September 19th, Newsletter

Dear Friends,

Tangents: Happy Monday.
September 19, 2008: Struggling to stave off financial catastrophe, the Bush administration asked Congress for $700 billion to buy up troubled mortgage-related assets from U.S. financial institutions.  Go to article »

1970: Michael Eavis hosts the first ever Glastonbury Festival in Pilton, Somerset, England.

Oktoberfest returns after two-year hiatus. The world’s largest beer festival kicked off Saturday in Munich, Germany, with thousands of people joining the festivities. Look at all the lederhosen

Hoard of Islamic era gold and silver coins found behind Egyptian temple: Archaeologists in Egypt have uncovered a nearly 1,000-year-old cache of gold and silver coins behind a temple in Esna, a city located along the Nile River.  The hoard, which was discovered by a team of researchers from Egypt’s Supreme Council for Archaeology, includes coins minted throughout different parts of the Islamic era, which began in A.D. 610, when Muhammad received his first revelation, and lasted until approximately the 13th century.  Full Story: Live Science (9/16)

In a 1st, scientists use designer immune cells to send an autoimmune disease into remission: Five patients with hard-to-treat lupus entered remission after scientists tweaked their immune cells using a technique normally used to treat cancer. After the one-time therapy, all five patients with the autoimmune disease stopped their standard treatments and haven’t had a relapse.  This treatment, known as chimeric antigen receptor (CAR) T-cell therapy, needs to be tested in larger groups of lupus patients before it can be approved for widespread use. But if the results hold up in larger trials, the therapy could someday offer relief to people with moderate to severe lupus.
Full Story: Live Science (9/17)

Simon Armitage’s elegant poem for the Queen’s death, his elegy inspired by one of her favourite flowers:

Floral Tribute
Evening will come, however determined the late afternoon,
Limes and oaks in their last green flush, pearled in September mist.
I have conjured a lily to light these hours, a token of thanks,
Zones and auras of soft glare framing the brilliant globes.
A promise made and kept for life – that was your gift –
Because of which, here is a gift in return, glovewort to some,
Each shining bonnet guarded by stern lance-like leaves.
The country loaded its whole self into your slender hands,
Hands that can rest, now, relieved of a century’s weight.

Evening has come. Rain on the black lochs and dark Munros.
Lily of the Valley, a namesake almost, a favourite flower
Interlaced with your famous bouquets, the restrained
Zeal and forceful grace of its lanterns, each inflorescence
A silent bell disguising a singular voice. A blurred new day
Breaks uncrowned on remote peaks and public parks, and
Everything turns on these luminous petals and deep roots,
This lily that thrives between spire and tree, whose brightness
Holds and glows beyond the life and border of its bloom.

-by Simon Armitage

The coffin of Queen Elizabeth II, draped in the royal standard at Westminster Abbey, is surrounded by members of her family during the state funeral service
Photograph: David Levene/The Guardian

Emma, the monarch’s fell pony, stands as the ceremonial procession of the coffin of Queen Elizabeth II arrives at Windsor Castle
Photograph: Aaron Chown/PA

The royal corgis await the cortege
Photograph: Peter Nicholls/Reuters
Market Closes for September 19, 2022

Close Change
31019.68 +197.26
S&P 500 3899.89 +26.56
NASDAQ  11535.02 +86.62
TSX 19562.38 +176.50

International Markets

Close Change
NIKKEI 27567.65 -308.26
18565.97 -195.72
SENSEX 59141.23 +300.44
FTSE 100* 7236.68 -45.39


Bonds % Yield Previous % Yield
10 Year Bond
3.146 3.139
30 Year
3.050 3.072
10 Year Bond
3.4944 3.4494
30 Year Bond
3.5168 3.5131


BOC Close Today Previous  
Canadian $ 0.7544 0.7537
1.3255 1.3268
Euro Rate
1 Euro=
Canadian $ 1.3284 0.7528
1.0024 0.9976


Gold Close Previous
London Gold
1664.65 1689.10
WTI Crude Future  85.73 85.11

Market Commentary:
On this day in 1974, U.S. Secretary of the Treasury William E. Simon predicted that interest rates, then around 8%, would soon fall. The Dow leapt 3.4% on the good news. Over the next seven years, interest rates proceeded to double.
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 0.9% at 19,562.38 in Toronto. The move follows the previous session’s decrease of 0.9%.
Nutrien Ltd. contributed the most to the index gain, increasing 4.2%. Kinross Gold Corp. had the largest increase, rising 10.8%.
Today, 181 of 236 shares rose, while 52 fell; 9 of 11 sectors were higher, led by materials stocks.

