September 11, 2023 Newsletter

Dear Friends,

Tangents: Happy Monday.

September 11, 2001:  suicide hijackers crashed two airliners into the World Trade Center in New York, causing the 110-story twin towers to collapse. Another hijacked airliner hit the Pentagon and a fourth crashed in a field in Pennsylvania.  Go to article >>.

D.H. Lawrence, writer, b.1885.

Demolition of Marilyn Monroe’s former home in Los Angeles is on hold for now.  The new owners of Monroe’s former property want it demolished. Fans of the pop culture icon are livid, saying the house should be designated as a Historic-Cultural Monument.

How Mount Fuji fell victim to over tourism.  One of Japan’s sacred symbols looks like Disneyland as thousands of tourists create human traffic jams.

Scientists have no idea what this specimen is.  A mysterious golden specimen found two miles below the ocean’s surface in Alaska is puzzling scientists. See the video here.

In a 1st, NASA’s Perseverance rover makes breathable oxygen on Mars.  NASA’s Perseverance rover has generated 4.3 ounces of breathable oxygen while on the Red Planet, enough to sustain an adult human for three hours.  Read More.

Lost ‘rainbow cup’ coin minted by Celts 2,000 years ago discovered in Germany.  Legend has it that “rainbow cups” are drops of gold that fall to Earth at the end of a rainbow.  Full Story: Live Science (9/8)

2,700-year-old ‘extremely well preserved’ skeleton found in fortress in Turkey may be an earthquake victim
These human remains may hint at the collapse of the ‘magnificent’ city of Ayanis.  Read More.

The best new hotels in London for under $500 a night.
PHOTOS FO THE DAY:

Bad Hindelang, Germany
Traditional Bavarian herders guide cows down from mountain pasture during the annual end-of-summer cattle drive (Almabtrieb).  Photograph: Daniel Kopatsch/Getty Images

Duma, Palestine
People take a dip in a spring water pool overlooking the Jordan valley.  Photograph: Menahem Kahana/AFP/Getty Images

