised its free cash flow guidance for the full year after posting mobile subscriber gains and profit that beat analysts’ estimates.
* Lam Research Corp.’s revenue fell for a third straight quarter, a sign demand for chipmaking equipment remains sluggish.
* Blackstone Inc., grappling with higher interest rates and stung by a pullback in dealmaking, reported a 12% decline in quarterly profit available to shareholders.
* Las Vegas Sands Corp. authorized its first share buyback program since 2020, signaling management’s confidence in the business after years of pandemic-related hardship.
Key events this week:
* Japan CPI, Friday
* China loan prime rates, Friday
* Philadelphia Fed President Patrick Harker speaks, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.9% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.8%
* The Dow Jones Industrial Average fell 0.7%
* The MSCI World index fell 0.9%
Currencies
* The Bloomberg Dollar Spot Index fell 0.2%
* The euro rose 0.5% to $1.0587
* The British pound was little changed at $1.2148
* The Japanese yen was little changed at 149.81 per dollar
Cryptocurrencies
* Bitcoin rose 1.8% to $28,775.9
* Ether rose 0.4% to $1,569.01
Bonds
* The yield on 10-year Treasuries advanced seven basis points to 4.98%
* Germany’s 10-year yield was little changed at 2.93%
* Britain’s 10-year yield advanced two basis points to 4.67%
Commodities
* West Texas Intermediate crude rose 2.5% to $90.50 a barrel
* Gold futures rose 0.9% to $1,986.80 an ounce
This story was produced with the assistance of Bloomberg Automation.
Have a lovely evening.

Be magnificent!
As ever,

Carolann
Whatever task you undertake, do it with all your heart and soul.  Always be courteous, never be discouraged.
Beware of him who promises something for nothing.  Do not blame anybody for your mistakes and failures. -Bernard Mannes Baruch, 1870-1965.

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