* This year, the index fell 7.8%, heading for the worst year since 2018
* This quarter, the index rose 3.7%
* The index declined 4.5% in the past 52 weeks. The MSCI AC Americas Index lost 14% in the same period
* The S&P/TSX Composite is 11.9% below its 52-week high on April 5, 2022 and 7.7% above its low on July 14, 2022
* The S&P/TSX Composite is down 2.1% in the past 5 days and fell 2.7% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 13.2 on a trailing basis and 12 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$3.1t
* 30-day price volatility rose to 15.42% compared with 15.17% in the previous session and the average of 13.67% over the past month
|Index Points | |
Sector Name | Move | % Change | Adv/Dec
Materials | 53.5438| 2.5| 48/3
Financials | 42.7855| 0.7| 26/2
Energy | 26.6400| 0.8| 31/7
Industrials | 23.0536| 0.9| 23/4
Information Technology | 16.1962| 1.6| 9/5
Consumer Discretionary | 9.5464| 1.4| 11/3
Utilities | 6.9306| 0.7| 12/4
Real Estate | 0.4540| 0.1| 11/10
Health Care | 0.3814| 0.5| 3/4
Communication Services | -0.5209| -0.1| 2/4
Consumer Staples | -2.4957| -0.3| 5/6
| | |Volume VS| YTD
| Index | | 20D AVG | Change
Top Contributors |Points Move|% Change | (%) | (%)
Nutrien | 17.7800| 4.2| 8.2| 25.1
Shopify | 11.9300| 3.5| -34.9| -75.0
RBC | 11.1400| 0.9| -17.2| -4.9
Brookfield Renewable Partners | -0.5970| -0.8| -35.3| 11.6
Rogers Communications | -1.9060| -1.4| -35.1| -7.6
Couche-Tard | -2.2770| -0.7| -31.7| 10.7

By Rita Nazareth
(Bloomberg) — Stocks pushed higher in the final hour of New York trading, with a rally in megacaps like Apple Inc. and Tesla Inc. driving a rebound that followed the worst weekly rout since mid-June.
Major equity benchmarks had a tough time finding direction Monday as traders geared for another super-sized US rate hike amid fears on whether the Federal Reserve could overtighten and raise the odds of a hard landing.

Treasury 10-year yields hovered near 3.5% while the two-year rate, which is more sensitive to imminent Fed moves, hit the highest since 2007.
Traders are betting the Fed will hike by 75 basis points Wednesday, signal rates are heading above 4% and will then pause.

The long hold strategy is rooted in the idea the central bank would avoid the disastrous stop-go policy of the 1970s that allowed inflation to get out of hand.
While a case can be made for going bigger, a shock full-point hike could add to recession jitters, further depressing investor sentiment.
“While more hawkish central bank pricing and the resulting increase in real yields is weighing on risk assets, we also believe that any downside from here would be limited,” JPMorgan Chase & Co. strategists led by Marko Kolanovic, said. “Robust earnings, low investor positioning and well anchored long-term inflation expectations should mitigate any downside in risk assets from here.”
To Sam Stovall, chief investment strategist at CFRA Research, a full-point hike would “unnerve Wall Street” as it would imply a central bank “overreacting to the data rather than sticking to its game plan.”

Following the previous seven rate increases of that magnitude, the US equity benchmark fell four times each over one-, three-, and six-month periods, he added.
Meantime, Ed Yardeni, president of his namesake research firm who nailed the market bottom in 1982 and 2009, sees the Fed boosting rates by 100 basis points this month, with Chair Jerome Powell and the central bank’s economic projections looking hawkish.
He noted that could cause the S&P 500 to retest its June 16 low of 3,666.77, almost 6% below current levels.
While a policy surprise could certainly move markets, the Fed’s revised forecasts for where the policy rate will ultimately come to rest and how long it’s likely to stay at that level will be equally important.

