April 25, 2024, Newsletter

Dear Friends,

Tangents: Happy Friday Eve.  Anzac Day, Australia, New Zealand.  Holocaust Day, Israel.
April 25, 1901: First licence plates issued.
1915: Battle of Gallipoli.
April 25, 1959: The St. Lawrence Seaway opened to shipping.  Go to article >>
April 25, 1974: The Carnation Revolution – in Portugal, the fascist Estado Novo is overthrown in a bloodless coup.

Oliver Cromwell, revolutionary, b. 1599
Ella Fitzgerald, b. 1917.

An honest review of the Apple Vision Pro
With an initial $3,500 price tag, the Apple Vision Pro will likely take some time before usage reaches any kind of critical mass. Industry experts say sports and other live events may intrigue more consumers.

Streaming and texting on the moon?
NASA is partnering with a major cellular company to install a simple 4G network on the moon later this year. It could lay the groundwork for an off-world internet similar to Earth’s.

2024 NFL Draft begins today
The first round of the 2024 NFL Draft begins at 8 p.m. ET. Take a look at the venue in Detroit where many top athletes and fans are set to gather in the coming hours.

Reggie Bush is getting 2005 Heisman Trophy back
Football star Reggie Bush is getting his 2005 Heisman Memorial Trophy back after having had to relinquish the award in 2010.

DNA analysis spanning 9 generations of people reveals marriage practices of mysterious warrior culture
Researchers reconstructed the relationships among nearly 300 Avars, people from a 1,500-year-old mysterious warrior culture in the Carpathian Basin. Read More.

Enormous explosion in ‘Cigar Galaxy’ reveals rare type of star never seen beyond the Milky Way
An incredibly brief, ultrabright explosion has led astronomers to a newfound magnetic star outside the Milky Way, which could be the first of many extragalactic magnetars, according to new research. Read More.

‘We have combined two marvels of modern medicine’: Woman gets pig kidney and heart pump in groundbreaking procedures
In a medical first, doctors transplanted a gene-edited pig kidney into a human patient after giving her a new heart pump. Read More.

Giant prehistoric salmon had tusk-like teeth, just like a warthog’s
The largest salmon species ever discovered, Oncorhynchus rastrosus may have used its distinctive, tusk-like teeth to compete with rivals, defend against predators and dig nests. Read More.

PHOTOS OF THEE DAY

New York, US
The full pink moon rises above 42nd Street in New York City, as seen from Weehawken, New Jersey
Photograph: Anadolu/Getty Images

Toby’s Inlet, Australia
A mass stranding of whales in Western Australia
Photograph: AAP/Parks and Wildlife, Western Australia

