April 12, 2023 Newsletter

Dear Friends,

Tangents:
April 12, 1980: The United States leads a boycott of the Summer Olympic Games in Moscow to protest the late 1979 Soviet invasion of Afghanistan.  In total, 65 nations refuse to participate in the games, whereas 80 countries send athletes to compete.
April 12, 1981: The space shuttle Columbia blasted off from Cape Canaveral, Fla., on its first test flight.  Go to article >

1955: Polio vaccine announced.
Franklin D. Roosevelt, d. 1945.
David Letterman, b. 1947
1961: First man in Space.

Has 200 years of sci-fi prepared us for artificial intelligence?

Michael Jordan’s 1998 NBA Finals sneakers sell for a record $2.2 million.  These game-winning shoes just became the most expensive sneakers ever to sell at auction.

Bizarre object 10 million times brighter than the sun defies physics, NASA says.  The object is producing enough energy to break a physical law known as the Eddington limit, which determines how bright something of a given size can be. It should have blown into pieces, but somehow it hasn’t.  Full Story: Live Science (4/11)

Einstein was right about invisible dark matter, massive new map of the universe suggests.  Astronomers have made the most detailed map ever of mysterious dark matter using the universe’s very first light, and the “ground-breaking” image has possibly proved Einstein right yet again.  Full Story: Live Science (4/11)

Scientists create ‘slits in time’ in mind-bending physics experiment.  In a first, scientists have shown that they can send light through “slits” in time.  Full Story: Live Science (4/11)

PHOTOS OF THE DAY

London, UK
The Coronation Chair inside Westminster Abbey ahead of the coronation of King Charles III. Westminster Abbey has been used as the coronation church since William the Conqueror in 1066, with the exception of kings Edward V and Edward VIII, who were not crowned
Photograph: Dan Kitwood/PA

Wollongong, Australia
A sulphur-crested cockatoo spreads its wings
Photograph: Mark Evans/Getty Images

New Jersey, USA
A massive 2,500-acre forest fire burns in Ocean County as firefighters battle the blaze. The fire started late on Tuesday and is burning across some 2,500 acres
Photograph: New Jersey Department of Environmental Protection/AP
Market Closes for April 12^th, 2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1991, the Nasdaq Composite Index broke the 500 barrier for the first time, closing at 501.62, up 2.31. The technology-heavy index closed today at 11929.34.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the fourth day, climbing 0.2%, or 32.47 to 20,454.32 in Toronto.
The index advanced to the highest closing level since March 6.
Canadian National Railway Co. contributed the most to the index gain, increasing 1.4%.
Osisko Mining Inc. had the largest increase, rising 4.8%.
Today, 111 of 232 shares rose, while 116 fell; 7 of 11 sectors were higher, led by industrials stocks.
Insights
* The index declined 5.8% in the past 52 weeks. The MSCI AC Americas Index lost 7.9% in the same period
* The S&P/TSX Composite is 7.4% below its 52-week high on April 21, 2022 and 14.4% above its low on Oct. 13, 2022
* The S&P/TSX Composite is up 0.9% in the past 5 days and rose 3.4% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 13.3 on a trailing basis and 13.6 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.2% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.26t
* 30-day price volatility little changed to 12.86% compared with 12.87% in the previous session and the average of 12.02% over the past month
================================================================
|Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Industrials | 15.4304| 0.6| 8/19
Materials | 10.4997| 0.4| 30/20
Energy | 10.4836| 0.3| 17/19
Real Estate | 2.9514| 0.6| 16/4
Information Technology | 2.7239| 0.2| 7/5
Financials | 1.8832| 0.0| 17/12
Communication Services | 1.0609| 0.1| 3/2
Utilities | -0.4044| 0.0| 8/8
Health Care | -1.1471| -1.7| 1/5
Consumer Discretionary | -4.2862| -0.6| 3/12
Consumer Staples | -6.7078| -0.8| 1/10
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
Canadian National | 9.1590| 1.4| -34.9| 0.9
TC Energy | 6.5800| 1.7| -69.2| 4.6
Waste Connections | 4.9520| 1.5| -1.0| 6.7
Couche-Tard | -2.4550| -0.7| -20.9| 13.4
Nutrien | -5.7850| -1.6| -30.7| -1.8
TD Bank | -10.2600| -1.0| -11.0| -8.2
US
By Carly Wanna and Peyton Forte
(Bloomberg) — US stocks limped into the final minutes of the trading day after data showed inflation moderated, but was likely not enough to forestall the Federal Reserve from raising interest rates one more time this year.
The S&P 500 ended the day down 0.4% and the Nasdaq 100 slid 0.9% as signs of an early morning rebound disappeared.
The tech-heavy gauge has fallen in six of the last seven sessions.
Policy-sensitive two-year Treasury yields tumbled as much as 15 basis points before paring the drop to trade at 3.96%.
Swaps markets showed the odds are still in favor for a Fed rate hike in May while traders amped up bets the central bank will cut rates later this year.
Markets rallied early in the day after data showed US consumer prices rose 0.1% in March, just below economists’ forecast of 0.2%.
The closely watched core CPI number — which excludes food and energy — increased 0.4%, meeting the median estimate and coming on the heels of the prior month’s 0.5% gain.
While stocks have been stuck in a tight range, data hinting at a slowdown in economic growth could catalyze equities to move lower, according to Eric Johnston, head of equity derivatives and cross assets at Cantor Fitzgerald. Already, he says the economy is slowing, and “equities will begin to price that in very shortly.”
“Stocks have been helped the past month by CTA buying of US equities and due to global liquidity flows, and we think both are about to stop or reverse,” he said referring to the commodity trading advisers that make rules-based bets in futures markets.
Investors will be dissecting Thursday’s producer prices report next.
Meanwhile, Fed policymakers scaled back expectations for peak rates as they sought to balance reining in inflation and steadying the banking sector, according to minutes of the March Federal Open Market Committee released Wednesday.
Fed staff are now predicting a “mild recession” later this year.
Officials have been sending mixed messages on the battle to tamp down rising prices.
Earlier, San Francisco Fed President Mary Daly said more rate hikes may not be needed while Richmond Fed’s Thomas Barkin said “we still have a ways to go.”
Some of the biggest banks in the US are expected to report earnings on Friday.
Liz Young, head of investment strategy at SoFi, expected markets would swing today, CPI data was not “below expectations in a meaningful way.”
She expects the producer price report to provide added clarity.
“What closes the loop on this inflation data is actually the PPI data,” Young said. “Although CPI has been moderating, which is definitely good news, if PPI remains sticky or slightly higher than expectations, that’s where you see the knock-on effect on corporate margins.”
Elsewhere, the dollar fell against a basket of all its G-10 peers while Bitcoin slumped, dipping back below $30,000 after hitting its highest since June on Tuesday.
Oil climbed to the highest level this year as crude futures topped $83 a barrel and gold resumed its advance.

