March 4, 2024, Newsletter

Dear Friends,

Tangents: Happy Monday.
March 4, 1789: U.S. Constitution went into effect.
March 4, 2007:The world’s first national internet election is held.  Estonia was the first country to allow its citizens to vote in a parliamentary  election online.
March 4^th, 2012: Vladimir Putin scored a decisive victory in Russia’s presidential election to return to the Kremlin and extend his hold on power for six more years. Independent observers say the election was riddled
with violations.  Go to article >>

Antonio Vivaldi, b. 1675.

1,000-year-old vessels found in Guatemala held tobacco possibly used as ‘narcotics to induce deep sleep, visions and divinatory trances’
Archaeologists have discovered a collection of pre-Hispanic ceramic vases that contain traces of nicotine, possibly from liquid infusion.  Read More.

Boiling tap water can remove nearly 90 percent of microplastics, new study finds
Tiny plastic particles float inside tap water, and it’s still unclear how they impact our health. But boiling the water for 5 minutes could remove most of these microplastics, a new study finds. Read More

Fracturing Antarctic glacier breaks 80 mph speed record
The Pine Island glacier formed a 6.5-mile-long crack at 80 mph, proving to scientists that some glaciers can shatter like glass. Read More.

It’s been 10 years since Ellen’s iconic Oscars selfie with Bradley Cooper, Julia Roberts, Jennifer Lawrence, Brad Pitt, Lupita Nyong’O and all of their famous friends
Only 10 years?! Whew, it feels like 100.

LeBron James becomes first player in NBA history to score 40,000 career points
I’m no basketball expert, but that seems like a lot of points.

Here’s why Americans drive on the right and the UK drives on the left
It’s “Start a fight between Brits and Americans” time again.

Let ‘Dune: Part Two’ inspire you to revisit these other sci-fi sequels
Not all of them feature big scary worms, but a suspicious amount of them do.

PHOTOS OF THE DAY

A person uses skis as snow continues to fall in Truckee
Photograph: Mario Tama/Getty Images

