April 17, 2024, Newsletter

Dear Friends,

Tangents:
On April 17, 1961, about 1,500 CIA-trained Cuban exiles launched the disastrous Bay of Pigs invasion of Cuba in a failed attempt to overthrow the government of Fidel Castro. Go to article >>
April 17, 1991: First time the Dow tops 3,000.
1932: Haile Selassie ends slavery, Ethiopia.

Explosive ‘devil comet’ 12P will soon be at its brightest and best. Here’s how to see it before it disappears.
The explosive green ‘devil comet’ 12P/ Pons-Brooks is about to reach its closest point to the sun. Here’s how to see the rare visitor at its best and brightest.  Full Story: Live Science (4/16)

AI pinpoints where psychosis originates in the brain
Scientists have moved a step closer to understanding the basis of the hallucinations and delusions that characterize schizophrenia and bipolar disorder. Read More.

Watch hammerhead sharks swim in ‘cyclones’ around ancient volcano in rare footage
Filmmakers have captured hundreds of hammerhead sharks circling a volcanic island off Costa Rica for a new Netflix wildlife series. Read More.

A software billionaire is betting big on a wild climate fix.

PHOTOS OF THE DAY

Congjiang, China
A bolt of lightning crosses the sky over the terraced fields in south-western Guizhou province
Photograph: AFP/Getty Images

London, UK
The former British Olympic artistic swimmers Asha Randall and Katie Clark perform with Sisy Wang and Emily Kuhl in a large water tank to mark 100 days before the start of the 2024 Olympic Games in Paris
Photograph: Matt Crossick/PA Media Assignments

​​​​​​​Thockrington, UK
The northern lights (aurora borealis) illuminate the sky just before midnight in Northumberland
Photograph: Owen Humphreys/PA
Market Closes for April 17^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1837, John Pierpont Morgan was born in Hartford, Conn., to Juliet Pierpont and Junius Spencer Morgan, a merchant and stockbroker. The sickly baby, whom his parents called “Bub” and his friends called “Pip,” grew up to become the most powerful financier in American history.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite advanced slightly to 21,656.05 in Toronto, ending a 5-day loss.
The gain follows the previous session’s decrease of 0.4%.
Toronto-Dominion Bank contributed the most to the index gain, increasing 0.9%.
Goeasy Ltd. had the largest increase, rising 6.3%.
Today, 108 of 224 shares rose, while 114 fell; 5 of 11 sectors were higher, led by materials stocks.
Insights
* The index advanced 4.9% in the past 52 weeks. The MSCI AC Americas Index gained 20% in the same period
* The S&P/TSX Composite is 3.2% below its 52-week high on April 9, 2024 and 15.9% above its low on Oct. 27, 2023
* The S&P/TSX Composite is down 2.4% in the past 5 days and fell 0.9% 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 14.8 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$3.44t
* 30-day price volatility fell to 8.38% compared with 8.43% in the previous session and the average of 8.73% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Materials | 19.9017| 0.8| 34/16
Information Technology | 14.3264| 0.8| 8/2
Financials | 6.9153| 0.1| 13/14
Utilities | 4.9961| 0.6| 10/5
Consumer Staples | 2.6823| 0.3| 8/2
Communication Services | -0.8990| -0.1| 2/3
Health Care | -1.2379| -1.9| 1/3
Consumer Discretionary | -1.8346| -0.2| 5/8
Real Estate | -4.4212| -0.9| 5/15
Energy | -6.1288| -0.2| 14/27
Industrials | -21.1260| -0.7| 8/19
================================================================
| | |Volume VS | YTD
| Index | | 20D AVG | Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
TD Bank | 8.8080| 0.9| -18.6| -8.6
Constellation Software | 8.5070| 1.7| 55.6| 13.0
Shopify | 5.9110| 0.7| 64.2| -7.3
Canadian Natural Resources | -5.4750| -0.7| -59.3| 22.5
Canadian Pacific Kansas | -5.6690| -0.8| -6.9| 10.2
TFI International | -8.3350| -7.0| 244.1| 10.3
US
By Rita Nazareth
(Bloomberg) — The stock market suffered its longest losing streak since January as a handful of big techs sold off — despite a slide in bond yields.
Equities fell for a fourth straight day, with the S&P 500 extending a drop from its all-time high to more than 4%.
Chipmakers bore the brunt of the selling after ASML Holding NV’s orders tumbled.
Nvidia Corp. led losses in mega-caps.
A tug of war between bulls and bears unfolded amid the expiration of VIX options — with Wall Street’s favorite volatility gauge whipsawing.
After a 10% stock rally in the first quarter — the strongest start to a year since 2019 — investors have been increasingly skeptical about how much further the market could go over the near term, even accounting for the continued
strength in the economy.
“The combination of geopolitical uncertainty, rising interest rates, Fed hawkishness, and inflation frustration have combined to put bears temporarily in charge,” said Mark Hackett at Nationwide.
The S&P 500 slid to around 5,030. The Nasdaq 100 dropped over 1%.
Just a day after Jerome Powell thew cold water on rate-cut bets, dip buyers emerged in the Treasury market, with two-year yields dropping further below 5% and $13 billion sale of 20-year bonds drawing solid demand.
The US economy has “expanded slightly” since late February and firms reported greater difficulty in passing on higher costs, the Federal Reserve said in its Beige Book survey of regional business contacts.
Powell signaled this week that policymakers will wait longer than previously anticipated to cut rates following a series of surprisingly high inflation readings.
Fed officials narrowly penciled in three cuts in forecasts published last month — but investors are now betting on just one to two this year, futures markets show.
“Fed Chair Powell was downright hawkish,” said Win Thin and Elias Haddad at Brown Brothers Harriman. “The Fed wants the market to do the tightening for them. Financial conditions remain too loose and so some combination of higher yields, wider spreads, stronger dollar, and lower equities is needed to tighten conditions.”
While global equities are facing tactical headwinds, this is just a consolidation phase and stocks are expected to keep rising this year, according to UBS strategists led by Andrew Garthwaite.
They noted positive developments including artificial intelligence pushing productivity and earnings higher, lower warranted equity risk premium, likely falling labor costs and less worries on margin pressures.
The equity risk premium for US equities — a measure of the differential between stocks and bonds’ expected returns — is now deep in negative territory, something that hasn’t happened since early 2000s.
While this is not necessarily a negative indicator for the stock market, it all depends on the economic cycle.
The lower ERP can be seen as a promise of a future boost in corporate profits, but also that a bubble is in the making.
Fundamentals and technical trends for equity markets still appear supportive, suggesting the recent pullback should prove temporary, according to HSBC strategists led by Max Kettner, who are using the decline to add to their bullish stance.
“Sentiment and positioning are not flashing a warning signal, though real money investors have started to extend their constructive stance on equities lately, they wrote.
US corporate earnings are set for a “healthier runway” through 2024 and investors are growing more confident that companies can meet expectations, according to Morgan Stanley strategists.
The market is watching for profits to bottom in the first quarter before sequentially recovering in the second quarter and eventually expanding in the back half of the year, a team including Michelle Weaver and Michael Wilson wrote.