Swap contracts that forecast rates over the next two years now peak at 4.5% in March 2023 — a full point higher than was expected after the last meeting in July.
“Due to current negative indicators including high inflation and the Fed’s upcoming rate announcement, global economic growth concerns and earnings expectations, we expect to see a continued negative pattern in the near-term,” said Mark Hackett, chief of investment research at Nationwide. “It will not take much good news to light a fire under the market, but we don’t expect that good news to come in the next few weeks.”
In a sign of how severe the equity beatdown has been, the S&P 500 has been trading below a key technical level for the longest stretch since the global financial crisis.

Its long-term trend has turned “sharply lower recently,” and the index has closed below its 200-day moving average for 110 trading sessions, the longest streak since the bear markets of 2008-2009 and 2000-2002, according to Bespoke Investment Group.
During the five-week period that started in mid-August and ended Sept. 7, long-only institutional investors sold $51.2 billion worth of US-traded stocks — roughly a quarter of what they dumped in the prior 31 weeks of this year, according to an S&P Global Market Intelligence analysis.

The data don’t include last week, when a surprising inflation print stoked concerns of a Fed tightening that’s more aggressive than expected.
“Volatility is expected to remain heightened through the remainder of this year at a minimum,” said Megan Horneman, chief investment officer at Verdence Capital Advisors. “Until there is consistent improvement from inflation, timing the peak in Fed rate hikes is challenging. We do not suggest selling into the volatility. While we do not rule out a testing of the June S&P 500 low, we would look at it as a potential buying opportunity and focus on areas that are reflecting the potential downside in economic growth and earnings.”
Every major bottom in the last 15 years hasn’t culminated until the Cboe VIX Index started trading 10 volatility points higher than the VIX futures two months from now, signaling a front-month inversion of the volatility curve, data compiled by BTIG LLC show.

That’s yet to happen in this year’s rout.
Even as the VIX curve shifted higher and became flatter, it’s still in its usual upward-sloping shape, meaning the here-and-now cost for protection is lower than several months out.
Bond issuers also seem cautious about the market now.

Four potential high-grade borrowers looked at selling bonds Monday, but ultimately opted to stand down amid a volatile start to trading.
Supply is now running well below forecasts for September, with rapidly rising yields derailing some issuers’ plans.
In a time-tested harbinger of an economic downturn, short-term US rates have exceeded yields on longer maturities for months.

The MLIV Pulse survey, which drew 737 responses, showed that the bulk of contributors expect a deeper inversion.
Some see it reaching levels last seen in the early 1980s, when Paul Volcker ratcheted up borrowing costs to break the back of hyperinflation.
The majority of the MLIV survey’s contributors say it’s best to bet on dollar gains, and 44% prefer to sell stocks.

Key events this week:
* US housing starts, Tuesday
* EIA crude oil inventory report, Wednesday
* US existing home sales, Wednesday
* Federal Reserve decision, followed by a news conference with Chair Jerome Powell, Wednesday
* Bank of Japan monetary policy decision, Thursday
* The Bank of England interest rate decision, Thursday
* US Conference Board leading index, initial jobless claims, Thursday

Some of the main moves in markets:
* The S&P 500 rose 0.7% as of 4 p.m. New York time
* The Nasdaq 100 rose 0.8%
* The Dow Jones Industrial Average rose 0.6%
* The MSCI World index rose 0.4%

* The Bloomberg Dollar Spot Index was little changed
* The euro was little changed at $1.0024
* The British pound rose 0.1% to $1.1436
* The Japanese yen fell 0.2% to 143.17 per dollar

* The yield on 10-year Treasuries advanced four basis points to 3.49%
* Germany’s 10-year yield advanced five basis points to 1.80%

* West Texas Intermediate crude rose 0.4% to $85.46 a barrel
* Gold futures were little changed
–With assistance from Matthew Burgess, Cecile Gutscher, Vildana Hajric, Isabelle Lee and Peyton Forte.

Have a lovely evening.

Be magnificent!

As ever,


Time brings all things to pass. –Aeschylus,  525 BC-456 BC.

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