September 9, 2024, Newsletter

Dear Friends,

Tangents: Happy Monday.

September 9, 490 BC: Battle of Marathon.
September 9^th, 1916 The first self-service grocery store, Piggly Wiggly, was opened in Memphis, Tenn., by Clarence Saunders.  Go to article >>
September 9, 1936: Beryl Markham receives the key to the city from Mayor LaGuardiaafter becoming the first woman to fly across the Atlantic from east to west.
1948: Kim Il-sung declares the creation of the Democratic People’s Republic of Korea with the support of the USSR.

Leo Tolstoy, writer, b. 1828.
Hugh Grant, actor, b. 1960.
Adam Sandler, actor, b. 1966.

William the Conqueror, d.1087.

Only billionaire in the building
She’s a former Disney Channel star, today she’s in the hit Hulu series “Only Murders in the Building” — and now Selena Gomez can now add becoming a self-made billionaire to her long list of achievements.
Employee tracking 
A major accounting firm has let its employees know that their locations will soon be tracked to dial back on the work-from-home culture and enforce its back-to-office rule.

Sinner’s the winner
The world’s No. 1 tennis player, Jannik Sinner, won the US Open on Sunday, beating American Taylor Fritz in straight sets. Fritz was the first American man to reach a grand slam singles final since 2009.

A particularly active ‘aurora season’ could be just weeks away
September could be a prime time to see vibrant auroras, thanks to a quirk of Earth’s tilt that leads to more intense geomagnetic activity around the equinox. Read More.

Stone Age burial ground in France used for 800 years is nearly all male — and ancient DNA reveals they’re largely related
DNA analyses of human remains found at the site revealed that the majority of the male individuals buried there shared a paternal link.  Read More.

When was the last time Antarctica was ice-free?
Antarctica is covered by a miles-thick ice sheet, but was that always the case? And when was the coldest continent ice-free? Read More.

Novel Chinese computing architecture ‘inspired by human brain’ can lead to AGI, scientists say
AGI could be on the horizon thanks to a novel computing architecture that completely redefines how artificial neurons form an intelligent system. Read More.

PHOTOS OF THE DAY

Lincolnshire, UK
Tom Jackson riding Capels Hollow Drift as part of the cross-country element of the Defender Burghley horse trials near the town of Stamford
Photograph: Joe Giddens/PA

Ameca, Mexico
Children dressed as Escaramuza Charra (woman on horseback) attend a class with their hobby horses at the Caballito de Palo Charreria sports academy in the state of Jalisco
Photograph: Ulises Ruiz/AFP/Getty Images

