January 28, 2025 Newsletter

Dear Friends,

Tangents:
January 28, 1986: Challenger Space Shuttle explosion, 73 seconds after liftoff from Cape Canaveral, killing all seven crew members.  Go to article

January 28, 1958: The first Leo brick design is patented, creating one of the most iconic and enduring toys in history.

1,200-year-old remains of dismembered pregnant woman in Ecuador hint at ‘enigmatic’ sacrifice to thwart El Niño
The unusual burial of a woman and fetus in prehistoric Ecuador may reflect the community’s fear of her power. Read More.

Over 400 gold and silver Roman-era coins unearthed in the Netherlands depict rulers from Rome, Britain and Africa.

We may finally know what causes Mars’ gigantic, planet-wide dust storms
Mars’ southern hemisphere absorbs a lot of the sun’s energy during the Red Planet’s spring, and that may be causing Mars’ dust storms, a new study suggests. Read More.

Thieves steal ancient artifacts in museum heist
A 2,500-year-old gold helmet was among the valuable items taken during a heist at the Drents Museum in the Netherlands.

Tourists look forward to flight routes connecting China and India
China and India have agreed to resume direct commercial flights for the first time in five years. Here’s what travelers should know.

Do you need new workout clothes?
Expensive doesn’t mean better when choosing athletic apparel, experts say.

To have one of those in Maine was pretty shocking.  — A resident in York County, Maine, after a magnitude 3.8 earthquake rattled parts of the New England region on Monday. The startling quake in an unexpected area should serve as a wake-up call for businesses, schools and homeowners everywhere to consider having safety protocols for earthquakes, the resident said.

PHOTOS OF THE DAY

Lerwick, Shetland Islands
Members of the Up Helly Aa festival’s ‘Jarl Squad’ pose with a replica Viking longship after the morning parade in Lerwick. Up Helly Aa dates back to the 1880s and celebrates Viking culture and the heritage of the Shetland Islands
Photograph: Tolga Akmen/EPA

Lambs born at Noah’s Ark Zoo farm in Wraxall, Somerset, have been named Nik and Nak after a brand of potato crisps
Photograph: Noah’s Ark Zoo Farm/SWNS

​​​​​​​Paris, France
Visitors take photographs on their phones of Leonardo da Vinci’s painting of the Mona Lisa, at the Louvre museum
Photograph: Thibault Camus/AP
Market Closes for January 28, 2025

