February 2, 2022 Newsletter

Dear Friends,

Tangents: Groundhog Day – 6 more weeks of winter!

On February 2, 1943, the remainder of Nazi forces from the Battle of Stalingrad surrendered in a major victory for the Soviets in World War II.  Go to article ».

February 2, 1990: South African President F.W. de Klerk lifts the 30-year ban on the African National Congress, resulting in the release from prison of Nelson Mandela and marking the beginning of the end of apartheid.

February 2^nd: Candlemas Day- in Roman Catholic churches all the candles that will be needed in the church throughout the year are consecrated on this day.  The ancient Romans had a custom of burning candles to scare away evil spirits.

Jeff Bezos’s superyacht requires a bridge be dismantled for delivery.

PHOTOS OF THE DAY

Groundhog handler AJ Dereume with Punxsutawney Phil during the 136th celebration of Groundhog Day at Gobbler’s Knob in Punxsutawney. The groundhog has forecast six more weeks of winter

Photograph: Jeff Swensen/Getty ImagesA flamingo at Gediz Delta, one of Turkey’s largest wetlands and home to about 300 bird species, that is on its way to becoming a Unesco world heritage site

Photograph: Lokman Ilhan/Anadolu Agency/Getty Images

A young boy dressed in traditional Tamang dress plays with pigeons as Sonam Lhosar (the new year festival) is observed

Photograph: Amit Machamasi/Zuma/ Rex/Shutterstock

Market Closes for February 2, 2022

International Markets

Bonds

Currencies

Commodities

Market Commentary:

On this day in 1848, for $15 million, the U.S. purchased the entire territories of Arizona, California, New Mexico and Texas, along with parts of Colorado, Nevada and Utah, from Mexico under the Treaty of Guadalupe Hidalgo. The U.S. as a result stretched “from sea to shining sea.”

Canada

By Bloomberg Automation
     (Bloomberg) — The S&P/TSX Composite rose for the fourth day, climbing 0.2 percent, or 42.44 to 21,362.36 in Toronto.

The index advanced to the highest closing level since Jan. 17.
Toronto-Dominion Bank contributed the most to the index gain, increasing 1.6 percent.

Birchcliff Energy Ltd. had the largest increase, rising 5.5 percent.
Today, 128 of 241 shares rose, while 109 fell; 9 of 11 sectors were higher, led by financials stocks.
Insights
* The index advanced 20 percent in the past 52 weeks. The MSCI AC Americas Index gained 17 percent in the same period
* The S&P/TSX Composite is 2 percent below its 52-week high on Nov. 16, 2021 and 20.3 percent above its low on Feb. 2, 2021
* The S&P/TSX Composite is up 3.7 percent in the past 5 days and rose 0.7 percent in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 19.2 on a trailing basis and 14.9 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.6 percent on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.41t
* 30-day price volatility fell to 13.32 percent compared with 13.73 percent in the previous session and the average of 13.20 percent over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 59.5566| 0.8| 18/10
Energy | 26.1308| 0.8| 20/11
Industrials | 23.3544| 0.9| 14/16
Consumer Staples | 10.7085| 1.4| 10/1
Communication Services| 9.0121| 0.9| 6/0
Materials | 7.2932| 0.3| 23/30
Utilities | 4.4352| 0.5| 9/7
Real Estate | 3.3576| 0.5| 18/6
Consumer Discretionary| 3.1523| 0.4| 6/8
Health Care | -2.9466| -1.9| 1/7
Information Technology| -101.5941| -5.6| 3/13
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
TD Bank | 20.8800| 1.6| -30.9| 8.4
Bank of Montreal | 12.2700| 1.9| 17.2| 8.9
Canadian Pacific | 11.7300| 2.0| -16.2| 1.7
Dye & Durham | -2.2490| -14.5| 313.7| -30.5
Lightspeed Commerce Inc | -2.9170| -7.3| 47.9| -20.2
Shopify | -97.5900| -10.0| 46.3| -35.6

US

By Vildana Hajric and Peyton Forte
     (Bloomberg) — A slew of disappointing tech earnings after regular trading ended overshadowed what will go down as the biggest four-day rally for U.S. stocks since November 2020. 
Dip buyers who powered the Nasdaq 100 to a 8% rally since Thursday got a gut check in late trading, when the biggest exchange-traded fund that tracks the index lost 1.8% as of 4:25 p.m. in New York.

