January 29, 2024 Newsletter

Dear Friends,

Tangents: Happy Monday.
January 29^th, 1802: First celebration of Burns Night, in honor of poet Robert Burns’s birthday by The Mother Club in Greenock who later realized his actual birthday was January 25^th.
January 29, 1989: Dow jumps 38.06 recoups 508-pt loss since Oct 1987; index at 2,256.43  Go to article >>

Thomas Paine, b.1737.
Anton Chekov, b.1860.
W.C. Fields, b.1880.

NASA’s Perseverance rover may already have found signs of life on Mars, discovery of ancient lake sediments reveals
The discovery of an ancient lake bed beneath the Perseverance rover’s location on Mars could mean the robotic scout has already scraped up microbial fossils. But we won’t know for sure until we fetch the sample. Read More.

Even Stone Age people burned their porridge, 5,000-year-old food-scorched clay pot reveals
Thousands of years ago, a Neolithic person tried cooking porridge but ended up burning.  Read More.

1.6-billion-year-old fossils push back origin of multicellular life by tens of millions of years
Researchers uncovered fossils of multicellular eukaryotes that are over a billion years old. Read More.

Largest ever fully electric concept plane could take to the skies by 2033
The Elysian E9X is a 90-seater plane that can one day travel up to 620 miles — and it’s based on research that claims our previous assumptions on battery-electric aircraft were wrong. Read More.

Already broke your New Year’s diet resolution?
Many people make dietary New Year’s resolutions … and most struggle to stick with them. Here’s why you shouldn’t blame yourself.

A look back at ‘Entertaining,’ Martha Stewart’s first book
Before she was a style and food icon, Martha Stewart wrote a cookbook in 1982 that changed how people hosted parties. Some of its ideas hold up surprisingly well today.

5 reasons to be thrilled about this year’s Oscar nominations
Despite the notable Oscar snubs last week, there are still some nominees who could make history at this year’s show

