January 17, 2023 Newsletter

Dear Friends,

Tangents: Happy Tuesday.
January 17, 1917: The US pays Denmark $25 million for the Virgin Islands.

1997: A court in Ireland granted the first divorce in the Roman Catholic country’s history.  Go to article » 

Benjamin Franklin, b. 1706.
Anton Chekov, b. 1860
Al Capone, b. 1899.
James Earl Jones, b. 1931.
Muhammed Ali, b. 1942.

Enjoying nature may lessen the need for some medications, study finds.  Here’s a sign to take the scenic route. According to a new study, visiting nature is associated with lowering the odds of using blood pressure pills and mental health medications.

Never-before-seen volcanic magma chamber discovered deep under Mediterranean, near Santorini: A submarine volcano whose deadly eruption shattered the picturesque Greek island of Santorini nearly 400 years ago has a growing, never-before-seen magma chamber that could fuel another massive eruption within the next 150 years, a new study finds.   About 4 miles (7 kilometers) from Santorini, 1,640 feet (500 meters) under the ocean’s surface, lies the Kolumbo volcano. A study revealed that a previously undetected magma chamber growing beneath the Kolumbo volcano could lead to another eruption, thus endangering residents and tourists on Santorini.
Full Story: Live Science (1/16)

A mysterious brain network may underlie many psychiatric disorders: Scientists have uncovered a mysterious network of brain connections that is linked to several psychiatric disorders, including schizophrenia, depression and obsessive-compulsive disorder (OCD).   This shared brain circuitry could help reveal why many patients who are diagnosed with one psychiatric illness also meet the criteria for a second.  Full Story: Live Science (1/14)

Why does lightning zigzag?  Lightning can light up the sky in a bright flash and take on a variety of shapes, but if you were to draw it, you’d almost certainly scratch out a zigzag.  But what gives thunderbolts this branch-like shape? Why does lightning zigzag across the sky, instead of discharging in a straight line between a thundercloud and the ground?  Full Story: Live Science (1/14)

Pentagon is struggling to explain more than 170 fresh UFO reports, new document reveals: The U.S. government has been inundated with hundreds of UFO encounter reports in the past year, and about half of them remain inexplicable, according to an unclassified document released by the Pentagon Thursday (Jan. 12).  The 11-page report, filed by the Office of the Director of National Intelligence (ODNI), reveals that the Pentagon has cataloged a total of 510 reports of alleged sightings of unidentified flying objects (UFOs) — or unidentified aerial phenomena (UAPs), as the government prefers to call them — largely filed by U.S. military personnel.  Full Story: Live Science
PHOTOS OF THE DAY

New Jersey, US
George Washington Bridge is illuminated on Martin Luther King Jr Day, as seen from the Fort Lee Historic Park in New Jersey
Photograph: Anadolu Agency/Getty Images

Paris, France
The Eiffel Tower displays the words ‘Woman, Life, Freedom’ in a display of support for the Iranian people
Photograph: Anadolu Agency/Getty Images

