September 21, 2023 Newsletter

Dear Friends,

Tangents: Happy Friday Eve.
Today is the International Day of Peace, observed by All UN member states.

September 21, 1937: J.R.R. Tolkien’s The Hobbit is published for the first time.

2001: Congress approved $15 billion to help an airline industry reeling from the Sept. 11 terrorist attacks.  Go to article >>

Bill Muray, actor, b. 1950.
Leonard Cohen, musician, b.1934.
H.G. Wells, author, b. 1866.
Stephen King, author, b. 1947.
Ethan Coen, director, b. 1957.
Faith Hill, singer, b. 1967.

Archaeologists unearth oldest known wooden structure in the world
This simple wooden structure may look like a normal log in a stream, but researchers say it’s almost half a million years old.
Archaeologists in Zambia discover oldest wooden structure in the world, dating to 476,000 years ago
A new finding in Zambia reveals the oldest known wooden construction shaped by the hands of a human ancestor and demonstrates the ingenuity and technical prowess of our ancient relatives.  Read More.

$10,000 bill sells for record-breaking figure
Issued in 1934, a rare $10,000 bill dating back to the Great Depression just sold for $480,000 at auction.

Neuralink, Elon Musk’s brain implant startup, set to begin human trials
Elon Musk’s controversial startup has opened recruitment for its first human clinical trial and will soon begin implanting chips into human brains.

Here’s what India’s possible name change is all about
Various media outlets are reporting that the Modi government may soon put forward a resolution to officially change the country’s name to Bharat. Here are the clues that might lead to a grand unveiling.

10-year-old helps struggling mom finish marathon
A young girl jumped into the final leg of the Salt Lake City marathon to help her mom finish the race. Watch the heartwarming moment.

Cup crafted from prehistoric human skull discovered in cave in Spain
A new study suggests that Spain’s ancient peoples shared complex beliefs about death and the afterlife.  Read More.

‘Grand cosmic fireworks’: See the stunning winners of the 2023 astronomy photo of the year contest
The winning images from the Royal Observatory Greenwich’s 15th annual astrophotography contest will blow you away.  Read More.

PHOTOS OF THE DAY

Paris, France
Britain’s King Charles addresses senators and members of the national assembly at the French senate, the first time a member of the British royal family has spoken in the senate chamber.  Photograph: Emmanuel Dunand/AFP/Getty Images

Guests attend the state banquet at the Palace of Versailles.  Photograph: Daniel Leal/AFP/Getty Images

