January 21, 2025, Newsletter

Dear Friends,

Tangents: St. Agnes Day.

January 21, 1793: The Execution of Louis XVI, King of France, marks a pivotal moment in the French Revolution and symbolizes the end of absolute monarchy in France.
January 21, 1976: The supersonic Concorde jet was put into service by Britain and France. Go to article

1915: Kiwanis International founded.

Ethan Allen, Revolutionary War Hero, b. 1738.
Roger Nash Baldwin, founder ACLU, b. 1884.
Chrisitan Dio, designer, b. 1905.
Geena Davis, actor, b. 1956

Ozempic-style drugs tied to more than 60 health benefits and risks in biggest study-of-its-kind
A large new study has shed light on the wider health impacts of taking Ozempic-style drugs. Read More.

Giant reserves of ‘gold’ hydrogen may be lurking beneath at least 30 US states, 1st-of-its-kind map reveals
USGS researchers have unveiled the first map of prospective locations for hydrogen gas in the contiguous United States — and there’s a lot more than they previously thought. Read More.

‘Our model of cosmology might be broken’: New study reveals the universe is expanding too fast for physics to explain
Astronomers have been confounded by recent evidence that the universe expanded at different rates throughout its life. New findings risk turning the tension into a crisis, scientists say. Read More.

Coco Gauff stunned by Paula Badosa at the Australian Open
The American tennis star was knocked out of the Australian Open after Paula Badosa of Spain served up some serious competition.

Ring camera footage shows meteorite strike near a Canadian home
This Ring camera footage shows a small meteorite crash near a home in Prince Edward Island, Canada.

Archaeologists find lavish thermal spa in Pompeii
An intricate thermal spa complex was uncovered in a recent dig in the ancient Roman city of Pompeii. See photos here.

Champagne sales sink because people don’t want to celebrate
The number of Champagne shipments from France sank by almost 10% last year to 271 million bottles, marking the second consecutive year of declines.   More

Figure of the day: 25%, the share of the global population living in cities of over a million people, up from 15% six decades ago.

PHOTOS OF THE DAY

Quang Phu Cau, Vietnam
A worker arranges sets incense sticks out to dry in a courtyard on the outskirts of Hanoi ahead of lunar new year celebrations
Photograph: Nhac Nguyen/AFP/Getty Images

Spišská Nová Ves, Slovakia
A woman and her two children explore the Siklava Skala icefall
Photograph: Anadolu/Getty Images

​​​​​​​Pelicans rest on a rock in the lake in St James’s Park, London, during last week’s cold snap across the UK. The lake would have been frozen over if not for the fountain. Six great white pelicans live in the park and are free to come and go as they please
Photograph: Vuk Valcic/Sopa Images/Rex/Shutterstock
Market Closes for January 21, 2025

