April 12, 2024, Newsletter

Dear Friends,

Tangents: Happy Friday.
April 12,1961: Yuri Gagarin becomes the first human in space.  The Soviet Cosmonaut’s flight took 108 minutes from launch to landing.
April 12, 1981: The space shuttle Columbia blasted off from Cape Canaveral, Fla., on its first test flight.  Go to article >>

Franklin D. Roosevelt, d.. 1945.
David Letterman, b. 1947.
1955: Polio vaccine.

Car-size asteroid discovered just days ago flies 30 times closer to Earth than the moon
A newly discovered asteroid got within 12,000 miles of Earth on a harrowing, ultra-close approach. The space rock won’t return for 70 years. Read More.

Uranus and Neptune aren’t made of what we thought, new study hints
A study suggests the ice giants Uranus and Neptune aren’t quite as watery as previously thought. They may also contain huge amounts of frozen methane, potentially solving the puzzle of how they formed. Read More.

Toxic formaldehyde in hair-straightening products to be banned
Experts explain what the expected FDA ban on formaldehyde in hair-straightening products really means for everyday Americans. Read More.

Watch derpy robots show off their soccer skills thanks to new AI training method
Short, stumpy robots learned how to play soccer — and improved their skills dramatically thanks to a new AI training technique that combines several pre-existing methods. Read More

Meghan, Duchess of Sussex, and Prince Harry have two new Netflix shows in production
An upcoming Netflix series curated by Meghan “will celebrate the joys of cooking & gardening, entertaining, and friendship,” the streaming giant said.

Creating a board game is more complicated than you think
Designers, artists, marketers and publishers of some of the most popular board games tell CNN exactly what it takes to turn an idea into reality.

Taylor Swift’s music is back on TikTok
The pop star’s hit songs are back on TikTok ahead of her latest album’s release. Read about the ongoing dispute with her music distributor, Universal Music Group, over royalties.

Russian hackers steal US government emails with Microsoft
Microsoft has notified “several” US federal agencies that Russian hackers may have stolen emails via a major software breach.

Foxes were once humans’ best friends, study says
Scientists believe this extinct fox species may have been domesticated 1,500 years ago by hunter-gatherers.

PHOTOS OF THE DAY

Grindavík, Iceland
A volcano that erupted three times between December and February continues to spew lava and emit smoke as the northern lights appear over the town
Photograph: Marco di Marco/AP

A bird perches on an elephant as the larger animal moves through Amboseli national park in Kajiado, Kenya
Photograph: Monicah Mwangi/Reuters

