November 7, 2023, Newsletter

Dear Friends,

Tangents:
November 7, 1917: Bolsheviks depose Czar Nicholas II, Russian Revolution begins, leading to the rise of communism and the formation of the Soviet Union.
Russia’s Bolshevik Revolution took place as forces led by Vladimir Ilyich Lenin overthrew the provisional government of Alexander Kerensky.  Go to article >>

Joni Mitchell, b. 1943
Marie Currie, b. 1867
Albert Camus, b. 1913

More than 30,000 ancient Roman coins found underwater
Divers recently made a huge discovery off the coast of Italy that could point to the presence of a shipwreck.

Michelin-starred restaurant closes because it’s too expensive
This Michelin-starred restaurant in Northern Ireland is closing due to costs becoming too expensive — for both customers and the restaurant operators

Sphinx may have been built from a natural rock feature
It’s possible that wind erosion made a rock feature in ancient Egypt look something like a sphinx, and then the Egyptians further refined it into the iconic monument.  Read More.

PHOTOS OF THE DAY

Paris, France
The French president, Emmanuel Macron, (third left) attends the ceremony of the grand changing of the guard, performed by the 1st Infantry Regiment of the Republican Guard for the first time since 1996, in front of the Élysée Palace, reviving a tradition abandoned 27 years ago.  Photograph: Gonzalo Fuentes/EPA.

Salisbury, UK
Colourful projections on Salisbury Cathedral in Wiltshire, part of the installation Sarum Lights: Illuminating Art.  Photograph: Ben Birchall/PA.

​​​​​​​Saint-Étienne-au-Mont, France
Firefighters walk down a flooded street to evacuate people by boat after the Liane River overflowed near Boulogne-Sur-Mer.  Photograph: Pascal Rossignol/Reuters.
Market Closes for November 7^th, 2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1929: After the market slumped 6% in the morning, J.P. Morgan stepped in publicly and began to buy stocks for its own account. By day’s end, the Dow had squeezed out a small gain, but the tickertape ran two hours late, and many sell orders were unfilled when they couldn’t be matched with buy orders.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the second day, dropping 0.9%, or 168.35 to 19,575.59 in Toronto.
The move was the biggest since falling 1.2% on Oct. 20.
Canadian Natural Resources Ltd. contributed the most to the index decline, decreasing 3.6%.
Ero Copper Corp. had the largest drop, falling 10.3%.
Today, 175 of 227 shares fell, while 50 rose; 9 of 11 sectors were lower, led by energy stocks.
Insights
* This year, the index rose 1%, heading for the best year since 2021
* The index was little changed in the past 52 weeks. The MSCI AC Americas Index gained 14% in the same period
* The S&P/TSX Composite is 6.1% below its 52-week high on Feb. 2, 2023 and 4.7% above its low on Oct. 27, 2023
* The S&P/TSX Composite is up 3.7% in the past 5 days and rose 1.7% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 14.8 on a trailing basis and 14 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.4% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.13t
* 30-day price volatility fell to 15.41% compared with 15.65% in the previous session and the average of 14.35% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Energy | -83.3648| -2.2| 6/34
Materials | -41.2383| -1.8| 7/44
Financials | -38.9126| -0.7| 6/22
Utilities | -13.2927| -1.6| 1/14
Industrials | -8.2225| -0.3| 8/17
Real Estate | -5.9628| -1.3| 2/19
Communication Services | -5.2785| -0.7| 1/4
Consumer Staples | -1.1844| -0.1| 4/7
Health Care | -0.7875| -1.4| 0/4
Consumer Discretionary | 3.4156| 0.5| 6/8
Information Technology | 26.4832| 1.7| 9/2
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
Canadian Natural Resources | -25.1100| -3.6|n/a | 16.8
Suncor Energy | -17.5700| -4.2|n/a | 2.7
Cenovus Energy | -10.9100| -4.5|n/a | -6.3
Constellation Software | 3.5480| 0.9|n/a | 39.3
Restaurant Brands | 5.0840| 2.5|n/a | 7.5
Shopify | 18.0500| 2.6|n/a | 80.7
US
By Rita Nazareth
(Bloomberg) — A rally in big tech drove stocks to their longest winning streak in two years, with investors shrugging off the latest attempts from Federal Reserve speakers to tone down Wall Street’s dovish bid.
After a series of twists and turns in the first hour of trading, the S&P 500 rose for a seventh straight day and got closer to the key 4,400 mark.
The Nasdaq 100 climbed almost 1%, with Microsoft Corp. hitting an all-time high and cloud-software shares soaring.
Bets on a Fed pivot next year sent bond rates sharply lower, with the 10-year yield dropping below 4.6%.
Oil sank over 4% to settle near $77 a barrel.
Global equities are poised for a double-digit rally in 2024 if the Fed pivots its monetary policy and allows the economy to avoid a recession, according to HSBC Holdings Plc strategists.
The S&P 500 rose in price an average 13% in the nine months after the last rate hike in the past three decades, said Sam Stovall, chief investment strategist at CFRA and author of “The Seven Rules of Wall Street.”
“The recent move in stocks is consistent with our view that investor pessimism had been overdone,” said Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management. “While we continue to see near-term headwinds for equities, we believe conditions are in place for positive total returns over the next six to 12 months.”
The rally in equities came on the heels of a growing list of macroeconomic concerns — with the recovery leaving some investors wondering whether the markets will continue to climb a “wall of worry,” said Fawad Razaqzada at City Index and Forex.com.
Lauren Goodwin at New York Life Investments, says the Fed may be done with rate hikes, but she’s concerned that the relief we are seeing in the markets is only a “stop en route to recession.”
Equities advanced even after some central bank officials emphasized that bringing inflation fully down to the 2% goal is their main focus.
Fed Bank of Minneapolis President Neel Kashkari said policymakers have yet to win the fight against inflation and they will consider more tightening if needed.
His Chicago counterpart Austan Goolsbee said officials don’t want to “pre-commit” decisions on rates.
Fed Governor Michelle Bowman said she continues to think the central bank will need to raise interest rates higher to contain inflation — but added a surge in Treasury yields since September has led to tighter financial conditions.
A jump in US yields over recent weeks amounts to nothing less than an “earthquake” for the bond market, according Governor Christopher Waller.
“We’ll be especially attentive to policymakers’ thoughts around the recent shifts in financial conditions and what a nearly 50 basis-point drop in 10-year yields and a strong rebound in equity valuations could mean for the path of monetary policy,” said Ian Lyngen, head of US rates strategy at BMO Capital Markets.
Investors flocked to zero-coupon bonds during October’s Treasury rout in a bet that yields would decline from multiyear highs.
About $10.3 billion of zero-coupon Treasuries were created in October, the second-highest monthly total on record, data released by the Treasury Department late Monday show.
The $12.2 billion generated in October 2018 — also following a surge in yields — was the most on record.

