February 21, 2024, Newsletter

Dear Friends,

Tangents:
February 21, 1804: The world’s first ever railway journey takes place in Wales.
February 21, 1916: Battle of Verdun – over 1 million men killed, France.
1925: New Yorker magazine debuts.
On Feb. 21, 1965, former Black Muslim leader Malcolm X was shot and killed by assassins identified as Black Muslims as he was about to address a rally in New York City; he was 39.  Go to article >>

Andres Segovia, guitarist, b. 1893.
Anais Nin, b. 1903.
W.H. Auden, poet/writer, b. 1907.

James Webb telescope finds ancient galaxy larger than our Milky Way, and it’s threatening to upend cosmology
Astronomers believe the first galaxies formed around giant halos of dark matter. But a newly discovered galaxy dating to roughly 13 billion years ago mysteriously appeared long before that process should have occurred. Read More.

Ancient language found on 2,100-year-old bronze hand may be related to Basque
Researchers think the inscription is written in a Vasconic language spoken in northeastern Spain before the arrival of the Romans. Read More.

NASA grabbed a whopping 120 grams of rubble from asteroid Bennu, and it may contain the seeds of life
NASA’s final tally shows that OSIRIS-REx collected roughly 4 ounces (120 grams) of material from asteroid Bennu. The sample collected from the “potentially hazardous” asteroid is thought to contain some of the earliest precursors for life. Read More.

“Hotel California” trial centers on handwritten Eagles lyrics.

PHOTOS OF THE DAY

San Francisco, US
Surfers under the Golden Gate Bridge during rainy weather in California
Photograph: Tayfun Coskun/Anadolu/Getty Images

Laruns, France
Visitors walk along a slope at the Artouste ski resort in the Pyrenées-Atlantiques region, which has not had such little snow in February for over 30 years
Photograph: Christophe Archambault/AFP/Getty Images

​​​​​​​The sun rises behind the BT Tower, viewed from Richmond Park in south London.
Photograph: Rick Findler/Story Picture Agency
Market Closes for February 21^st, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1947, Edwin H. Land, founder of Polaroid Corp., demonstrated the instant camera to 650 scientists assembled at the annual meeting of the Optical Society of America. Never before had it been possible to develop a snapshot within a single minute. Polaroid went on to become one of the great growth stocks of postwar America.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the second day, dropping 0.2%, or 45.15 to 21,172.38 in Toronto.
The move was the biggest since falling 2.3% on Feb. 13.
Shopify Inc. contributed the most to the index decline, decreasing 4.0%.
IA Financial Corp. had the largest drop, falling 8.7%.
Today, 99 of 225 shares fell, while 119 rose; 5 of 11 sectors were lower, led by information technology stocks.
Insights
* This month, the index rose 0.7%
* The index advanced 4.5% in the past 52 weeks. The MSCI AC Americas Index gained 24% in the same period
* The S&P/TSX Composite is 0.7% below its 52-week high on Feb. 16, 2024 and 13.3% above its low on Oct. 27, 2023
* The S&P/TSX Composite is up 2.9% in the past 5 days and rose 1.3% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 16.5 on a trailing basis and 16.8 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$3.36t
* 30-day price volatility rose to 12.23% compared with 12.21% in the previous session and the average of 9.96% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Information Technology | -53.6918| -2.8| 0/10
Financials | -46.7637| -0.7| 7/19
Materials | -18.0304| -0.9| 23/27
Consumer Staples | -2.1125| -0.2| 7/4
Communication Services | -1.1362| -0.1| 1/3
Health Care | 0.1779| 0.3| 2/1
Real Estate | 0.1860| 0.0| 15/6
Consumer Discretionary | 0.2002| 0.0| 6/7
Utilities | 1.0772| 0.1| 9/5
Industrials | 3.2819| 0.1| 10/16
Energy | 71.6648| 2.0| 39/1
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
Shopify | -35.5600| -4.0| 2.6| -1.0
Wheaton Precious Metals | -15.1400| -8.0| 203.4| -15.9
Constellation Software | -8.1920| -1.6| -2.0| 11.5
Enbridge | 6.2420| 0.9| 5.2| -1.5
Suncor Energy | 11.1400| 2.8| 59.6| 6.8
Canadian Natural Resources | 18.7100| 2.9| 99.1| 1.3
US
By Rita Nazareth
(Bloomberg) — Big tech looked poised for a rebound after Nvidia Corp.’s solid earnings bolstered confidence in the artificial-intelligence frenzy that has powered the stock market resurgence.
The giant chipmaker soared 6% in late trading after predicting another blowout sales gain for the current quarter, with Chief Executive Officer Jensen Huang saying “accelerated computing and generative AI have hit the tipping point.”
A $243 billion exchange-traded fund tracking the Nasdaq 100 (QQQ) pushed decidedly higher after struggling to find direction in the immediate aftermath of Nvidia’s earnings.
“Nvidia has been the ‘poster child’ of AI enthusiasm because NVDA makes the type of semiconductor chips that power generative AI and demand for those chips has gone through the roof,” said Tom Essaye, founder of The Sevens Report. “The AI-driven rally in the ‘Mag Seven’ is largely justified by the fact that they’re making a lot more money than they were previously.”
The S&P 500 staged a late-day rebound on Wednesday, erasing losses minutes before the market close.
Treasury yields climbed after a $16 billion sale of 20-year bonds.
Traders also kept a close eye on the latest Federal Reserve minutes that showed officials are in no rush to cut rates.
Traders also kept an eye on the latest debate about the outlook for the Fed’s next steps. Fed Governor Michelle Bowman argued on Wednesday that the current economic environment doesn’t warrant the central bank cutting rates. Fed Bank of Richmond President Thomas Barkin said recent data highlighted how price pressures in some sectors are still too high, despite improvement in the overall inflation picture.
Most Fed officials last month flagged concerns over moving too quickly to cut interest rates, indicating such risks outweighed keeping borrowing costs elevated for too long, according to the minutes of the January Federal Open Market Committee meeting.
“Given the uptick in prices, the Fed’s concerns appear valid,” said Quincy Krosby at LPL Financial. “Above all else, they don’t want to repeat the mistake of monetary policy from the 1970’s, which opened the door to stagflation and the need for much higher interest rates to expunge seemingly embedded inflation.”
JPMorgan Chase & Co.’s Marko Kolanovic, who drew attention for his gloomy stock-market calls through last year’s rally, is raising a risk that’s mostly gone out of vogue on Wall Street — a return of 1970s-style stagflation.
The bank’s chief market strategist said a recent pickup in consumer and producer prices has cast a shadow over the economic enthusiasm that powered equity markets in recent months.
Speaking of which, stakes are so high for Nvidia’s earnings that even strategists who wouldn’t normally comment on individual securities had something to say ahead of the numbers.
“We do not usually talk about individual stocks as asset allocation traditionally is the largest driver of portfolio risk and return,” said Emily Roland and Matt Miskin at John Hancock Investment Management. “While Nvidia is high quality for sure, to us the AI hype has gone beyond the ‘reasonable price’ stage.”
A host of similarities between tech stocks now and previous bubbles suggest the “Magnificent Seven” is only nearing — but not yet at — levels that may lead it to pop, Bank of America Corp. strategist Michael Hartnett said last week.
While Nvidia is the proverbial “picks and shovels” of the “AI gold rush”, other big-tech companies such as Microsoft Corp., Meta Platforms Inc., Alphabet Inc., Amazon.com Inc. and Apple Inc. have also seen large stock rallies as investors expect these companies to harness the power of generative AI to boost profits, Essaye noted.
“Has the AI mania gone too far and are we looking at a bubble situation?” Essaye said. “Based on what most of us think about typical bubbles, the answer is ‘no’ they are not in a  bubble.”