​​​​​​​Rayong, Thailand
Aerial picture shows a breakwater installed to prevent coastal erosion along the Saeng Chan beach in Thailand’s Rayong province. Breakwaters are offshore concrete walls installed to reduce the erosive and damaging effects of strong waves out at sea
Photograph: Amaury Paul/AFP/Getty Images
Market Closes for April 25^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1931, Pynchon & Co., one of Wall Street’s most prestigious brokerage firms, went bust. Pynchon had bet much of its own money on new-media issues it helped underwrite, including Fox Films, whose shares had tumbled.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite advanced slightly to 21,885.38 in Toronto.
The move follows the previous session’s decrease of 0.6%.
Teck Resources Ltd. contributed the most to the index gain and had the largest move, increasing 8.7%.
Today, 109 of 224 shares rose, while 113 fell; 2 of 11 sectors were higher, led by materials stocks.
Insights
* This month, the index fell 1.3%
* So far this week, the index rose 0.4%
* The index advanced 7.1% in the past 52 weeks. The MSCI AC Americas Index gained 24% in the same period
* The S&P/TSX Composite is 2.2% below its 52-week high on April 9, 2024 and 17.1% above its low on Oct. 27, 2023
* The S&P/TSX Composite is up 0.8% in the past 5 days and fell 0.3% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 18.2 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$3.47t
* 30-day price volatility fell to 8.00% compared with 8.23% in the previous session and the average of 7.97% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Materials | 57.1321| 2.2| 42/7
Energy | 28.0607| 0.7| 31/10
Consumer Staples | -0.2631| 0.0| 5/6
Health Care | -0.4958| -0.8| 1/2
Industrials | -0.7673| 0.0| 8/19
Communication Services | -3.5956| -0.5| 1/4
Consumer Discretionary | -3.6016| -0.5| 2/11
Real Estate | -3.8192| -0.8| 5/16
Utilities | -4.7365| -0.6| 5/10
Financials | -19.8747| -0.3| 9/18
Information Technology | -36.3838| -2.0| 0/10
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
Teck Resources | 17.3800| 8.7| 85.3| 20.8
Enbridge | 9.8070| 1.4| 20.4| 3.8
Barrick Gold | 8.5900| 3.1| -1.8| -2.5
Constellation Software | -5.7790| -1.1| -36.9| 11.3
Bank of Nova Scotia | -8.2320| -1.5| 62.8| -2.1
Shopify | -22.6300| -2.7| 10.1| -6.6
US
By Rita Nazareth
(Bloomberg) — Wall Street was rattled by data that showed exactly what investors did not want to hear: a sharp slowdown in the world’s largest economy and stubborn inflationary pressures.
Treasuries sold off, with yields hitting fresh 2024 highs as the economic figures revived the “stagflation” chatter — bringing more uncertainty to the path of Federal Reserve policy.
Swap traders pushed back the timing of the first rate cut to December.
Equities also struggled, but trimmed most of an earlier slide amid a surge in two heavyweights: Nvidia Corp. and Tesla Inc.
Their rally offset a post-earnings plunge in fellow mega-cap Meta Platforms Inc.
Intel Slips After Revenue Forecast Misses Analyst Estimates The latest economic data interrupted a run of strong demand and muted price pressures that had fueled optimism for a “soft landing.”
Gross domestic product increased at a 1.6% annualized rate, trailing all forecasts.
A closely watched measure of underlying inflation advanced at a greater-than-expected 3.7% clip.
“This report was the worst of both worlds: economic growth is slowing and inflationary pressures are persisting,” said Chris Zaccarelli at Independent Advisor Alliance. “The Fed wants to see inflation start coming down in a persistent manner, but the market wants to see economic growth and corporate profits increasing.”   If neither are headed in the right direction, he said, then that’s going to be “bad news” for markets.
The S&P 500 dropped to around 5,050, trimming this week’s gains.
Meantime, 10-year yields rose six basis points to 4.70%.
A $44 billion offer of seven-year notes was sold roughly in line with forecasts.
“The day the music died,” Bill Gross, the co-founder of Pacific Investment Management Co., posted on X. “10 year Treasury moving to 4.75%. Why own bonds?” He also said: “Stick to value stocks, avoid tech for now.”
Cantor Fitzgerald Chief Executive Officer Howard Lutnick expects the Fed to cut rates a single time this year, just ahead of the US presidential election.
“I’m thinking September, and it’s not really to move the economy — it’s to show off a little bit,” Lutnick said in an interview Thursday with Bloomberg Television.
The latest economic data must harden the tone from the Fed next week some, said Krishna Guha at Evercore.
“The Fed still goes into a holding pattern circling the airport until it gets a better read on forward inflation dynamics,” he said.
It appears economic growth is “coming back down to earth” after an unusually strong second half of last year, said Mike Reynolds at Glenmede.
The combination of slower growth and sticky inflation will undoubtedly increase the whispers around potential “stagflation risk,” potentially complicating the Fed’s job, according to Jim Baird at Plante Moran Financial Advisors.
“Stagflation chatter will surely pick up in the wake of these figures, but we’re less concerned with such an outcome as long as the labor market remains so strong,” said Ian Lyngen at BMO Capital Markets.
To Jeff Roach at LPL Financial, the economy will likely decelerate further in the following quarters as consumers are probably near the end of their spending splurge.
“We should expect inflation will ease throughout this year as aggregate demand slows, although the path to the Fed’s 2% target still looks a long ways off,” he noted.
Fed’s Goolsbee Says Central Bank Needs to ‘Recalibrate’ Policy.
In the short term, Thursday’s numbers don’t appear to be a green light for either stock bulls or bears, said Chris Larkin at E*Trade from Morgan Stanley.
“The uncertainty is unlikely to ease pressures in a market experiencing its deepest pullback since last year,” he noted.
The most-relevant setback in the data is the acceleration of core inflation, according to David Donabedian at CIBC Private Wealth US.
“We are not far from all rate cuts being backed out of investor expectations,” he said, adding Fed Chair Jerome Powell will possibly deliver a more hawkish tone during next week’s Fed meeting.
Traders will scrutinize Powell’s comments for clues about the latest thinking around easing policy.
He’s previously said that growth can run at a faster rate without stoking inflation.
Swap traders now see only about 35 basis points of Fed rate reductions for all of 2024, well below the more than six quarter-point reductions they expected at the start of the year.
High Commodity Costs Hurt Rate Cut Prospects, World Bank Says
“The main story remains ‘The Fed vs. The Economy’,” said Scott Helfstein at Global X.
He believes the central bank is not apt to make any major moves ahead of the election in September or November.
So, it comes down to the July and December meetings.
“There is a lot of data that will come out before December — but one cut in 2024 looks reasonable,” he concluded.
Zaccarelli at Independent Advisor Alliance says he’s looking ahead to Friday’s PCE numbers because slowing inflation is the number one issue for the Fed.
In addition, he noted that the rate cut (or even rate increase) debate has been heating up — and that’s what’s injected so much uncertainty into bond and stock markets lately.
“Our base case remains that inflation will slow in the months ahead, allowing the Fed to start trimming rates in September,” said Brian Rose at UBS Global Wealth Management.

