February 14, 2025, Newsletter

Dear Friends,

Tangents: Happy Valentine’s Day! ❤🌹❤🌹❤🌹

Film lovers: Whether you adore Valentine’s Day or loathe it, we have movie recommendations for you. – NY Times.

February 14, 1876: Alexander Graham Bell applies for a patent for the telephone, a groundbreaking invention that revolutionizes global communication.

Dispatch: An ancient English ritual meant to chase away evil spirits and the winter blues is back. – NY Times.

Monkey blamed for nationwide blackout in Sri Lanka
It sounds bananas but I’m not lion … A monkey is being blamed for a power outage in Sri Lanka that disrupted supply to the island’s 22 million people.

‘You get one split second’: The story behind a viral bird photo
A photographer’s four-year project produced more than half a million photos. But one stood out from them all.

Boeing Starliner astronauts say they aren’t stuck in space
The two astronauts who piloted the Boeing Starliner’s first crewed test flight responded to claims that they were “abandoned” in space.

Denny’s is closing dozens of restaurants
The American diner is closing at least 30 of its restaurants as part of the struggling chain’s plans to jumpstart growth.

Biological aging may not be driven by what we thought
A new study draws a line between random genetic mutations and predictable epigenetic changes used to measure biological aging. Read More.

Parts of San Francisco and Los Angeles are sinking into the sea — meaning sea-level rise will be even worse
A study led by NASA and NOAA has found that California is sinking in some areas, which means the projected sea level rise for parts of Los Angeles and San Francisco has doubled. Read More.

Scientists just rewrote our understanding of epigenetics
DNA and RNA epigenetics, once thought to be separate, have now been found to work together to fine-tune gene expression. Read More.

Supercomputer runs largest and most complicated simulation of the universe ever
Frontier, the second fastest supercomputer in the world, used dark matter and the movement of gas and plasma rather than just gravity to model the observable universe.  Read More.

Watch record-breaking great white shark get tagged and released off East Coast
Scientists have tagged a giant male great white shark off the East Coast. The researchers said “Contender” is the largest male white shark ever caught and studied in the northwest Atlantic. Read More.

“R.F.K. Jr. is now in charge of the F.D.A., N.I.H. and C.D.C., to which Americans said, ‘OMG,’ ‘WTF’ and ‘FML.’” — JIMMY FALLON.

“But now it has happened, so you can now add ‘employment’ to the list of things he’s tested positive for.” — JORDAN KLEPPER.

“The Senate today confirmed Robert F. Kennedy Jr. as secretary of health and human services. He was actually Trump’s second choice, but the Wuhan bat withdrew his nomination.” — SETH MEYERS.
PHOTOS OF THE DAY

Space
An image made by the integration of photographs taken over six hours shows Nebula IC 443 over Hinojedo in Cantabria, Spain. This supernova remnant, known as Medusa Nebula, is in the Gemini constellation, 5,000 light years from Earth
Photograph: Pedro Puente Hoyos/EPA

Male red deer in Richmond Park, London, UK
Photograph: SMPNEWS/Alamy Live News

Pathum Thani, Thailand
Thai Buddhist monks pray at Wat Dhammakaya temple
Photograph: Guillaume Payen/Anadolu/Getty Images
Market Closes for February 14, 2025

