February 20, 2025, Newsletter

Dear Friends,

Tangents: Happy Friday Eve.
February 20, 1872: Cyrus W. Baldwin patents the hydraulic electric elevator, introducing a significant advancement in vertical transportation technology.
On Feb. 20, 1962, astronaut John Glenn became the first American to orbit Earth as he flew aboard the Friendship 7 Mercury capsule.  Go to article.

Ansel Adams, photographer, b. 1902.
Cindy Crawford, model, b. 1966.
Kurt Cobain, musician, b. 1967.

Lasers reveal 1,000-year-old Indigenous road near Chaco Canyon that aligns with the winter solstice
Lasers have revealed a 1,000-year-old sacred road near Chaco Canyon in New Mexico. Researchers think the Indigenous roads were more about cosmology than traffic. Read More.

Breakthrough quantum chip that harnesses new state of matter could set us on the path to quantum supremacy
Microsoft scientists have created a quantum processor that taps into a rare state of matter that was first theorized in the 1930s, paving the way for a processor with a million qubits within years. Read More.

Man nearly guaranteed to get early Alzheimer’s is still disease-free in his 70s — how?
A man who should have developed early-onset Alzheimer’s disease due to a genetic mutation is still symptom-free in his 70s. Scientists are trying to understand why. Read More.

Cynthia Erivo set to host the Tony Awards
The “Wicked” star, who is up for an Oscar for her performance in that film, will host this year’s Tony Awards.

4 Nations hockey tickets are rivaling prices for the Super Bowl
The 4 Nations Face-Off Championship between Canada and the US could generate a massive net profit. Data shows ticket prices are rivaling those of the Super Bowl.

Are your supplements safe?
Protein bars, shakes and pre-workout mixes are often used to maximize results at the gym. But some supplements are also associated with muscle dysmorphia, a study shows.

Tomb of ancient Egyptian king unearthed in ‘remarkable’ discovery
This discovery marks one of the most significant archaeological breakthroughs in recent years, an Egyptian official said.

Where does the internet actually come from?
Surfing the web, checking your email and streaming your favorite shows are all possible because of a vast network of undersea cables that power the global internet. Watch this video to learn how these cables work.
PHOTOS OF THE DAY

Nice, France
A woman takes part in the Battle of Flowers event at the city carnival. The theme is King of the Oceans
Photograph: Syspeo/Sipa/Rex/Shutterstock

Placentia, California
An Allen’s hummingbird sits in her nest under the shelter of a tangelo tree
Photograph: Bruce Chambers/Zuma Press/Rex/Shutterstock

Phnom Penh, Cambodia
A woman takes her daily exercise in the village of Sre Ampel at dawn
Photograph: Heng Sinith/AP
Market Closes for February 20, 2025

