October 19,2022 Newsletter

Dear Friends,

Tangents:
October 19, 1953: Dystopian novel “Fahrenheit 451” by Ray Bradbury is published in the US.  Fahrenheit 451  presented an  American society where books have been outlawed and “firemen” burn any that are found.  The novel’s subject matter led to its censorship in apartheid south Africa and various schools in the US.

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 »

People will still pay up for chocolate.

New photos of the Pillars of Creation just dropped.

Exact burial spot of St. Nicholas, inspiration for Santa Claus, discovered in Turkish church:  Archaeologists in southern Turkey have just uncovered the original burial place of Father Christmas himself, formally known as St. Nicholas, but whose modern nicknames of Santa Claus, Saint Nick and Kris Kringle are known by children the world over.  While researchers already knew that the saint’s body was buried in the fourth century A.D. church in Turkey’s Antalya province, the holy man’s remains were stolen around 700 years after he died, so the specific spot where he was originally interred was a mystery.  Full Story: Live Science (10/19)

Energy jet traveling 7 times the speed of light appears to break the laws of physics:  Astronomers have detected a gargantuan blast of energy from space that appears to be doing the impossible: Traveling seven times faster than the speed of light.  This is, of course, an optical illusion — a rare and mind-boggling phenomenon called superluminal motion, which occurs when particles come very close to moving at the speed of light. In this case, scientists detected a jet of energy blasting out of a stellar collision site at a staggering 99.97% of the speed of light — about 670 million mph (1.07 billion km/h), according to a study published Oct. 12 in the journal Nature.
Full Story: Live Science (10/19)

Girl Scouts of America receive largest ever donation from single donor.  MacKenzie Scott, the ex-wife of Amazon founder Jeff Bezos, has donated more than $80 million to the Girl Scouts of America.

PHOTOS OF THE DAY

Gardener Dan Bull works from a cherrypicker to trim a section of 14-metre-high yew hedge at the National Trust’s Powis Castle. The famous tumps are more than 300 years old and it takes one gardener 10 weeks each autumn to clip them
Photograph: Jacob King/PA

Baby sea turtles walk towards the waters of the Pacific Ocean after being released at sunset
Photograph: Alex Pena/Anadolu Agency/Getty Images

A misty morning over fields near King’s Lynn
Photograph: Paul Marriott/REX/Shutterstock
Market Closes for October 19, 2022

