September 13, 2023 Newsletter

Dear Friends,

Tangents:

September 13, 1985: Super Mario Bros game first appears, created by Shigeru Miyamoto at Nintendo.
Septmeber13, 2000, Chase Manhattan agreed to buy J.P. Morgan for more than $35 billion, creating the third largest financial company in the U.S.  Go to article >>
1814: Star Spangled Banner inspired by the attack on Fort McHenry.

Main takeaways from Apple’s iPhone event.  Apple unveiled its iPhone 15 lineup along with other major updates during its September keynote event on Tuesday. Here are the key takeaways.

What is USB-C? Here’s everything you need to know:  Apple announced this week it will switch to USB-C charging cables for some new devices. Here, our tech guru explains why USB-C is a major upgrade and also recommends chargers, hubs and cables for your new device.

Christiane Amanpour celebrates 40 years at CNN.  Forty years ago, the veteran journalist arrived at CNN to discuss her first role with only $100 in her pocket. Now, as CNN’s chief international anchor, Christiane Amanpour is reflecting on some of the standout moments of her storied career.

Wonders of the wilderness.  Start your day with this breathtaking time-lapse of Grand Teton National Park in Jackson Hole, Wyoming.

7,000-year-old animal bones, human remains found in enigmatic stone structure in Arabia
Researchers have discovered human bones and animal remains dating to around 7,000 years ago in Arabian stone structures known as mustatils.  Read More.

‘Once again, innovation and proliferation ended with catastrophe’: The environmental disaster of plants taking over the world
The evolutionary leap that allowed plants to live on land 400 million years ago upended Earth in a way unseen since the Great Oxidation Event over 1.5 billion years earlier.
Read More.

Green comet Nishimura has passed the closest point to Earth, and it won’t be back for another 430 years
The comet Nishimura, which was only discovered in August, will soon be slingshotted around the sun and back out toward the edge of the solar system where it will remain for centuries.  Read More.

PHOTOS OF THE DAY

Taiyuan City, China
Students take part in the traditional first writing ceremony as schools open in Shanxi province.  Photograph: Shutterstock.

A ‘dacha’ is a country house made of wood, used by Soviet citizens to escape the rigours of the city for rural idyll. Widespread in the countries of the former USSR, this important cultural and architectural form has been largely ignored academically.  Some have been sold, some have burned down, others are abandoned and decaying. The spirit that existed previously has evaporated. –photograph: Fyodor Savintsev.

