September 13, 2022 Newsletter

Dear Friends,

Tangents:
September 13, 1959: The Soviet space probe Luna 2 became the first man-made object to reach the moon as it crashed onto the lunar surface.  Go to article »
1899: The first recorded automobile fatality in the US takes place.  Henry H. Bliss was struck by a taxi cab while crossing the street in New York City.  He died the next day due to his injuries.
1814: Star-Spangled Banner inspired by the attack on Fort McHenry.

Ferrari is selling a $390,000 SUV.

RIP,  Jean-Luc Godard.

Massive ‘bullseye’ in Australian desert is evidence of an ancient reef: A strange doughnut-shaped mound in a desert in southern Australia recently made a surprise appearance in high-resolution satellite images.
The odd formation, which from space resembles a big bullseye, is likely the remains of an ancient reef, made by microbes and left over from a time when a vast ocean covered the now-arid environment, new research suggests.
Full Story: Live Science (9/13)

Did Nero really fiddle while Rome burned? The Roman emperor Nero ranks among the most infamous rulers of the Roman Empire for supposedly fiddling while Rome burned. But did that really happen? And does Nero really deserve his bad reputation?   As with all stories, we have to consider the source.  Full Story: Live Science (9/10)

Dining at 1,820 feet, in South Korea’s highest restaurant.  Your dinner table is ready… and it’s a window seat on the 123rd floor. What do you think about the view?

150-million-year-old dinosaur skeleton will be auctioned in Paris.  A paleontology expert said fossil collectors have been asking for “a dinosaur that can fit my living room.” Well, here it is — colossal price tag and all.

PHOTOS OF THE DAY

The top of One World Trade Center appears in the clouds in New York
Photograph: Justin Lane/EPA

People visit a lantern show during the mid-autumn festival in China’s southern Guangdong province
Photograph: AFP/Getty Images

Members of the Hillsborough Court Guard wait for King Charles III and Camilla, the Queen Consort, to arrive at Hillsborough Castle
Photograph: Mark Marlow/EPA
Market Closes for September 13, 2022

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1982, Forbes published its first American rich list. Of the 13 billionaires, 10 derived their fortunes from oil. Shipping magnate Daniel K. Ludwig topped the pile at over $2 billion.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell 1.7% at 19,645.40 in Toronto.
The move was the biggest since falling 3.1% on June 16 and follows the previous session’s increase of 1.1%.
Today, financials stocks led the market lower, as all sectors lost; 214 of 237 shares fell, while 22 rose.
Toronto-Dominion Bank contributed the most to the index decline, decreasing 2.2%.
Canopy Growth Corp. had the largest drop, falling 8.1%.
Insights
* In the past year, the index had a similar or greater loss nine times. The next day, it declined seven times for an average 0.6% and advanced twice for an average 0.3%
* This year, the index fell 7.4%, heading for the worst year since 2018
* This quarter, the index rose 4.2%
* The index declined 4.9% in the past 52 weeks. The MSCI AC Americas Index lost 13% in the same period
* The S&P/TSX Composite is 11.6% below its 52-week high on April 5, 2022 and 8.1% above its low on July 14, 2022
* The S&P/TSX Composite is up 2.9% in the past 5 days and fell 2.6% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 13.3 on a trailing basis and 12.1 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.2% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.19t
* 30-day price volatility rose to 14.70% compared with 14.01% in the previous session and the average of 13.48% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | -116.4243| -1.8| 2/27
Materials | -47.8208| -2.1| 2/49
Information Technology| -39.1287| -3.6| 0/14
Industrials | -31.6741| -1.2| 4/24
Energy | -31.3486| -0.9| 9/28
Communication Services| -21.2825| -2.2| 0/7
Consumer Discretionary| -17.2454| -2.5| 0/13
Real Estate | -15.2323| -2.9| 0/23
Consumer Staples | -13.6052| -1.6| 0/11
Utilities | -6.0184| -0.6| 4/12
Health Care | -2.0656| -2.7| 1/6
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
TD Bank | -24.7000| -2.2| -28.9| -10.2
Shopify | -20.0000| -5.6| 214.0| -75.2
RBC | -19.9200| -1.6| -30.4| -5.5
Waste Connections | 0.5850| 0.2| 9.6| 11.7
Brookfield Renewable Partners | 0.6830| 1.0| 6.6| 9.6
ARC Resources | 0.7520| 0.9| 45.5| 62.8
US
By Stephen Kirkland
(Bloomberg) — A broad-based selloff sent equities to their worst day in more than two years after hotter-than-expected inflation data fueled bets on a jumbo hike by the Federal Reserve next week.
Treasury yields surged and the dollar gained.
Across the board selling sent the S&P 500 down more than 4%, while the tech-heavy Nasdaq 100 losses surpassed 5% as yield-sensitive stocks took the biggest hit.
Both benchmarks are poised for their worst one-day routs since 2020.
Swaps traders are now fully pricing in a rate increase of three-quarters of a percentage point, with wagers rising for a similar move in November and policy rates ultimately reaching around 4.3% early in 2023.
The two-year Treasury yield, the most sensitive to policy changes, jumped as much as 22 basis points, pushing it more than 30 basis points above the 10-year rate and deepening an inversion in what is generally a recession warning.
The consumer price index increased 0.1% from July, after no change in the prior month, Labor Department data showed Tuesday.
From a year earlier, prices climbed 8.3%, a slight deceleration but still more than the median estimate of 8.1%.
So-called core CPI, which strips out the more volatile food and energy components,  also topped forecasts.
“Overall, today was a surprising day against the trend of what had appeared to be some moderation across most indicators of growth and pricing pressure, so the Fed’s job is clearly not finished,” Rick Rieder, the chief investment officer of global fixed income at BlackRock Inc., the world’s biggest asset manager, wrote. “We think the Fed will pause the rate hiking cycle potentially at year-end, but maybe now the central bank will have to wait a bit longer to do that after having reached a restrictive policy stance.”
More comments:
* “Headline inflation has peaked but, in a clear sign that the need to continue hiking rates is undiminished, core CPI is once again on the rise, confirming the very sticky nature of the US inflation problem,” Seema Shah, chief global strategist at Principal Global Investors, said in a note. “In fact, 70% of the CPI basket is seeing an annualized price rise of more than 4% month-on-month. Until the Fed can tame that beast, there is simply no room for a discussion on pivots or pauses.”
* “The CPI report was an unequivocal negative for equity markets,” wrote Matt Peron, director of research at Janus Henderson Investors. “The hotter than expected report means we will get continued pressure from Fed policy via rate hikes. It also pushes back any ‘Fed pivot’ that the markets were hopeful for in the near term.”
* “Core cost-of-living prices falling when labor markets are tight with nominal wages rising rapidly is not going to produce the soft-landing fairy tale,” Steven Blitz, chief US economist at TS Lombard, said. “The Fed had better odds of rolling a hard eight than engineering a soft landing. There is no Fed pivot to prevent one, there is no turning back from the path they are on.”
* “Although today’s announcement shows that inflation remains historically high, there may be signs that the pressure of inflation is abating,” said Richard Flynn, managing director of Charles Schwab UK. “Company inventories are rising relative to sales, global economic growth has weakened, and the U.S. dollar is strong — all indications that price hikes may begin to slow soon. That being said, inflation is still far-above the Fed’s target.”
* “I’d buy this dip,” said Peter Tchir, head of macro strategy at Academy Securities. “There are bigger issues facing us, but this seems like an algo driven response to the data, chasing out recent weak longs, so I’m a buyer of stocks and bonds here.”