Here’s what else Wall Street had to say about CPI data:
Lauren Goodwin, portfolio strategist at New York Life Investments: “The March inflation data confirms that the disinflationary process is intact, but moving very slowly. Core CPI is still running far above target.”
“The Fed would have to see a slowdown in core CPI to accept that monetary policy has been tightened far enough.  Absent that evidence today, we expect to see another 25 basis point hike in May before the Fed pauses.”
Alexandra Wilson-Elizondo, co-head of portfolio management for multi asset solutions at Goldman Sachs Asset Management: “Today’s data release will most likely be perceived as welcome news because headline was marginally light of expectations and core was in-line.”  “The continued strength in the core figure is not consistent with the Federal Reserve’s 2% long-term target and will keep a 25-bps hike on the table for the May meeting.  However, the data release does not yet reflect post-banking stress information and the subsequent tightening of credit conditions.”
Jake Jolly, head of investment analysis at BNY Mellon Investment Management: “Ultimately you can really only justify these strong moves in the equity market if you believe that the soft landing probability is increasing materially.”  “It’s a good thing when inflation prints are in line with expectations, it’s much better than an upside surprise. But to me, this is still a very, very strong, inflationary pressures report, so it certainly doesn’t signal the all clear.”
Marija Veitmane, a senior multi-asset strategist at State Street Global Markets: “Last year saw a substantial equity selloff as higher interest rates pushed investors out of expensive stocks. Now we are nearing the end of the hiking cycle (though not there yet) and the market is getting excited about stocks again. We think this is wrong.”  “The hiking cycle will only end when the economy slows substantially – we see no other way for inflation to disappear.  And this is not going to be good news for equity investors as a decline in earnings would hurt more than an offsetting rate cut.”
John Leiper, chief investment officer at Titan Asset Management: “Core inflation remains stubbornly high and an increasingly bullish outlook for energy prices will continue to justify higher for longer. Equities remain expensive and we retain our defensive positioning.”  “You can’t go from a decade of ultra-low interest rates to the fastest rate hike cycle in over 40 years without systemic repercussions, not just to the banking sector but the economy as a whole. We are heading into recession and whether we get an additional rate hike or not, inflation remains an issue, despite today’s number. The writing is already on the wall.”
Guillermo Hernández Sampere, head of trading at MPPM GmbH: “The key core rate has risen slightly, so the inflationary pressure remains high, the Fed will probably continue to raise interest rates but less aggressively because of the incidents in the banking sector. The market sees the peak within reach.”
Joachim Klement, head of strategy, accounting and sustainability at Liberum Capital: “CPI is good news all round. Not only did energy inflation become materially negative as expected, food inflation stalled
and shelter inflation is cooling off. All that indicates that the Fed remains on the right track in bringing inflation down.  While core inflation keeps on rising, the main drivers of core inflation in recent months are mostly cooling off, indicating that the Fed may be able to stop hiking rates after the next meeting.”
Key events this week:
* China trade, Thursday
* US PPI, initial jobless claim, Thursday
* US retail sales, business inventories, industrial production, University of Michigan consumer sentiment, Friday
* Major US banks JPMorgan Chase, Wells Fargo and Citigroup report earnings, 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 0.9%
* The Dow Jones Industrial Average fell 0.1%
* The MSCI World index was little changed
Currencies
* The Bloomberg Dollar Spot Index fell 0.5%
* The euro rose 0.7% to $1.0989
* The British pound rose 0.5% to $1.2484
* The Japanese yen rose 0.4% to 133.19 per dollar
Cryptocurrencies
* Bitcoin fell 1.2% to $29,817.5
* Ether rose 0.4% to $1,902.82
Bonds
* The yield on 10-year Treasuries declined two basis points to 3.40%
* Germany’s 10-year yield advanced six basis points to 2.37%
* Britain’s 10-year yield advanced three basis points to 3.57%
Commodities
* West Texas Intermediate crude rose 2.1% to $83.24 a barrel
* Gold futures rose 0.5% to $2,029 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Macarena Muñoz, Sagarika Jaisinghani, Isabelle Lee and Allegra Catelli.
Have a lovely evening.

Be magnificent!
As ever,

Carolann
There’s a divinity that shapes our ends, Rough-hew them how we will. –Wm. Shakespeare, Hamlet, Act V, Sc II.

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