San Bartolomé de Pinares, Spain
A horse rider jumps over a bonfire during a traditional ritual in honour of Saint Anthony the Abbot, patron saint of domestic animals. The custom is meant to purify the animals with the smoke of the bonfires and protect them for the year to come
Photograph: Marcos del Mazo/Getty Images
Market Closes for January 17^th, 2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On Jan. 17, 1792, the dollar sign ($) showed up for the first time on a federal document—a U.S. Treasury bond issued to George Washington
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the eighth day, climbing 0.3%, or 67.13 to 20,457.46 in Toronto.
The index advanced to the highest closing level since Dec. 2.
Canadian Pacific Railway Ltd. contributed the most to the index gain, increasing 1.8%.
Bombardier Inc. had the largest increase, rising 9.5%.
Today, 133 of 236 shares rose, while 99 fell; 9 of 11 sectors were higher, led by energy stocks.
Insights
* The index declined 5% in the past 52 weeks. The MSCI AC Americas Index lost 15% in the same period
* The S&P/TSX Composite is 7.9% below its 52-week high on April 5, 2022 and 14.5% above its low on Oct. 13, 2022
* The S&P/TSX Composite is up 2.8% in the past 5 days and rose 5.2% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 13.5 on a trailing basis and 13.1 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.1% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.3t
* 30-day price volatility rose to 13.64% compared with 13.61% in the previous session and the average of 13.27% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Energy | 29.6730| 0.8| 29/9
Industrials | 20.4344| 0.8| 18/8
Financials | 19.0197| 0.3| 21/8
Information Technology | 10.6598| 0.9| 7/7
Utilities | 10.3509| 1.2| 14/2
Real Estate | 4.0255| 0.7| 15/7
Communication Services | 3.1363| 0.3| 4/2
Consumer Discretionary | 1.3145| 0.2| 4/11
Health Care | 0.9983| 1.3| 4/2
Consumer Staples | -1.7481| -0.2| 5/6
Materials | -30.7289| -1.2| 12/37
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
Canadian Pacific | 11.9400| 1.8| -15.4| 6.4
Shopify | 11.2600| 2.6| -9.2| 13.9
Canadian Natural Resources | 11.0800| 1.9| -16.7| 4.1
Agnico Eagle Mines | -5.7560| -2.4| -35.8| 3.8
Franco-Nevada | -5.8880| -2.3| -3.4| 3.1
Barrick Gold | -11.9500| -3.8| -43.1| 8.2
US
By Stephen Kirkland
(Bloomberg) — US stocks fell as concern over the outlook for corporate earnings weighed on risk sentiment while investors assessed the path for policy tightening.
The S&P 500 closed in the red for the first time in five days after struggling for direction throughout the session.
The Dow Jones Industrial Average dropped the most in a month, with financials weighing on the gauge of blue chips.
Meanwhile, the tech-heavy Nasdaq 100 eked out gains, up for a seventh day, taking a cue from declines in policy sensitive short-dated Treasury yields.
Goldman Sachs Group Inc. slid the most in a year after reporting fourth-quarter net revenue below expectations, while Morgan Stanley rallied as its wealth-management business boosted revenue above forecasts.
Travelers Cos. fell after reporting preliminary earnings.
Pfizer Inc. retreated as Wells Fargo & Co. predicted earnings downgrades for the drugs company.
Earnings may set the tone for traders this week as the reporting season moves up a gear.
Of the 33 S&P 500 companies that have posted results so far, 25 have beaten analysts’ expectations.
While it’s still early days in the season, the nascent trend lags buoyant surprises of earlier quarters.
UBS Wealth Management expects “quite a bit of downside here on the earnings” in the US, according to Hartmut Issel, head of Asia Pacific equities.
“While we envision more choppiness in markets in the first quarter, we see markets settling into a slow grind higher after that,” wrote Art Hogan, chief market strategist at B. Riley Wealth. “The Fed will have reached its terminal Fed funds rate in 1Q, and investors can start reacting to incoming data without the lens of what better news will mean for Monetary Policy. Good news for the economy can become good news for markets.”
Goldman Sachs fell 6.4% after it reported investment-banking fees tumbled by almost half during the last three months of 2022 and costs jumped.
Travelers dropped after the insurer reported higher storm claims in the fourth quarter as part of preliminary earnings.
Pfizer slid more than 3% after Wells Fargo downgraded its recommendation on the stock.
Morgan Stanley climbed 5.8%.