Corporate Highlights:
* American Airlines Group Inc. expects a return to profit heading into the busy summer travel season after bad weather and delays linked to air traffic congestion weighed on the carrier’s early-year results.
* Southwest Airlines Co. is slowing growth, ending service at four airports and offering voluntary leaves to address “significant challenges” stemming in part from reduced deliveries of Boeing Co. planes.
* Airbus SE will further increase production of its advanced A350 widebody jet as the plane-maker benefits from surging demand for long-distance travel and the crisis engulfing its arch-rival Boeing Co.
* Royal Caribbean Cruises Ltd. boosted its full-year profit forecast as demand for cruises continued to surge, prompting record price hikes.
* Caterpillar Inc. reported first-quarter results that showed machinery sales slipping from a year earlier and warned that the trend is expected to continue in its second quarter.
* Comcast Corp. reported a steeper-than-expected loss of internet subscribers.
* International Business Machines Corp.’s weak consulting unit sales disappointed investors, overshadowing its acquisition of software firm HashiCorp Inc.
* Ford Motor Co., rapidly retooling its electric vehicle strategy in a decelerating market for plug-ins, posted first-quarter results that beat expectations on strong sales of work trucks.
* Nasdaq Inc.’s profit fell the most in 14 years as firms continue to wait for the economy to stabilize before going public.
* Merck & Co. raised its annual profit and revenue forecast as the blockbuster cancer drug Keytruda continued to dominate the treatment landscape.
* Harley-Davidson Inc.’s first-quarter revenue beat estimates despite high borrowing costs and tighter consumer budgets.
* First Citizens BancShares Inc., which scooped up Silicon Valley Bank after the lender failed last year, lifted its guidance for lending income for 2024.
* Hertz Global Holdings Inc. reported a loss that was nearly three times worse than analysts expected as it accelerated sales of electric vehicles to reduce its fleet of Tesla Inc. models that have weighed on profits for the past year.

Key events this week:
* Japan rate decision, Tokyo CPI, inflation and GDP forecasts, Friday
* US personal income and spending, PCE deflator, University of Michigan consumer sentiment, Friday
* Exxon Mobil, Chevron earnings, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.5% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.5%
* The Dow Jones Industrial Average fell 1%
* The MSCI World index fell 0.5%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro rose 0.3% to $1.0729
* The British pound rose 0.4% to $1.2513
* The Japanese yen fell 0.2% to 155.63 per dollar
Cryptocurrencies
* Bitcoin rose 1% to $64,705.41
* Ether rose 1% to $3,161.87
Bonds
* The yield on 10-year Treasuries advanced six basis points to 4.70%
* Germany’s 10-year yield advanced four basis points to 2.63%
* Britain’s 10-year yield advanced three basis points to 4.36%
Commodities
* West Texas Intermediate crude rose 1.2% to $83.77 a barrel
* Spot gold rose 0.7% to $2,332.94 an ounce

This story was produced with the assistance of Bloomberg Automation.
Have a lovely evening.

Be magnificent!
As ever,

Carolann
Procrastination is the thief of time. –Edward Young, 1681-1765.

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