October 23,2023, Newsletter

Dear Friends,

Tangents: Happy Monday!
Carolann is away from the office for a conference, I will be writing the newsletter on her behalf.

October 23, 1847, telegraph service was opened from Montreal to Albany and New York.
In 1950, University of Toronto researchers announced the development of an electronic heart pacemaker. Go to article >>

2023’s most popular Halloween costumes
If you still haven’t found a costume idea, fear not. CNN has you covered.

The Japanese city that dominates street food — and no, it’s not Tokyo
Fukuoka, Japan’s sixth largest city by population, has more open-air food stalls than the rest of the country combined. Enjoy these photos of Japan’s street food capital.

Australia’s Kaylee McKeown makes swimming history as she breaks 50m backstroke world record
See McKeown’s stunned reaction after she broke the women’s 50m backstroke world record in Budapest, Hungary.

Moon is 40 million years older than we thought, tiny crystals from Apollo mission confirm
A new analysis of zircon crystals from the Apollo 17 mission has revealed that the moon formed around 40 million years earlier than past geological evidence suggested. Read more.

Mystery blobs in Earth’s mantle may be linked to ancient gold and platinum that arrived from space
The gold and platinum that came from giant space rocks should have sunk into Earth’s core instead of rising to the crust.

PHOTOS OF THE DAY

Hertfordshire, UK
Harriet and her child pick Halloween pumpkins at the Pop Up Farm in Flamstead, St Albans
Photograph: Andrew Couldridge/Reuters

Svolvær, Norway
The northern lights appear in the sky over the Arctic town on the island of of Austvågøya in the Lofoten archipelago
Photograph: Manuel Romano/NurPhoto/Shutterstock