The main culprit was Meta Platforms Inc., which sank more than 20% after the Facebook parent’s forecast fell short of estimates.

A loss of that much would wipe out about $180 billion in market value from the stock.
Spotify Technology SA also sank almost 20% on its results, while chipmaker Qualcomm Inc. lost 4%.

Other tech shares that had been rebounding from a weak January got caught in the downdraft.

Tesla Inc. was lower by almost 2% and Cathie Wood’s flagship ETF lost nearly 4%.
The poor earnings marked an about-face from 24 hours earlier when Alphabet Inc. and Advanced Micro Devices Inc. delivered strong results that powered stocks higher during Wednesday’s cash session. 
It’s been a volatile start to the year with investors swinging between concerns over Federal Reserve tightening and confidence in the economic recovery.

A robust earnings outlook is helping to ease the uncertainty, at least for the moment.
However, many dangers, including stubborn inflation, geopolitical risks and pandemic flare-ups still lingers in the background.
“We are seeing writ large the market tug-of-war between the reality of a changing monetary backdrop and what that means for multiples — and eventually economic growth — and what’s still good earnings growth,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.
The latest Fed commentary hinted at a calibrated approach to raising interest rates to fight high inflation, soothing some concerns the economy might take a hit from tighter monetary policy.

None of six Fed officials speaking so far this week have backed the idea of a half-point rate increase in March, and the most aggressive, James Bullard, president of the St. Louis Fed, said five hikes — one more than every quarter — is “not too bad a bet.”

Treasury yields dipped and the dollar was weaker.
“Fed officials backing away from a 50bp hike is important because it suggests the Fed will not aggressively offset a near-term economic rebound,” wrote Dennis DeBusschere, founder of 22V Research. “If true, that would favor a significant reversal in cyclicals, higher real yields, and reopening stock performance.”
ADP data ahead of Friday’s jobs report showed employment at U.S. companies contracted in January by the most since the early days of the pandemic with the spike omicron cases.

Poor job numbers could urge the Fed to reconsider aggressive rate hikes.
However, a dip in employment is not unexpected with government officials warning of the possibility in recent days.
“It was a weak number versus surveys, but not a cause for concern for the Fed in their hiking plans,” said Adam Shakoor, portfolio manager at Columbia Threadneedle Investments. “The Fed has already telegraphed the labor market as tight and near maximum employment at the end of 2021, so we should expect to see some deceleration in these figures play out in 2022.”

What to watch this week:
* Earnings are due from Amazon, Ford Motor, Meta Platforms, Qualcomm, Spotify
* Bank of England, European Central Bank rate decisions, Thursday
* Fed Board of Governors confirmation hearing, Thursday
* U.S. factory orders, initial jobless claims, durable goods, Thursday
* U.S. payrolls report for January, Friday
* Winter Olympics kick off in China, Russia’s President Vladimir Putin due to attend opening ceremony, 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 0.8%
* The Dow Jones Industrial Average rose 0.6%
* The MSCI World index rose 0.8%
Currencies
* The Bloomberg Dollar Spot Index fell 0.2%
* The euro rose 0.3% to $1.1305
* The British pound rose 0.4% to $1.3571
* The Japanese yen rose 0.2% to 114.46 per dollar
Bonds
* The yield on 10-year Treasuries declined one basis point to 1.78%
* Germany’s 10-year yield was little changed at 0.04%
* Britain’s 10-year yield declined four basis points to 1.26%
Commodities
* West Texas Intermediate crude rose 0.1% to $88.32 a barrel
* Gold futures rose 0.3% to $1,807 an ounce
–With assistance from Srinivasan Sivabalan and Sunil Jagtiani.

Have a lovely evening.

Be magnificent!

As ever,

Carolann

You have enemies?  Good.  That means you’ve stood up for something, sometime in your life. –Winston Churchill, 1864-1965.

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

Toll Free: 1.877.430.5895

Fax: 778.430.5828

www.carolannsteinhoff.com