International Markets

Bonds

Currencies

Commodities

Market Commentary:
A weak currency is the sign of a  weak economy, and a weak economy leads to a weak nation. –H. Ross Perot,1930-2019.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the second day, dropping 0.4%, or 112.08 to 25,514.08 in Toronto.
Shopify Inc. contributed the most to the index decline, decreasing 3.7%.
Tfi International Inc. had the largest drop, falling 20.8%.
Today, 116 of 220 shares fell, while 99 rose; 7 of 11 sectors were lower, led by information technology stocks.
Insights
* This month, the index was little changed
* So far this week, the index was little changed
* The index advanced 20% in the past 52 weeks. The MSCI AC Americas Index gained 22% in the same period
* The S&P/TSX Composite is 1.4% below its 52-week high on Jan. 30, 2025 and 20.9% above its low on Feb. 21, 2024
* The S&P/TSX Composite is little changed in the past 5 days and rose 1.4% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 21 on a trailing basis and 18.4 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$4.14t
* 30-day price volatility rose to 11.12% compared with 11.01% in the previous session and the average of 11.16% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Information Technology | -74.9158| -2.6| 1/9
Industrials | -29.5951| -0.9| 5/22
Financials | -24.7882| -0.3| 9/16
Energy | -13.3830| -0.3| 19/22
Consumer Staples | -11.0318| -1.2| 3/7
Real Estate | -3.3770| -0.7| 6/14
Consumer Discretionary | -0.0090| 0.0| 6/5
Communication Services | 1.3629| 0.2| 2/3
Health Care | 2.2038| 3.2| 3/1
Utilities | 3.3045| 0.3| 10/5
Materials | 38.1482| 1.2| 35/12
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
Shopify | -56.9700| -3.7| 20.4| 14.4
TFI International | -21.0500| -20.8| 748.4| -26.0
RBC | -21.0300| -1.2| -46.5| -2.3
Ivanhoe Mines | 5.4720| 6.9| 77.2| -1.1
Canadian National | 5.7810| 1.0| -2.2| 0.9
Manulife Financial | 34.6400| 6.7| 28.1| 2.2
US
By Rita Nazareth
(Bloomberg) — Stocks fell from all-time highs as a disappointing forecast from the world’s largest retailer added to concern about the economy’s main engine.
Walmart Inc., the first big-box retailer to report results after the holiday season, sank 6.5%.
Its chief financial officer acknowledged “uncertainties related to consumer behavior and global economic and geopolitical conditions.”
That’s just days after retail sales signaled an abrupt pullback by consumers.
A slide in banks also weighed on trading, with JPMorgan Chase & Co. and Goldman Sachs Group Inc. each falling over 3.8%.
Retailers like Walmart tend to perform well during tough economic times.
It’s also true that Walmart usually starts the year with a conservative guidance.
But the fact is consumers are dealing with stubborn prices and high borrowing costs, and many are turning to credit cards and other debt to support their spending — with a rising number of those loans starting to go bad.
“This news out of Walmart raises even more concerns about the state of the consumer,” said Matt Maley at Miller Tabak + Co.
“We have already seen some very disappointing numbers on consumer confidence and last week’s retail sales data was much lower than expected. It raises some questions about how strong growth will be over the rest of this year.”
Those uncertainties hit a market dealing with risks ranging from tariffs to inflation, geopolitics and valuations.
After rallying over 20% last year, US stocks have trailed global counterparts — with the S&P 500 failing to achieve meaningful breakouts during the three times it closed at a record in 2025.
“A correction may soon be necessary to restore a more attractive valuation for US stocks,” said Fawad Razaqzada at City Index and Forex.com.
“While there are no overt warning signs just yet, it pays to be alert to signals that would put the S&P 500 forecast on a downward trajectory in the short-term.”
The S&P 500 slipped 0.4%. The Nasdaq 100 slid 0.5%.
The Dow Jones Industrial Average lost 1%.
The Russell 2000 dropped 0.9%.
The KBW Bank Index slumped 2.4%.
A gauge of the Magnificent Seven mega caps fell 0.5%.
The yield on 10-year Treasuries slid three basis points to 4.50%.
The Bloomberg Dollar Spot Index fell 0.7%.
The yen led gains in major currencies on bets the Bank of Japan will hike rates sooner rather than later.
“Walmart, a bellwether for consumer spending, raised another red flag, just as mounting trade tensions threaten to drive up the costs of goods,” said Jose Torres at Interactive Brokers.
Before Thursday’s decline, Walmart’s shares had doubled since December 2023.
That left no room for disappointment.
Despite the market reaction, its outlook is more nuanced than it first appears.
In reality, it reflects a few key factors that don’t necessarily spell doom and gloom for the company’s business.
In addition, CFO John David Rainey also said consumer behavior remained “consistent” and “resilient.”
He noted that January had actually been the strongest month in the quarter.
Aside from the selloff in consumer companies, banks are among the groups hit the hardest.
Among the reasons, Jason Goldberg at Barclays Plc cited Walmart’s outlook and a contraction in the Conference Board leading economic index as factors fueling macroeconomic concerns.
But there’s also the fact that banks have also “had a decent move” resulting in “some profit taking,” the analyst wrote.
“US equities are seeing some broader de-risking today,” said Dan Wantrobski at Janney Montgomery Scott.
While the overall consolidation pattern remains intact/healthy at this time, Wantrobski is watching for key support within the 5,950-6,000 range for the S&P 500 in sessions ahead.
“A closing break below this threshold still opens the door to a bigger drawdown towards the 200-day moving average — which resides within our 5,600-5,800 support target,” he added.
The gauge is currently above 6,100.
The US stock market can flip into a correction territory as retail and institutional buyers are running out of steam, according to Goldman Sachs Group Inc.’s Scott Rubner, the bank’s managing director for global markets and tactical specialist.
Demand from retail traders, which have been piling into US stocks at a record pace this year, is expected to slow down ahead of the tax paying season in March.
Flows from pension funds can also “run out of juice,” according to Rubner attributing it to seasonal trends.
January and February are typically the strongest months of the year for yearly asset allocations, followed by weaker inflows in March.
Meantime, a measure of the S&P 500’s ability to brush off fear-inducing headlines and surprise policy announcements is the strongest since before the Covid-19 pandemic.
Investors are now less fixated on one particular variable —like a key inflation report — than in recent years, making the market more resilient to macro shocks, according to analysts at 22V Research.
“More variables, like earnings, industry group, and factor exposures, matter,” said Kevin Brocks, director at 22V Research.
“The macro picture has improved and the economy is further from recession.”