Bangkok, Thailand
Chinese tourists dressed in rented Thai traditional costumes take souvenir photographs during their visit to Wat Arun, also known as the Temple of Dawn
Photograph: Anusak Laowilas/NurPhoto/Shutterstock
Market Closes for October 23^rd, 2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1907: Nervous depositors besieged New York’s biggest trust companies, demanding their deposits back after a crash in speculative copper stocks threatened the solvency of the trusts. J.P. Morgan, acting as the country’s unofficial central banker, lent $3 million to the Trust Co. of America, helping calm the panicky public.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the fourth day, dropping 0.4%, or 68.9 to 19,046.74 in Toronto.
The index dropped to the lowest closing level since Oct. 4.
Nutrien Ltd. contributed the most to the index decline, decreasing 4.6%.
Dye & Durham Ltd. had the largest drop, falling 13.6%.
Today, 133 of 227 shares fell, while 91 rose; 8 of 11 sectors were lower, led by materials stocks.
Insights
* This year, the index fell 1.7%, heading for the worst year since 2022
* This month, the index fell 2.5%
* The index advanced 1% in the past 52 weeks. The MSCI AC Americas Index gained 12% in the same period
* The S&P/TSX Composite is 8.6% below its 52-week high on Feb. 2, 2023 and 2.9% above its low on Oct. 21, 2022
* The S&P/TSX Composite is down 2.9% in the past 5 days and fell 3.7% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 14.5 on a trailing basis and 13.6 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.5% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.03t
* 30-day price volatility fell to 14.46% compared with 14.62% in the previous session and the average of 14.06% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Materials | -31.2069| -1.3| 13/36
Energy | -27.0776| -0.7| 13/27
Industrials | -14.3718| -0.6| 9/17
Information Technology | -3.3756| -0.2| 2/9
Health Care | -1.4512| -2.6| 1/3
Consumer Discretionary | -0.5554| -0.1| 5/9
Real Estate | -0.2954| -0.1| 12/9
Financials | -0.1269| 0.0| 12/16
Consumer Staples | 0.9529| 0.1| 9/2
Communication Services | 3.6034| 0.5| 3/2
Utilities | 5.0130| 0.7| 12/3
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
Nutrien | -12.8900| -4.6|n/a | -21.3
Canadian Natural | | | |
Resources | -9.1600| -1.3|n/a | 17.8
Canadian Pacific | | | |
Kansas | -6.6390| -1.1|n/a | -4.3
RBC | 3.1220| 0.3|n/a | -12.5
BCE | 3.1240| 1.0|n/a | -14.0
Enbridge | 5.1660| 0.8|n/a | -16.9
US
By Rita Nazareth
(Bloomberg) — A renewed bout of volatility in the bond market impacted stock trading, with investors also awaiting earnings from a handful of big techs.
Oil sank as Israel appeared to hold off on a broader ground invasion of Gaza.
After several twists and turns, the S&P 500 closed at its lowest since May.
The gauge fell for a fifth straight session — its longest slide this year, while holding above the key 4,200 mark. That’s a technical support and represents a 50% retracement of the rally from the lows seen in the March banking turmoil.
The Nasdaq 100 outperformed, with Microsoft Corp. gaining ahead of its results and Nvidia Corp. up about 4%.
Treasury 10-year yields slumped after hitting 5%.
The dollar fell.
The world’s biggest bond market has faced intense volatility amid expectations the Federal Reserve will keep rates elevated and the government will boost bond sales to cover widening deficits.
Exactly how the inter-relationships between growth, interest rates and the Fed are working right now is uncertain, according to Jason Draho, head of asset allocation Americas at UBS Global Wealth Management. That means: Markets are likely to stay choppy until there’s more clarity, he added.
“With the peak level for the 10-year yield still anyone’s guess, the US equity market should remain under pressure since breadth and relative strength readings have yet to hit extremes,” said Sam Stovall, chief investment strategist at CFRA. “As a result, one thing is certain: October will add to its reputation as the most volatile month of the year.”
While the rise in rates usually makes stocks look less attractive versus Treasuries, the spread between the earnings yield on the S&P 500 and the 10-year rate — the equity risk premium — does not look alarming, according to David Lefkowitz, head of US equities at UBS Global Wealth Management.
While history suggests that a 10-year Treasury rate greater than about 6.5% tends to lead to lower valuations, it’s hard to know if this “tipping point” is still valid, Lefkowitz said.
It’s possible it could be lower because potential nominal growth in gross domestic product is lower than in the past, he noted, adding that the main risk to stocks is if higher rates lead to a pronounced economic slowdown.
Some of the market’s most prominent bond bears are saying the historic rout in US Treasuries has gone too far.
Billionaire investor Bill Ackman wrote in a social media post that he unwound his bet against US government bonds amid rising global risks.
Bill Gross, co-founder of Pacific Investment Management Co., wrote that he’s buying short-dated interest-rate futures in anticipation of a recession by year-end.
The full impact of the most aggressive monetary-tightening campaign by global central banks in decades has yet to be felt and will remain a headwind for financial markets going into next year, according to JPMorgan Chase & Co.’s Marko Kolanovic.
To Phillip Colmar, global strategist at MRB Partners, if there isn’t a consolidation phase in bond yields, equities are going to struggle.
“Within that equity market, you have to be careful about what you pick because what people loved earlier were tech stocks, which are longer duration,” Colmar added. “They better deliver because you have a high interest rate environment and they’re priced for perfection.”
Investors looking to the earnings season for a dose of good news are hanging their hopes on big tech.
The five biggest companies in the S&P 500 — Apple Inc.,
Microsoft, Alphabet Inc., Amazon.com Inc. and Nvidia Corp. — account for about a quarter of the benchmark’s market capitalization.
Their earnings are projected to jump 34% from a year earlier on average, according to analyst estimates compiled by Bloomberg Intelligence.
Morgan Stanley’s Michael Wilson — among the most bearish voices on US stocks — said he “would not be surprised” to see further declines in the S&P 500 with “earnings expectations likely too high for the fourth quarter and 2024, and policy tightening likely to be felt from both a monetary and fiscal standpoint.”
With about a fifth of the S&P 500 members having reported, shares of companies that lagged analysts’ estimates on the earnings-per-share metric have seen their stock underperform the benchmark index by a median of 3.7% on the day of results, according to data compiled by BI.
That’s the worst performance in the data’s history going back to the second quarter of 2019.
“October can be a tough month for stocks, but more often than not tends to see the S&P 500 rise,” said Lori Calvasina, head of US equity strategy at RBC Capital Markets. “Unfortunately, as of mid-October of 2023, US equities are still in a spooky place.”

