December 10, 2024 Newsletter

Dear Friends,

Tangents:

December 10, 1901: The first ever Nobel Prize ceremony takes place in Stockholm, honoring achievements in physics, chemistry, medicine, literature, and peace.  It set a global standard for excellence.
December 10, 1998: Six astronauts opened the doors to the new international space station. Go to article.

Alfred Noble, d. 1896.
Emily Dickinson, poet, b. 1830.
Red Cloud, Lakota Chief, d. 1909.

1973: CBGB opens in New York City.

77:
That’s how many Nobel Prize winners signed a letter urging the US Senate to oppose Robert F. Kennedy Jr.’s nomination to lead the Department of Health and Human Services. The letter cites Kennedy’s opposition to vaccines, his criticism of the fluoridation of drinking water, his promotion of AIDS conspiracy theories and his criticism of HHS agencies, such as the FDA and the CDC.

Golden Globes 2025: See the full list of nominees
The nominees for the 82nd Golden Globe Awards, honoring the best in television and film, were announced Monday. See which shows and movies earned the most nominations.

Why is New Orleans banning shiny balloons and confetti?
New Orleans, known for its celebrations and festive spirit, is now banning the release of metallic balloons following repeated disruptions to the city’s electrical services. Some residents are not so jazzed about the new rules.

See inside a 155 mph sleeper train connecting Hong Kong and Beijing
CNN takes a trip on the new service from Beijing which offers a perfect weekend getaway. Watch the video here.

‘An existential threat affecting billions’: Three-quarters of Earth’s land became permanently drier in last 3 decades
Climate change is causing unprecedented drying across the Earth — and five billion people could be affected by 2100, a new UN report has warned. Read More.

‘It explains why our ability to focus has gone to hell’: Screens are assaulting our Stone Age brains with more information than we can handle
Modern technology has fundamentally changed how our ancient minds work. Read More.

New thunderstorms wider than Earth are spewing out green lightning on Jupiter — and could make one of the gas giant’s massive bands disappear
A pair of massive thunderstorms have been spotted swirling in Jupiter’s “South Equatorial Belt” and are likely unleashing massive bolts of green lightning. Some experts think the pale clouds could end up altering the rusty band’s color — and potentially even making it “disappear.”

Ancient ‘land bridge’ that connected Siberia to US wasn’t what it seems, scientists find
The boggy landscape of the Bering land bridge may have allowed some ice age animals to cross easily, while others stayed in Asia.

How long does it take to travel to the moon?
The answer depends on many factors, including the amount of fuel needed, the moon’s orbit and the mission’s objectives.

What is the universe expanding into if it’s already infinite?
The universe is constantly expanding, but how do scientists think about what it’s expanding into?

Possible bust of Cleopatra VII found at ancient Egyptian temple
A small statue of a woman wearing a royal crown may depict Cleopatra VII, an archaeologist claims. Other archaeologists think it is likely someone else.

PHOTOS OF THE DAY

The Nutcracker ballet in Nairobi – in pictures
The beloved Christmas ballet, with music by Pyotr Ilyich Tchaikovsky, was first performed in 1892. Known for its enchanting score and festive themes, it has become a holiday tradition worldwide
Senior company members of Dance Centre Kenya perform during The Nutcracker at the Kenya National Theatre in Nairobi Photograph: Luis Tato/AFP/Getty Images

Shetland, UK
‘A rail of traditional jumpers to choose from in Lerwick. What a choice of colours and designs. Warmth and style … what more could you ask for?’
Photograph: Lynne Falconer

