October 27, 2021 Newsletter

Dear Friends,

Tangents:
On Oct. 27, 1904, the first rapid transit subway, the IRT, opened in New York City.  Go to article »

Theodore Roosevelt, 26^th US President, b. 1858.
Dylan Thomas, poet, b. 1914.
Marlene Dietrich, actor, b. 1901.
John Cleese, actor, b. 1939.
Sylvia Plath, poet, b. 1932
Fran Leibowitz, author, b. 1950.
 
Bloomberg Opinion: Three reasons why inflation isn’t here to stay.

China may have just had a Sputnik moment.

Hertz will let Uber drivers rent electric cars.

Poaching is causing female African elephants to evolve without tusks.

PHOTOS OF THE DAY
Joggers run through the fog hanging over harvested fields as sun rises on a foggy cold autumn morning
CREDIT: AFP/Getty Images
The Cumbre Vieja volcano erupts again on La Palma in the Canary Islands
CREDIT: Miguel Calero/EPA
A woman visits the Olympic Park 100 days before the start of the 2022 Beijing Winter Olympics, which are followed by the Paralympics in March 2022
CREDIT: Roman Pilipey/EPA
Patterns formed by crystallised minerals on the surface of evaporation ponds of the Dead Sea, which has lost a third of its surface area since 1960
CREDIT: Menahem Kahana/AFP/Getty Images

Market Closes for October 27^th, 2021

International Markets

Bonds

Currencies

Commodities

Market Commentary:
     On this day in 1978, the Full Employment and Balanced Growth Act of 1978 was signed into law by President Jimmy Carter. Also known as the Humphrey-Hawkins Act after its co-sponsors, the law requires the Federal Reserve Board to take unemployment and inflation into account as it sets interest rates. It also requires the Fed chairman to testify before Congress twice a year.
Canada
By Natasha Abellard
(Bloomberg) — Canadian equities fell as the country’s central bank signaled that rate hikes might be coming sooner than previously thought. The S&P/TSX Composite retreated for a second day, dropping 1% in Toronto. The move was the biggest since the benchmark fell 1.4% on Sept. 28. Today, financials stocks led the market lower, as 9 of 11 sectors lost; 192 of 233 shares fell, while 40 rose. Royal Bank of Canada contributed the most to the index decline, decreasing 1.3%. Denison Mines had the largest drop, falling 7.7%.
Insights
* In the past year, the index had a similar or greater loss 11 times. The next day, it advanced nine times for an average 1% and declined twice for an average 0.5%
* This year, the index rose 20%, heading for the best year in at least 10 years
* This month, the index rose 4.4%, heading for the biggest advance since November 2020
* The index advanced 31% in the past 52 weeks. The MSCI AC Americas Index gained 34% in the same period
* The S&P/TSX Composite is 1.7% below its 52-week high on Oct. 26, 2021 and 35.9% above its low on Oct. 30, 2020
* The S&P/TSX Composite is down 1.1% in the past 5 days and rose 2.4% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 19.9 on a trailing basis and 16.3 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.5% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.34t
* 30-day price volatility rose to 10.78% compared with 10.40% in the previous session and the average of 9.95% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
* Financials | -62.0066| -0.9| 2/26
* Energy | -52.2273| -1.8| 2/21
* Information Technology | -27.2178| -1.2| 1/14
* Materials | -24.5975| -1.0| 14/41
* Industrials | -22.0426| -0.9| 2/28
* Consumer Staples | -14.2009| -1.9| 1/12
* Consumer Discretionary | -10.4513| -1.4| 1/12
* Utilities | -6.4756| -0.7| 4/12
* Health Care | -5.9092| -3.0| 0/9
* Real Estate | 0.5980| 0.1| 9/14
* Communication Services | 6.0745| 0.6| 4/3
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
* Royal Bank of Canada | -16.9200| -1.3| -21.2| 25.2
* Suncor Energy | -11.2800| -3.7| 0.5| 32.2
* Brookfield Asset | | | |
* Management | -9.1160| -1.2| 7.7| 43.6
* Brookfield | | | |
* Infrastructure | 1.9290| 1.3| 11.5| 17.5
* Shaw Communications | 2.0520| 1.9| 49.4| 58.6
* Rogers Communications| 4.5990| 3.4| 66.5| -1.8