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the sixth day, climbing 0.4%, or 110.06 to 25,281.63 in Toronto.
The index advanced to the highest closing level since Dec. 12.
Shopify Inc. contributed the most to the index gain, increasing 2.0%.
Energy Fuels Inc/Canada had the largest increase, rising 4.7%.
Today, 109 of 222 shares rose, while 111 fell; 6 of 11 sectors were higher, led by financials stocks.
Insights
* This month, the index rose 2.2%
* The index advanced 21% 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 Dec. 9, 2024 and 23.5% above its low on Feb. 13, 2024
* The S&P/TSX Composite is up 2.8% in the past 5 days and rose 2.8% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 20.9 on a trailing basis and 17.5 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$3.97t
* 30-day price volatility rose to 11.81% compared with 11.72% in the previous session and the average of 10.77% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 61.5923| 0.7| 19/7
Information Technology | 44.6407| 1.8| 10/0
Industrials | 14.6785| 0.5| 16/11
Consumer Discretionary | 7.6239| 0.9| 7/4
Utilities | 4.0208| 0.4| 6/9
Materials | 2.9287| 0.1| 24/26
Real Estate | -0.2862| -0.1| 7/13
Health Care | -0.4686| -0.6| 1/3
Communication Services | -3.2215| -0.6| 1/4
Consumer Staples | -3.3707| -0.4| 7/3
Energy | -18.0689| -0.4| 11/31
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
Shopify | 24.7200| 2.0| -11.8| -0.4
Brookfield Corp | 23.9100| 2.9| -26.6| 3.8
RBC | 16.9500| 1.0| 118.2| 1.3
Cenovus | -6.1790| -3.1| -11.2| -1.3
TC Energy | -8.0690| -1.6| -32.3| 1.6
Canadian Natural Resources | -19.5100| -2.8| 10.0| 2.9
US
By Rita Nazareth
(Bloomberg) — Stocks climbed as President Donald Trump struck a better-than-feared tone on global trade and speculation grew that his policies will further boost Corporate America.
Bonds continued to unwind the recent surge in yields that roiled markets.
The dollar wavered.
Over 400 shares in the S&P 500 rose, with the gauge up almost 1% as Trump is expected to announce a new investment push for artificial intelligence led by Softbank Group Corp., OpenAI LLC, and Oracle Corp.
A closely watched exchange-traded fund tracking companies with AI exposure hit a three-year high.
Small caps climbed on bets they will benefit from a protectionist stance.
Trump’s flurry of executive orders helped boost space shares, while weighing on electric-vehicle makers.
An ETF focused on big Chinese firms gained as the US president so far refrained from announcing tariffs on the Asian nation.
Treasury yields hovered near their lowest levels of the year.
Mexico’s peso and Canada’s loonie got hit as Trump outlined levies he expects to place on both countries by Feb. 1.
“Risky assets should benefit from deregulation and tariffs emerging as not so bad as feared,” said Mohit Kumar at Jefferies International Ltd. “For rates, less onerous tariffs and likely lower oil prices should be a positive.”
Callie Cox at Ritholtz Wealth Management, says it’s time to see what speculation was “founded” and what was “just nonsense” when it comes to tariffs.
Meantime, she noted that Trump faces a crucial test on another front.
“We’ll start seeing more headlines around debt-ceiling talks, and possibly, more stress on the shorter end of the Treasury curve,” she said.
The debt ceiling is frequently used for leverage amid budget negotiations in Congress, with agreements often made at the last minute.
As a result, the standoffs typically ripple through short-term interest rates as investors dump Treasury bills most vulnerable to a potential default in favor of other securities.
The S&P 500 rose 0.9%.
The Nasdaq 100 added 0.6%.
The Dow Jones Industrial Average climbed 1.2%.
The Russell 2000 of small caps rallied 1.8%.
A gauge of the “Magnificent Seven” mega caps added 0.3%.
In late hours, Netflix Inc. soared after reporting its biggest quarterly subscriber gain in history.
United Airlines Holdings Inc. issued a bullish outlook.
The yield on 10-year Treasuries declined seven basis points to 4.56%.
The Bloomberg Dollar Spot Index was little changed.
“Last week, the equity markets experienced a broad rally, supported by cooler inflation data, upbeat earnings from banks, and a recovery from short-term oversold conditions and negative sentiment,” said Craig Johnson at Piper Sandler.
“We expect further upside in equities, supported by the return of Trump’s ‘business and investor-friendly’ policies. The “presidential scorecard” of stock-market performance is resetting this Tuesday, with Trump beginning his day in the White House for the first time in four years.
For Joe Biden’s entire presidency, the Dow Jones Industrial average rallied 39.4% — about 18 percentage points less than the four years under his Trump’s first administration — and over 100 percentage points less than the 149.4% during the eight years of the Obama era, according to data compiled by Bespoke Investment Group.
“While the Dow’s performance under Biden was the weakest of the last three presidents, it was still nothing to sneeze at, and it caps off a third straight period of strong gains under a presidential term,” Bespoke said. “Let these performance numbers serve as a reminder that as an investor you should never let your politics and investment decisions overlap.”
Since 1944, from the election through the inauguration day, the S&P 500 gained an average 1.6%, according to Sam Stovall at CFRA.
During the subsequent “First 100 (calendar) Days”, the S&P 500 gained an average of 2.1%, he noted.
“What’s more, the performances of S&P 500 sectors and sub-industries during the ‘Post-Election Honeymoon Period’ have been predictive of sector and sub-industry leadership for the entire year,” Stovall added.
Since 1993, the top four sectors from election day through inauguration day posted an average calendar-year increase of 17% versus the S&P 500’s average 15.9% rise and outperformed the broad benchmark 75% of the time, Stovall said.
Even better, the top-10 S&P 500 sub-industries posted an average calendar-year increase of 26.8% and also beat the market 75% of the time, he concluded.
This time around, there are early signs that investors are preparing for equity laggards to rally on bets that Trump could take a softer-than-feared stance on global trade, according to a survey by Bank of America Corp.
If concerns around Trump’s tariff proposals prove to be “unfounded,” investor allocations would remain risk-on and stock markets that have trailed the powerful rally in the US would play catch up, BofA strategist Michael Hartnett said.
In what could be a different macro/market regime in 2025, with a moderate pick-up in economic growth, we want to look for other equity markets that have reversion potential and have positive earnings revisions, according to Emily Roland and Matt Miskin at John Hancock Investment Management.
“US large-cap value (financials heavy) and US mid-caps (industrials heavy) are the two best options across globally equities that offer reversion potential and improving earnings trends,” they noted.
“Non-US equities and US small-caps could get a boost simply from the rotation trends, but fundamentally not as strong.”
Roland and Miskin also added that investors don’t have to go far to benefit from the potential deconcentrating of the S&P 500 from the top 10 mostly technology-driven growth stocks.
“Simply a value tilt or moving down in cap a bit, may give them plenty of fundamentally favorable opportunities,” they concluded.
“Our base case for the US economy is for ‘growth despite tariffs’,” said Solita Marcelli at UBS Global Wealth Management.
“While we will be closely monitoring for risks, we do not believe that the tariff measures outlined in our base case would be sufficient to derail US growth.
Nor do we believe that such tariffs would preclude inflation continuing to fall from current levels, enabling the Federal Reserve to cut rates by 50bps later this year.”
The latest dovish inflation readings are “game-changers,” and should provide a Goldilocks backdrop for risk assets over the coming months, HSBC says.
The bank’s strategists led by Max Kettner expect only very shallow drawdowns in the coming months and would use any dips to boost risk asset exposure.
They say sentiment and positioning are still flashing a buy signal.
To Matt Maley at Miller Tabak, while many of the headlines related to Trump’s policies could have an important impact on the markets, earnings season — and forward guidance — should be extremely important as well.
“With the market as expensive as it is today, there are some concerns about whether the positive aspects of these new policies may have already been priced into the stock market,” Maley said.
“So, it’s going to be particularly important that the overall earnings picture does not begin to deteriorate in any meaningful manner.”