​​​​​​​Sumatra, Indonesia
Firefighters work to extinguish a peatland fire in Ogan Ilir.  Photograph: Al Zulkifli/AFP/Getty Images
Market Closes for September 13^th, 2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1982, Forbes published its first “rich list” of the 400 wealthiest people in America. Shipping magnate Daniel K. Ludwig topped the inaugural Forbes 400 with a net worth above $2 billion. Warren Buffett made the list, too, with a net worth of $250 million.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the third day, climbing 0.3%, or 55.86 to 20,278.94 in Toronto.
The index advanced to the highest closing level since Sept. 5.
Canadian National Railway Co. contributed the most to the index gain, increasing 1.8%. North West Co. had the largest increase, rising 14.7%.
Today, 103 of 226 shares rose, while 120 fell; 8 of 11 sectors were higher, led by financials stocks.
Insights
* This year, the index rose 4.6%, heading for the best year since 2021
* This quarter, the index rose 0.6%
* The index advanced 3.2% in the past 52 weeks. The MSCI AC Americas Index gained 13% in the same period
* The S&P/TSX Composite is 2.7% below its 52-week high on Feb. 2, 2023 and 13.5% above its low on Oct. 13, 2022
* The S&P/TSX Composite is up 0.3% in the past 5 days and fell 0.6% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 15.4 on a trailing basis and 14.5 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$3.21t
* 30-day price volatility fell to 11.91% compared with 11.93% in the previous session and the average of 11.37% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 40.0415| 0.7| 15/13
Industrials | 18.1223| 0.7| 15/11
Consumer Staples | 10.1728| 1.2| 9/2
Utilities | 6.6151| 0.8| 9/7
Consumer Discretionary | 4.8357| 0.7| 6/8
Real Estate | 1.3390| 0.3| 15/6
Communication Services | 1.1434| 0.1| 2/3
Health Care | 0.4285| 0.7| 2/2
Information Technology | -6.6202| -0.4| 4/7
Materials | -9.6845| -0.4| 19/30
Energy | -10.5290| -0.3| 7/31
================================================================
| | |Volume VS |
| Index | | 20D AVG |YTD Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
Canadian National | 10.8100| 1.8| -10.8| -6.2
Dollarama | 10.5900| 5.9| 318.7| 19.5
Brookfield Corp | 8.5820| 1.8| 13.2| 12.1
Shopify | -4.3680| -0.6| -27.7| 80.6
Canadian Natural Resources | -4.7610| -0.7| -50.9| 15.9
Magna Intl | -6.1690| -4.2| 24.6| -0.7
US
By Rita Nazareth
(Bloomberg) — Stocks, bonds and the dollar saw small moves, with a mixed inflation report reinforcing speculation the Federal Reserve will pause its rate hikes — but refrain from calling the end of its tightening cycle.
The S&P 500 was little changed.
The Dow Jones Industrial Average underperformed.
American Airlines Group Inc. led industry losses after cutting its earnings outlook amid a jump in jet fuel prices.
Most mega-caps rose, with the chiefs of five of the 10 biggest US companies appearing at a closed-door Senate meeting to shape how artificial intelligence is regulated.
Apple Inc. fell as China flagged security problems with iPhones.
Two-year yields dropped below 5%.
The greenback edged lower.
Swaps tied to the next two Federal Open Market Committee meetings continued to price in little chance of a hike next week — and about 50% odds of one in November. Measures of credit-default swaps for both investment and speculative-grade companies slid — suggesting bets on a September pause from the Fed supersede economic worries for now.
The core consumer price index, which excludes food and energy costs, advanced 0.3% from July, the first acceleration in six months.
From a year ago, it increased 4.3% — in line with estimates and marking the smallest advance in nearly two years.
It’s still above the Fed’s 2% goal.
To Krishna Guha at Evercore ISI, while the report isn’t amazing as far as policy goes, it’s not a disaster either.
“Not a great CPI report, but not something that changes the basic Fed outlook,” said Guha, the firm’s vice chairman. “This Fed is not itching to hike again and we think it would take significantly more to push the FOMC to actually deliver another increase — with our base case remaining the Fed is done here.”