Corporate Highlights:
* Nvidia Corp. is using Arm Holdings Plc technology to develop chips that would challenge Intel Corp. processors in personal computers, potentially ratcheting up competition between the two semiconductor makers, according to people familiar with the situation.
* Chevron Corp. agreed to buy Hess Corp. for $53 billion, a deal aimed at boosting production growth as the US oil industry bets on an enduring future for fossil fuels.
* Reliance Industries Ltd., controlled by Asia’s richest tycoon Mukesh Ambani, is nearing a cash and stock deal to buy Walt Disney Co.’s India operations, according to people familiar with the matter.
* Engage Smart Inc., a business-to-business software company, has agreed to be acquired by Vista Equity Partners in an all-cash deal valued at about $4 billion.
* Roche Holding AG will pay $7.1 billion to acquire Telavant Holdings Inc., a developer of a promising therapy for treating inflammatory bowel disease.
* Walgreens Boots Alliance Inc. rose as JPMorgan Chase & Co. raised the drugstore chain rating to overweight.
* Pinterest Inc. climbed after Stifel raised its rating to buy, noting there’s room for growth outside the company’s domestic market.
* Okta Inc. tumbled after the identity verification company said that hackers used a stolen credential to access its support case management system.
* United Auto Workers union members at Stellantis NV’s lucrative truck plant in Sterling Heights, Michigan, walked off the job Monday morning, a surprise hit designed to extract further concessions in the sixth week of the strike against Detroit’s three biggest automakers.
Elsewhere, gold dropped.
Bitcoin topped $31,000.
Argentina’s dollar bonds were the worst in emerging markets as investors fret over a presidential runoff between the nation’s economy minister and a radical libertarian.

Key events this week:
* Reserve Bank of Australia Governor Michele Bullock speaks at the Commonwealth Bank Annual Conference in Sydney, Tuesday
* Paris-based International Energy Agency releases its world energy outlook annual report, Tuesday
* Eurozone S&P Global Services PMI, S&P Global Manufacturing PMI, Tuesday
* Euro-area bank lending survey, Tuesday
* US S&P Global Manufacturing PMI, Tuesday
* Microsoft, Alphabet earnings, Tuesday
* Australia CPI, Wednesday
* Germany IFO business climate, Wednesday
* Canada rate decision, Wednesday
* US new home sales, Wednesday
* IBM, Meta earnings, Wednesday
* European Central Bank interest rate decision; President Christine Lagarde holds news conference, Thursday
* US wholesale inventories, GDP, US durable goods, initial jobless claims, pending home sales, Thursday
* Intel, Amazon earnings, Thursday
* China industrial profits, Friday
* Japan Tokyo CPI, Friday
* US PCE deflator, personal spending and income, University of Michigan consumer sentiment, Friday
* Exxon Mobil earnings, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.2% as of 4 p.m. New York time
* The Nasdaq 100 rose 0.3%
* The Dow Jones Industrial Average fell 0.6%
* The MSCI World index fell 0.1%
Currencies
* The Bloomberg Dollar Spot Index fell 0.4%
* The euro rose 0.7% to $1.0666
* The British pound rose 0.7% to $1.2244
* The Japanese yen rose 0.1% to 149.65 per dollar
Cryptocurrencies
* Bitcoin rose 5.1% to $31,379.27
* Ether rose 4.2% to $1,709.69
Bonds
* The yield on 10-year Treasuries declined seven basis points to 4.85%
* Germany’s 10-year yield declined two basis points to 2.87%
* Britain’s 10-year yield declined five basis points to 4.60%
Commodities
* West Texas Intermediate crude fell 2.4% to $86.01 a barrel
* Gold futures fell 0.5% to $1,984.80 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Vildana Hajric, Emily Graffeo, Isabelle Lee and Elena Popina.

Have a wonderful day everyone.

Be magnificent!
As ever,

Shabnam
“Go confidently in the direction of your dreams. Live the life you have imagined.” —Henry David Thoreau

Shabnam Mohammadpourmarzbali
Assistant to Carolann Steinhoff
Queensbury Securities Inc.,
St. Andrew’s Square,
Suite 340A, 730 View St.,
Victoria, B.C. V8W 3Y7

Tel: 778.430.5808
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www.carolannsteinhoff.com