Brahmanbaria, Bangladesh
A worker covers mounds of rice with giant hat-shaped bamboo cones in a field after they have been dried in the scoring sun. This is a traditional method of keeping freshly collected rice protected from rain and fog after the removal of moisture.  Photograph: Joy Saha/Shutterstock.
Market Closes for September 21^st, 2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1931, U.S. stocks tumbled after the Bank of England abruptly abandoned the Gold Standard, and the New York Stock Exchange instituted a temporary ban on short selling. By the session’s end, stocks had recovered most of their lost ground.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the fourth day, dropping 2.1%, or 423.08 to 19,791.62 in Toronto.
The move was the biggest since falling 2.7% on Sept. 23, 2022.
Today, financials stocks led the market lower, as all sectors lost; 215 of 227 shares fell, while 11 rose.
Shopify Inc. contributed the most to the index decline, decreasing 5.6%. Wesdome Gold Mines Ltd. had the largest drop, falling 7.5%.
Insights
* In the past year, the index had a similar or greater loss once
* This year, the index rose 2.1%, heading for the best year since 2021
* This quarter, the index fell 1.8%
* This month, the index fell 2.5%
* So far this week, the index fell 4%, heading for the biggest decline since the week ended Sept. 23
* 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 5% below its 52-week high on Feb. 2, 2023 and 10.7% above its low on Oct. 13, 2022
* The S&P/TSX Composite is down 3.8% in the past 5 days and was little changed in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 15.1 on a trailing basis and 14.2 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 rose to 13.84% compared with 12.39% in the previous session and the average of 11.69% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | -114.1841| -1.8| 1/27
Energy | -61.8947| -1.7| 2/38
Industrials | -59.6149| -2.2| 2/24
Information Technology| -59.5638| -4.0| 1/10
Materials | -56.8363| -2.4| 3/47
Utilities | -19.0657| -2.2| 0/16
Consumer Discretionary| -16.7371| -2.3| 0/14
Communication Services| -14.9643| -1.9| 0/5
Real Estate | -11.6655| -2.4| 0/21
Consumer Staples | -8.0395| -1.0| 0/11
Health Care | -0.5147| -0.8| 2/2
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
Shopify | -36.2200| -5.6| 9.5| 54.0
Brookfield Corp | -25.6600| -5.4| 28.2| 4.7
RBC | -18.8500| -1.6| -5.7| -5.1
Equinox Gold | 0.1590| 1.4| 29.9| 35.4
Bausch Health | 0.2060| 0.9| 6.6| 33.2
SNC-Lavalin Group | 1.0440| 1.9| 41.1| 91.8
US
By Rita Nazareth
(Bloomberg) — Stocks fell to their lowest since June, while Treasury 10-year yields climbed as the latest reading on the labor market just reinforced the case for the Federal
Reserve’s higher-for-longer stance.
The S&P 500 dropped 1.6%.
All major US equity benchmarks broke below their key 100-day moving averages — seen as a bearish signal by some technical analysts.
Amazon.com Inc. and Nvidia Corp. led a rout in mega-caps.
Cisco Systems Inc. sank after agreeing to buy Splunk Inc. for $28 billion.
Broadcom Inc. slid on a report that Alphabet Inc.’s Google is considering dropping the firm as a supplier for artificial-intelligence chips as soon as 2027.
Wall Street’s “fear gauge” — the VIX index of stock volatility — extended its surge from the lowest since 2020 hit last week.

Longer-dated US yields climbed, with 10-year rates approaching 4.5% — a level last seen in 2007. Meantime, the two-year note yield fell.
The differential between both yields — a proxy for confidence in the economy — narrowed.
The dollar briefly touched a six-month high.
The yen rebounded after earlier inching closer to the 150 level that some analysts consider to be a trigger for intervention.
The pound fell after the Bank of England kept rates unchanged for the first time in almost two years.
The MSCI Emerging Markets Index of stocks was poised to erase its 2023 advance.
“The lesson for the markets is that a lot of investors had been second-guessing the Fed,” said Chris Gaffney, president of world markets at EverBank. “They’re committed to keeping inflation down and part of that, I think, is to keep rates higher for longer — and markets are finally coming to grips with that.”
To Matt Maley at Miller Tabak + Co., while the Fed signaled it will indeed keep rates higher for longer, the central bank “did seem to push that narrative to an even greater degree than expected” — by raising the growth outlook and where officials expect the Fed funds rate to be trading at future dates in a significant manner.
“The outlook was significantly more hawkish than what the market was expecting,” said Fiona Cincotta, senior market analyst at City Index. “The Fed has been doing what it said it will do – keep rates higher for longer. I feel like the market is playing catch up with what the Fed has been saying all along.”
Applications for US unemployment benefits fell to the lowest level since January last week, indicating a healthy labor market that continues to support the economy.
Initial jobless claims dropped to 201,000.
The median estimate in a Bloomberg survey of economists called for 225,000 applications.
“On net, it was a solid read from one of the closest to ‘real time’ employment data investors are afforded,” said Ian Lyngen at BMO Capital Markets. “It also marginally increases the chances the Fed hikes in November and certainly reinforces the Fed’s messaging regarding avoiding cuts as long as possible in 2024.”
With most of the Fed board supporting an additional hike in 2023, lower-than-expected jobless claims is the type of data that could make that a reality, according to Mike Loewengart at Morgan Stanley Global Investment Office.  “The Fed has been waiting for the labor market to loosen up, and so far it hasn’t happened,” Loewengart added. “But even if they don’t hike again, continued strength in the jobs market will likely translate into rates remaining higher for longer.”
Bond traders are bracing for Treasury yields to keep pushing higher after the Fed signaled it’s likely to hold interest rates at lofty levels well into next year.
Fifty-eight percent of the 172 respondents in the Bloomberg Markets Live Pulse survey conducted after the Fed’s decision said that 2-year Treasury yields have yet to peak, while a plurality expect 10-year yields to climb over 4.5%.
Two-year rates rose above 5.19% Thursday to a fresh 17-year high, while 30-year yields climbed to 4.48%, a level last seen in 2011.
Bond investors’ pain isn’t over yet, even though the Fed is done raising interest rates, said Bill Gross, the former chief investment officer of Pacific Investment Management Co.  In an investment outlook published Thursday, Gross said  bond markets are headed for an unprecedented third year of losses, because of sticky inflation and widening deficits, a result of government fiscal spending he equates with throwing “money out of a helicopter.”
Former Fed Bank of St. Louis President James Bullard said the central bank may need to raise rates further and hold them higher to guard against the risk of a reacceleration of inflation.
Meantime, Former Treasury Secretary Lawrence Summers said policymakers are too optimistic with their latest set of economic projections, cautioning that they are at risk of being surprised by both faster inflation and weaker growth than they anticipate.
James Zelter, co-president of Apollo Global Management Inc., is “skeptical” the economy will achieve a soft landing, saying the effects of tighter monetary policy from central banks still haven’t been fully felt.
Meantime, economic data also showed sales of previously owned US homes declined in August to the lowest since the start of the year, restrained by limited inventory and historically high mortgage rates.
The combination of high financing costs, diminished inventory and elevated prices has created one of the least affordable housing markets on record. 