Corporate Highlights:
* Morgan Stanley sold $8 billion of bonds Wednesday, following its release of higher-than-expected quarterly revenue, as it joined rivals JPMorgan Chase & Co. and Wells Fargo & Co. in tapping the US investment-grade market this week.
* Trump Media & Technology Group Corp. soared on Wednesday to recoup a sliver of the billions in market value it shed in the three weeks since its debut as a public company.
* United Airlines Holdings Inc. surged after the carrier forecast better-than-expected profit this quarter, tempering concerns that Boeing Co. aircraft delays and regulatory pressure will put expansion plans at risk.
* President Joe Biden vowed to keep United States Steel Corp. American-owned and called for higher tariffs on Chinese steel and aluminum as he sought to woo union workers ahead of November’s election.
* Microsoft Corp.’s $13 billion investment into OpenAI Inc. is set to avoid a formal investigation by European Union merger watchdogs, calming fears that the relationship could be forced apart.
* Jane Street Group LLC generated $10.6 billion in net trading revenue last year, as the proprietary-trading firm continues to cement its presence as a dominant market-maker.
* U.S. Bancorp reduced the outlook for a key driver of its profit for the year as lenders face pressure to pay more for deposits.
* Abbott Laboratories raised the lower end of its annual profit forecast as strong sales in medical devices drove first-quarter earnings and revenue above expectations.

Key events this week:
* Taiwan Semiconductor earnings, Thursday
* US Conf. Board leading index, existing home sales, initial jobless claims, Thursday
* Fed Governor Michelle Bowman speaks, Thursday
* New York Fed President John Williams speaks, Thursday
* Atlanta Fed President Raphael Bostic speaks, Thursday
* BOE Deputy Governor Dave Ramsden and ECB Governing Council member Joachim Nagel speak, Friday
* Chicago Fed President Austan Goolsbee speaks, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.6% as of 4 p.m. New York time
* The Nasdaq 100 fell 1.2%
* The Dow Jones Industrial Average fell 0.1%
* The MSCI World index fell 0.3%
Currencies
* The Bloomberg Dollar Spot Index fell 0.4%
* The euro rose 0.5% to $1.0672
* The British pound rose 0.2% to $1.2454
* The Japanese yen rose 0.3% to 154.33 per dollar
Cryptocurrencies
* Bitcoin fell 3.1% to $61,112.01
* Ether fell 2.2% to $3,004.54
Bonds
* The yield on 10-year Treasuries declined eight basis points to 4.59%
* Germany’s 10-year yield declined two basis points to 2.47%
* Britain’s 10-year yield declined four basis points to 4.26%
Commodities
* West Texas Intermediate crude fell 3% to $82.77 a barrel
* Spot gold fell 0.4% to $2,373.16 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Jessica Menton, Michael Msika, Sagarika Jaisinghani and Farah Elbahrawy.
Have a wonderful evening.

Be magnificent!
As ever,

Carolann
Good judgement comes from experience, and a lot of that comes from bad judgement. –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