January 14, 2025, Newsletter

Dear Friends,

Tangents:
January 14,1784: End of the American Revolution.
January 14, 2004 Former Enron finance chief Andrew Fastow pleaded guilty to conspiracy as he accepted a 10-year prison sentence.  Go to article
January 14, 2005: The European Huygens space prove made history by landing on Saturn’s moon Titan, marking the first-ever landing in the outer solar system.

Albert Schweitzer, philosopher, b. 1869.
Benedict Arnold, traitor, b. 1741.

10th-century woman buried with weapons in Hungary is 1st of her kind, but researchers are hesitant to call her a warrior
A woman buried with archery equipment in 10th-century Hungary is unusual but may not necessarily have been a warrior. Read More.

New treatment for most aggressive brain cancer may help patients live longer
Glioblastoma often kills within months. A new targeted radiation therapy may help patients live longer. Read More.

Enormous skull of 200-million-year-old giant dinosaur discovered in China
The well-preserved skull belongs to a never-before-seen species of sauropodomorph that potentially grew up to 33 feet long. Read More.

Walmart’s logo got its first facelift in nearly 20 years
The company says the redesigned logo is inspired by founder Sam Walton’s old trucker hat. Can you spot the changes?

Rachel Maddow returning to MSNBC five nights a week
The network’s prime-time star is expanding her on-air presence for the first 100 days of Donald Trump’s administration, MSNBC announced Monday, injecting what may be a much-needed ratings boost into the progressive outlet’s lineup.

Rams roll over the Vikings in final contest of NFL wild-card round
Los Angeles beat Minnesota 27-9 in a game played in Glendale, Arizona, due to the LA wildfires.

PHOTOS OF THE DAY

Altadena, US
Smoke from the Eaton fire lingers above the mountains of Angeles national forest in California
Photograph: Étienne Laurent/AFP/Getty Images

Puerto Caimito, Panama
A pelican is silhouetted against the first full moon of the year
Photograph: Bienvenido Velasco/EPA

​​​​​​​Colombo, Sri Lanka
A priest prays during the Thai Pongal harvest festival at a Hindu temple. Thai Pongal, which takes place over four days, is one of the first Hindu festivals of the year, celebrated by Tamils all over the world
Photograph: Chamila Karunarathne/EPA
Market Closes for January 14, 2025

International Markets

Bonds

Currencies

Commodities

MARKET COMMENTARY:
📈 On this day in 2000, the dot-com bubble reached a peak, with stock indexes closing at or near record highs. Federal Reserve Chairman Alan Greenspan a day earlier had cautioned that a future observer looking back might conclude that markets were in a euphoric and speculative bubble.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 0.2% at 24,588.58 in Toronto.
The move follows the previous session’s decrease of 0.9%.
Enbridge Inc. contributed the most to the index gain, increasing 1.2%.
Fortuna Mining Corp. had the largest increase, rising 7.4%.
Today, 134 of 223 shares rose, while 86 fell; 6 of 11 sectors were higher, led by materials stocks.
Insights
* The index advanced 17% in the past 52 weeks. The MSCI AC Americas Index gained 21% in the same period
* The S&P/TSX Composite is 4.9% below its 52-week high on Dec. 9, 2024 and 20.1% above its low on Feb. 13, 2024
* The S&P/TSX Composite is down 1.4% in the past 5 days and fell 2.7% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 20.2 on a trailing basis and 16.9 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$3.87t
* 30-day price volatility fell to 10.88% compared with 10.95% in the previous session and the average of 10.17% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Materials | 42.9610| 1.5| 42/9
Financials | 27.2058| 0.3| 18/8
Energy | 17.7527| 0.4| 30/11
Consumer Discretionary | 3.3462| 0.4| 8/3
Health Care | 0.4303| 0.6| 2/2
Real Estate | 0.2891| 0.1| 10/9
Industrials | -1.9795| -0.1| 14/14
Utilities | -5.7163| -0.6| 3/12
Information Technology | -6.3947| -0.3| 6/4
Communication Services | -12.6002| -2.2| 0/5
Consumer Staples | -13.0289| -1.4| 1/9
================================================================
| | |Volume VS |
| Index | | 20D AVG |YTD Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
Enbridge | 11.7400| 1.2| 12.5| 3.7
Bank of Nova Scotia| 7.0590| 1.1| -40.6| -4.6
Fairfax Financial | 6.8860| 2.4| 495.5| -0.9
Cenovus | -5.1930| -2.6| 9.6| -1.8
Shopify | -5.5200| -0.4| -5.5| -4.7
BCE | -6.3240| -3.0| 36.5| -2.8
US
By Rita Nazareth
(Bloomberg) — Stocks bounced around all day long, with traders unwilling to make any significant bets as they awaited key inflation data for clues on the path of Federal Reserve rates.
After several twists and turns in the run-up to the consumer price index, the S&P 500 finished 0.1% higher.
While most of its shares advanced, big tech once again came under pressure.
Options traders are bracing for the US equity benchmark’s busiest CPI day since March 2023.
The index is expected to move 1% in either direction on Jan. 15, based on the cost of at-the-money puts and calls, according to Stuart Kaiser at Citigroup Inc.
“All eyes are now on Wednesday’s CPI report, which may be the most important inflation reading in recent memory, as it will fuel the market’s Fed-obsessed sentiment,” said Chris Brigati at SWBC.
“A strong inflation number adds to this idea of no cuts in 2025, and potentially even a rate hike, while a weak inflation data point may help to calm the market’s Fed fears.”
Data Tuesday showed the producer price index unexpectedly cooled in December, helped by a drop in food costs and flat services prices.
Yet several of its components that feed into the Fed’s preferred inflation measure — the personal consumption expenditures gauge — were actually mixed in December.
“This means the Fed and markets will not benefit from particularly benign PPI inputs into PCE as was the case in November,” said Krishna Guha at Evercore.
“In the very near term, this leaves markets exposed (in both directions) to Wednesday’s CPI report.”
The S&P 500 closed above its 100-day moving average after briefly falling below it.
The Nasdaq 100 fell 0.1%.
The Dow Jones Industrial Average added 0.5%.
A gauge of the “Magnificent Seven” mega caps slipped 1%.
The Russell 2000 of small firms gained 1.1%.
Homebuilders jumped after KB Home’s earnings beat.
Eli Lilly & Co. sank 6.6% amid disappointing sales.
The yield on 10-year Treasuries was little changed at 4.78%.
The dollar slipped after Bloomberg News reported Donald Trump’s incoming economic team is considering gradual hikes in tariffs, helping avoid an inflation spike.
Oil dropped from a five-month high as Hamas and Israel tentatively agreed to a cease-fire, cooling a rally fueled by risks to Russian and Iranian supplies.
Underlying US inflation probably cooled only a touch at the close of 2024 against a backdrop of a resilient job market and steadfast economy, supporting the Fed’s go-slow approach to further rate cuts.
The consumer price index excluding food and energy is seen rising 0.2% in December after four straight months of 0.3% increases, according to the median projection in a Bloomberg survey of economists.
The core CPI, a better snapshot of underlying inflation, is forecast to have risen 3.3% from a year earlier — matching readings from the prior three months.
A survey conducted by 22V Research showed 47% of investors expect the market reaction to CPI to be “risk-off,” 29% think “risk-on” and 24% said “mixed/negligible.”
The survey also showed that 53% of the respondents believe that financial conditions need to tighten.
“Higher interest rates or some tightening of financial conditions appear needed for the US economy to achieve “macro balance” (core PCE closer to 2% and full employment), said Dennis DeBusschere at 22V.
Wall Street is also gearing up for the unofficial start of the earnings season, with results from big banks hitting the tape on Wednesday.
Lenders including JPMorgan Chase & Co. and Wells Fargo & Co. are expected to show continued gains from trading and investment banking, which helped offset net interest income declines caused by higher deposits and sluggish loan demand.
“When it comes to big-bank earnings, net interest income is the key data point to watch,” Brigati at SWBC said.
“If banks have been able to take advantage of borrowing at cheaper rates versus their loan portfolio, this is a constructive sign for the coming year.”

