October 3, 2023, Newsletter

Dear Friends,

Tangents:

On Oct. 3, 1990, West Germany and East Germany ended 45 years of postwar division, declaring the creation of a new unified country.  Go to article >>

Gore Vidal, writer, b. 1925.
Stevie Ray Vaughan, b. 1954.

Apple confirms some new iPhone models are overheating:
The tech giant said some iPhones are overheating because third-party apps, including Instagram and Uber, are “overloading the system.”

Nobel Prize winners announced:
This year’s Nobel Prize in medicine has been awarded to two pioneering scientists for their work on mRNA vaccines, a crucial tool in curtailing the spread of Covid-19. The Nobel Prize in physics goes to a remarkable trio for their research into electrons in flashes of light.

How to see the last ‘ring of fire’ eclipse until 2046:
Here’s what you should know about the exciting celestial event coming soon.

‘Like building skyscrapers in Central Park’: Tokyo redevelopment plan sparks protests
A revamp of one of Tokyo’s most beloved parks is fueling anger in the capital. View the renderings of the controversial project.

Turkish film festival canceled amid ‘censorship’ controversy:
One of Turkey’s most prestigious film festivals was canceled after a political documentary provoked the ire of the government.

8 pre-Inca mummies and artifacts unearthed just beneath the streets of Lima, Peru
While installing new gas lines in Peru, workers unearthed nearly a dozen pre-Inca mummies buried alongside a variety of artifacts.  Read More.

Watch Chinese astronauts light a spherical fire in risky open-flame experiment on Tiangong space station
Chinese astronauts lit a match while filming a lecture aboard the Tiangong Space Station, creating a spherical open flame that would be forbidden
aboard the ISS. Read More.

PHOTOS OF THE DAY

Stockholm, Sweden
Journalists wait for the announcement of the winners of the 2023 Nobel prize in physics, at the Royal Swedish Academy of Sciences. The prize was jointly awarded to Pierre Agostini, Ferenc Krausz and Anne L’Huillier for ‘experimental methods that generate attosecond pulses of light for the study of electron dynamics in matter’, the academy announced.  Photograph: Anders Wiklund/EPA

Munich, Germany
Bavarians in traditional costumes fire their muzzle loaders on the last day of the Oktoberfest beer festival.  Photograph: Matthias Schräder/AP.