​​​​​​​A traditional miniature painting is brought to life in Mughal Miniatures, a dance performance by the Birmingham-based south Asian dance company Sonia Sabri at ParkWorks, Stratford Park
Market Closes for September 9^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 2008: Lehman Brothers stock tumbled 45% after Korea Development Bank walked away from a potential capital infusion. The U.S. investment bank failed days later, marking an intensification of the global financial crisis.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 1.1% at 23,027.15 in Toronto.
The move was the biggest gain since Aug. 23 and follows the previous session’s decrease of 0.9%.
Royal Bank of Canada contributed the most to the index gain, increasing 1.7%.
Tilray Brands Inc. had the largest increase, rising 5.5%.
Today, 178 of 226 shares rose, while 45 fell; all sectors were higher, led by financials stocks.
Insights
* In the past year, the index had a similar or greater gain 16 times. The next day, it advanced 14 times for an average 0.7% and declined twice for an average 1%
* This year, the index rose 9.9%, heading for the best year since 2021
* This quarter, the index rose 5.3%
* The index advanced 15% in the past 52 weeks. The MSCI AC Americas Index gained 22% in the same period
* The S&P/TSX Composite is 1.7% below its 52-week high on Aug. 26, 2024 and 23.2% above its low on Oct. 27, 2023
* The S&P/TSX Composite is down 1.4% in the past 5 days and rose 3.2% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 18.4 on a trailing basis and 15.8 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.61t
* 30-day price volatility rose to 14.49% compared with 14.39% in the previous session and the average of 14.34% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 107.1133| 1.5| 27/0
Industrials | 43.1864| 1.4| 24/4
Materials | 28.9440| 1.1| 44/7
Information Technology | 25.7759| 1.4| 10/0
Energy | 12.7444| 0.3| 19/21
Consumer Staples | 8.9833| 0.9| 9/2
Utilities | 8.2258| 0.9| 12/3
Communication Services | 5.0384| 0.7| 5/0
Real Estate | 3.7913| 0.7| 17/2
Consumer Discretionary | 0.9768| 0.1| 8/5
Health Care | 0.9518| 1.4| 3/1
================================================================
| | |Volume VS |
| Index | | 20D AVG |YTD Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
RBC | 27.6800| 1.7| -14.4| 24.5
TD Bank | 18.4500| 1.8| 2.5| -2.6
Canadian Pacific Kansas | 15.5800| 2.1| 20.2| 9.5
Methanex | -2.1470| -7.9| 336.6| -15.4
Cenovus Energy | -2.8560| -1.4| 87.8| 2.7
Tourmaline Oil | -3.0940| -2.2| -53.2| 1.1
US
By Rita Nazareth
(Bloomberg) — A renewed wave of dip buying spurred a rebound in stocks after a selloff triggered by economic concerns, with traders now looking to this week’s inflation data for clues on the size of Federal Reserve rate cuts.
Almost every major group in the S&P 500 rose, with the benchmark up 1.2%.
That’s after its worst start to a September on record, according to Bespoke Investment Group data going back to 1953. Nvidia Corp. and Tesla Inc. led gains in mega caps.
Apple Inc. introduced the iPhone 16, with Chief Executive Officer Tim Cook saying it was built for artificial intelligence “from the ground up.”
The shares closed little changed after an almost 2% slump.
“We’re seeing mostly technical dip-buying,” said Tom Essaye at The Sevens Report. “Economic growth is undoubtedly and clearly losing momentum, but a soft landing remains more likely than a hard landing. This week focus turns back to inflation.”
Treasuries saw mild moves, with traders paring the chance of a half-point rate reduction at the Fed’s upcoming September meeting to about 20% from as high as 50% last week.
At the same time, some options traders wagered on an increase in the amount of Fed easing expected by December or March.
The S&P 500 closed near 5,471. The Nasdaq 100 gained 1.3%.
The Dow Jones Industrial Average added 1.2%.
The Russell 2000 rose 0.3%.
Boeing Co. rallied 3.4% on optimism that a labor deal will avert a strike.
Alphabet Inc. sank 1.7% as Google headed back to court to face US Justice Department allegations it manipulates the display advertising market.
Treasury 10-year yields were little changed at 3.70%.
The dollar gained. Bitcoin rose to around $57,000.
“Equity investors are walking a sentiment tightrope between Fed rate cut cheer, recession fears, and a political wonderland,” said Craig Johnson at Piper Sandler. “Looking at popular averages through a technical analysis lens suggests last week’s weakness was just a pullback within the context of a longer-term uptrend.”
US stocks could remain choppy and see further declines in the near term amid risks around seasonality, sentiment and the presidential election, according to RBC Capital Markets strategists.
“Any further damage would be contained within a 10%” pullback range, the team led by Lori Calvasina wrote in a note.
They warn that if hard landing fears escalate, the risk of a growth scare decline in the 14%-20% range “will also admittedly rise.”
With labor market data signaling a cooling rather than an imminent recession, HSBC strategists led by Max Kettner said they were adding to their overweight position on US stocks based on a resilient third-quarter earnings outlook.
Higher volatility over the short, medium and long term will make utilities and other quality and income stocks more attractive relative to growth peers, Bank of America Corp. equity and quant strategist Savita Subramanian said Monday.
“Prefer the tortoise (quality & income) to the hare (growth & re-rating),” she wrote in a note to clients, adding that utility returns have matched those of the Nasdaq “over the long term.” Utilities are also beating tech stocks this year, Subramanian said.
Last week’s selloff in US equities has left major indexes susceptible to further declines, according to strategists at Citigroup Inc.
Large unwinds of long positions in the S&P 500 short positions indicate risk appetite turning toward more “directly bearish tilt,” the team led by Chris Montagu said. De-grossing, or closure of long and short positions by hedge funds, in the gauge is leaving gross exposure at half of its peak in mid-July, the strategists noted.
Hedge funds continued to unwind their positions in US stocks as the S&P 500 suffered its biggest weekly decline since March 2023.
Global equities were net sold for the eighth straight week led by North America, according to Goldman Sachs Group Inc.’s prime brokerage desk report for the week ended on Sept. 6.
The move is a continuation of a trend that, broadly speaking, started in May as funds began a big unwind of their positions in order to get more cash readily on hand for possible dislocations around the US presidential election.
“Slowdowns do not necessarily portend recessions, nor are stock market corrections necessarily the harbinger of bear markets,” said Konstantinos Venetis at TS Lombard. “But the mix of rising macro (growth) and political (US election) uncertainty increasingly puts the burden of proof on the bulls in the near term.”
Venetis says that while the Fed is poised to ease, the question is whether “insurance” cuts prove too little too late.
“The risk is that ‘growth scare’ dynamics assume a life of their own and raise the pressure further on an equity market that already looks vulnerable from a technical standpoint, he noted. To Mark Haefele at UBS Global Wealth Management, despite bouts of equity weakness the fundamentals for stocks remain positive. “We expect S&P 500 companies to grow earnings by 11% this year and 8% in 2025, he said. “And historically, in the absence of a US recession, the index has gained 17% on average in the 12 months following the first Fed rate cut of a cycle.”
History suggests that the Fed’s success in piloting a soft versus hard landing will play a key role in dictating the path for US equities, according to Seema Shah at Principal Asset Management.
For example, in 1985 and 1995, she says rate cuts supported strong equity gains as recessions were avoided.
Meantime, in 2001 and 2007, even aggressive easing couldn’t prevent steep market declines amid economic downturns.
“Today, the markets remain cautiously optimistic, reflecting hopes that rate cuts will avoid a downturn,” Shah said. “Yet, if economic conditions worsen sharply, fears of a recession could outweigh the benefits of rate cuts. History shows that rate cuts themselves are not the enemy — it’s the economic context in which they occur that investors should be paying close attention to.”
On Wednesday, a government report is expected to show the consumer price index rose 2.6% in August from a year earlier, according to the median forecast of economists surveyed by Bloomberg.
That would be the smallest increase since 2021.
There will be little new guidance from Fed officials, who are in the traditional blackout period ahead of the Sept. 17-18 meeting.
“Inflation matters,” said Chris Low at FHN Financial. “Weaker numbers might encourage the Fed toward a 50 basis-point cut, while anything higher could lock in 25 basis points. As it is, though, even if inflation is benign and some participants push for a bigger cut, we expect the Fed to land on a quarter point for a first step, with an option to cut faster at later meetings if the data support moving faster.”

