February 7, 2023 Newsletter

Dear Friends,

Tangents:
February 7, 1940: The second full-length animated Walt Disney film, Pinocchio, premieres.
On Feb. 7, 1964, the Beatles arrived in the United States for the first time, giving rise to Beatlemania. Go to article » 

Charles Dickens, b.1812.
Chris Rock, b. 1966.
Ashton Kutcher, b. 1978.

Harvard psychiatrist says this is the secret to happiness.  If you’re in search of “the good life,” check out the lessons learned from the world’s longest scientific study on happiness.

Area woman makes recipes etched on gravestones.

La La Land is headed to Broadway.

Bright green laser lines shoot across night sky in Hawaii. What caused them?   A camera attached to a telescope on Hawaii’s tallest peak recently captured footage of a series of eerie, bright green lines that shot across the night sky for just over a second.  Experts say the unexpected light show resulted from a rapid burst of lasers fired toward Earth by a NASA spacecraft.  Full Story: Live Science (2/7)

7.5-foot-long sword from 4th-century Japan may have ‘protected’ deceased from evil spirits:  Archaeologists in Japan have unearthed a 7.5-foot-long (2.3 meters) iron sword during excavations of a 1,600-year-old burial mound near the city of Nara.  The sword was too large to wield as a weapon, so its purpose was probably to protect the person it was buried with from evil spirits, experts say. Full Story: Live Science (2/6)

Statue of slain Roman emperor dressed as Hercules found near sewer in Rome:  A newly found statue in Rome appears to depict a slain Roman emperor dressed as Hercules.  It may offer insight to the viewpoint of a Roman emperor who embraced traditional Greco-Roman gods at a time when Christianity was spreading throughout the empire. Full Story: Live Science (2/6)

Which came first: the chicken or the egg?   You’ve heard the age-old riddle: “Which came first: the chicken or the egg?” Taken metaphorically, it’s a meditation on the futility of determining the cause of a self-perpetuating cycle. Taken literally, it’s a great question for evolutionary biologists.  Chickens come from eggs, but eggs come from chickens. So which came first?  Full Story: Live Science (2/6)

PHOTOS OF THE DAY

Amsterdam, the Netherlands
A woman takes a picture of a painting by Johannes Vermeer titled The Glass of Wine at the Rijksmuseum, which is hosting the biggest exhibition of the 17th-century artist’s work
Photograph: John Thys/AFP/Getty Images

Ashkelon, Israel
Lightning strikes over the coastal city
Photograph: Amir Cohen/Reuters