Corporate Highlights
* Microsoft Corp. said its AI assistant for Windows will start rolling out Sept. 26 and the Office AI app will be widely available Nov. 1 as the software giant continues to bake
generative artificial intelligence into its products.
* Rupert Murdoch is stepping down as chairman of the boards of Fox Corp. and News Corp. following a nearly seven-decade career, and will become chairman emeritus of each company.
* Comcast Corp.’s NBCUniversal has reached a five-year deal to air WWE’s Friday Night SmackDown, taking over broadcast rights that have belonged to Fox Corp. since 2019.
* Darden Restaurants Inc. is seeing more “softness” among households with incomes above $125,000 compared to last year, Chief Executive Officer Rick Cardenas said.
Key events this week:
* China’s Bund Summit, Friday
* Japan CPI, PMIs, Friday
* Bank of Japan rate decision, Friday
* Eurozone S&P Global Eurozone PMIs, Friday
* US S&P Global Manufacturing PMI, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 1.6% as of 4 p.m. New York time
* The Nasdaq 100 fell 1.8%
* The Dow Jones Industrial Average fell 1.1%
* The MSCI World index fell 1.7%
Currencies
* The Bloomberg Dollar Spot Index rose 0.2%
* The euro was little changed at $1.0660
* The British pound fell 0.4% to $1.2292
* The Japanese yen rose 0.5% to 147.55 per dollar
Cryptocurrencies
* Bitcoin fell 1.8% to $26,595.91
* Ether fell 2.2% to $1,589.59
Bonds
* The yield on 10-year Treasuries advanced seven basis points to 4.48%
* Germany’s 10-year yield advanced three basis points to 2.74%
* Britain’s 10-year yield advanced nine basis points to 4.30%
Commodities
* West Texas Intermediate crude fell 0.1% to $89.55 a barrel
* Gold futures fell 1.4% to $1,940.20 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Isabelle Lee and Vildana Hajric.
Have a lovely evening.

Be magnificent!
As ever,

Carolann
In war it does not matter who is right, but who is left. –Winston Churchill, 1874-1965.

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