White arctic fox pups with summer fur
Photograph: Lisi Niesner/Reuters

​​​​​​​Galápagos
Islands, Ecuador La Cumbre volcano erupts on Fernandina Island
Photograph: Getty Images
Market Closes for March 4^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1472, the world’s oldest continually operating bank, the Monte della Pieta (now known as Monte dei Paschi di Siena), was founded in Siena, Italy to lend money to “poor or wretched or needy persons” at 7.5% annual interest.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite declined slightly to 21,531.07 in Toronto.
The move follows the previous session’s increase of 0.9%.
Canadian Natural Resources Ltd. contributed the most to the index decline, decreasing 2.0%.
Denison Mines Corp. had the largest drop, falling 4.2%.
Today, 112 of 225 shares fell, while 111 rose; 7 of 11 sectors were lower, led by energy stocks.
Insights
* This quarter, the index rose 2.7%
* The index advanced 4.6% in the past 52 weeks. The MSCI AC Americas Index gained 26% in the same period
* The S&P/TSX Composite is 0.3% below its 52-week high on March 1, 2024 and 15.2% above its low on Oct. 27, 2023
* The S&P/TSX Composite is up 1% in the past 5 days and rose 2.1% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 18.1 on a trailing basis and 14.7 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$3.42t
* 30-day price volatility rose to 11.87% compared with 11.86% in the previous session and the average of 10.83% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Energy | -33.2114| -0.9| 20/21
Information Technology | -11.9433| -0.6| 5/5
Consumer Staples | -9.9987| -1.1| 1/10
Communication Services | -9.7148| -1.3| 0/5
Consumer Discretionary | -2.7939| -0.4| 4/9
Health Care | -1.3808| -2.0| 0/4
Utilities | -0.8086| -0.1| 5/10
Real Estate | 0.3982| 0.1| 10/11
Industrials | 1.1292| 0.0| 10/16
Financials | 1.6522| 0.0| 16/11
Materials | 45.3959| 2.1| 40/10
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
Canadian Natural Resources | -14.8400| -2.0| 152.8| 10.3
TD Bank | -13.7900| -1.3| 0.0| -6.3
Shopify | -8.5040| -1.0| -48.4| -0.3
Bank of Nova Scotia| 5.7270| 1.0| 28.8| 3.3
Barrick Gold | 8.7090| 3.5| -7.1| -12.4
Agnico Eagle Mines | 11.2300| 4.8| 73.0| -2
US
By Rita Nazareth
(Bloomberg) — The relentless rally in stocks took a breather on Monday, with traders awaiting this week’s batch of jobs data and remarks from Federal Reserve officials for clues on the interest-rate outlook.
In the absence of fresh catalysts, equities showed signs of exhaustion after a rally that drove the S&P 500 to its 15^th record in 2024.
Treasuries fell, with syndicate desks calling for $30 billion of new high-grade bond sales this week.
Speaking Wednesday and Thursday, Fed Chair Jerome Powell is expected to double down on his message that there’s no rush to cut rates.
Meantime, data forecast to show labor-market cooling should reinforce bets on policy easing.
“If the S&P 500 is going to make this the eighth-straight week it hits an all-time high, it will likely need to hear encouraging words from Powell about rate cuts in his two days of congressional testimony, and avoid any major surprises from jobs data,” said Chris Larkin at E*TRADE from Morgan Stanley.
The S&P 500 edged lower. Tesla Inc. sank over 7%.
Nvidia Corp. climbed 3.6%, overtaking Saudi Aramco to become the world’s third-most valuable public company.
Super Micro Computer Inc., which will join the US equity benchmark this month, has now surged almost 1,000% in the past 12 months.
New York Community Bancorp slid after Friday’s credit downgrades.
US 10-year yields increased four basis points to 4.22%.
Bitcoin topped $67,000. Gold rose above $2,100.
The S&P 500 saw its 16th weekly gain in the last 18 — something that hasn’t happened since 1971, according to Deutsche Bank AG. If the gauge makes 17 out of 19 this week, it will be for the first time since 1960’s, the firm noted.
“We’re seeing some incredible levels being broken from many different risk assets,” said Matt Maley at Miller Tabak. “Some of this is justified, but others are a sign of ‘froth.’ This means that the risks are rising in the stock market, and thus investors need to avoid becoming too complacent.”
Marko Kolanovic at JPMorgan Chase & Co. also see signals of accumulating “froth” in the market.
“This may keep monetary policy higher for longer, as premature rate cutting risks further inflating asset prices or causing another leg up in inflation,” he wrote.
To Chris Senyek at Wolfe Research, the US equity market is likely to push higher until economic data signals a significant slowdown ahead or inflation looks sticky enough to keep the Fed from cutting rates deeply and quickly.
“The market’s relentless rally, in which it embraces even the mostly slightly bullish news and ignores any bad news (known as a ‘Teflon’ market because nothing sticks) is raising this question: Can anything make the stock market decline?” said Tom Essaye, founder of The Sevens Report.   “The answer, of course, is ‘yes’.”
Slowing growth, reduced rate-cut expectations, falling earnings expectations are among the factors that could lead to that, he added.
Nouriel Roubini, the economist known for his bearish outlook ahead of the 2008 global financial crisis, expressed optimism that US growth will remain brisk this year — though that might be a negative for stocks.
“There actually is a serious possibility of what people refer to as a ‘no landing,’ that growth remains above potential and inflation remains sticky,” Roubini told Bloomberg Surveillance. “Paradoxically, the good news on growth may be bad news for the market if that implies the Fed is not going to cut as much and as soon as people expect.”
Fed Bank of Atlanta President Raphael Bostic said he expects the Fed’s first cut — which he has penciled in for the third quarter — will be followed by a pause the following meeting to assess how the policy shift is affecting the economy.
Powell heads to Capitol Hill for his semiannual testimony before Congress — two years after the central bank began its aggressive battle against surging inflation.
With the economy powering along and inflation inching toward the Fed’s sweet spot, Powell will make the case for why officials are in no rush to lower rates.
Fed officials’ most recent quarterly forecast in December was for three quarter-point cuts this year — and the bond market has embraced that view, based on the prices of swap contracts that reference future Fed meeting dates.
“If Powell says something to the effect that rate cuts will come in the second half of the year, then that can catalyze a move to pricing in two cuts,” said Steve Bartolini, portfolio manager at T. Rowe Price Group Inc.
Bets on Fed-rate cuts and the artificial-intelligence euphoria spurred a fourth-consecutive month of gains for stocks — defying concerns that the market has topped after its almost 35% run since the start of last year.
The gains have left strategists scrambling to lift their end-2024 targets.
Bank of America Corp.’s Savita Subramanian was the latest to ratchet up her  forecast for the S&P 500 to among the highest on Wall Street.
She now expects the benchmark to end the year at 5,400, compared with her earlier target of 5,000.
Indicators are flashing bullish signals on stronger earnings growth ahead and “surprising” profit margin resilience, she said.
The S&P 500’s advance to a record high — fueled by a small group of supercharged technology stocks — doesn’t resemble past bubbles, according to strategists at Goldman Sachs Group Inc.
Stocks with an enterprise value-to-sales ratio of above 10 account for 24% of total US equity market capitalization, versus 28% during 2021 and 35% during the tech bubble, strategist David Kostin wrote.
However, the breadth of “extreme valuations” is far more contained with the number of stocks trading at those multiples down sharply from the peak in 2021, he added.
“This time is different,” Kostin said. “Unlike the broad-based ‘growth at any cost’ in 2021, investors are mostly paying high valuations for the largest growth stocks in the index. We believe the valuation of the Magnificent 7 is currently
supported by their fundamentals.”

