April 1st, 2024, Newsletter

Dear Friends,

Tangents: Happy Monday, April 1^st!
Carolann is away from the office for a conference, I will be writing the newsletter on her behalf.

April 1^st, 1789: The U.S. House of Representatives held its first full meeting in New York City.
April 1^st, 1976: Apple Inc. was founded by Steve Jobs, Steve Wozniak in the garage of Jobs’ parents house in Cupertino, California
April 1^st, 2004: Google introduced Gmail, its free email service, to the public. Initially met with skepticism due to its large storage capacity and ad-supported model, Gmail quickly gained popularity and became one of the most widely used email platforms globally.

The incredible ‘sacred’ waterfall in Angola that you’ve probably never heard of.
The spectacle is wreathed in a cool mist that locals say is part of its spiritual history.

Where does the solar system end?
The location of the solar system’s outer boundary is a point of contention among astronomers.

How much does Earth weigh?
Earth’s mass took hundreds of years to estimate, and even now, experts don’t agree on the exact number.

Skeleton panda sea squirt: The weird little creature that looks like baby panda dressed up for Halloween
Scientists discovered this little panda skeleton that lives off the coast of a Japanese island was a new species after scuba divers posted photos of it online.

Orcas aren’t all the same species, study of North Pacific killer whales reveals
Orcas have long been categorized as a single species, although some scientists have questioned this classification in recent decades. Now, researchers propose that two orca populations in the eastern North Pacific Ocean are actually two distinct species. Read more.

April 8 solar eclipse: What time does totality start in every state?

Ancient quarries in Israel reveal where Homo erectus hunted and butchered elephants
Ancient humans quarried flint to make weapons for hunting and butchering elephants up to 2 million years ago in what’s now the Upper Galilee region of Israel, a new study finds.

World Nature Photography Awards 2024: Spectacular images of wildlife. Read More.

Space photo of the week: James Webb telescope reveals surprising starburst in ancient galaxy. Read More.

PHOTOS OF THE DAY

Straumur, Iceland
The aurora borealis, also known as the Northern Lights, fills the night sky
Photograph: Owen Humphreys/PA

Afar, Ethiopia
A man walks through a salt canyon near Dallol, in the Danakil Depression, one of the hottest, most inhospitable place on earth
Photograph: Michele Spatari/AFP/Getty Images