Treasuries posted modest gains at the front end of the curve, with the policy sensitive two-year yield falling 3 basis points.
European sovereigns also caught bids, with the 10-year bund yield dropping eight basis points.
The drop in yields suggested traders are betting pressures on rate hikes are easing.
The dollar traded near the lowest level since April and the euro fell. The yen gained ahead of a Bank of Japan policy decision.
Data today showed New York state manufacturing activity plummeted in January to the lowest level since the early months of the pandemic as new orders and shipments collapsed.
The measure has shown contraction in five of the last six months, underscoring the depth of the pain to the manufacturing sector as the Federal Reserve hikes interest rates.
A New York Fed survey showed that spending growth may be slowing as interest rates rise but still remains elevated. 
More Commentary:
“Earnings season gets into full swing this week and the focus will be on jobs, wages, inflation, and margins for companies reporting,” wrote Paul Nolte, senior wealth manager and market strategist at Murphy & Sylvest Wealth Management.  “The expectation this year is for a modest decline in economic growth which should do little to dampen corporate profits. The next few weeks will be a good test of that thesis.”
“As we saw in today’s earnings from GS and MS (we own both) the difference between good management and one that is behind is vast,” wrote Nancy Tengler, CEO & CIO of Laffer Tengler Investments. “However, we think GS kitchen-sinked it and warned, so this presents an interesting opportunity to buy shares,” .
“While we agree that evidence is building that inflation has definitively turned down, we caution against exuberance around the ‘inflation is dead’ narrative,” Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, said in a note. “We are still a long way from ‘mission accomplished.’”
Several Fed officials will be speaking this week, providing more clues on their policy priorities.
The World Economic Forum’s annual meeting kicks off in Davos, Switzerland, with speakers including ECB President Christine Lagarde and the International Monetary Fund’s Kristalina Georgieva.
Elsewhere, oil contracts traded higher as traders looked to a revival in Chinese demand this year after data showed the economy fared better than expected last quarter.
Key events this week:
* Earnings to include: Charles Schwab, Discover Financial, Interactive Brokers, Investor AB, Netflix, Procter & Gamble, Prologis, State Street
* Fed’s John Williams to speak, Tuesday
* Euro-zone CPI, Wednesday
* US retail sales, PPI, industrial production, business inventories, MBA mortgage applications, cross-border investment, Wednesday
* Bank of Japan rate decision, Wednesday
* Federal Reserve releases Beige Book, Wednesday
* Fed speakers include Raphael Bostic, Lorie Logan and Patrick Harker, Wednesday
* US housing starts, initial jobless claims, Philadelphia Fed index, Thursday
* ECB account of its December policy meeting and President Christine Lagarde on a panel in Davos, Thursday
* Fed speakers include Susan Collins and John Williams, Thursday
* Japan CPI, Friday
* China loan prime rates, Friday
* US existing home sales, Friday
* IMF’s Kristalina Georgieva and ECB’s Lagarde speak in Davos, Friday
Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.2% as of 4 p.m. New York time
* The Nasdaq 100 rose 0.1%
* The Dow Jones Industrial Average fell 1.1%
* The MSCI World index was little changed
Currencies
* The Bloomberg Dollar Spot Index fell 0.1%
* The euro fell 0.3% to $1.0793
* The British pound rose 0.7% to $1.2279
* The Japanese yen rose 0.2% to 128.27 per dollar
Cryptocurrencies
* Bitcoin rose 1.2% to $21,387.14
* Ether rose 0.5% to $1,586.93
Bonds
* The yield on 10-year Treasuries advanced four basis points to 3.54%
* Germany’s 10-year yield declined eight basis points to 2.09%
* Britain’s 10-year yield declined six basis points to 3.32%
Commodities
* West Texas Intermediate crude rose 1.4% to $80.97 a barrel
* Gold futures fell 0.6% to $1,910.90 an ounce
This story was produced with the assistance of Bloomberg Automation.

–With assistance from Tassia Sipahutar, Richard Henderson, Denitsa Tsekova, Srinivasan Sivabalan, Vildana Hajric, Isabelle Lee and Peyton Forte.
Have a lovely evening.

Be magnificent!
As ever,

Carolann

Happiness is beneficial for the body but it is grief that develops the powers of the mind. -Marcel Proust, 1871-1922.

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