London, UK
Westminster Bridge shrouded in fog. The mayor of London, Sadiq Khan, activated the severe weather emergency protocol for the third time this winter as temperatures fell to -6C
Photograph: Dan Kitwood/Getty Images
Market Closes for February 7^th, 2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1804, John Deere was born in Rutland, Vt. In 1837, he invented the world’s first self-cleaning steel plow, opening up the American frontier.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 0.5% at 20,725.00 in Toronto.
The move follows the previous session’s decrease of 0.6%.
Toronto-Dominion Bank contributed the most to the index gain, increasing 1.2%.
Lithium Americas Corp. had the largest increase, rising 9.9%.
Today, 142 of 236 shares rose, while 89 fell; 3 of 11 sectors were higher, led by energy stocks.
Insights
* The index declined 2.4% in the past 52 weeks. The MSCI AC Americas Index lost 7.8% in the same period
* The S&P/TSX Composite is 6.7% below its 52-week high on April 5, 2022 and 16% above its low on Oct. 13, 2022
* The S&P/TSX Composite is little changed in the past 5 days and rose 4.6% 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 13.3 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$3.27t
* 30-day price volatility fell to 9.71% compared with 9.85% in the previous session and the average of 12.42% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Energy | 57.4413| 1.6| 38/1
Financials | 56.5126| 0.9| 23/6
Materials | 19.3054| 0.8| 40/8
Information Technology | -0.1659| 0.0| 7/6
Health Care | -0.2149| -0.3| 2/4
Consumer Discretionary | -0.8478| -0.1| 6/9
Real Estate | -2.1865| -0.4| 6/16
Industrials | -4.9990| -0.2| 12/14
Consumer Staples | -7.0750| -0.9| 4/7
Communication Services | -10.5456| -1.1| 0/6
Utilities | -11.1409| -1.3| 4/12
================================================================
| | |Volume VS |
| Index | | 20D AVG |YTD Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
TD Bank | 14.0300| 1.2| -51.2| 5.9
Canadian Natural Resources | 12.5400| 2.1| -20.9| 5.5
Cenovus Energy | 10.1200| 4.2| -2.9| -0.7
Shopify | -4.2720| -0.8| -10.5| 46.4
Canadian Pacific | -4.8160| -0.7| -9.8| 3.1
Nutrien | -8.5110| -2.1| -11.9| 10.1
US
By Rita Nazareth
(Bloomberg) — Stock traders bracing for Jerome Powell to push back against the powerful rally that led to a loosening in financial conditions didn’t really get that, with the market finding encouragement to move higher.
What the Federal Reserve’s chief said Tuesday wasn’t that much different from his remarks last week, noted JPMorgan Chase & Co.’s Michael Feroli.
Powell basically highlighted that disinflation has begun, it has a long way to go and further hikes will likely be needed if the jobs market remains strong.
When asked if he would have raised rates by 50 basis points in February, instead of the 25 basis points as officials did, Powell demurred.
“The important takeaway is that Powell had a chance to signal a shift to a more aggressive posture and he didn’t take it,” wrote Bill Adams, chief economist for Comerica Bank in Dallas. “In the near-term, the Fed will likely continue to make one (or perhaps two) more hike(s) before going on hold.”
JPMorgan’s Feroli added that markets “shouldn’t expect the same degree of hand holding” from the central bank as it gets closer to the terminal rate as data will dictate its path.
The S&P 500 halted a two-day slide that was driven mostly by overbought conditions.
The tech-heavy Nasdaq 100 climbed over 2%, with giants Microsoft Corp. and Google’s parent Alphabet Inc. soaring.
The dollar fell alongside Treasury two-year yields, which are more sensitive to imminent Fed moves.
“The bond bullish response in the US rates market indicated that Powell’s decision to set a tone that wasn’t particularly more hawkish than last week’s comments was a disappointment for those anticipating the payrolls print would have changed the messaging,” said Ian Lyngen at BMO Capital Markets. “Staying the course in this context underwhelmed a subset of investors hoping for a more aggressive response.”
Earlier Tuesday, Fed Bank of Minneapolis President Neel Kashkari said January’s strong labor-market report shows the US central bank would need to keep raising rates. “Right now I’m still at around 5.4%,” he told CNBC Tuesday, referring to his forecast for how high rates need to go to bridle inflation.
The Fed raised its benchmark to a range of 4.5% to 4.75% last week.
Traders will also keep a close eye on Joe Biden’s speech to a joint session of Congress on Tuesday evening in light of renewed tensions with China and a brewing showdown with House Republicans over raising the federal debt  ceiling.
For investors worried that stock prices are going to be pummeled by shrinking corporate profits, here’s a little bit of good news: the drop so far seems largely priced in.
With fourth-quarter results from more than half of the S&P 500 companies already in, earnings per share have fallen 2.8% from a year earlier, according to data compiled by Bloomberg Intelligence.
That’s less than the 3.3% drop expected before earnings season began.
The smaller-than-anticipated drop suggests that the profit contraction isn’t beginning as badly as once feared, lending support to share-price valuations.
“We continue to see broadening breadth and constructive price action to support further upside in equities,” said Craig Johnson at Piper Sandler. “Our short-term indicators suggest some areas may have rallied too much, too fast. However, we do not expect a significant reversal of the current YTD uptrend and view pullbacks and consolidations as buying opportunities.”
Still, as the Nasdaq 100 approaches a bull market and earnings estimates are trending down, valuations have swelled to expensive levels compared with real bond yields, posing a risk to the rally.
The tech-heavy benchmark’s forward price-to-earnings ratio has jumped to 24, the highest level since April, spurred by bets that inflation has peaked and the Fed will pivot soon.
The move is at odds with the inflation-protected 10-year Treasury yield, which remains high on fears that a buoyant job market and stronger-than-expected economic data will keep the pressure on the Fed to stay hawkish. 
Key events:
* US wholesale inventories, Wednesday
* New York Fed President John Williams is interviewed at Wall Street Journal live event, Wednesday
* US initial jobless claims, Thursday
* ECB President Christine Lagarde participates in EU leaders summit, Thursday
* Bank of England Governor Andrew Bailey appears before Treasury Committee, Thursday
* US University of Michigan consumer sentiment, Friday
* Fed’s Christopher Waller and Patrick Harker speak, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 1.3% as of 4 p.m. New York time
* The Nasdaq 100 rose 2.1%
* The Dow Jones Industrial Average rose 0.8%
* The MSCI World index rose 0.9%
Currencies
* The Bloomberg Dollar Spot Index fell 0.4%
* The euro was little changed at $1.0724
* The British pound rose 0.2% to $1.2040
* The Japanese yen rose 1.2% to 131.10 per dollar
Cryptocurrencies
* Bitcoin rose 1.3% to $23,203.53
* Ether rose 1.7% to $1,666.16
Bonds
* The yield on 10-year Treasuries advanced three basis points to 3.67%
* Germany’s 10-year yield advanced five basis points to 2.35%
* Britain’s 10-year yield advanced seven basis points to 3.32%
Commodities
* West Texas Intermediate crude rose 4.3% to $77.30 a barrel
* Gold futures rose 0.2% to $1,883.20 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Michael Msika, Vildana Hajric, Peyton Forte, Isabelle Lee and Lu Wang.
Have a lovely evening.

Be magnificent!
As ever,

Carolann

What befalls the earth befalls all the sons of the earth.  This we know; the earth does not belong to man, man belongs to the earth.
All things are connected like the blood that unites us all.  Man does not weave this web of life.  He is merely a strand of it.
Whatever he does to the web, he does to himself. -Chief Seattle, 1786-1866.

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