January 8, 2025, Newsletter

Dear Friends,

Tangents:
January 8, 1851: Earth’s rotation proved.
January 8, 1889: Computer pioneer Herman Hollerith patents his punched card calculator, paving the way for modern automatic computation.
January 8, 1982: AT&T settled the Justice Department’s antitrust lawsuit against it by agreeing to divest itself of the 22 Bell System companies. Go to article

Elvis Presley, b. 1935.
Stephen Hawking, physicist, b.1942.
David Bowie, musician, b.1947.

‘This keeps happening’: Airplane stowaway incidents raise alarm
A string of stowaway incidents has raised concerns about airport safety and security. Read about the latest incident involving a JetBlue flight this week.

Coffee-drinking health benefits
Limit your coffee intake to this time window to help decrease the risk of cardiovascular disease, a new study suggests.

CNN photo gallery: The golden lion tamarin
Deforestation and the illegal pet trade drove these charismatic monkeys to the brink of extinction. Now, they’re bouncing back.

Hello Kitty’s $80 billion kingdom
CNN’s Hanako Montgomery meets the designer responsible for the economic powerhouse we know today. Watch the video here.

4,100-year-old tomb of doctor who treated pharaohs discovered at Saqqara
Archaeologists working at the site of Saqqara have discovered a 4,100-year-old tomb that held the burial of a doctor. Read more.

The moon is about to ‘swallow’ Mars for 4 hours — and you can watch it from the US
On Jan. 13, bright Mars will disappear behind the full moon for several hours. It’s the only lunar occultation of Mars visible from the U.S. this year. Here’s how to get the most out of it. Read more.

Most of the atoms in your body left the Milky Way on a ‘cosmic conveyor belt’ long before you were born, new study reveals
New research suggests that most of the atoms within the human body likely spent part of their lives drifting beyond the Milky Way on a cosmic “conveyor belt,” before eventually returning to our galaxy. Read more.

Rare comet could shine bright as Venus as it falls toward the sun: What to expect from Comet ATLAS (C/2024) G3
Comet ATLAS (C/2024) G3 is set to dazzle Southern Hemisphere skywatchers in mid-January. Here’s everything you need to know about the ‘New Year comet’. Read more.

RIP
Peter Yarrow, who was one-third of the popular folk trio Peter, Paul and Mary, and co-writer of the song “Puff, the Magic Dragon,” died Tuesday. He was 86. During an incredible run of success spanning the 1960s, Yarrow, Noel Paul Stookey and Mary Travers released six Billboard Top 10 singles, two No. 1 albums and won five Grammys.

PHOTOS OF THE DAY

Panchagarh, Bangladesh
Workers collect tea leaves from a tea garden in the plains of the northernmost district of the country
Photograph: Syed Mahabubul Kader/Zuma Press Wire/Rex/Shutterstock

Whitley Bay, UK
Huge waves smash against the seafront in North Tyneside
Photograph: Owen Humphreys/PA

A flock of painted storks forage for food on a cold winter morning at Kalkere Lake in Bengaluru, India
Photograph: Idrees Mohammed/AFP/Getty Images
Market Closes for January 8, 2025