More Comments on CPI:
* Chris Zaccarelli, chief investment officer at Independent Advisor Alliance: “This isn’t the goldilocks number that investors were hoping for, but markets can still trade in a range – as inflation is high enough to keep the Fed still in play — but not hot enough for a shift away from the ‘Fed is almost done’ narrative.  As long as the economy remains resilient and inflation doesn’t reignite, the market can rally into year-end, once we get past the seasonally weak months of September and October.”
* Mike Loewengart at Morgan Stanley Global Investment Office: “Today’s middle-of-the-road CPI report may have disappointed those who were looking for inflation to establish a clear cooling trend. But given how high oil prices are and how strong recent economic data has been, the fact that the numbers were more or less in line with estimates may be seen as a small victory. There will continue to be bumps in this road, but the Fed is still on track to leave interest rates unchanged after next week’s policy meeting.”
* Damian McIntyre, portfolio manager for alternative equities at Federated Hermes: “Today’s US CPI report wasn’t earth-shattering. This print likely makes a case for another pause for the FOMC in September, but provides little clarity into Fed action beyond this. We expect conflicting pronouncements from the Fed heading into the autumn and consensus over the best path forward is unlikely, creating the potential for a contentious November meeting.”
* John Leiper, chief investment officer at Titan Asset Management: “It’s tempting to read too much into the month-on-month data in this hyper data-dependent central bank age. I think this doesn’t move the needle too much. We still expect the Fed to hold on rates at the next meeting. Markets are pricing in slightly higher chance of another hike later this year.”
* Greg Wilensky, head of US fixed income at Janus Henderson Investors: “While these numbers do not change our, and the market’s expectations that the Fed will hold the target Fed Funds rate unchanged at the September meeting, the slightly stronger number can influence the tone of the press conference and Summary of Economic Projections.  We continue to expect some reduction in the number of participants projecting further hikes, but probably not enough to move the median projection of one more rate hike. That said, we believe that we have likely seen the last rate hike for this cycle, as the economic data that the Fed will see over the coming months will keep them on hold and allow the impact of 5.25% of prior hikes to slow the economy and inflation.”
* Florian Ielpo at Lombard Odier Asset Management: “This inflation report places the Fed in a more comfortable wait-and-see situation: the marginally higher than expected
inflation comes from the evolution of energy prices – nothing the Fed should be worrying too much about at the moment.”
* Brian Pietrangelo at Key Private Bank: “In our view, the economy maintains decent momentum, but is showing signs of slowing, and thus the Federal Reserve is likely
to pause next week and wait for additional data to unfold for the November meeting.”
* Hussain Mehdi, macro and investment strategist at HSBC Asset Management: “The upside surprise to the August core monthly print will be a disappointment for Fed policymakers. However, the broad trend of disinflation remains intact while there is ongoing evidence of a cooling labor market. This means there is still a strong case for a pause at next week’s Fed meeting.  In our view, we believe there is room for further gains for US equities this year. But we think the economic reality of restrictive monetary policy will eventually catch up with the market. A likely tip into recession next year will damage the outlook for corporate earnings and can weigh on multiples. For this reason,
we think a cautious and defensive positioning in portfolios still makes sense.”
* Seema Shah, chief global strategist at Principal Asset Management: “The inflation print likely is not enough to tilt next week’s Fed call towards a hike, yet it also hasn’t entirely cleared up the question of a November pause versus hike.”

Corporate News
* Moderna Inc. gained after saying a reformulated version of its messenger-RNA based flu shot met its primary goals in a final-stage trial — a result that could pave the way for the company to seek regulatory approval for the influenza vaccine.
* Ford Motor Co. advanced after UBS Group AG upgraded its rating to buy from sell.
* 3M Co. slipped after pushing out the spinoff of its health care division and cautioning on the outlook for next year.
* Spirit Airlines Inc. slipped after citing “steep” discounts for travel ahead of the Thanksgiving holiday, and also saying the surge in fuel — one of the industry’s largest costs — would hurt its quarterly results.
* Shares of commercial real estate brokerages like CBRE Group Inc. and Jones Lang LaSalle Inc. slumped on speculation interest rates will remain higher for longer, which could add more pressure to transactions.
* Caesars Entertainment Inc. paid tens of millions of dollars to hackers who broke into the company’s systems in recent weeks and threatened to release the company’s data, according to two people familiar with the matter. The shares fell.
Key events this week:
* 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 0.1% as of 4 p.m. New York time
* The Nasdaq 100 rose 0.4%
* The Dow Jones Industrial Average fell 0.2%
* The MSCI World index was little changed
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro fell 0.2% to $1.0732
* The British pound was little changed at $1.2488
* The Japanese yen fell 0.3% to 147.46 per dollar
Cryptocurrencies
* Bitcoin rose 0.3% to $26,150
* Ether was little changed at $1,599.68
Bonds
* The yield on 10-year Treasuries declined three basis points to 4.25%
* Germany’s 10-year yield was little changed at 2.65%
* Britain’s 10-year yield declined seven basis points to 4.35%
Commodities
* West Texas Intermediate crude was little changed
* Gold futures fell 0.2% to $1,931.20 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Isabelle Lee, Emily Graffeo, Robert Brand, and Tatiana Darie.
Have a lovely evening.

Be magnificent!
As ever,

Carolann
Comfort and prosperity have never enriched the world as much as adversity has. –Billy Graham, 1918-2018.

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