International Markets

Bonds

Currencies

Commodities

MARKET COMMENTARY:
Save a lot and save often. -Richard Bernstein, 1932-2022.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell 0.8% at 25,483.23 in Toronto.
The move was the biggest since falling 1.1% on Feb. 3 and follows the previous session’s increase of 0.5%.
Today, energy stocks led the market lower, as 8 of 11 sectors lost; 156 of 220 shares fell, while 63 rose.
Agnico Eagle Mines Ltd. contributed the most to the index decline, decreasing 5.1%.
Seabridge Gold Inc. had the largest drop, falling 15.5%.
Insights
* In the past year, the index had a similar or greater loss 17 times. The next day, it declined 10 times for an average 0.8% and advanced seven times for an average 0.4%
* So far this week, the index was little changed
* The index advanced 22% in the past 52 weeks. The MSCI AC Americas Index gained 22% in the same period
* The S&P/TSX Composite is 1.5% below its 52-week high on Jan. 30, 2025 and 23.3% above its low on Feb. 14, 2024
* S&P/TSX Composite is trading at a price-to-earnings ratio of 21.1 on a trailing basis and 18.2 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$4.15t
* 30-day price volatility rose to 10.99% compared with 10.68% in the previous session and the average of 11.19% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Energy | -109.0458| -2.5| 3/40
Materials | -85.9826| -2.7| 7/42
Industrials | -15.4513| -0.5| 11/17
Consumer Discretionary| -14.3872| -1.8| 2/9
Consumer Staples | -10.4974| -1.1| 4/6
Health Care | -1.0317| -1.5| 0/4
Real Estate | -0.6868| -0.1| 8/12
Information Technology| -0.6102| 0.0| 3/6
Utilities | 1.7545| 0.2| 7/8
Communication Services| 2.1366| 0.4| 3/2
Financials | 18.5229| 0.2| 15/10
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
Agnico Eagle Mines Ltd | -25.4500| -5.1| 80.6| 20.7
TC Energy | -14.9800| -3.1| 62.3| -2.8
Franco-Nevada | -10.9600| -4.0| -11.3| 16.1
Brookfield Asset Management | 8.1630| 3.8| 79.4| 8.7
CAE | 10.3200| 13.8| 318.3| 4.1
Fairfax Financial | 10.4500| 3.5| 42.9| 3.5
US
By Rita Nazareth
(Bloomberg) — The bond market ended the week with solid gains as a soft reading on retail sales revived bets on Federal Reserve rate cuts.
A rally in Treasuries pushed the 10-year yield below 4.5%, with the bond notching its fifth straight week of gains — the longest run since July 2021.
Money markets are back to fully pricing in a first Fed reduction by September.
The S&P 500 hovered near its all-time highs. The dollar hit a fresh low for 2025.
US retail sales slumped in January by the most in nearly two years, indicating an abrupt pullback by consumers after a spending spree in the closing months of 2024.
The value of retail purchases, not adjusted for inflation, decreased 0.9% after an upwardly revised 0.7% gain in December.
“The consumer sentiment report showed people were getting nervous and today’s weak retail sales number confirmed it,” said David Russell at TradeStation.
“However, the resulting slack is good news for the Fed and tilts the balance a little bit more toward rate cuts.”
At Interactive Brokers, Jose Torres says the weak consumption report is reopening the door to a potential Fed reduction this summer, a prospect that was dampened by a “piping hot” inflation print earlier this week.
The S&P 500 was little changed.
The Nasdaq 100 added 0.4%.
The Dow Jones Industrial Average fell 0.4%.
US markets will be closed Monday for Presidents’ Day.
Meta Platforms Inc. rose for a 20th consecutive session.
Dell Technologies Inc. jumped on news it’s near an over $5 billion server deal for Elon Musk’s xAI.
Intel Corp. fell Friday, but closed with its best week since 2000.
The yield on 10-year Treasuries declined five basis points to 4.48%.
The Bloomberg Dollar Spot Index fell 0.3%.
“Consumers pulled back hard on spending after a generous holiday season, but they were still willing to open their pocketbooks when it came to dining out,” said Ellen Zentner at Morgan Stanley Wealth Management.
“This suggests households remain confident in the economy even as policy uncertainty has risen.”
To Gary Schlossberg at Wells Fargo Investment Institute, evidence of slowing activity isn’t enough to offset recent signs of firming inflation and shift expectations back to an early rate cut by the Fed.
“Are consumers taking a break?” said Bret Kenwell at eToro.
“Investors should be careful not to extract too much meaning from one data point. However, weaker retail sales amid increasing or stubbornly high inflation is a burden for US consumers and companies. It’s too early to call it a trend, but if that trend were to develop, it would be a troubling sign.”
Will Compernolle at FHN Financial says he’s skeptical the report signals a true inflection point in consumer spending.
Paired with an “overzealous reaction” to Thursday’s producer price index, bonds have moved into “overbought territory,” he said.
“The positive scenario from today’s data is this: rates ease as the economy moderates and the consumer weakness is a blip that doesn’t impact investors’ love affair with stocks,” said Steve Sosnick at Interactive Brokers.
“The flipside is a much worse scenario: the consumer and the government both slam their wallets shut, impacting GDP faster than the Fed is willing or able to operate.”
Faster inflation in the US could end up being a “blessing in disguise” for financial markets because it will force President Donald Trump to opt for smaller trade tariffs, according to Bank of America Corp’s Michael Hartnett.
The strategist recommended buying bonds, saying that the 30-year Treasury yield likely reached a multi-year high of about 5% in January.
The yield was trading near 4.7% on Friday.
Hartnett also reiterated his preference for international equities over US stocks.
“Bond yields have certainly bounced around this week, and the fact that they’ve been able to come back down played a big role in yesterday’s strong rally in the stock market,” said Matt Maley at Miller Tabak.
“However, this seemed to have more to do with the inflation issue than with the war or with tariffs.”
Given that the stock market has been range-bound for almost three months now, any meaningful upside breakout of this range will be quite positive on a technical basis, Maley concluded.
An analysis conducted by Goldman Sachs Group Inc. shows that the market has been more micro-driven than average since the start of 2023.
During the last 6 months, 74% of the typical S&P 500 stock’s returns have been driven by company-specific rather than “macro” factors vs. an average of 58% over the past two decades.
“We expect the current micro-driven environment will persist in 2025,” said strategists led by David Kostin.
Among the factors, they said economic forecasts point to a healthy growth environment this year; continued artificial- intelligence development and adoption should create differentiation across stocks; elevated policy uncertainty also suggests elevated dispersion.
“Debates over trade, tax, fiscal, and other policies represent potential catalysts for additional return dispersion,” they noted. “A micro-driven market creates opportunity for active managers.”