​​​​​​​Northumberland, UK
‘I took this picture outside my studio during Storm Bert. It shows my sculpture Moot, which is carved in wood and has a plethora of little gouged marks that became indistinguishable from the blizzard.’
Photograph: Joseph Hillier
Market Closes for December 10, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1929, Charles Schwab, chairman of Bethlehem Steel, argued that the stock-market crash meant “nothing in the welfare of business. Wealth was founded on the industries of the nation, and while they are sound, stocks may go up and stocks may go down, but the nation will prosper,” he said.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the second day, dropping 0.5%, or 121.09 to 25,504.33 in Toronto.
The move was the biggest since falling 0.6% on Nov. 15.
Shopify Inc. contributed the most to the index decline, decreasing 1.6%.
Torex Gold Resources Inc. had the largest drop, falling 4.9%.
Today, 159 of 219 shares fell, while 58 rose; 10 of 11 sectors were lower, led by information technology stocks.
Insights
* This year, the index rose 22%, poised for the best year since 2021
* This quarter, the index rose 6.3%
* The index advanced 25% in the past 52 weeks. The MSCI AC Americas Index gained 30% in the same period
* The S&P/TSX Composite is 1.3% below its 52-week high on Dec. 9, 2024 and 26.7% above its low on Dec. 13, 2023
* The S&P/TSX Composite is down 0.5% in the past 5 days and rose 3% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 21.1 on a trailing basis and 17.6 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.7% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$4.04t
* 30-day price volatility rose to 8.40% compared with 8.26% in the previous session and the average of 8.52% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Information Technology | -37.3456| -1.4| 2/8
Energy | -25.0224| -0.6| 10/31
Financials | -17.5789| -0.2| 8/18
Materials | -17.0573| -0.6| 16/33
Industrials | -7.6859| -0.2| 7/20
Utilities | -5.1701| -0.5| 7/8
Consumer Staples | -4.6055| -0.5| 3/6
Real Estate | -4.4832| -0.9| 1/19
Communication Services | -4.3068| -0.7| 1/4
Health Care | -1.1382| -1.5| 0/4
Consumer Discretionary | 3.3067| 0.4| 3/8
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
Shopify | -22.1500| -1.6| 7.2| 55.9
Constellation Software | -10.6200| -1.6| -9.3| 40.8
Manulife Financial | -8.8520| -1.6| -0.5| 52.2
CIBC | 2.6450| 0.4| 53.1| 47.7
Dollarama | 4.1560| 1.5| -12.7| 48.9
TD Bank | 8.0820| 0.9| 15.9| -12.1
US
By Rita Nazareth
(Bloomberg) — Stocks fell and bond yields rose, with Wall Street traders gearing up for inflation data that will help determine whether the Federal Reserve will cut or hold rates next week.
Just a day ahead of the consumer price index, the S&P 500 pushed further away from its all-time highs.
Oracle Corp. tumbled on uninspiring results.
Meantime, a gauge of the “Magnificent Seven” mega-caps climbed 1%, led by Alphabet Inc. as analysts applauded the Google parent’s announcement of a major development in quantum computing through the use of its Willow quantum chip.
Homebuilders got hit as Toll Brothers Inc.’s profit-margin projection fell short of estimates, “Animal spirits take a breather ahead of CPI,” said Jose Torres at Interactive Brokers.
“US stocks are stalling near all-time highs as investors await this year’s final CPI report, which is expected to reflect another increase in the annualized headline figure.”
Wednesday’s CPI will offer Fed officials a final look at the pricing environment ahead of their next meeting.
Any indication that inflation progress has stalled could well undercut the chances of a rate cut. For now, swap trading projects an 80% chance of a quarter-point Fed reduction this month.
The market is pricing in the smallest implied reaction to CPI since 2021, according to Bank of America Corp. strategists, who argue the readout will matter more this time.
“A softer print can clear the path for a year-end rally, with the second half of December being the second strongest period of the year,” a team led by Ohsung Kwon said.
“On the contrary, a firmer print can revamp volatility,” particularly after the post-election rally.
The S&P 500 fell 0.3%.
The Nasdaq 100 slid 0.3%.
The Dow Jones Industrial Average slipped 0.3%.
Treasury 10-year yields rose two basis points to 4.22%.
The Bloomberg Dollar Spot Index added 0.1%.
“Upward momentum wanes as investors trim some profits ahead of upcoming inflation data,” said Craig Johnson at Piper Sandler.
“Primary uptrends remain intact, underpinned by bullish market breadth. Use pullbacks that confirm support levels as buying opportunities, particularly among leading sectors.”
CPI figures on Wednesday are expected to show a fourth straight 0.3% increase in the consumer price index excluding food and fuel.
The data will be the last major inflation data point before the Fed’s final policy meeting of the year.
A survey conducted by 22V Research shows that 37% of investors expect the market reaction to CPI to be “risk-off.”
There is an even split between the percentage of investors who bet the reaction will be “risk-on” and “mixed/negligible.”
Moreover, the 22V tally revealed that 61% of investors believe that core CPI is on a “Fed-friendly” glide path —without a significant tightening of financial conditions or a recession.
This is the highest value since February.
And 37% say financial conditions need to tighten.
That compares with last month’s 45%.
To Bret Kenwell at eToro, one metric to watch is year-over- year core CPI, which has been at 3.3% in each of the last two months.
Current expectations again call for 3.3%.
“An in-line or lower reading likely cements a rate cut, while a higher-than-expected result could create some doubt over whether the Fed should cut rates again,” he noted.
The Fed is focused on both maintaining full employment and inflation, which has stubbornly stalled in the 3% range after a steep decline in 2022 and 2023, according to Matthew Weller at Forex.com and City Index.
“Nonetheless, the majority of Fed speakers in recent weeks have indicated that the central bank is on track to cut interest rates by 25 basis points at the upcoming December meeting, even if that perspective isn’t necessarily unanimous at this point,” he noted.
Win Thin and Elias Haddad at Brown Brothers Harriman & Co. say that if the Fed does indeed reduces rates, it will be a “hawkish cut” that sets up a pause in January — and perhaps beyond.
A Bloomberg Economics nowcast supports expectations of a sticky core reading, while flagging downside risk to the headline measure.
“More worrying for policymakers, inflation looks set to hover uncomfortably above target through next year, with another of our models pointing to a rebound in demand drivers,”
according to Scott Johnson at BE.
BE’s model of the broad economic factors influencing US inflation holds mixed signals for the Fed.
Disinflationary supply shocks have helped drive inflation below its long-run average in recent months, but factors related to demand are now pushing the other way, after fading over the past year.
“Our US team sees the Fed moving more cautiously in the face of ‘animal spirits’ unleashed by the presidential election,” Jonhson said.
To Ian Lyngen and Vail Hartman at BMO Capital Markets, elevated equity prices are unlikely to factor into the Fed’s policy decision next week.
“After all, if concerns related to the wealth effect fueling inflation haven’t had a material influence on the Fed thus far in the cycle, there isn’t going to be a tone shift now that stocks have the added boost of a business-friendly election outcome,” they said.
All that market bullishness on equities can be somewhat of a contrarian signal to Birinyi Associates’ Jeffrey Yale Rubin, who said it makes him “uneasy” about a further S&P 500 advance.
“Last year, we were lonely (and preferred it that way) in our bullish view which we articulated in the January edition of Reminiscences: ‘We want to own stocks because we are in a bull market and in a bull market that is what you do, you own stocks’,” Rubin said. “While we remain positive heading into 2025, we are uneasy given the bullish company.”
Dan Wantrobski at Janney Montgomery Scott says technical gauges suggest some caution into year-end.
“We are currently seeing/hearing a tremendous amount of bullishness ramping up for 2025- from strategist reports, economist forecasts, and from the investment community in general,” he said.
“This, in our opinion, may at some point become a contrarian indicator, as many areas of the markets remain overbought heading into the new year.”