Corporate Highlights:
* Southwest Airlines Co. is pausing hiring for management, headquarters jobs and outside workers in a new round of cost cuts following a fight with activist shareholder Elliott Investment Management.
* Meta Platforms Inc. is cutting roughly 5% of its staff through performance-based terminations and plans to hire new people to fill their roles this year, according to an internal memo sent to all employees.
* Units of CVS Health Corp., Cigna Group and UnitedHealth Group Inc. charged significantly more than the national average acquisition cost for dozens of specialty generic drugs, bringing in more than $7.3 billion in “excess” revenue over six years, the Federal Trade Commission said in a report on the drug middlemen.
* B. Riley Financial Inc. received more demands for information from federal regulators about its dealings with now-bankrupt Franchise Group as well as a personal loan for co-founder and Chairman Bryant Riley.
* Capital One Financial Corp. misled customers when it rolled out a new savings account with a higher interest rate it didn’t also give to existing savings accounts, the Consumer Financial Protection Bureau said Tuesday in a lawsuit against the bank.
* United Rentals Inc. agreed to buy H&E Equipment Services Inc. for $3.4 billion in cash, gaining a fleet of equipment to serve construction and industrial markets.
* Country Garden Holdings Co. suffered another record loss in 2023 as one of China’s largest developers continues its lengthy restructuring process after defaulting on its debt.

Key events this week:
* Eurozone industrial production, Wednesday
* Citigroup, JPMorgan, Goldman Sachs, Bank of New York Mellon, Wells Fargo and BlackRock earnings, Wednesday
* US CPI, Empire manufacturing, Wednesday
* Fed’s John Williams, Tom Barkin, Austan Goolsbee and Neel Kashkari speak, Wednesday
* TSMC earnings, Thursday
* ECB releases account of December policy meeting, Thursday
* Bank of America, Morgan Stanley earnings, Thursday
* US initial jobless claims, retail sales, import prices, Thursday
* China GDP, property prices, retail sales, industrial production, Friday
* Eurozone CPI, Friday
* US housing starts, industrial production, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.1% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.1%
* The Dow Jones Industrial Average rose 0.5%
* The MSCI World Index rose 0.2%
* Bloomberg Magnificent 7 Total Return Index fell 1%
* The Russell 2000 Index rose 1.1%
Currencies
* The Bloomberg Dollar Spot Index fell 0.4%
* The euro rose 0.6% to $1.0302
* The British pound was little changed at $1.2206
* The Japanese yen fell 0.3% to 157.97 per dollar
Cryptocurrencies
* Bitcoin rose 2.5% to $96,500.95
* Ether rose 3.3% to $3,217.58
Bonds
* The yield on 10-year Treasuries was little changed at 4.78%
* Germany’s 10-year yield advanced four basis points to 2.65%
* Britain’s 10-year yield was little changed at 4.89%
Commodities
* West Texas Intermediate crude fell 1.3% to $77.82 a barrel
* Spot gold rose 0.5% to $2,676.38 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Sujata Rao, Julien Ponthus, Margaryta Kirakosian and Aya Wagatsuma.

Have a lovely evening.

Be magnificent!

As ever,

Carolann
We come nearest to the great when we are great in humility. –Rabindranath Tagore, 1861-1941.

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