International Markets

Bonds

Currencies

Commodities

MARKET COMMENTARY:
📈 On this day in 2002, Global Crossing, a poster child of dot-com era investment mania, filed for bankruptcy protection. The company, launched by former Drexel Burnham junk-bond trader Gary Winnick five years earlier, spent some $15 billion building fiber-optic networks in 27 countries before going under.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 0.5% at 25,419.45 in Toronto.
The move was the biggest since rising 0.9% on Jan. 17 and follows the previous session’s decrease of 0.7%.
Today, information technology stocks led the market higher, as 5 of 11 sectors gained; 96 of 222 shares rose, while 119 fell.
Shopify Inc. contributed the most to the index gain and had the largest move, increasing 9.6%.
Insights
* This month, the index rose 2.8%
* The index advanced 20% in the past 52 weeks. The MSCI AC Americas Index gained 23% in the same period
* The S&P/TSX Composite is 1.6% below its 52-week high on Dec. 9, 2024 and 24.2% above its low on Feb. 13, 2024
* The S&P/TSX Composite is up 0.5% in the past 5 days and rose 2.5% 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$3.98t
* 30-day price volatility fell to 11.51% compared with 11.52% in the previous session and the average of 11.04% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Information Technology | 160.6340| 6.3| 10/0
Financials | 20.5341| 0.2| 12/14
Materials | 3.9362| 0.1| 29/18
Communication Services | 1.8642| 0.3| 4/1
Real Estate | 1.5846| 0.3| 11/6
Consumer Discretionary | -0.2930| 0.0| 5/6
Health Care | -0.8360| -1.1| 1/3
Consumer Staples | -4.2988| -0.5| 3/7
Utilities | -9.2527| -1.0| 1/14
Industrials | -18.3603| -0.6| 10/18
Energy | -25.2175| -0.6| 10/32
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
Shopify | 126.1000| 9.6| 51.8| 10.6
Constellation Software | 16.9000| 2.7| 38.9| 6.1
CIBC | 9.5270| 1.6| -40.7| 2.2
Canadian National | -7.7130| -1.3| -2.5| 3.7
Canadian Natural Resources | -11.0900| -1.7| -7.9| -1.4
Canadian Pacific Kansas | -12.6200| -1.7| -2.5| 9.6
US
By Rita Nazareth
(Bloomberg) — The world’s largest technology companies climbed after a selloff that shook global markets, with traders gearing up for the start of the mega cap earnings season and the Federal Reserve decision on rates.
Equities rebounded, with the S&P 500 up about 1% and the Nasdaq 100 rising 1.6%.
Following a plunge that erased almost $600 billion in value, Nvidia Corp. rallied 8.8%.
Microsoft Corp. is in talks to acquire the US arm of ByteDance Ltd.’s TikTok, according to President Donald Trump.
The software giant rose 2.9%.
While tech bounced back, most shares in the US equity benchmark actually fell — a reversion of the move in the previous session.
Still, a relative sense of calm prevailed after a rough start to the week on concern that a cheap artificial intelligence-model from Chinese startup DeepSeek could make valuations of the technology that has powered the bull market tough to justify.
“Was it a bit unnerving? Yes, for some. Should you panic? Not at all,” said Kenny Polcari at SlateStone Wealth.
“If you talk to anyone that bought stock yesterday, they loved the opportunity to buy some of these names at a deep discount. In the end, no matter how this plays out, competition is good. And remember, you get what you pay for.”
A key test for AI bulls will be the start of the big-tech reporting season on Wednesday.
While earnings from the so-called Magnificent Seven behemoths are still rising — and far outpacing the rest of the market — the group’s profit growth is projected to come in at the slowest pace in almost two years.
“The dust is now settling after Monday’s long overdue AI reckoning, and while we still believe in the AI-driven productivity story, investing in this sector going forward may not be as easy as it was over the past two years,” said Emily Bowersock Hill at Bowersock Capital Partners.
“We expect investors to be more discerning and selective when it comes to AI investing.”
As the Fed’s two-day meeting began, investors have accepted that officials probably won’t be cutting rates this time.
But they’re looking for any signal from Chair Jerome Powell on which way inflation is going.
A survey conducted by 22V Research shows 67% of respondents expect the reaction to the Fed Wednesday to be “mixed/negligible,” 21% said “risk-off” and 12% “risk-on.”
A gauge of the Magnificent Seven megacaps climbed 2.7%.
The Dow Jones Industrial Average gained 0.3%.
The Russell 2000 added 0.2%.
Boeing Co. rose 1.1% as its chief is optimistic the company can return to a key production target for its 737 airliner this year.
JetBlue Airways Corp. tumbled 28% after projecting higher costs this year than Wall Street expected.
The yield on 10-year Treasuries was little changed at 4.54%.
The Bloomberg Dollar Spot Index rose 0.3%.
A punishing selloff in technology stocks on Monday spelled opportunity for dip-buyers prowling in the $11 trillion ETF arena.
As the Invesco QQQ Trust Series 1 (ticker QQQ) sank nearly 3% on Monday, spooked by Chinese startup DeepSeek’s AI progress, investors poured $4.3 billion into the tech-heavy fund — its biggest one-day haul since 2021.
The same impulse drove a record $1 billion into the GraniteShares 2x Long NVDA Daily ETF (NVDL), and almost $1.3 billion into the Direxion Daily Semiconductors Bull 3x Shares (SOXL), Bloomberg data show, despite double-digit plunges in both funds.
Craig Johnson at Piper Sandler noted that the fact that more stocks rose than fell during Monday’s selloff was a “a clear sign of strength beyond the AI sector as this market rally broadens out.”
At Wolfe Research, Chris Senyek said while the focus on DeepSeek rattled markets to start the week, the reaction was overblown in the short term.
“With that said, this news flow probably caps P/E multiples for data center driven industrials and power names to which AI enthusiasm had spread,” he said.
“This makes upcoming earnings season all that more important.”
Against a backdrop of healthy demand and stubborn inflation, officials are widely expected to hold borrowing costs steady.
At their December confab, policymakers signaled just two interest-rate cuts this year.
“Simply put, the strong US fundamental story of strong growth, elevated inflation, and a more hawkish Fed continues to favor higher US yields and a stronger dollar,” Win Thin at Brown Brothers Harriman, wrote in a note.
By some measures, this Fed meeting is expected to be relatively uneventful for the stock market.
Options traders are betting on modest swings in equities, with the S&P 500 forecast to move 0.8% in either direction on Wednesday, below the 1.1% average realized move on Fed days over the past 18 months, data compiled by Piper Sandler show.
“Markets are not expecting a cut and will focus on what the Fed projects for the rest of 2025,” said Bowersock Hill.
“Both inflation and interest rates are going to remain higher for longer – we would not be surprised to see one rate cut in 2025, or even none.”