Corporate Highlights:
* JPMorgan Chase & Co. said it now expects its net interest income haul to beat expectations for next year, reversing earlier guidance that analysts were being too optimistic.
* Boeing Co. said it has resumed assembly of its bestselling aircraft after a debilitating 53-day long strike, with November deliveries coming in at the lowest in four years.
* Sycamore Partners is in talks to acquire struggling drugstore chain Walgreens Boots Alliance Inc., according to people familiar with the matter.
* C3.ai Inc., a data-analysis software company, reported quarterly revenue that topped estimates and raising its full-year sales forecast.
* Taiwan Semiconductor Manufacturing Co.’s sales rose 34% in November, reflecting sustained growth from AI demand despite concerns that data center building will slow.
* Alaska Air Group Inc., the owner of its namesake carrier and Hawaiian Airlines, laid out plans for a dramatic global expansion while boosting its profit forecast.
* Eli Lilly & Co. approved a program to buy back as much as $15 billion of its own shares amid rapid growth fueled in part by the blockbuster weight-loss drug Zepbound. The company also raised its quarterly dividend 15%.
* Designer Brands Inc., the parent company of footwear and accessories chain DSW, cut its adjusted earnings per share guidance for the full year.
* MongoDB Inc., a database software company, reported third-quarter results and announced the departure of its Chief Financial Officer Michael Gordon. While analysts noted the strong results, Guggenheim said the departure was not a positive.

Key events this week:
* US CPI, Wednesday
* Canada rate decision, Wednesday
* ECB rate decision, Thursday
* US initial jobless claims, PPI, Thursday
* Eurozone industrial production, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.3% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.3%
* The Dow Jones Industrial Average fell 0.3%
* The MSCI World Index fell 0.5%
Currencies
* The Bloomberg Dollar Spot Index rose 0.1%
* The euro fell 0.3% to $1.0526
* The British pound rose 0.2% to $1.2772
* The Japanese yen fell 0.5% to 151.92 per dollar
Cryptocurrencies
* Bitcoin fell 0.4% to $96,524.56
* Ether fell 1.5% to $3,646.5
Bonds
* The yield on 10-year Treasuries advanced two basis points to 4.22%
* Germany’s 10-year yield was little changed at 2.12%
* Britain’s 10-year yield advanced five basis points to 4.32%
Commodities
* West Texas Intermediate crude was little changed
* Spot gold rose 1.2% to $2,691.97 an ounce

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

Be magnificent!
As ever,

Carolann
Don’t lie, don’t cheat, don’t steal, don’t whine, don’t complain, don’t make excuses;
worry about the things you can control, and not the things you can’t. –John Wooden, 1910-2010.

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 (Text Only)
Toll Free: 1.877.430.5895
Fax: 778.430.5828
www.carolannsteinhoff.com