​​​​​​​London, UK
A person stands with a group of swans on the bank of the River Thames with the City of London financial district in the distance.
Photograph: Henry Nicholls/AFP/Getty Images
Market Closes for October 3^rd, 2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 2008, amid the depths of the financial crisis, President George W. Bush signed into law an unprecedented $700 billion plan to rescue the U.S. financial system. The move established the Troubled Asset Relief Program, known as TARP, a rescue package that saved a swath of U.S. companies but never won widespread public support.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the third day, dropping 0.8%, or 156.26 to 19,020.92 in Toronto.
The index dropped to the lowest closing level since Oct. 24, 2022.
Shopify Inc. contributed the most to the index decline, decreasing 4.6%.
Lundin Mining Corp. had the largest drop, falling 5.3%.
Today, 158 of 227 shares fell, while 65 rose; 8 of 11 sectors were lower, led by financials stocks.
Insights
* This year, the index fell 1.9%, heading for the worst year since 2022
* The index advanced 0.7% in the past 52 weeks. The MSCI AC Americas Index gained 14% in the same period
* The S&P/TSX Composite is 8.7% below its 52-week high on Feb. 2, 2023 and 6.4% above its low on Oct. 13, 2022
* The S&P/TSX Composite is down 2.7% in the past 5 days and fell 7.4% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 14.9 on a trailing basis and 14.1 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$3.05t
* 30-day price volatility rose to 14.50% compared with 14.39% in the previous session and the average of 12.73% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | -85.5038| -1.5| 3/25
Information Technology | -32.8298| -2.3| 1/10
Materials | -18.7053| -0.8| 23/27
Real Estate | -8.4998| -1.9| 1/20
Consumer Discretionary | -8.3075| -1.2| 2/12
Energy | -4.7548| -0.1| 18/20
Utilities | -3.1936| -0.4| 6/9
Health Care | -0.6762| -1.1| 0/4
Communication Services | 0.1868| 0.0| 3/2
Industrials | 0.9846| 0.0| 3/23
Consumer Staples | 5.0314| 0.6| 5/6
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
Shopify | -28.4000| -4.6|n/a | 49.8
RBC | -27.4100| -2.4|n/a | -11.1
Nutrien | -11.9500| -4.2|n/a | -20.7
Canadian Natural Resources | 3.3580| 0.5|n/a | 15.3
Couche-Tard | 4.7200| 1.3|n/a | 19.4
Canadian Pacific Kansas | 6.8320| 1.1|n/a | -0.2
US
By Cristin Flanagan
(Bloomberg) — Stocks sank while Treasury yields hit new multi-year highs after jobs data bolstered the case for the Federal Reserve to keep interest rates elevated.
The S&P 500 fell 1.4% to a four-month low while the Nasdaq 100 index dropped 1.8% after a too hot readout on August job openings.
Wall Street’s fear gauge, the CBOE Volatility Index or VIX, rose above 20 intraday — a key level signaling mercurial spirits are afoot — the highest such reading since May.
The ICE BofA MOVE Index, which tracks expected bond volatility, started the week at the highest since Aug. 21.
Among Tuesday’s biggest losers were travel names including Airbnb Inc. and cruise ship operator Carnival Corp. while McCormick & Co. slid after the spice distributor’s sales missed estimates, hurt by a slow economic recovery in China.
Markets tumbled across the board after the number of available positions rose to 9.61 million from less than 9 million in July, according to the Bureau of Labor Statistics’
Job Openings and Labor Turnover Survey, or JOLTS.
The report drove swaps traders to increase wagers on the Federal Reserve raising rates in December to better than a 50-50 odds.
Investors have yet to fully embrace the Fed’s higher-for-longer narrative and are instead following “fickle market momentum,” according to Luke Templeman, an analyst at Deutsche Bank. “Small catalysts are causing an outsized number to attempt to preempt market moves.”
“The dominant market theme, therefore, is one that many developed-market investors have not had to deal with since the ‘08-’09 crisis: volatility,” he added.
The next datapoint for the labor market will be a monthly payrolls print on Friday where traders will looking for any signs of cooling.
“Unless, the NFP report comes in lower than expected, Wall Street will likely start to fully price in at least one more Fed rate hike before the end of the year,” said Ed Moya, senior market analyst for the Americas at Oanda.
Yields on the US 10- and 30-year traded to the highest level since 2007, with the longer-term bond reaching above 4.9%.
Wall Street has been speculating that rates on longer dated bonds will hit 5%.
The climb in yields was also stoking anxiety in the credit market where at least two issuers called off sales Tuesday.
“The strength of the headline is impressive and certainly bodes well for the ongoing strength in the US labor market,“ Ian Lyngen, head of US rates strategy at BMO Capital Markets, wrote.
While the JOLTs numbers are from August, “investors are nonetheless interpreting this as yet further confirmation that the US economy can withstand higher real borrowing costs.”
Wall Street strategists are warning about the impact that elevated interest rates have on equities, with Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co. saying there’s a risk of further stock-market declines.
This week’s Treasury selloff came after US lawmakers managed to avert a government shutdown, prompting traders to increase bets that the Fed will raise rates this year. Atlanta Fed President Raphael Bostic beat the “higher-for-longer” drum Tuesday saying the central bank needed to keep rates elevated “for a long time.”
He forecast a single rate cut for 2024, toward the end of the year.
Comments from other Fed policymakers were more hawkish, with Cleveland Fed president Loretta Mester saying on Monday that one more rate hike was likely needed and Governor Michelle Bowman urging multiple increases.
West Texas Intermediate crude recovered from an early drop to head back toward $90 a barrel while the dollar index reached a 10-month high.
The rally in the greenback drove the yen to its weakest level in a year as the Japanese currency touched 150 per dollar before reversing. 
Key events this week: 
* China has week-long holiday
* New Zealand rate decision, Wednesday
* Eurozone services and composite PMIs, Wednesday
* ECB President Christine Lagarde gives welcome address at conference, Wednesday
* US ISM services index, Wednesday
* France industrial production, Thursday
* BOE Deputy Governor Ben Broadbent, Riksbank First Deputy Governor Anna Breman participate at panel discussion, Thursday
* US trade, initial jobless claims, Thursday
* San Francisco Fed President Mary Daly speaks at the Economic Club of New York, Thursday
* Germany factory orders, Friday
* US unemployment rate, nonfarm payrolls, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 1.4% as of 4 p.m. New York time
* The Nasdaq 100 fell 1.8%
* The Dow Jones Industrial Average fell 1.3%
* The MSCI World index fell 1.4%
Currencies
* The Bloomberg Dollar Spot Index rose 0.2%
* The euro was little changed at $1.0471
* The British pound was little changed at $1.2078
* The Japanese yen rose 0.7% to 148.77 per dollar
Cryptocurrencies
* Bitcoin fell 2% to $27,278
* Ether fell 0.9% to $1,650.68
Bonds
* The yield on 10-year Treasuries advanced 12 basis points to 4.80%
* Germany’s 10-year yield advanced five basis points to 2.97%
* Britain’s 10-year yield advanced three basis points to 4.60%
Commodities
* West Texas Intermediate crude rose 0.8% to $89.56 a barrel
* Gold futures fell 0.4% to $1,840.10 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Edward Bolingbroke, Sujata Rao, Julien Ponthus, Jason Scott and Tassia Sipahutar.

Have a lovely evening.

Be magnificent!
As ever,

Carolann
Experience does not err; it is only your judgement that errs in expecting from her what is not in her power. –Leonardo da Vinci, 1452-1519.

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