Corporate Highlights:
* Uber Technologies Inc. is working on a new paid offering that would let commuters lock in prices for frequent rides ahead of time, rivaling a popular feature that Lyft Inc. launched five months ago.
* Starbucks Corp. is reorganizing its top ranks as part of Chief Executive Officer Brian Niccol’s plan to win back customers by speeding up service and making cafes feel more upscale.
* Royal Caribbean Cruises Ltd. reported a full-year profit forecast that blew past expectations as cruise demand continues to ramp up. It also announced its first foray into the river cruise market.
* Chevron Corp., investor Engine No. 1 and GE Vernova Inc. formed a partnership to develop natural gas-fired power plants next to data centers, aiming to tap into artificial intelligence’s surging demand for electricity.
* Defense company Lockheed Martin Corp.’s earnings per share forecast for 2025 fell short of the average analyst estimate.
* Aerospace and defense manufacturer RTX Corp. is “fully prepared” to support President Donald Trump’s ambitions to build an orbital missile defense system to protect the US.
* Kimberly-Clark Corp., the maker of Scott toilet paper and Huggies diapers, reported profit that missed expectations as its turnaround plan runs up against broader challenges.
* LVMH’s sales of fashion and leather goods declined in the fourth quarter, casting doubt on the prospects for a quick recovery in luxury demand.

Key events this week:
* US Fed rate decision, Wednesday
* Tesla, Microsoft, Meta, ASML earnings, Wednesday
* Canada rate decision, Wednesday
* Eurozone ECB rate decision, consumer confidence, unemployment, GDP, Thursday
* US GDP, jobless claims, Thursday
* Apple, Deutsche Bank earnings, Thursday
* US personal income & spending, PCE inflation, employment cost index, 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 1.6%
* The Dow Jones Industrial Average rose 0.3%
* The MSCI World Index rose 0.6%
* Bloomberg Magnificent 7 Total Return Index rose 2.7%
* The Russell 2000 Index rose 0.2%
Currencies
* The Bloomberg Dollar Spot Index rose 0.3%
* The euro fell 0.6% to $1.0431
* The British pound fell 0.5% to $1.2441
* The Japanese yen fell 0.6% to 155.51 per dollar
Cryptocurrencies
* Bitcoin was little changed at $101,308.68
* Ether fell 1.9% to $3,100.09
Bonds
* The yield on 10-year Treasuries was little changed at 4.54%
* Germany’s 10-year yield advanced three basis points to 2.56%
* Britain’s 10-year yield advanced three basis points to 4.61%
Commodities
* West Texas Intermediate crude rose 1% to $73.93 a barrel
* Spot gold rose 0.8% to $2,763.63 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Rheaa Rao, Margaryta Kirakosian, Robert Brand and Winnie Hsu.

Have  a lovely evening.

Be magnificent!
As ever,

Carolann
The price of discipline is always less than the pain of regret. –Nido Qubein, b. 1948.

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)
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www.carolannsteinhoff.com