​​​​​​​Geese walk through pear trees in full bloom in a village in Qingdao, Shandong province, China
Photograph: Costfoto/NurPhoto/Rex/Shutterstock
Market Closes for April 12^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On April 13, 1989, American Continental filed for Chapter 11 bankruptcy and regulators seized its main subsidiary, Lincoln Savings & Loan Association, after discussions to sell the ailing thrift collapsed. American Continental Chairman Charles Keating would later face charges over the bank’s demise, which came to symbolize the broader savings-and-loan crisis.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the third day, dropping 1%, or 210.12 to 21,899.99 in Toronto.
The move was the biggest since falling 2.3% on Feb. 13.
Royal Bank of Canada contributed the most to the index decline, decreasing 1.2%.
MTY Food Group Inc. had the largest drop, falling 9.9%.
Today, 192 of 224 shares fell, while 30 rose; all sectors were lower, led by financials stocks.
Insights
* So far this week, the index fell 1.6%, heading for the biggest decline since the week ended Oct. 27
* The index advanced 7.1% in the past 52 weeks. The MSCI AC Americas Index gained 25% in the same period
* The S&P/TSX Composite is 2.1% below its 52-week high on April 9, 2024 and 17.2% above its low on Oct. 27, 2023
* S&P/TSX Composite is trading at a price-to-earnings ratio of 18.4 on a trailing basis and 15.1 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$3.51t
* 30-day price volatility rose to 7.98% compared with 7.71% in the previous session and the average of 9.33% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | -61.1547| -0.9| 3/24
Energy | -39.0904| -1.0| 7/33
Information Technology | -32.0299| -1.7| 0/10
Materials | -27.0312| -1.0| 6/44
Utilities | -10.7763| -1.4| 2/13
Industrials | -10.1413| -0.3| 4/23
Communication Services | -9.8779| -1.4| 1/4
Consumer Discretionary | -9.8128| -1.3| 1/12
Consumer Staples | -4.8879| -0.6| 3/8
Real Estate | -4.2573| -0.9| 2/18
Health Care | -1.0558| -1.6| 1/3
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
RBC | -15.6400| -1.2| 9.6| 1.2
Constellation Software | -15.2400| -3.0| -29.7| 9.0
Canadian Natural Resources | -14.4000| -1.7| -5.9| 25.6
Whitecap Resources | 0.6690| 1.5| 18.9| 19.8
Agnico Eagle Mines | 0.9390| 0.3| 16.9| 16.5
Waste Connections | 1.9270| 0.5| -35.1| 16.4
US
By Rita Nazareth
(Bloomberg) — The financial world was roiled by a flare-up in geopolitical risks that sent stocks sliding — while spurring a flight to the safest corners of the market such as bonds and the dollar.
Oil rose.
Equities saw their worst day since January after a news report that Israel was bracing for an attack by Iran on government targets.
Approximately 40 launches were identified crossing from Lebanese territory, some of which were intercepted, the Israel Defense Forces wrote in a post on X.
US President Joe Biden said he expects Iran will attack Israel sooner rather than later — and his message to Iran is “don’t” do it.
Wall Street’s “fear gauge” — the VIX — spiked to levels last seen in October.
To Matt Maley at Miller Tabak, investors have been much too complacent about geopolitical issues.
“Since gold and oil markets have been pricing in a meaningful impact on the marketplace from this crisis, it’s not out of the question that the stock market will follow those other markets and see an outsized reaction before long,” Maley
noted.
The S&P 500 fell 1.5% Friday, with banks and chipmakers leading losses.
The gauge posted its biggest weekly drop in 2024.
Treasury 10-year yields sank seven basis points to 4.52%.
Andrew Brenner at NatAlliance Securities also cited “massive short covering” and rate locking before an expected flurry of debt issuance by banks after earnings.
The dollar notched its best week since September 2022.
Brent oil settled above $90.
Gold topped the $2,400-an-ounce mark before erasing gains.
Treasuries rallied sharply, following the market’s worst two days since February, in which yields reached year-to-date highs after inflation readings savaged expectations for Federal Reserve interest-rate cuts this year.
Two-year yields — which briefly topped 5% this week — plunged on Friday.
“Risk was off the menu on Friday,” said Fawad Razaqzada at City Index and Forex.com. “Investors were lighting up on risk exposure ahead of the weekend, fearing risk assets could gap lower should something happen.”
A direct confrontation between Israel and Iran would mean a significant escalation of the Middle East conflict and would lead to a significant rise in oil prices, according to Commerzbank analysts including Carsten Fritsch.
Escalating geopolitical tensions — most recently in the Middle East, but also including attacks on Russian energy infrastructure by Ukraine — have spurred bullish activity in the oil options market.
There’s been elevated buying of call options — which profit when prices rise — in recent days, with implied volatility jumping.
Jose Torres at Interactive Brokers says the latest developments illustrate how investor sentiment and high equity valuations are vulnerable to geopolitical conflicts, persistent inflation and oil prices.
“Investors have pushed back their expectations for the start of the Fed’s easing cycle — with geopolitics possibly replacing the Fed as one of the market’s top volatility influencers,” he noted.
As Wall Street’s earnings season kicked off, big banks’ results offered the latest window into how the US economy is faring amid an interest-rate trajectory muddied by persistent inflation.
JPMorgan Chase & Co. and Wells Fargo & Co. both reported net interest income — the earnings they generate from lending — that missed estimates amid increasing funding costs.
Citigroup Inc.’s profit topped analysts’ estimates as corporations tapped markets for financing and consumers leaned on credit cards — signs that a prolonged period of elevated interest rates will benefit big banks.
“Many economic indicators continue to be favorable.  However, looking ahead, we remain alert to a number of significant uncertain forces,” JPMorgan’s Chief Executive Officer Jamie Dimon said.
He cited the wars, growing geopolitical tensions, persistent inflationary pressures and the effects of quantitative tightening.
Meantime, the latest economic data did little to alter the reduced risk appetite on Friday — with consumer sentiment down as inflation expectations rose.
BlackRock Inc. Chief Executive Officer Larry Fink said he expects the Fed to cut rates twice at the most this year, and that it will be difficult for the central bank to curb inflation.
Fink told CNBC he would “call it a day and a win” if the inflation rate gets to between 2.8% and 3%, which is above the Fed’s 2% target.
Pacific Investment Management Co. warned that the Fed could pivot back toward interest rate hikes if US inflation moves higher — with the asset manager preferring to buy bonds in other markets.
“If inflation starts to re-emerge then there’s a possibility that the Fed hikes instead of delivering any cuts,” Mohit Mittal, chief investment officer for core strategies at Pimco, said in an interview on Bloomberg Television.
Traders also kept an eye on the latest Fed speak.
A slew of officials emphasized Friday that there is no urgency to lower interest rates, pointing to still-elevated inflation and a robust labor market.
That included comments from both the Boston Fed’s Susan Collins as well as San Francisco’s Mary Daly.
Atlanta’s Raphael Bostic repeated his view for one rate cut toward the end of the year, and Kansas City’s Jeffrey Schmid noted he prefers a “patient” approach to reductions.
While shifting expectations around the timing and pace of the first cuts are likely to create further yield volatility in the near term, UBS’s Chief Investment Office thinks the more important point is that the US central bank remains set to start easing this year.
With a low probability of the Fed needing to hike rates further, CIO maintains their positive outlook on quality bonds.
“We continue to favor quality bonds in our global portfolios and recommend investors lock in attractive yields before rates fall this year,” said Solita Marcelli at UBS Global Wealth Management. “We like those with 1–10-year duration, as
well as sustainable bonds.”  “We also think investors should consider an active exposure to fixed income to improve diversification,” she concluded.