El Alto, Bolivia
Two Indigenous women observe the landscape at the top of the Cholet ‘El Crucero de los Andes’ building, which has the highest viewpoint in the world.
Photograph: Claudia Morales/Reuters
Market Closes for September 11^th, 2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1789, Alexander Hamilton was sworn in as the first U.S. Secretary of the Treasury. His first official act, to the surprise of many legislators, was to insist on federal assumption and dollar-for-dollar repayment of the nation’s $75-million war debt. “The debt of the United States…was the price of liberty,” he said.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 0.5% at 20,182.76 in Toronto.
The move was the biggest since rising 1.2% on Sept. 1 and follows the previous session’s decrease of 0.3%.
Toronto-Dominion Bank contributed the most to the index gain, increasing 1.6%. BlackBerry Ltd. had the largest increase, rising 14.0%.
Today, 141 of 226 shares rose, while 80 fell; 9 of 11 sectors were higher, led by financials stocks.
Insights
* This year, the index rose 4.1%, heading for the best year since 2021
* This quarter, the index was little changed
* The index advanced 2.1% in the past 52 weeks. The MSCI AC Americas Index gained 9.6% in the same period
* The S&P/TSX Composite is 3.2% below its 52-week high on Feb. 2, 2023 and 12.9% above its low on Oct. 13, 2022
* The S&P/TSX Composite is down 1.8% in the past 5 days and fell 1.1% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 15.2 on a trailing basis and 14.4 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$3.18t
* 30-day price volatility fell to 12.04% compared with 12.10% in
the previous session and the average of 11.28% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 61.8519| 1.0| 25/3
Materials | 28.0354| 1.2| 34/16
Information Technology | 27.2088| 1.7| 10/1
Industrials | 17.0226| 0.6| 16/10
Utilities | 4.6826| 0.6| 12/3
Communication Services | 4.4910| 0.6| 5/0
Consumer Staples | 4.3716| 0.5| 8/3
Health Care | 1.4852| 2.3| 2/2
Real Estate | 1.3012| 0.3| 12/7
Consumer Discretionary | -0.6474| -0.1| 7/7
Energy | -41.6889| -1.1| 10/28
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
TD Bank | 16.0300| 1.6| 9.2| -6.6
Shopify | 14.2800| 2.0| 3.2| 86.5
Brookfield Corp | 7.1850| 1.5| -38.4| 11.2
Cenovus Energy | -5.5740| -2.1| -38.7| 4.0
Suncor Energy | -9.3560| -2.2| 4.6| 6.7
Canadian Natural Resources | -19.4300| -2.9| 151.6| 14.5
US
By Rita Nazareth
(Bloomberg) — Stocks rose ahead of economic data that will help shape Wall Street’s views on how close the Federal Reserve is from ending its rate hikes.
Bonds were mixed.
The dollar fell.
Bitcoin hovered near $25,000.
The S&P 500 approached 4,500 and the Nasdaq 100 rose 1.2%.
Tesla Inc. rallied 10% as Morgan Stanley said its Dojo supercomputer may boost value by up to $500 billion.
Qualcomm Inc. climbed after Apple Inc. extended a deal with the chipmaker.
Traders also awaited the iPhone maker’s product unveiling Tuesday.
Charter Communications Inc. jumped after reaching an agreement with Walt Disney Co. on ending a blackout of ESPN for millions of pay-tv customers.
In late hours, Oracle Corp. slid after reporting slower growth in cloud sales.
Traders also kept a close eye on negotiations between the United Auto Workers and automakers to prevent a strike, with the Biden administration deploying top officials to help facilitate the talks.
The UAW union said it’s ready to negotiate day and night with General Motors Co., Ford Motor Co. and Stellantis NV to reach an agreement by the Sept. 14 deadline.
US consumers’ inflation expectations were mostly stable in August, but households grew more concerned about their finances and more pessimistic about the job market, according to a Fed Bank of New York survey.
The consumer-price index report Wednesday will provide the latest insight into how much further the Fed may need to go to pull inflation back toward its target.
“This week is more likely to be a ‘good news is good, bad news is bad’ story,” said Chris Larkin, managing director of trading and investing at E*TRADE from Morgan Stanley. “The market’s ability to rebound in the near term could hinge on this week’s inflation numbers, especially Wednesday’s CPI.”
The market is in a late-cycle backdrop — a time when the Fed is expected to pause or reverse its hawkish policy stance — and more conservative equity factors, like high cash and low debt, have started to outperform, according to Morgan Stanley strategist Michael Wilson.
He reiterated his view that stock markets are not yet reflecting the risk of a recession.
“Bullishness is relatively high while the Fed remains shy of its inflation target,” John Stoltzfus, chief investment strategist at Oppenheimer & Co., wrote.
He said investors should curb their enthusiasm for a long rate pause or even a rate cut and instead “right-size expectations.”
Some 26% of respondents in the latest MLIV Pulse survey say they plan to decrease their exposure to the US equity benchmark over the next month.
That’s double the amount of those who plan to buy.
Only 13% of respondents said they might expand their exposure.
The greenback retreated after a bullish streak as Asia’s biggest central banks took aim in different ways at its recent rally.
The People’s Bank of China gave a strong warning to speculators to steer clear of destabilizing the yuan, while the head of the Bank of Japan took a more subtle approach in hinting at the possibility of an eventual policy shift, sending the yen up about 1%.
Bitcoin dropped to the lowest since June.
The world’s largest digital token was on the verge of forming a “death cross” — a pattern in which the 50-day moving average falls below its 200-day marker.
Such a crossover typically signals a loss of short-term momentum and further selling pressure ahead.
Treasury two-year yields were little changed near 5%, while 10-year rates edged higher to about 4.3%.
The auction of three-year notes on Monday drew the highest yield since 2007, reflecting the recent bond-market selloff driven by anticipation the Fede will keep rates elevated into next year.
Oil steadied near its highs of the year after rallying about 10% in recent weeks, with technical indicators that suggest its gains may be overdone sapping the benefit of risk-on
sentiment in broader markets.
Meantime, short sellers are raking in profits by betting against a part of the US equity market overlooked by most investors: small-cap stocks.
The group has seen paper profits of nearly $13 billion this year by wagering on a drop in the prices of small-, micro- and nano-cap shares, according to an estimate by S3 Partners LLC based on the average amount of short positions in the market.
That’s in stark contrast to the roughly $140 billion in losses from short sales of mid-, mega- and large-cap stocks, which rallied for much of the year as the economy defied gloomy forecasts, the Fed edged closer to ending its rate hikes and breakthroughs in artificial intelligence triggered a stampede in tech stocks.
The wind is about to shift for the US stock market, if history is any guide, says Bank of America Corp.
With equities in the “recovery” phase of the business cycle, this year’s laggards — including value and small-capitalization stocks — are primed to outperform, upending the growth, large-cap leadership that has dominated 2023’s bull run, according to strategists led by Savita Subramanian. 