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1987, Wall Street took its worst plunge of the modern era, as the Dow lost 22.6%, on what became known as “Black Monday.” Traders on Wall Street’s equity desks watched the ticker in shocked, dead silence as it plunged faster and farther than anyone alive had ever seen. By day’s end, more than 500 million shares had changed hands and traumatized analysts were predicting a severe recession.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell 0.7% at 18,674.40 in Toronto.
The move follows the previous session’s increase of 1%.
Brookfield Asset Management Inc. contributed the most to the index decline, decreasing 2.8%.
Parkland Corp. had the largest drop, falling 7.1%.
Today, 187 of 236 shares fell, while 48 rose; 10 of 11 sectors were lower, led by financials stocks.
Insights
* This year, the index fell 12%, 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 20% in the same period
* The S&P/TSX Composite is 15.9% below its 52-week high on April 5, 2022 and 4.5% above its low on Oct. 13, 2022
* The S&P/TSX Composite is up 2.6% in the past 5 days and fell 4.5% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 12.6 on a trailing basis and 11.5 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$3t
* 30-day price volatility fell to 23.68% compared with 23.76% in the previous session and the average of 19.56% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | -78.7332| -1.3| 1/28
Materials | -28.8363| -1.3| 6/45
Utilities | -16.5640| -1.8| 0/16
Information Technology | -15.6238| -1.6| 0/13
Real Estate | -13.4255| -2.8| 0/22
Consumer Staples | -9.0011| -1.2| 0/11
Industrials | -5.9837| -0.2| 5/22
Consumer Discretionary | -5.8114| -0.9| 3/11
Communication Services | -4.4853| -0.5| 2/5
Health Care | -3.7149| -4.6| 0/7
Energy | 58.3981| 1.7| 31/7
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
Brookfield Asset Management | -15.0400| -2.8| -40.5| -30.1
Bank of Nova Scotia| -13.5500| -2.5| -9.9| -27.5
TD Bank | -12.0600| -1.1| -30.6| -11.6
Suncor Energy | 7.0310| 1.7| -40.1| 37.4
Cenovus Energy | 9.0930| 4.1| -27.2| 57.5
Canadian Natural Resources | 23.4400| 4.1| -49.1| 45.6
US
By Rita Nazareth
(Bloomberg) — Stock traders balked at any rebound attempt on Wednesday, with Treasury yields creeping back to multiyear highs and mounting concern that a hawkish Federal Reserve will raise the odds of a hard landing.
The day that marked the 35th anniversary of the equity crash saw the market halting a back-to-back rally, making any calls for a bottom look elusive.
Not even bright earnings spots like Netflix Inc. and United Airlines Holdings Inc. were able to enthuse investors about more gains in the S&P 500.
A late day rout in Tesla Inc. on disappointing sales could further weigh on sentiment.
“Earnings are not allowing us to see that capitulation and resetting of 2023 earnings expectations yet,” Morgan Stanley’s Lisa Shalett told Bloomberg Television. “It’s not yet a clearing event that sets up for a durable, viable bottom in this market.”
To Nicholas Colas at DataTrek Research, a more sustainable advance would require a backdrop of stabilizing yields – which was the setup for the two-month surge in the US equity benchmark that started in mid-June.
That seems like a “tall order” given that Fed policy remains tight and bond rates are stuck at such high levels, he noted.
Treasuries saw a renewed wave of selling, spurred by firmer global inflation readings, corporate deal hedging flows and a poorly received US 20-year bond auction.
The two-year yield jumped to the highest since 2007 as traders pushed expectations for the peak policy rate closer to 5% — from a current range between 3% and 3.25%.
Fed Bank of St. Louis President James Bullard said it’s good news that markets are pricing in anticipated hikes by policymakers, making it important that officials “follow through” and implement those increases to curb high inflation.
In another sign of economic jitters, a Bank of America Corp. survey showed 60% of chief investment officers want companies to use cash reserves to improve their balance sheets – – rather than opting for capital expenditures or stock buybacks.
The economy will probably mostly slow in 2023, so companies have time to use “still strong cash flow generation this year to shore up their balance sheets before a potential recession hits next year,” wrote credit strategist Yuri Seliger.
As the third-quarter earnings season gets underway, a nightmare scenario for stock pickers is unfolding.
The S&P 500’s three-month realized correlation — a gauge of how closely the top weighted stocks in the benchmark move relative to each other — is at its highest level since July 2020.
As correlations rise, it becomes increasingly difficult for fund managers to outperform the broader market.
That means more turbulence may lie ahead since the S&P 500’s drop over the past six months looks tame when compared with the type of declines typically seen in the last half-year of major equity downturns, according
to Bespoke Investment Group.
“Oversold conditions coinciding with key support has recently underpinned a recovery in stocks, leaving many investors wondering if this will be another trick or a potential treat?” said Craig Johnson, chief market technician at Piper
Sandler. “From our technical perspective, risk for another trick appears high as there is insufficient evidence to confirm the equity market has fully capitulated. This does not eliminate the probability of a sizable relief rally developing into year-end.”
Key events this week:
* US existing home sales, initial jobless claims, Conference Board leading index, Thursday
* Euro area consumer confidence, 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 0.4%
* The Dow Jones Industrial Average fell 0.3%
* The MSCI World index fell 0.9%
Currencies
* The Bloomberg Dollar Spot Index rose 0.6%
* The euro fell 0.9% to $0.9773
* The British pound fell 0.9% to $1.1223
* The Japanese yen fell 0.4% to 149.87 per dollar
Cryptocurrencies
* Bitcoin fell 0.7% to $19,226.67
* Ether fell 1.4% to $1,296.2
Bonds
* The yield on 10-year Treasuries advanced 12 basis points to 4.13%
* Germany’s 10-year yield advanced nine basis points to 2.38%
* Britain’s 10-year yield declined seven basis points to 3.88%
Commodities
* West Texas Intermediate crude rose 3.5% to $85.69 a barrel
* Gold futures fell 1.3% to $1,634.30 an ounce.
–With assistance from Emily Graffeo and Peyton Forte.
Have a lovely evening.

Be magnificent!
As ever,

Carolann

Illness is the doctor to whom we pay the most heed; to kindness, to knowledge, we make promises only; pain we obey. -Marcel Proust, 1871-1922.

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