On the corporate front, Twitter Inc. shareholders approved Elon Musk’s proposed $44 billion buyout, paving the way for a trial next month.
JPMorgan Chase & Co. says deal fees may fall by half in the third quarter, and Citigroup Inc. warned trading revenue in the third quarter will likely drop as a slowdown in its business dedicated to securitized products crimps fixed-
income trading revenue.
The latest inflation data came amid debate about the outlook for the global economy and how that will affect markets.
While stocks rallied in recent days, with the S&P 500 completing its biggest four-day surge since June on Monday, Bank of America Corp.’s latest survey showed the number of investors expecting a recession has reached the highest since May 2020.
A gauge of the dollar climbed more than 1%, advancing against all of its Group-of-10 counterparts.
Bitcoin fell 10%.
Here are some key events to watch this week:
* UK CPI, Wednesday
* US PPI, Wednesday
* US business inventories, empire manufacturing, retail sales, initial jobless claims, industrial production, Thursday * China home sales, retail sales, industrial production, fixed assets, surveyed jobless rate, Friday
* Euro area CPI, Friday
* US University of Michigan consumer sentiment, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 4.3% as of 4 p.m. New York time
* The Nasdaq 100 fell 5.5%
* The Dow Jones Industrial Average fell 3.9%
* The MSCI World index fell 3.4%
Currencies
* The Bloomberg Dollar Spot Index rose 1.2%
* The euro fell 1.5% to $0.9973
* The British pound fell 1.6% to $1.1500
* The Japanese yen fell 1.2% to 144.49 per dollar
Bonds
* The yield on 10-year Treasuries advanced six basis points to 3.42%
* Germany’s 10-year yield advanced eight basis points to 1.73%
* Britain’s 10-year yield advanced nine basis points to 3.17%
Commodities
* West Texas Intermediate crude fell 0.3% to $87.55 a barrel
* Gold futures fell 1.6% to $1,712.80 an ounce
–With assistance from Sagarika Jaisinghani, Brett Miller, Tony Jordan, Peyton Forte, Robert Brand and Isabelle Lee.
Have a lovely evening.

Be magnificent!

As ever,

Carolann

Anyone who stops learning is old, whether at twenty or eighty.  Anyone who keeps learning stays young. –Henry Ford, 1863-1947.

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