Corporate Highlights:
* Discount retailer Big Lots Inc. has filed for bankruptcy protection and plans to sell the firm’s assets and ongoing business in a court-supervised process.
* PayPal Holdings Inc. added Shopify Inc. to its list of recent partnerships, reaching a deal to process some of the payment company’s debit- and credit-card transactions.
* B. Riley Financial Inc., the embattled broker-dealer and investment firm, outlined preliminary plans to sell assets and round up financing to cope with its debt burden and shore up its balance sheet.
* Starboard Value LP is pushing News Corp. to eliminate its dual-class share structure and is prepared to take further action against the media company if it refuses to engage.

Key events this week:
* China trade, Tuesday
* Germany CPI, Tuesday
* US presidential debate between Donald Trump and Kamala Harris, Tuesday
* US CPI, Wednesday
* Japan PPI, Thursday
* ECB rate decision, Thursday
* US initial jobless claims, PPI, Thursday
* Eurozone industrial production, Friday
* Japan industrial production, Friday
* U. Michigan consumer sentiment, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 1.2% as of 4 p.m. New York time
* The Nasdaq 100 rose 1.3%
* The Dow Jones Industrial Average rose 1.2%
* The MSCI World Index rose 0.8%
* Bloomberg Magnificent 7 Total Return Index rose 1.4%
* The Russell 2000 Index rose 0.3%
Currencies
* The Bloomberg Dollar Spot Index rose 0.3%
* The euro fell 0.4% to $1.1036
* The British pound fell 0.4% to $1.3073
* The Japanese yen fell 0.5% to 143.00 per dollar
Cryptocurrencies
* Bitcoin rose 4.9% to $57,055.69
* Ether rose 3.2% to $2,348.97
Bonds
* The yield on 10-year Treasuries was little changed at 3.70%
* Germany’s 10-year yield was little changed at 2.17%
* Britain’s 10-year yield declined three basis points to 3.86%
Commodities
* West Texas Intermediate crude rose 1.3% to $68.58 a barrel
* Spot gold rose 0.3% to $2,505.96 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Vildana Hajric.

Have a lovely evening.

Be magnificent!
As ever,

Carolann
You can, you should, and if you’re brave enough to start, you will.  –Stephen King, b. 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