Taizhou, China
Maintenance workers at a solar farm and fishery in Jiangsu province
Photograph: Costfoto/NurPhoto/Shutterstock
Market Closes for April 1st, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1930, in one of the biggest “suckers’ rallies” of all time, the total market value of New York Stock Exchange-listed companies hit $67.5 billion, up roughly 40% from its trough in the Great Crash of 1929. By the end of the year, however, stocks had retreated more than 40%.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite advanced slightly to 22,185.25 in Toronto.
Cameco Corp. contributed the most to the index gain, increasing 8.2%.
Ballard Power Systems Inc. had the largest increase, rising 18.0%.
Today, 109 of 224 shares rose, while 112 fell; 3 of 11 sectors were higher, led by energy stocks.
Insights
* The index advanced 12% in the past 52 weeks. The MSCI AC Americas Index gained 27% in the same period
* The S&P/TSX Composite is 0.2% below its 52-week high on March 28, 2024 and 18.7% above its low on Oct. 27, 2023
* The S&P/TSX Composite is up 0.9% in the past 5 days and rose 3.8% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 18.5 on a trailing basis and 15.2 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.51t
* 30-day price volatility little changed to 7.05% compared with 7.05% in the previous session and the average of 11.02% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Energy | 43.9301| 1.1| 36/5
Materials | 36.8659| 1.5| 36/12
Information Technology | 10.1978| 0.5| 4/6
Health Care | -0.8129| -1.1| 0/4
Communication Services | -2.3503| -0.3| 1/4
Real Estate | -4.8313| -1.0| 2/19
Industrials | -4.9354| -0.2| 11/16
Consumer Discretionary | -5.7874| -0.7| 3/10
Utilities | -6.8896| -0.8| 2/12
Consumer Staples | -8.5680| -0.9| 5/6
Financials | -38.5920| -0.6| 9/18
================================================================
| | |Volume VS |
| Index | | 20D AVG |YTD Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
Cameco | 14.5100| 8.2| 17.4| 11.0
Shopify | 13.9300| 1.6| -40.1| 2.9
Canadian Natural Resources | 10.2000| 1.3| -45.4| 20.6
Manulife Financial | -5.6820| -1.3| -32.2| 14.0
Brookfield Corp | -7.5990| -1.3| -59.1| 5.2
Couche-Tard | -8.5290| -2.2| 21.7| -3.1
US
By Rita Nazareth
(Bloomberg) — Wall Street traders sent both stocks and bonds lower after solid US factory data reinforced speculation that the Federal Reserve will be in no rush to cut interest rates.
Treasuries fell across the curve — with 10-year yields climbing over 10 basis points — as manufacturing unexpectedly expanded for the first time since September 2022 — while input costs climbed.
Following the report, the amount of Fed easing priced into swap contracts for this year slid to around 65 basis points — less than forecast by policymakers.
Equities also lost traction after the S&P 500 notched its fifth-straight month of gains.
“Investors are indeed front-running the possibility of yet another hawkish pivot from the Fed,” said Jose Torres at Interactive Brokers. “The Fed’s first rate cut may arrive in the second half of the year after all — with probabilities of a reduction this June inching closer to coin-flip odds.”
Later this week, a report is expected to show employment gains continued in March while wage growth moderated.
Fed Chair Jerome Powell — who is set to speak Wednesday — said Friday that officials are awaiting more evidence prices are contained.
US 10-year yields hovered near their 2024 highs.
The S&P 500 fell below 5,250.
Megacaps were mixed, with Apple Inc. down and Microsoft Corp. up.
FedEx Corp. sank as its contract with the United States Postal Service will expire in late September.
The dollar rose.
Oil and gold climbed as an Israeli attack in Syria threatened to widen the conflict in the Middle East.
While the market appears “content” to point toward the manufacturing release as the trigger for the move, there was already a bond selloff underway prior to the headlines, said Ian Lyngen and Vail Hartman at BMO Capital Markets.
“Monday’s price action in the futures space suggests the pendulum of sentiment in US rates may be shifting toward the hawkish direction — although it goes without saying there remains ample room for expectations to meaningfully shift as more data is revealed,” they noted.
The Institute for Supply Management’s manufacturing gauge rose to 50.3 last month. While barely above the level of 50 that separates expansion and contraction, it halted 16 straight months of shrinking activity.
At the same time, the group’s gauge of prices paid rose to 55.8, the highest since July 2022.
Perhaps “most troubling” was the jump in the prices paid, according to Michael Shaoul at Market field Asset Management.
“This indicates that some of the ‘transitory’ relief from reflationary forces is starting to reverse.”
To Kurt Rankin at PNC, the renewed upward trend for manufacturers’ costs should serve as a reminder that risks remain at a time when Fed officials continue to cite the need for further evidence that inflation is on a sustainable path toward their 2% goal.
“Rising producer costs – which are inevitably passed on to consumers – makes that evidence less likely to surface in the next few months.” he noted.
Bond traders priced in less monetary policy easing by the Fed this year — and briefly set the odds of a first move in June to less than 50%.
Another factor putting pressure on bonds Monday was a raft of corporate-bond issuance.
Adobe Inc. was in the high-grade market looking to raise cash to help pay for capital expenditures, stock buybacks and acquisitions, one of seven companies selling notes.
Japanese e-commerce company Rakuten Group Inc. is selling a $1.25 billion junk bond to repurchase notes that mature this year and further out, one of four deals in the market.
It’s unclear how long the frenzied activity will continue.
First-quarter sales broke records in investment-grade corporate bonds, while for high yield, activity was the highest since 2021.
But issuance activity often tapers off in April —particularly after the Easter holiday.
In this week’s commentary from the BlackRock Investment Institute, the firm said it’s “staying nimble while seeking income.”
“We think central banks will keep rates higher for longer than pre-pandemic due to persistent supply constraints,” BII said. “While income is back, tight US credit spreads and long- term yield volatility pose risks.”
The strength of the US economy and corporations has helped the markets navigate the disappointment some investors felt over the course of the first quarter as the Fed pushed back a number of times on market expectations for rate cuts, according to John Stoltzfus at Oppenheimer Asset Management.
“Chances for a pivot by the Fed in June appear to us somewhat subdued in comparison to what had been expected earlier this year as reflected in the futures market,” he noted. “In our view, investors’ expectations as to when, where and how much the Fed will cut this year are likely best kept right-sized near term.”
Investors who just booked profits from one of the strongest first quarters for the S&P 500 in decades are preparing for what comes next — whether that’s stocks climbing higher or crashing back to earth.
The cost of S&P 500 bullish call options expiring in one year with a 25% chance of coming in the money — known as having a 25-delta — is up, while the cost of equivalent bearish puts is down.
Meaning investors are ready for continued broad market advances and aren’t particularly worried about a slight pullback.
To Chris Senyek at Wolfe Research, trading in stocks is likely to get much choppier following an incredibly strong run and little fear baked into prices.
“Overvaluation alone has not historically been cause for imminent concern,” a Goldman Sachs Group Inc. team led by Ryan Hammond told clients in a note last week.
“Periods of overvaluation often persist for nearly a year and are typically benign if the subsequent economic growth environment is healthy.”
Gains in the US stock market last quarter boosted confidence among equity investors to the highest in nearly two years, but sentiment is still far from the “euphoric” levels that typically signal a top, according to Bank of America Corp. strategists.
BofA’s Sell-Side Indicator edged up in March to 55% — the highest level since May 2022, a team led by head of US equity and quantitative strategy Savita Subramanian said on Monday in note to clients.
Whenever the indicator was same level or lower than that average recommendation, returns were positive 94% of the time over the subsequent 12 months.
To Jonathan Krinsky at BTIG, the biggest risk into April is a momentum unwind.
The Goldman Sachs Long/Short High Beta Momentum Index recently reached 32% above its 200-day moving average — a level only exceeded twice in the last 15 years.
It was up about 36% on the quarter.
Since its inception, it has only been up over 30% for a quarter twice.
In the following quarters, it was down 22% and 23%, respectively.
“With earnings season expectations already priced in, we’re watching for a few pressure points that could pose a risk to this remarkable rally,” said Mark Hackett at Nationwide.
“Ultimately, the market is facing two tests right now: complacency and margin pressure. April will provide clarity for how this market will fare on both fronts.”