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 0.5% at 25,051.68 in Toronto.
The move follows the previous session’s decrease of 0.3%.
Constellation Software Inc/Canada contributed the most to the index gain, increasing 3.9%.
K92 Mining Inc. had the largest increase, rising 16.0%.
Today, 101 of 223 shares rose, while 119 fell; 5 of 11 sectors were higher, led by materials stocks.
Insights
* The index advanced 19% in the past 52 weeks. The MSCI AC Americas Index gained 23% in the same period
* The S&P/TSX Composite is 3.1% below its 52-week high on Dec. 9, 2024 and 22.4% above its low on Feb. 13, 2024
* The S&P/TSX Composite is up 1.3% in the past 5 days and fell 2.5% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 20.7 on a trailing basis and 17.2 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.8% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.93t
* 30-day price volatility rose to 10.19% compared with 10.05% in the previous session and the average of 9.50% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Materials | 49.3239| 1.7| 38/12
Financials | 47.0843| 0.6| 14/12
Information Technology | 43.7404| 1.8| 8/2
Energy | 11.8773| 0.3| 19/23
Consumer Staples | 6.8293| 0.7| 3/7
Health Care | -1.1975| -1.6| 0/4
Real Estate | -1.6360| -0.3| 5/14
Utilities | -4.3742| -0.5| 5/10
Communication Services | -5.7861| -1.0| 0/5
Consumer Discretionary | -5.9962| -0.7| 4/7
Industrials | -18.0573| -0.6| 5/23
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
Constellation Software | 22.4000| 3.9| 84.9| -2.7
Brookfield Corp | 21.2900| 2.6| 16.4| 1.6
Shopify | 12.9100| 1.0| 0.4| 1.2
TD Bank | -6.8560| -0.7| 118.0| 1.8
Canadian Pacific Kansas | -7.6470| -1.1| -7.9| 5.3
Canadian National | -10.1500| -1.8| -21.3| 0.9
US
By Rita Nazareth
(Bloomberg) — Stock traders refrained from making big bets, with the market set to close on the eve of Friday’s jobs report.
Treasuries rebounded as a solid $22 billion sale brought a degree of relief after the recent selloff.
Equities swung between small gains and losses throughout the session, with the S&P 500 reclaiming the 5,900 psychological mark after briefly falling below it.
The options market is betting the gauge will move roughly 1.2% in either direction after the upcoming US employment data, according to Citigroup Inc.
That would be the biggest implied move on a jobs day since September.
US employers probably tempered their hiring last month to wrap up a year of moderating yet still-healthy job growth that economists expect to carry on in 2025.
A survey conducted by 22V Research showed most investors are watching payrolls closer than normal.
Only 26% of the respondents think Friday’s data will be “risk-on,” 40% said “risk-off,” and 34% “mixed/negligible.”
“Investors will want to see a return to Goldilocks data, consistent with a cooling labor market to help temper the recent spike in yields and help stocks stabilize,” said Tom Essaye at The Sevens Report.
The latest Federal Reserve minutes didn’t break any significant ground, showing officials adopted a new stance on rate-cutting amid elevated price risks, deciding to move more slowly in the months ahead.
Meantime, Fed Governor Christopher Waller said he believes inflation will continue to cool toward the central bank’s 2% target.
The S&P 500 added 0.2%.
The Nasdaq 100 was little changed.
The Dow Jones Industrial Average rose 0.2%.
US stock markets will close Jan. 9, in observance of a National Day of Mourning for former President Jimmy Carter.
The bond market will close at 2 p.m. New York time.
The yield on 10-year Treasuries declined two basis points to 4.67%.
The 20-year yield, a laggard on the US government debt curve since its re-introduction in 2020, briefly topped 5%.
UK markets tumbled, pushing bond yields to the highest in more than a decade.
The Bloomberg Dollar Spot Index rose 0.4%.
“While further near-term strength in the labor market is likely to keep expectations around 1-2 cuts in 2025 for now, we continue to believe that inflation will continue to slowly trend down while employment stays in balance allowing the Fed to cut rates three times in 2025,” said Chris Senyek at Wolfe Research.
While the recent slide in stocks and bonds could worsen as traders fret over the prospect of higher inflation and interest rates, the decline is unlikely to reach the extremes seen in 2022 when markets weathered their worst year since the global financial crisis, according to Morgan Stanley’s Mike Wilson.
The bank’s chief US equity strategist expects a choppy first half of 2025 and an improved second part of the year, he said during an interview with Bloomberg Television on Wednesday.
The difference between now and then is that the Federal Reserve in 2022 was aggressively raising interest rates at a pace that is unlikely going to be repeated in the foreseeable future.
There is not as much downside for rates today “but that doesn’t mean there couldn’t be 10% downside for many stocks if rates stay at this level,” Wilson noted.
There’s room for stocks to fall further as bond yields approach levels that have been painful for equities in recent years.
“Equity/bond yield correlations have turned negative again,” Goldman Sachs Group Inc. strategists including Christian Mueller-Glissmann wrote in a note, stressing that if yields keep going up without good economic data, it will hit equity markets.
“With equities having been relatively resilient during the bond selloff, we think near-term correction risk is somewhat elevated in case of negative growth news.”
“Historically, the most common driver of significant losses are recessions,” said Henry Allen at Deutsche Bank AG.
“The huge plunges in 2020 and 2008 required an economic contraction, and the bursting of the dot-com bubble also happened amidst a slowdown that ended up in a recession in 2001.  But right now, there’s no sign of a slowdown, and if anything, several leading indicators are looking increasingly positive.”
If economic growth stays robust and the Fed doesn’t start pivoting in a hawkish direction, it’s not implausible that elevated valuations continue for some time, Allen noted.
However, if signs of a slowdown emerge or rate hikes move back on the table, the historic precedents show that equities are capable of a notable decline, even without a recession, he concluded.
“The start of the new year has been volatile,” said Craig Johnson at Piper Sandler.
“Increased sensitivity to rising bond yields and short-term oversold conditions are testing investors’ patience and nerves. Despite the increased caution, we remain optimistic as the major indices’ primary uptrends remain well-intact.”

Corporate Highlights:
* Albertsons Cos. raised its adjusted earnings outlook for the full year, a positive sign for the grocer seeking to pave a new path after its proposed deal with Kroger Co. fell apart.
* Advanced Micro Devices Inc. was downgraded to reduce from buy at HSBC, which cited difficulty in competing with Nvidia Corp.
* Merck & Co. was downgraded to hold from buy at Truist Securities, which cited growth concerns at the pharmaceutical company.
* Palo Alto Networks Inc., a security software company, received a pair of analyst downgrades.
* The US utilities sector was upgraded to overweight from market weight at RBC Capital Markets, which called the group the “top defensive sector.”

Key events this week:
* China CPI, PPI, Thursday
* Eurozone retail sales, Thursday
* US state funeral and National Day of Mourning for former President Jimmy Carter is a federal holiday, Thursday
* Japan household spending, leading index, Friday
* US jobs report, consumer sentiment, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.2% as of 4 p.m. New York time
* The Nasdaq 100 was little changed
* The Dow Jones Industrial Average rose 0.2%
* The MSCI World Index was little changed
Currencies
* The Bloomberg Dollar Spot Index rose 0.4%
* The euro fell 0.2% to $1.0316
* The British pound fell 0.9% to $1.2363
* The Japanese yen fell 0.2% to 158.37 per dollar
Cryptocurrencies
* Bitcoin fell 2.5% to $94,069.98
* Ether fell 2.2% to $3,288.33
Bonds
* The yield on 10-year Treasuries declined two basis points to 4.67%
* Germany’s 10-year yield advanced seven basis points to 2.55%
* Britain’s 10-year yield advanced 11 basis points to 4.80%
Commodities
* West Texas Intermediate crude fell 1.2% to $73.38 a barrel
* Spot gold rose 0.5% to $2,663.05 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Andre Janse van Vuuren, Sujata Rao, Kit Rees, Joanna Ossinger and Rob Verdonck.

Have a lovely evening.

Be magnificent!
As ever,

Carolann
Talent is God given.  Be humble.  Fame is man-given.  Be grateful.  Conceit is self-given.  Be careful. –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
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www.carolannsteinhoff.com