Corporate Highlights:
* Spirit Airlines Inc. won court approval to leave bankruptcy via a lender-backed take-private deal after rejecting a takeover offer from rival Frontier Group Holdings Inc.
* Boeing Co.’s chief executive officer said Elon Musk and his DOGE team are helping the plane maker work through bottlenecks that have caused the next fleet of Air Force One jets to fall years behind schedule.
* Carvana Co. tumbled after the used-car retailer reported lower gross profit per vehicle and shrinking wholesale volumes for the latest quarter, undercutting a turnaround narrative that had buoyed the stock.
* Alibaba Group Holding Ltd. posted its fastest pace of revenue growth in more than a year, as the Chinese internet pioneer co- founded by Jack Ma takes another step toward a recovery after years of turbulence.
* Hasbro Inc. is targeting mid-single-digit sales growth through 2027 and savings of about $1 billion, as the toymaker laid out a plan to expand its reach over the next few years.
* Herbalife Ltd., a nutrition company, reported fourth-quarter adjusted earnings per share that beat consensus estimates.
* Birkenstock Holding Plc opted to keep its outlook unchanged, even as sales of its high-end sandals and clogs jumped more than expected in the first quarter.
* Grab Holdings Ltd. predicted full-year revenue that trailed estimates, suggesting caution around a Southeast Asian ride- hailing and food delivery market where GoTo Group remains a formidable rival.

Key events this week:
* Eurozone HCOB manufacturing & services PMI, Friday
* US S&P Global manufacturing & services PMI, existing home sales, consumer sentiment, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.4% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.5%
* The Dow Jones Industrial Average fell 1%
* The MSCI World Index fell 0.3%
* The Russell 2000 Index fell 0.9%
* KBW Bank Index fell 2.4%
* Bloomberg Magnificent 7 Total Return Index fell 0.5%
Currencies
* The Bloomberg Dollar Spot Index fell 0.7%
* The euro rose 0.8% to $1.0503
* The British pound rose 0.7% to $1.2670
* The Japanese yen rose 1.2% to 149.65 per dollar
Cryptocurrencies
* Bitcoin rose 2.3% to $98,548.34
* Ether rose 1.5% to $2,752.03
Bonds
* The yield on 10-year Treasuries declined three basis points to 4.50%
* Germany’s 10-year yield declined two basis points to 2.53%
* Britain’s 10-year yield was little changed at 4.61%
Commodities
* West Texas Intermediate crude rose 0.4% to $72.57 a barrel
* Spot gold rose 0.2% to $2,938.39 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Cecile Gutscher, Sujata Rao, Margaryta Kirakosian, Anand Krishnamoorthy and Divya Patil.
Have a lovely evening.

Be magnificent!
As ever,

Carolann
The truth is, everyone is going to hurt you.  You just have to find the ones worth suffering for. –Bob Marley, 1945-1981.

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