Corporate Highlights:
* Airbnb Inc. issued an upbeat forecast for the first three months of 2025, citing “continued strong demand” after a bustling holiday travel season.
* Applied Materials Inc., the largest US maker of chip- manufacturing equipment, issued a lukewarm revenue forecast for the current period, citing the risk of export controls crimping its business.
* Coinbase Global Inc. said revenue more than doubled and profit increased more than forecast during last quarter’s Trump- inspired rally in digital assets.
* Dell Technologies Inc. is in advanced stages of securing a deal worth more than $5 billion to provide Elon Musk’s xAI with servers optimized for artificial intelligence work.
* DraftKings Inc. shares rose as much as 15% to their highest level in nearly three-and-a-half years after the company reported fourth-quarter earnings that beat expectations and raised its sales guidance for the current year.
* Moderna Inc. recorded a quarterly loss as vaccine sales waned and the company had an unexpected charge for a canceled manufacturing contract.
* Palo Alto Networks Inc. issued a disappointing earnings outlook for the current quarter, despite rivals including Fortinet Inc. and Check Point Software Technologies Ltd. posting strong results.
* Roku Inc., the streaming-video platform company, reported fourth-quarter results that beat expectations.
* SoundHound AI Inc., Serve Robotics Inc. and Nano-X Imaging Ltd. tumbled after Nvidia Corp. filed a 13F indicating that the chipmaker exited its stakes in the companies.
* Taiwan Semiconductor Manufacturing Co. is considering taking a controlling stake in Intel Corp.’s factories at the request of Trump administration officials, a person familiar with the matter said, as the president looks to boost American manufacturing and maintain US leadership in critical technologies.

Some of the main moves in markets:
Stocks
* The S&P 500 was little changed as of 4 p.m. New York time
* The Nasdaq 100 rose 0.4%
* The Dow Jones Industrial Average fell 0.4%
* The MSCI World Index was little changed
* Bloomberg Magnificent 7 Total Return Index rose 0.4%
* The Russell 2000 Index was little changed
Currencies
* The Bloomberg Dollar Spot Index fell 0.3%
* The euro rose 0.2% to $1.0491
* The British pound rose 0.2% to $1.2586
* The Japanese yen rose 0.3% to 152.32 per dollar
Cryptocurrencies
* Bitcoin rose 0.7% to $97,156.73
* Ether rose 2.2% to $2,726.16
Bonds
* The yield on 10-year Treasuries declined five basis points to 4.48%
* Germany’s 10-year yield advanced one basis point to 2.43%
* Britain’s 10-year yield advanced one basis point to 4.50%
Commodities
* West Texas Intermediate crude fell 0.8% to $70.72 a barrel
* Spot gold fell 1.5% to $2,884.89 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from John Viljoen, Sagarika Jaisinghani, Margaryta Kirakosian, Julien Ponthus and Divya Patil.
Have a wonderful weekend everyone.

Be magnificent!
As ever,

Carolann
There are all kinds of love in this world, but never the same love twice. -F. Scott Fitzgerald, 1896-1940.

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