PHOTOS OF THE DAY
London, UK
Two-year-old Damian is walked through some newly emerged daffodils in St James’s Park. This winter has been one of the warmest on record, with Kinlochewe in the Scottish Highlands reaching 19.6C over the weekend
Photograph: Dan Kitwood/Getty Images
Florida, US
Royal Caribbean’s Icon of the Seas. billed as the world’s largest cruise ship, sails from the Port of Miami on its maiden cruise
Photograph: Marco Bello/AFP/Getty Images
Venice, Italy
The pantegana (big rat) releases balloons near the Rialto Bridge on the Grand Canal during the Venice carnival
Photograph: Guglielmo Mangiapane/Reuters
Market Closes for January 29^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1886, Karl Benz received a patent in Germany for his “motorwagen,” a frail and ungainly vehicle with three wheels and a wooden chassis. It was the world’s first automobile.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the third day, climbing 0.4%, or 76.4 to 21,201.68 in Toronto.
The index advanced to the highest closing level in at least a year.
Shopify Inc. contributed the most to the index gain, increasing 2.1%.
Ballard Power Systems Inc. had the largest increase, rising 4.5%.
Today, 123 of 225 shares rose, while 97 fell; 10 of 11 sectors were higher, led by information technology stocks.
Terminal users can read more in our markets live blog.
Insights
* This month, the index rose 1.2%
* The index advanced 2.4% in the past 52 weeks. The MSCI AC Americas Index gained 20% in the same period
* The S&P/TSX Composite is at its 52-week high and 13.4% above its low on Oct. 27, 2023
* The S&P/TSX Composite is up 1.3% in the past 5 days and rose 1.2% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 16.6 on a trailing basis and 15.4 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$3.35t
* 30-day price volatility fell to 9.57% compared with 9.73% in the previous session and the average of 10.81% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Information Technology | 34.1122| 1.8| 10/0
Financials | 12.8941| 0.2| 14/13
Industrials | 9.9361| 0.3| 13/12
Materials | 7.4500| 0.3| 29/22
Consumer Discretionary | 7.1846| 0.9| 9/4
Utilities | 6.0406| 0.7| 11/4
Real Estate | 4.8161| 1.0| 17/2
Consumer Staples | 4.5390| 0.5| 8/2
Communication Services | 3.8971| 0.5| 3/2
Health Care | 0.7683| 1.2| 3/1
Energy | -16.8724| -0.5| 6/35
================================================================
| | |Volume VS | YTD
| Index | | 20D AVG | Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
Shopify | 19.8000| 2.1| 15.6| 8.6
Constellation Software | 8.9620| 1.8| -32.1| 14.5
TD Bank | 7.1570| 0.7| -46.3| -3.3
RBC | -2.7460| -0.2| 22.3| -1.0
Onex | -2.9810| -5.9| 8.0| 8.6
Canadian Natural Resources | -6.3640| -1.0| 7.8| -1.3
US
By Rita Nazareth
(Bloomberg) — Wall Street’s busy week kicked off with gains in both stocks and bonds, with the Treasury surprising several traders after cutting its quarterly borrowing estimate to $760 billion.
The news came a few days before the Treasury’s quarterly refunding announcement and drew investors’ attention amid all the concern about a widening budget deficit.
Treasury yields fell, lifting the tech-heavy Nasdaq 100 up 1% ahead of results from five mega-caps that have a combined market value of more than $10 trillion.
Aside from the deluge of earnings this week, investors are also awaiting the Federal Reserve’s rate decision and a raft of data from consumer confidence to jobs.
“This week could be key,” said Chris Larkin at E*TRADE from Morgan Stanley. “If the market is going to sustain its latest breakout, it may need to avoid earnings disappointments from this week’s big-tech lineup, get encouraging news from the Fed on interest rates, and see jobs numbers that are solid, but not too hot.”
The S&P 500 topped 4,900, with Tesla Inc. leading gains in mega-caps.
Amazon.com Inc. abandoned its planned $1.4 billion acquisition of iRobot Corp., sinking shares of the Roomba maker.
Treasury 10-year yields dropped seven basis points to 4.07%.
Oil  fell after last week’s rally pushed futures into over-bought territory.
At the same time, ample crude supplies outweighed military escalation in the Middle East.
This week also marks the busiest this season for earnings, with results from Microsoft Corp., Alphabet Inc., Apple Inc., Amazon.com Inc. and Meta Platforms Inc.
As most of the mega-caps remain in record territory, there are concerns that investors are over- exposed to just a handful of stocks, which could open the door for some pain if quarterly results underwhelm.
The next few days will be crucial to determine whether stock valuations — particularly those of mega-cap US technology companies — are sustainable given that investors are pricing in significant earnings growth expectations in anticipation of rate cuts coming sooner than Fed officials project, according to JPMorgan Chase & Co.’s Marko Kolanovic.
“The 800-pound gorillas all report this week,” said Paul Nolte at Murphy & Sylvest Wealth Management. “Expect to see some market volatility around those earnings.
Combined with a Fed meeting, this week could be a wild ride as we head into February.”
After a bit of a rocky start to the year, the S&P 500 went on to cap a third straight weekly advance — and is now up almost 20% since late October.
In the week through Jan. 23, a ratio of bulls to bears identified in an Investors Intelligence survey of newsletter writers was hovering at the highest since 2021, when stocks neared a prior peak before the 2022 bear market, Yardeni
Research analysis shows.
Another signal of elevated bullishness was evident in a weekly survey of retail investors by the American Association of Individual Investors.
Dan Wantrobski at Janney Montgomery Scott is on the watch for further “profit-taking” or “consolidation” in leadership areas — which remain overbought on a short-term basis, according to him.
From a fundamental standpoint, economic data in the US continues pointing to a benign backdrop for markets, according to Mark Haefele at UBS Global Wealth Management.
He expects the Fed to feel comfortable cutting rates starting in May — though this will likely require further signs the economy is cooling off.
“In our view, stocks continue to price in an ‘immaculate everything’ scenario in which the Fed cuts deeply and the U.S. economy (at worst) glides down for a ‘soft landing’,” said Chris Senyek of Wolfe Research. “While we’re still not believers, our sense is that the Fed and economy are now ‘show me’ stories.”
Going into this week’s two-day Fed policy meeting, investors are assigning roughly even odds to the prospect that the central bank will start lowering borrowing costs at its next decision in March.
That makes Fed Chair Jerome Powell’s press conference, and any signal he may or may not choose to send, of critical importance.
It all comes down to how officials have been reading the recent spate of economic data.
On one hand, inflation numbers continue to surprise to the downside.
On the other, consumer spending continues to be surprisingly robust.
“The Fed could justifiably signal a March cut,” said Robert Teeter at Silvercrest Asset Management. “Nonetheless, we expect the Fed to back away from taking action in March, while simultaneously laying the groundwork for future cuts predicated on the removal of excessively restrictive rates.”
Underscoring the wait-and-see sentiment, a JPMorgan & Chase survey recently showed the percentage of investors who are neutral on the bond market has increased to the highest since April.
“We believe the odds of Fed rate cuts occurring in the first quarter of 2024 remain low, and that the much-anticipated policy pivot won’t begin until midyear,” said Saira Malik at Nuveen. “Still, with inflation falling and monetary policy
expectations recalibrating, we encourage investors to assess their taxable fixed-income portfolio allocations and to take advantage of opportunities we see across the asset class.”
Powell and his colleagues are expected to keep benchmark borrowing costs at a range between 5.25% and 5.5%.
They may also deliberate when to start slowing down the pace of balance-sheet unwinding — a process known as quantitative tightening.
“One potential wildcard comes in the form of the market’s response to any attempt on the part of the Fed to begin socializing the looming tapering of QT,” said Ian Lyngen and Ben Jeffery at BMO Capital Markets. “It’s bond bullish to be sure, although there is a strong argument that much of the potential for slower SOMA rollovers is already priced into the US rates market.”
Meantime, blue-chip firms have sold $188.57 billion of bonds in the US in January, setting a record for the month, as companies look to take advantage of drops in longer-term borrowing costs.
The sales broke the prior record for January of around $175 billion, set in 2017, according to data compiled by Bloomberg News.
And more sales are probably coming through the end of the month, Wall Street bond syndicate professionals said.
And dollar bulls are coming back with a splash in the latest MLIV Pulse survey.
About 62% of respondents surveyed Jan. 22-26 expect the Bloomberg Dollar Spot Index to gain over the next month.
That’s the highest reading since September of 2022.