Corporate Highlights:
* US aviation safety regulators found Boeing Co. failed to comply with manufacturing quality control requirements on “multiple” occasions, according to an audit launched in response to response a harrowing near-disaster involving a new Alaska Airlines 737 Max 9 jet in January.
* Apple Inc. was hit Monday with a €1.8 billion ($2 billion)penalty from the European Union over an investigation into allegations it shut out music-streaming rivals, including Spotify Technology SA, on its platforms.
* American Airlines Group Inc. agreed to buy 260 short-haul aircraft that include a huge deal for Boeing Co. 737 Max jets, a key endorsement of the plane-maker as it works through a crisis of confidence following a near-catastrophic accident in January.
* Coinbase Global Inc., the biggest US cryptocurrency exchange, said some individual investors saw zero balances in their accounts for the second time in less than a week.
* JetBlue Airways Corp. formally abandoned its pursuit of Spirit Airlines Inc. more than a month after a federal judge blocked the $3.8 billion acquisition on antitrust grounds.
* Arkhouse Management Co. and Brigade Capital Management boosted their offer for Macy’s Inc. by 14% after the retailer rebuffed a previous proposal.

Key Events This Week:
* Bank of Japan Governor Kazuo Ueda speaks, Tuesday
* China Caixin services PMI, Tuesday
* China kicks off its 14th National People’s Congress, Tuesday
* Eurozone S&P Global Services PMI, PPI, Tuesday
* US factory orders, ISM services, S&P Global Services PMI, Tuesday
* Super Tuesday in the US, with North Carolina, California, Texas and Oklahoma among more than a dozen states holding Republican and Democratic primaries
* Canada rate decision, Wednesday
* Eurozone retail sales, Wednesday
* US ADP employment, JOLTS job openings, Wednesday
* Fed Chair Jerome Powell testifies before the House Financial Services Committee, Wednesday
* Fed issues Beige Book, Wednesday
* Fed’s Neel Kashkari (Minneapolis) and Mary Daly (San Francisco) speak, Wednesday
* China trade, forex reserves, Thursday
* European Central Bank’s rate decision, Thursday
* US initial jobless claims, trade, Thursday
* President Joe Biden delivers the State of the Union address, Thursday
* Fed Chair Jerome Powell testifies before the Senate Banking Committee, Thursday
* Cleveland Fed President Loretta Mester speaks, Thursday
* Eurozone GDP, Friday
* US nonfarm payrolls, unemployment, Friday
* New York Fed President John Williams speaks, Friday
* ECB Governing Council member Robert Holzmann speaks, Friday
Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.1% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.4%
* The Dow Jones Industrial Average fell 0.2%
* The MSCI World index was little changed
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro rose 0.2% to $1.0857
* The British pound rose 0.3% to $1.2690
* The Japanese yen fell 0.3% to 150.53 per dollar
Cryptocurrencies
* Bitcoin rose 7.6% to $67,638.91
* Ether rose 3.4% to $3,595.41
Bonds
* The yield on 10-year Treasuries advanced four basis points to 4.22%
* Germany’s 10-year yield declined two basis points to 2.39%
* Britain’s 10-year yield was little changed at 4.12%
Commodities
* West Texas Intermediate crude fell 1.5% to $78.75 a barrel
* Spot gold rose 1.7% to $2,117.36 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Michael Mackenzie and Elizabeth Stanton.
Have a lovely evening.

Be magnificent!
As ever,

Carolann
During the first period of a man’s life the greatest danger is not to take the risk. –Soren Kierkegaard, 1813-1855.

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