Corporate News
* JetBlue Airways Corp. agreed to transfer some Spirit Airlines Inc. gates and flight slots at three airports to help lessen antitrust concerns over its pending acquisition of the low-cost carrier. Spirit shares jumped.
* Citizens Financial Group Inc. Chief Financial Officer John Woods vowed the company won’t do deals that require it to book losses as it looks to reduce a $13.7 billion portfolio of unwanted loans. The shares rose.
* Truist Financial Corp. will embark on “sizable” job cuts as part of the firm’s efforts to trim expenses by $750 million in the coming months.
* J.M. Smucker Co. sank after agreeing to buy Twinkies maker Hostess Brands Inc.
* RTX Corp. slumped after cutting its full-year sales outlook.  The company dramatically expanded the scope of required engine checks at its Pratt & Whitney unit, a move that will affect nearly its entire fleet of turbines powering Airbus SE’s latest A320 and ground hundreds of the single-aisle jets for months.
* Lockheed Martin Corp. may see more than $800 million in payments withheld through next June until it wins approval for the software powering its most advanced version of the F-35, according to newly disclosed delivery figures. The shares dropped.
* Arm Holdings Ltd.’s initial public offering is already oversubscribed by 10 times and bankers plan to stop taking orders by Tuesday afternoon, according to people familiar with the matter.
* Instacart and its backers set the stage for an initial public offering that may value the grocery-delivery business at as much as $9.3 billion, less than a quarter of what it was worth at the height of the Covid-19 pandemic. The company is seeking to raise as much as $616 million.
Key events this week:
* Germany ZEW survey expectations, Tuesday
* UK jobless claims, unemployment, Tuesday
* Apple set to unveil iPhone 15 line and next-generation smartwatches at “Wonderlust,” its biggest product-upgrade event of the year, Tuesday
* Japan PPI, Wednesday
* Eurozone industrial production, Wednesday
* UK industrial production, Wednesday
* US CPI, Wednesday
* Tech leaders including Tesla’s Elon Musk and Meta Platforms’ Mark Zuckerberg are set to attend a forum on the future of AI convened by Senator Chuck Schumer,  Wednesday
* Japan industrial production, Thursday
* European Central Bank policy meeting and news conference by President Christine Lagarde, Thursday
* US retail sales, PPI, business inventories, initial jobless claims, Thursday
* China property prices, retail sales, industrial production, Friday
* US industrial production, University of Michigan consumer sentiment, Empire Manufacturing index, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.7% as of 4 p.m. New York time
* The Nasdaq 100 rose 1.2%
* The Dow Jones Industrial Average rose 0.3%
* The MSCI World index rose 0.7%
Currencies
* The Bloomberg Dollar Spot Index fell 0.7%
* The euro rose 0.5% to $1.0749
* The British pound rose 0.4% to $1.2512
* The Japanese yen rose 0.9% to 146.54 per dollar
Cryptocurrencies
* Bitcoin fell 3.1% to $25,017.47
* Ether fell 4.9% to $1,539.3
Bonds
* The yield on 10-year Treasuries advanced two basis points to 4.28%
* Germany’s 10-year yield advanced three basis points to 2.64%
* Britain’s 10-year yield advanced five basis points to 4.47%
Commodities
* West Texas Intermediate crude fell 0.3% to $87.23 a barrel
* Gold futures rose 0.2% to $1,945.70 an ounce
This story was produced with the assistance of Bloomberg Automation.

Have a lovely evening.

Be magnificent!
As ever,

Carolann
The future belongs to those who prepare for it today. –Malcolm X, 1925-1965.

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