February 22, 2023 Newsletter

Dear Friends,

Tangents: Ash Wednesday for Catholics, beginning of Lent.

February 22, 1879: Frank Winfield Woolworth opened a five-cent store in Utica, N.Y. Go to article » 
1979: Saint Lucia gains independence from the United Kingdom.

George Washington, President, b. 1732.
Arthur Schopenauer, philosopher, b. 1888.

Wedding dress recovered from 1660 shipwreck.  A treasure trove of luxury goods was recovered from a 17th century Dutch shipwreck. See the remarkable objects here.

3rd-century-B.C. woman was buried facedown with a nail hole in her skull. Here’s why: The strange facedown burial of a young woman, who likely had a nail driven into her skull around the time she died in Sardinia more than 2,000 years ago, could be the result of ancient beliefs about epilepsy, according to new research.
The facedown burial may indicate that the individual suffered from a disease, while an unusual nail-shaped hole in the woman’s skull may be the result of a remedy that sought to prevent epilepsy from spreading to others — a medical belief at the time.  Full Story: Live Science (2/21)

‘Runaway’ black hole the size of 20 million suns found speeding through space with a trail of newborn stars behind it:
Astronomers have spotted a runaway supermassive black hole, seemingly ejected from its home galaxy and racing through space with a chain of stars trailing in its wake.
According to the team’s research, the discovery offers the first observational evidence that supermassive black holes can be ejected from their home galaxies to roam interstellar space.  Full Story: Live Science (2/21)

Venice’s canals have run dry.

Apple’s latest moonshot is huge.

Apple’s latest moonshot is huge.
PHOTOS OF THE DAY

Rio de Janeiro, Brazil
Lightning hits the hand of the Christ the Redeemer statue during a storm on Corcovado mountain
Photograph: Mauro Pimentel/AFP/Getty Images

A Xironda, Spain
Locals dress up in masks, cowbells and whips to celebrate Entroido, an ancient rural carnival celebrated in Galicia in the run-up to Ash Wednesday
Photograph: Brais Seara Fernandez/Getty Images