Corporate Highlights:
* Whirlpool Corp., the owner of the Maytag and KitchenAid brands, projects 2024 sales will be weaker than Wall Street expectations as consumers forgo appliance upgrades.
* Bankrupt pharmacy chain Rite Aid Corp. hired liquidators at the request of company lenders even as the retailer continues negotiating with at least two potential buyers, a person familiar with the chain’s revival efforts said.
* SoFi Technologies Inc. reached profitability for the first time, taking the fintech one step closer to Chief Executive Officer Anthony Noto’s goal of turning the former anti-bank into a top 10 financial institution.
* Reddit Inc. is weighing feedback from early meetings with potential investors in its initial public offering that it should consider a valuation of at least $5 billion, according to people familiar with the matter, even as it is estimated below that figure in the volatile market for shares of private companies.
* Bayer AG was ordered to pay about $2.3 billion to a former Roundup user who blamed the weed killer for his cancer.
* Renault SA scrapped plans to list its electric-vehicle business, reversing course due to a lack of appetite for share sales amid a slowdown in EV demand.
* Ryanair Holdings Plc said it would jump at the chance to grab any extra Boeing Co. 737 Max jet deliveries from airlines that don’t want them, lending support to the embattled US plane maker under fire for quality lapses after a mid-air panel blowout this month.
* Holcim Ltd., a Swiss cement maker, said it will spin off its North American unit into a separate US-listed entity, a move that could unlock a higher valuation for the business.
* BYD Co.’s earnings rose on back of soaring electric vehicle sales — but fell short of analyst expectations as a price war in China hit the bottom line.
* China Evergrande Group received a liquidation order from a Hong Kong court, setting off a daunting process to carve up the biggest casualty of a property crisis that’s upending the world’s second-largest economy.

Key events this week:
* Japan unemployment, Tuesday.
* Eurozone economic confidence, GDP, consumer confidence, Tuesday
* US Conf. Board consumer confidence, JOLTS jobs openings, Tuesday
* Microsoft, Alphabet earnings, Tuesday
* China non-manufacturing PMI, manufacturing PMI, Wednesday
* Japan industrial production, retail sales, housing starts, Wednesday
* Bank of Japan issues summary of opinions from January policy meeting, Wednesday
* Boeing announces earnings amid US government safety probe, Wednesday
* Federal Reserve interest rate decision and Fed Chair Jerome  Powell’s news conference, Wednesday.
* US Treasury quarterly refunding, Wednesday.
* China Caixin manufacturing PMI, Thursday
* Eurozone S&P Global Manufacturing PMI, CPI, unemployment, Thursday
* US productivity, construction spending, ISM Manufacturing, initial jobless claims, Thursday
* Apple, Amazon, Meta, Deutsche Bank, BNP Paribas earnings, Thursday
* Bank of England interest rate decision, Thursday
* US employment report, University of Michigan consumer sentiment, factory orders, Friday
Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.8% as of 4 p.m. New York time
* The Nasdaq 100 rose 1%
* The Dow Jones Industrial Average rose 0.6%
* The MSCI World index rose 0.7%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro fell 0.2% to $1.0831
* The British pound was little changed at $1.2711
* The Japanese yen rose 0.5% to 147.47 per dollar
Cryptocurrencies
* Bitcoin rose 2.8% to $43,159.08
* Ether rose 1.8% to $2,303.8
Bonds
* The yield on 10-year Treasuries declined seven basis points to 4.07%
* Germany’s 10-year yield declined six basis points to 2.23%
* Britain’s 10-year yield declined nine basis points to 3.88%
Commodities
* West Texas Intermediate crude fell 1.3% to $77.02 a barrel
* Spot gold rose 0.7% to $2,032.48 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Isabelle Lee, Jessica Menton, Ye Xie, Michael Mackenzie and Kasia Klimasinska.
Have a lovely evening.

Be magnificent!
As ever,

Carolann
You can achieve wisdom in three ways.  The first way is the way of meditation.  This is the most noble way.  The second way is the way of imitation.  This is the easiest and least satisfying way.  Thirdly, there is the way of experience.  This is the most difficult way. –Confucius, c. 551-c. 479, BCE.

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
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