Corporate Highlights:
* United States Steel Corp. shareholders voted in favor of a $14.1 billion takeover offer by Nippon Steel Corp., leaving the fate of the deal for the iconic American steelmaker to the realm of US regulators and politics.
* BlackRock Inc.’s long-term investment funds took in $76 billion of net inflows in the first quarter, helping to push the world’s largest money manager to a record $10.5 trillion of client assets.
* Exxon Mobil Corp. formally approved its sixth Guyanese oil development that will make the Latin American nation a bigger crude producer than OPEC member Venezuela.
* Beijing has ordered telecom carriers like China Mobile Ltd. to replace foreign chips in their core networks by 2027, the Wall Street Journal reported, citing people familiar with the matter.
* Activist investor Barington Capital Group L.P. is calling on Paramount Global to end exclusive talks with media mogul David Ellison and consider rival proposals, including one from Apollo Global Management Inc.

Some of the main moves in markets:
Stocks
* The S&P 500 fell 1.5% as of 4 p.m. New York time
* The Nasdaq 100 fell 1.7%
* The Dow Jones Industrial Average fell 1.2%
* The MSCI World index fell 1.2%
Currencies
* The Bloomberg Dollar Spot Index rose 0.7%
* The euro fell 0.8% to $1.0637
* The British pound fell 0.8% to $1.2447
* The Japanese yen was little changed at 153.26 per dollar
Cryptocurrencies
* Bitcoin fell 5.2% to $66,823.88
* Ether fell 8.8% to $3,214.92
Bonds
* The yield on 10-year Treasuries declined seven basis points to 4.52%
* Germany’s 10-year yield declined 10 basis points to 2.36%
* Britain’s 10-year yield declined six basis points to 4.14%
Commodities
* West Texas Intermediate crude rose 0.6% to $85.54 a barrel
* Spot gold fell 1.3% to $2,342.74 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Alex Longley, Jack Wittels, Julia Fanzeres, Jack Ryan, Sybilla Gross, Caleb Mutua, Carter Johnson and Michael Mackenzie.

Have a wonderful weekend everyone.

Be magnificent!

As ever,

Carolann
Le mieux est l’ennemi du bien.  The best is the enemy of the good. –Voltaire, 1694-1778.

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