Concrete infrastructure, amateur winner
Waterwall of Watu Purbo, Indonesia –Dinar Wahyu Herlambang
Market Closes for February 22^nd, 2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1980, the U.S. Department of Labor said that January’s consumer price index rose 1.4%, equating to an annualized inflation rate of 18%—the highest rise in prices since the 1973 oil crisis. The market stood stock-still; the Dow Jones Industrial Average closed at 868.77, up 0.15 points for the day.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the fourth day, dropping 0.3%, or 59.31 to 20,193.33 in Toronto.
The index dropped to the lowest closing level since Jan. 11.
Royal Bank of Canada contributed the most to the index decline, decreasing 1.2%. Sandstorm Gold Ltd. had the largest drop, falling 5.0%.
Today, 138 of 236 shares fell, while 93 rose; 8 of 11 sectors were lower, led by financials stocks.
Insights
* This month, the index fell 2.8%
* The index declined 3.4% in the past 52 weeks. The MSCI AC Americas Index lost 7.9% in the same period
* The S&P/TSX Composite is 9.1% below its 52-week high on April 5, 2022 and 13% above its low on Oct. 13, 2022
* The S&P/TSX Composite is down 2.5% in the past 5 days and fell 1.5% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 13.2 on a trailing basis and 12.5 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.2% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.23t
* 30-day price volatility fell to 8.41% compared with 8.53% in the previous session and the average of 10.10% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | -35.3874| -0.5| 9/20
Energy | -22.8664| -0.7| 13/25
Materials | -19.2140| -0.8| 15/34
Real Estate | -1.9267| -0.4| 6/15
Communication Services | -0.9755| -0.1| 3/3
Utilities | -0.6977| -0.1| 5/10
Health Care | -0.4419| -0.6| 1/6
Industrials | -0.3100| 0.0| 17/9
Information Technology | 1.0406| 0.1| 6/8
Consumer Discretionary | 4.6507| 0.6| 12/3
Consumer Staples | 11.1250| 1.3| 6/5
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
RBC | -16.1700| -1.2| -6.9| 7.3
Suncor Energy | -10.1700| -2.4| 179.7| 3.3
TD Bank | -8.2790| -0.7| -32.0| 4.2
Shopify | 7.8160| 1.7| -11.2| 21.3
Couche-Tard | 10.4100| 3.0| 9.1| 10.2
Nutrien | 12.9100| 3.5| 38.8| 6.4
US
By Rita Nazareth
(Bloomberg) — The stock market got little encouragement to sustain its rebound after the Federal Reserve signaled that interest rates will continue moving higher amid ongoing inflation concerns.
It’s not like the minutes from the latest Fed gathering brought a great deal of new information, but they certainly corroborated the idea that nothing will prevent officials from keeping rates higher for longer should economic resilience pose a threat to their goals.
Now one thing to highlight is that while Chair Jerome Powell hasn’t been pushing back against easier financial conditions, the statement indicated they could  warrant a “tighter stance.”
That all obviously means the Fed will be in no rush to cut rates.
And that perception continued to be reflected in the swap market.
The rate on the overnight index contract linked to the June gathering rose as high as 5.33%, around 75 basis points above the current effective fed funds rate.
With meetings in March, May and June, that could equate to a quarter-point move up at each gathering.
The market also priced in a higher peak policy rate, with the July contract nearly reaching 5.4%.
After a series of twists and turns, the S&P 500 suffered its fourth straight loss — the longest losing streak since December.
The gauge has now cut more than half of this year’s rally.
Treasury two-year yields, which are more sensitive to imminent Fed moves, significantly pared declines after the Fed minutes.
The dollar rose.
A number of officials said that an “insufficiently restrictive” policy stance could stall recent progress on moderating inflation pressures, according to the statement, suggesting they are prepared to move rates up further than their
December forecast of 5.1%.
The minutes also said “almost all” officials agreed it was appropriate to raise interest rates by 25 basis points at the meeting, while “a few” favored or could have supported a bigger 50 basis-point hike.
“Bottom line is that many market headwinds aren’t going away and investors should expect volatility to stay as they parse over the impact rates being higher for longer will have,” said Mike Loewengart at Morgan Stanley Global Investment Office.
In the run-up to the Fed’s minutes, a Bloomberg survey of economists showed that inflation that’s proving increasingly stubborn will prompt the central bank to raise rates to an even higher peak level and hold them there through the year.
Forecasters boosted their projections for the Fed’s preferred inflation gauge for every quarter through the first half of next year.
Aside from the Fed, traders kept an eye on some corporate highlights.
eBay Inc. projected revenue in the current quarter that topped analysts’ estimates in a sign the e-commerce company’s efforts to revive sales are beginning to work.
Apple Inc. has a moonshot-style project underway that dates back to the Steve Jobs era: noninvasive and continuous blood glucose monitoring, according to people familiar with the effort.
Intel Corp. slashed its dividend payment to the lowest level in 16 years.
Traders pinned hopes on the earnings season to push the S&P 500 somewhere out of a trading range it’s been stuck in for months.
Between JPMorgan Chase & Co.’s results that kicked off the announcement season and Walmart Inc.’s report Tuesday, the S&P 500 added 0.4%.
This ties for the smallest earnings-season reaction in either direction since 2018, data compiled by Bloomberg show.
“After a strong start to the year driven by absolute and relative short covering by institutional investors, skepticism over the sustainability of the rally remains elevated, and bears are beginning to wrestle control from the bulls,” said Mark Hackett, chief of investment research at Nationwide. “While institutional investors have been net buyers this year, they remain conservatively positioned and quick to sell, while retail investors continue to aggressively buy equities.”  “This is a similar trend to what we saw through the second half of 2022,” he added.
Another thing traders are taking note is the recent flare-up in equity volatility.
And the reason is that after a lengthy subdued period, that may put the S&P 500’s rally to the test.
The so-called VIX held near its highest level since mid-December.
“There was some huge upside call buying activity on the VIX in February as traders turned bearish on the resilience of the equity market,” said Aurel’s Gurmit Kapoor.
That’s a stark contrast to data at the end of last month that showed very few were betting against the rally.
Shares out on loan, an indication of short-selling interest, stood just below 1% of the S&P 500’s median free float as of Jan. 31, according to figures compiled by S&P Global Market Intelligence.
As the Fed’s most-ambitious policy tightening in decades tests investors’ resolve toward equities, US companies are increasingly relying on buybacks to boost their market valuation.
Companies in the S&P 500 bought back at least $936 billion of shares in 2022, compared with the $565 billion they paid out as dividends, according to estimates by Howard Silverblatt at S&P Dow Jones Indices.
That’s the highest amount of buybacks since the turn of the millennium.
Geopolitical tensions also simmered on the background.
US President Joe Biden said Russian President Vladimir Putin made a “big mistake” in suspending participation in the New START nuclear treaty, his first direct response to the announcement.
Biden made the brief remark Wednesday in Warsaw, ahead of a meeting with a group of eastern-flank NATO allies known as the Bucharest Nine.
Meantime, Putin said he’s waiting for his Chinese counterpart Xi Jinping to visit Russia as he hailed deepening ties with Beijing at talks with China’s top diplomat.
Key events this week:
* Eurozone CPI, Thursday
* US GDP, initial jobless claims, Thursday
* Atlanta Fed President Raphael Bostic speaks, Thursday
* BOJ governor-nominee Kazuo Ueda appears before Japan’s lower house, Friday
* US PCE deflator, personal spending, new home sales, University of Michigan consumer sentiment, Friday
* Russia’s invasion of Ukraine hits the one-year mark, 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 was little changed
* The Dow Jones Industrial Average fell 0.3%
* The MSCI World index fell 0.5%
Currencies
* The Bloomberg Dollar Spot Index rose 0.3%
* The euro fell 0.4% to $1.0603
* The British pound fell 0.6% to $1.2043
* The Japanese yen was little changed at 134.95 per dollar
Cryptocurrencies
* Bitcoin fell 1.5% to $23,826
* Ether fell 1.4% to $1,619.21
Bonds
* The yield on 10-year Treasuries declined three basis points to 3.92%
* Germany’s 10-year yield was little changed at 2.52%
* Britain’s 10-year yield declined one basis point to 3.60%
Commodities
* West Texas Intermediate crude fell 3.2% to $73.89 a barrel
* Gold futures fell 0.5% to $1,833.90 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Michael Msika and Vildana Hajric.
Have a lovely evening.

Be magnificent!
As ever,

Carolann

You don’t get to choose how you’re going to die.  Or when.  You can only decide how you’re going to live. Now. –Joan Baez, b.1941.

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