Corporate Highlights:
* In a rare move, Apple Inc. hit pause on development of next year’s software updates for the iPhone, iPad, Mac and other devices so that it could root out glitches in the code.
* UBS Group AG reported stronger-than-expected client inflows in its wealth-management business, boosted by the first signs of stabilization at Credit Suisse as it carries out an expensive and complex integration of its former rival.
* D.R. Horton Inc. reported worse-than-expected quarterly orders as soaring mortgage rates hit demand.
* Datadog Inc. soared after the cloud-software company reported third-quarter results that beat expectations and raised its full-year forecast.
* Uber Technologies Inc. gave a mixed picture of its business, showing a second consecutive profitable quarter and an increase in demand for rides and delivery but also slowing revenue growth.
* KKR & Co. reported growth in its insurance unit that eased a decline in private equity asset sales in the third quarter, as  alternative-asset managers rely on other businesses amid an industrywide deal slowdown.
* Carlyle Group Inc. reported a 43% drop in third-quarter distributable earnings as the firm cashed out of fewer bets amid a dealmaking slump across Wall Street.
* Elliott Investment Management has built up a stake in BioMarin Pharmaceutical Inc. and has been in talks with the company for months about its future, a person familiar with the matter said.

Key events this week:
* Eurozone retail sales, Wednesday
* Germany CPI, Wednesday
* BOE Governor Andrew Bailey speaks, Wednesday
* US wholesale inventories, Wednesday
* New York Fed President John Williams speaks, Wednesday
* Bank of Japan issues October summary of opinions, Thursday
* BOE chief economist Huw Pill speaks on the economy, Thursday
* US initial jobless claims, Thursday
* Fed Chair Jerome Powell participates in panel on monetary policy challenges at the IMF’s annual research conference in Washington, Thursday
* Atlanta Fed President Raphael Bostic and his Richmond counterpart Tom Barkin speak, Thursday
* UK industrial production, GDP, Friday
* ECB President Christine Lagarde participates in fireside chat, Friday
* US University of Michigan consumer sentiment, Friday
* Dallas Fed President Lorie Logan and her Atlanta counterpart Raphael Bostic speak, Friday

 Some of the main  moves in markets: 
Stocks
* The S&P 500 rose 0.3% as of 4 p.m. New York time
* The Nasdaq 100 rose 0.9%
* The Dow Jones Industrial Average rose 0.2%
* The MSCI World index fell 0.1%
Currencies
* The Bloomberg Dollar Spot Index rose 0.3%
* The euro fell 0.2% to $1.0696
* The British pound fell 0.4% to $1.2294
* The Japanese yen fell 0.2% to 150.44 per dollar
Cryptocurrencies
* Bitcoin rose 1.7% to $35,614.85
* Ether rose 0.4% to $1,900.76
Bonds
* The yield on 10-year Treasuries declined seven basis points to 4.57%
* Germany’s 10-year yield declined eight basis points to 2.66%
* Britain’s 10-year yield declined 11 basis points to 4.27%
Commodities
* West Texas Intermediate crude fell 4.2% to $77.44 a barrel
* Spot gold fell 0.5% to $1,968.81 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Sagarika Jaisinghani, Julia Fanzeres and Mia Gindis.
Have a lovely evening.

Be magnificent!
As ever,

Carolann
Too many people spend money they haven’t earned to buy things they don’t want  to impress people they don’t like. –Will Rogers, 1879-1935.

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