Corporate Highlights:
* AT&T Inc. said that personal data from about 73 million current and former customers was leaked onto the dark web, prompting it to reset 7.6 million account passcodes.
* Micron Technology Inc. climbed after Bank of America Corp. raised its price target on the memory-focused chipmaker to $144 from $120.
* Delta Air Lines Inc. gained after Morgan Stanley raised the price target on the carrier’s stock to $85 from $77.
* United Airlines Holdings Inc. asked pilots to take unpaid time off next month, a staffing cutback that could extend into late 2024 as the carrier grapples with delayed deliveries of Boeing Co. planes.
* Nippon Steel Corp. made what it calls a formal commitment on spending and jobs to the United Steelworkers union, backing up a pledge made in an earlier meeting as the Japanese steelmaker looks to build support for its $14.1 billion acquisition of United States Steel Corp.
* Advent International agreed to buy Canadian payments processor Nuvei Corp. for $6.3 billion, including debt, in a further sign that confidence is returning among private equity dealmakers.
* A federal court approved the 3M Co.’s offer of at least $10 billion to settle PFAS claims of roughly 12,000 public water systems across the US.
* Banks led by Goldman Sachs Group Inc. and JPMorgan Chase & Co. are launching a debt sale to boost drugmaker Endo International out of Chapter 11 bankruptcy protection.

Key events this week:
* Eurozone S&P Global Manufacturing PMI, Tuesday
* US factory orders, light vehicle sales, JOLTS job openings, Tuesday
* Fed’s John Williams, Loretta Mester, Mary Daly and Michelle Bowman speak, Tuesday
* St. Louis Fed President Alberto Musalem takes office, Tuesday. He replaces James Bullard.
* China Caixin services PMI, Wednesday
* Eurozone CPI, unemployment, Wednesday
* Japan services PMI, Wednesday
* US ADP employment, ISM Services, Wednesday
* Fed Chair Jerome Powell speaks, Wednesday
* Fed’s Austan Goolsbee, Adriana Kugler and Michelle Bowman also speak, Wednesday
* Eurozone S&P Global Services PMI, PPI, Thursday
* US initial jobless claims, Challenger job cuts, Thursday
* Fed’s Loretta Mester, Alberto Musalem, Thomas Barkin, Patrick Harker, Austan Goolsbee speak, Thursday
* European Central Bank publishes account of March rate decision, Thursday
* Eurozone retail sales, Friday
* US unemployment, nonfarm payrolls, Friday
* Fed’s Michelle Bowman, Thomas Barkin and Lorie Logan speak, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.2% as of 4 p.m. New York time
* The Nasdaq 100 rose 0.2%
* The Dow Jones Industrial Average fell 0.6%
* The MSCI World index fell 0.4%
Currencies
* The Bloomberg Dollar Spot Index rose 0.3%
* The euro fell 0.4% to $1.0742
* The British pound fell 0.6% to $1.2548
* The Japanese yen fell 0.2% to 151.65 per dollar
Cryptocurrencies
* Bitcoin fell 1.7% to $69,648.88
* Ether fell 4.1% to $3,485.04
Bonds
* The yield on 10-year Treasuries advanced 12 basis points to 4.32%
* Germany’s 10-year yield was little changed at 2.30%
* Britain’s 10-year yield was little changed at 3.93%
Commodities
* West Texas Intermediate crude rose 0.9% to $83.93 a barrel
* Spot gold rose 0.6% to $2,243.23 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Alexandra Semenova, Carly Wanna, Natalia Kniazhevich, Michael Mackenzie and Mark Niquette.

Have a wonderful evening everyone!

Be magnificent!
As ever,

Shabnam
“Answers are closed rooms, and questions are open doors that invite us in.”– Nancy Willard.

Shabnam Mohammadpourmarzbali
Assistant to Carolann Steinhoff
Queensbury Securities Inc.

340A – 730 View Street
Victoria BC  V8W 3Y7
Tel: 778-430-5851
Fax: 778-430-5828