Corporate Highlights:
* Intel Corp. has landed Microsoft Corp. as a customer for its made-to-order chip business, marking a key win for an ambitious turnaround effort under Chief Executive Officer Pat Gelsinger.
* Cisco Systems Inc. is selling $13.5 billion of bonds in the US high-grade debt market to partly finance its proposed $28 billion acquisition of Splunk Inc., as issuers rush to capitalize on strong investor demand.
* Boeing Co. ousted the head of its 737 Max program after a midair blowout of a fuselage panel on an Alaska Airlines jet led to withering scrutiny of the manufacturing quality of the plane maker’s most important model.
* Luxury homebuilder Toll Brothers Inc. said it’s optimistic about its prospects for a key selling season.
* HSBC Holdings Plc reported fourth-quarter profit fell 80% after taking unexpected charges on holdings in a Chinese bank and from selling its French retail operations. Shares slid in London.
* Palo Alto Networks Inc., a cybersecurity company, cut its annual revenue forecast, stoking concerns that customers are reining in spending despite an uptick in attacks.
* Mercedes-Benz Group AG plans to buy back as much as €3 billion ($3.2 billion) worth of stock, extending moves to reward shareholders after cash flow exceeded expectations.

Key Events This Week:
* Eurozone S&P Global Services PMI, S&P Global Manufacturing PMI, CPI, Thursday
* US initial jobless claims, US existing home sales, Thursday
* ECB issues account of January meeting, Thursday
* Fed Governor Lisa Cook and Minneapolis Fed President Neel Kashkari speak, Thursday
* China property prices, Friday
* Germany IFO business climate, GDP, Friday
* ECB publishes 1- and 3-Year inflation expectations survey, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.1% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.4%
* The Dow Jones Industrial Average rose 0.1%
* The MSCI World index was little changed
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro was little changed at $1.0818
* The British pound was little changed at $1.2634
* The Japanese yen fell 0.1% to 150.19 per dollar
Cryptocurrencies
* Bitcoin fell 2% to $50,990.31
* Ether fell 2.7% to $2,908.32
Bonds
* The yield on 10-year Treasuries advanced four basis points to 4.32%
* Germany’s 10-year yield advanced eight basis points to 2.45%
* Britain’s 10-year yield advanced six basis points to 4.10%
Commodities
* West Texas Intermediate crude rose 1.3% to $78.04 a barrel
* Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Tatiana Darie, Lu Wang, Henry Ren, Carly Wanna and Alexandra Semenova.

Have a  lovely evening.

Be magnificent!

As ever,

Carolann
One should count each day a separate life. –Marcus Annaeus Seneca, 54 BC-39 AD.

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