September 6, 2022 Newsletter

Dear Friends,

Tangents:
September 6, 1997: The funeral of Diana, Princess of Wales, starts at 9:08 am when the tenor bell of Westminster Abbey begins tolling to signal the departure of the cortège from Kensington Palace.
1970:  Palestinian guerrillas seized control of three jetliners, which were later blown up on the ground in Jordan after the passengers and crews were evacuated.  Go to article »
1921: Frist radio broadcast of a prizefight.

Reap the beauty of the full ‘Harvest Moon’ on Sept. 10:  Autumn is on the way, and it’s time to reap the beauty of September’s full moon — popularly called the Harvest Moon.
The next full moon peaks on Saturday, Sept. 10 at approximately 6 a.m. EDT (10 a.m. UTC), although it will appear bright and full in the sky beginning on Friday (Sept. 9) and into Sunday (Sept. 11) as well.
Full Story: Live Science (9/6)

Launch of NASA’s ‘mega moon rocket’ delayed by more than a month: The launch of NASA’s Artemis “mega moon rocket” has been pushed out more than a month, likely to mid-October, after Saturday’s (Sept. 3) second launch attempt was canceled because of an engine leak.The gigantic Artemis 1 rocket — made up of the Orion capsule perched atop the 30-story Space Launch System (SLS) — will be rolled back to the vehicle assembly building, and the next launch window won’t open until at least early October, NASA announced.  Full Story: Live Science (9/5)
PHOTOS OF THE DAY

The Fairview fire in California
Photograph: David Swanson/Reuters
Ferries sail along the Bosphorus as the sun breaks through clouds
Photograph: Francisco Seco/AP

Fifteen-hundred dance school students perform in Piazza del Duomo during the OnDance festival
Photograph: Matteo Corner/EPA
Market Closes for September 6, 2022

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1993, a consultant named Peter de Jager published “Doomsday 2000,” the first major article to warn about what becomes known as the “Y2K” bug. The world spent hundreds of billions of dollars to reprogram computers so that they could accept dates beyond “1999.” On Jan. 1, 2000, when worldwide meltdown was widely forecast by doomsayers like de Jager, absolutely nothing happened.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell 0.9% at 19,088.27 in Toronto. The index dropped to the lowest closing level since July 26 after the previous session’s increase of 0.7%.
Today, energy stocks led the market lower, as all sectors lost; 170 of 238 shares fell, while 64 rose.
Toronto-Dominion Bank contributed the most to the index decline, decreasing 1.7%. Aurora Cannabis Inc. had the largest drop, falling 8.1%.
US
By Rita Nazareth
(Bloomberg) — Stocks trimmed losses from nearly oversold levels, while bond yields soared on bets the Federal Reserve will stay hawkish as it confronts the hottest inflation in about four decades.
After exhausting gyrations, the S&P 500 managed to close slightly above 3,900 — a threshold seen by some technical analysts as a make-or-break level for short-term direction. Treasuries tumbled across the curve, taking the 30-year rate to the highest since 2014. The Bloomberg Dollar Spot Index rose to another record, while the Japanese yen hit a fresh 24-year low.
“We continue to advise against big market direction calls,” said Solita Marcelli, chief investment officer Americas at UBS Global Wealth Management. “Investors should keep their asset allocations closer to their long-term strategic benchmarks. We also recommend incrementally tilting portfolios toward higher- quality and more defensive assets, which should hold up better across multiple scenarios.”
Hedge funds have raised exposure in back-to-back weeks, data from Goldman Sachs Group Inc.’s prime brokerage show, increasing short sales via macro products such as index futures while buying shares of individual firms. The data suggest that money managers are both keen to pick up bargains and leery about the broader market’s direction.
US shares have given up about half of a rally from their June lows after a raft of Fed speakers signaled the central bank will keep its policy tight. While the equity market should still remain in “choppy waters,” several indicators suggest the selling is getting overdone, according to Keith Lerner at Truist Advisory Services.
“Markets do not typically move in a straight line,” said Lerner. “Of course, oversold markets can get more oversold. Still, after advocating for trimming equities on strength, we would be less apt to do so now — at least over the short term.” To Matt Maley at Miller Tabak + Co., any stock gains at his point should be seen as a short-term relief rally. He says traders should use those bounces as an opportunity to get more defensive.
Meantime, one of Wall Street’s biggest bears is turning even more pessimistic on the outlook for profits.
Morgan Stanley strategist Mike Wilson cut his expectations for earnings-per-share growth, saying that a slowing economy is now likely to be a bigger concern for stocks. In 2023, he expects profits to fall 3% — even in the absence of an economic recession.
Investors are unwinding their equity positions as if a deep recession is already here. So say strategists at Deutsche Bank AG, who found that a historically strong link between discretionary investors’ equity exposure and the ISM
manufacturing index is unwinding.
Their current stock exposure stands at the bottom-10^th percentile of historical observations after a sharp drop last week. Historically, that’s been consistent with an ISM print of 47, below the level of 50 that signals an economic contraction.
Traders bracing for a recession jolt have recently accelerated their retreat from stocks, with global equity funds posting outflows of $9.4 billion in the week to Aug. 31 – the fourth-largest redemptions this year, according to EPFR Global data cited by Bank of America Corp.
Amid rising borrowing costs, US companies extended a worldwide wave of issuance — offering the largest amount of bonds in 12 months. The newfound urgency to raise debt is sparked by the potential for greater uncertainty — and higher cost — after this month’s meeting of the Federal Open Market Committee.
Data showing the US service sector expanded at the fastest pace in four months just reinforced trader bets on a still restrictive Fed policy.
In the final week before officials enter a blackout period ahead of the Sept. 20-21 policy meeting, Fed Chair Jerome Powell leads a hefty lineup of central bankers offering their views.
Their remarks will be weighed carefully for evidence of a tilt toward another 75 basis-point rate increase, or if there’s scope for the hiking pace to be dialed back.
“The Fed is going to do whatever it takes to get inflation under control,” said Gene Podkaminer, head of research at Franklin Templeton Investment Solutions. “If market participants don’t believe them, it’s probably at their own peril.”

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.4% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.7%
* The Dow Jones Industrial Average fell 0.5%
* The MSCI World index fell 0.5%
Currencies
* The Bloomberg Dollar Spot Index rose 0.5%
* The euro fell 0.3% to $0.9903
* The British pound was little changed at $1.1516
* The Japanese yen fell 1.6% to 142.82 per dollar
Bonds
* The yield on 10-year Treasuries advanced 15 basis points to 3.34%
* Germany’s 10-year yield advanced seven basis points to 1.64%
* Britain’s 10-year yield advanced 16 basis points to 3.10%
Commodities
* West Texas Intermediate crude fell 0.2% to $86.67 a barrel
* Gold futures fell 0.7% to $1,711.10 an ounce

–With assistance from Andreea Papuc, John Viljoen, Sagarika Jaisinghani, Emily Graffeo and Isabelle Lee.

Have a lovely evening.

Be magnificent!
As ever,

Carolann

Thinking is difficult, that’s why most people judge. –Carl Jung, 1875-1961.

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