Corporate Highlights:
* Apple Inc. received a pair of analyst downgrades, in the latest sign that soft iPhone sales are becoming an increasing concern for investors, as artificial intelligence fails to act as a hoped-for growth catalyst.
* Charles Schwab Corp. reported results that exceeded Wall Street estimates as it continues to attract record inflows to its retail brokerage.
* 3M Co. expects profit to grow this year as Chief Executive Officer William Brown works to advance his plan to turn around the sprawling manufacturer.
* D.R. Horton Inc. reported earnings per share for the first quarter that beat the average analyst estimate.
* MicroStrategy Inc. shareholders voted for a 30 times increase to the number of authorized Class A common shares to help finance the company’s Bitcoin buying.
* B. Riley Financial Inc. suspended dividends on a pair of its preferred shares, holding off on cash payments to some investors while it prepares to pay off another set of notes coming due next month.
* Adidas AG reported better-than-expected results amid the sustained boom for retro sneakers like the Samba and more sales from its shrinking stockpile of Yeezy footwear.

Key events this week:
* US Conference Board leading index, Wednesday
* Samsung Galaxy “Unpacked 2025” event, expected to reveal new flagship phone models, Wednesday
* Eurozone consumer confidence, Thursday
* US jobless claims, Thursday
* Bank of Japan policy meeting, Friday
* Eurozone HCOB Manufacturing & Services PMI, Friday
* US University of Michigan consumer sentiment, existing home sales, S&P Global Manufacturing & Services PMI, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.9% as of 4 p.m. New York time
* The Nasdaq 100 rose 0.6%
* The Dow Jones Industrial Average rose 1.2%
* The MSCI World Index rose 0.8%
* The Russell 2000 Index rose 1.8%
* Bloomberg Magnificent 7 Total Return Index rose 0.3%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro was little changed at $1.0420
* The British pound was little changed at $1.2339
* The Japanese yen was little changed at 155.52 per dollar
Cryptocurrencies
* Bitcoin rose 3.5% to $106,109.48
* Ether rose 0.9% to $3,311.52
Bonds
* The yield on 10-year Treasuries declined seven basis points to 4.56%
* Germany’s 10-year yield declined two basis points to 2.51%
* Britain’s 10-year yield declined seven basis points to 4.59%
Commodities
* West Texas Intermediate crude fell 2.6% to $75.89 a barrel
* Spot gold rose 1.3% to $2,742.72 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Cecile Gutscher, Margaryta Kirakosian, Chiranjivi Chakraborty, Julien Ponthus and Aya Wagatsuma.

Have a lovely evening.

Be magnificent!
As ever,

Carolann
The further a society drifts from truth the more it will hate those who speak it. -George Orwell, 1903-1950.

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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