US
By Vildana Hajric and Kamaron Leach
(Bloomberg) — U.S. stocks dropped from all-time highs, with shares of small companies leading declines, and Treasuries gained on an uptick in growth concerns. The S&P 500 and Dow Jones Industrial Average fell after setting closing records Tuesday. The tech-heavy Nasdaq 100 set an intraday record before closing barely in the green with Google parent Alphabet Inc., Amazon.com Inc. and Tesla Inc. rallying. Robinhood Markets Inc. slumped after missing revenue estimates. The Russell 2000 slumped 1.9%, the biggest decline since late September. “Earnings are one of the bigger factors with better than expected results out of a lot of sectors,” said Ross Mayfield, investment strategy analyst at Baird. “Some of the fears of inflation or margin pressure are not yet being realized despite the problem being so well-known and probably discounted by the market a bit.” Long bonds continued to outperform shorter-maturity U.S. debt ahead of the government’s auctions of five-year notes Wednesday and a seven-year sale Thursday.
The yield difference between 5- and 30-year bonds narrowed to as little as 78 basis points, the lowest since March 2020. Mining and energy stocks led a retreat in the Stoxx Europe 600 index as prices of raw materials including aluminum and iron ore fell along with crude oil. Germany’s DAX underperformed after Europe’s biggest economy cut its 2021 growth forecast, citing the lingering effects of the pandemic and a supply squeeze. Bund yields dropped along with those on other European bonds. Investors are counting on earnings to support equity prices, and so far the reporting season has been solid overall. But worries remain that over time rising raw material and wage costs and supply-chain snarls could crimp margins and weigh on the global economy recovery.
“Equities moved higher last week, fully recovering from the September dip. That said, in our view, last week’s positive performance does not create headwinds for performance ahead,” said Lauren Goodwin, economist and portfolio strategist at New York Life Investments. “Market positioning is still approximately neutral, which could point to further upside potential in equity markets. We believe recent positive market moves could be the beginning of a now-earlier ‘Santa Clause rally.’”  The debt crisis in China’s property sector continues to hang over the market: authorities told billionaire Hui Ka Yan to use his personal wealth to alleviate China Evergrande Group’s woes. Meanwhile, a top Chinese regulator called on companies to make “active preparations” to meet payments on offshore bonds. Bitcoin fell below $60,000.  On the virus front, a Food and Drug Administration panel gave its backing to the Pfizer Inc. and BioNTech SE vaccine for young children.

Here are some events to watch this week:
* Earnings: Amazon, Apple, Samsung Electronics, China Vanke, PetroChina, Ping An Insurance Group
* Australia CPI, Wednesday
* U.S. wholesale inventories, U.S. durable goods, Wednesday
* Bank of Japan monetary policy decision, briefing, Thursday
* ECB rates decision, President Christine Lagarde briefing, Thursday
* U.S. GDP, initial jobless claims, Thursday
* G-20 joint finance and health ministers meeting ahead of the weekend leaders’ summit, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.5% as of 4:07 p.m. New York time
* The Nasdaq 100 rose 0.3%
* The Dow Jones Industrial Average fell 0.7%
* The MSCI World index fell 0.5%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro was little changed at $1.1600
* The British pound fell 0.2% to $1.3739
* The Japanese yen rose 0.3% to 113.85 per dollar
Bonds
* The yield on 10-year Treasuries declined seven basis points to 1.53%
* Germany’s 10-year yield declined six basis points to -0.18%
* Britain’s 10-year yield declined 12 basis points to 0.99%
Commodities
* West Texas Intermediate crude fell 3% to $82.10 a barrel
* Gold futures rose 0.3% to $1,799.20 an ounce

Have a lovely evening.

Be magnificent!

As ever,

Carolann

Men too involved in details usually become unable to deal with great matters. –Francois Duc de La Rochefoucauld, 1613-1680.

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