April 22, 2024, Newsletter

Dear Friends,

Tangents: Happy Monday.  Today is Earth Day.

April 22, 1945: Adolf Hitler admits defeat after learning teat Soviet forces had entered Berlin.
1955: Congress orders all US coins bear the motto “In God We Trust.”
2010:  The Deepwater Horizon oil platform, operated by BP, sank into the Gulf of Mexico two days after a massive explosion that killed 11 workers.  Go to article >>

Jack Nicholson, b. 1937.
Charles Mingus, bassist, b. 1922.
Germaine de Stael, salonnaire, b. 1766.
Henry Fielding, novelist, b.1707.

April’s full ‘Pink Moon’ blooms amid a meteor shower tomorrow. Here’s how to get the best view.
April’s full moon, nicknamed the Pink Moon, rises on Tuesday (April 23), but will appear bright and full on Monday and Wednesday as well. Here’s how to see it at its best. Read More.

A pink moon will brighten the night sky this week
Despite its cool name, April’s full moon will probably look like any other. Here’s why it’s called the pink moon.

Rare ‘porcelain gallbladder’ found in 100-year-old unmarked grave at Mississippi mental asylum cemetery
Archaeologists have discovered the burial of a woman with a rare “porcelain gallbladder” who was interred at the Mississippi State Lunatic Asylum’s cemetery 100 years ago. Read More.

Scientists may have pinpointed the true origin of the Hope Diamond and other pristine gemstones
Researchers suggest that the famed Golconda diamonds, including the Hope Diamond and Koh-i-noor, may have originated from a volcanic outcrop nearly 200 miles from where they were mined. Read More.

‘Uncharted territory’: El Niño to flip to La Niña in what could be the hottest year on record.
A quick flip from El Niño to La Niña is coming soon, but what does that mean for the U.S.? Full Story: Live Science (4/22).

Giving a hoot on Earth Day: How to protect owls in your own backyard
It can be tough to survive in a world altered by humans. Here’s what you should do if you want owls — or any birds — in your backyard.

Northern lights create dazzling spectacle in the sky
The northern lights could easily be described as Earth’s greatest light show. Watch this stunning video to learn why the lights are starting to appear in some unexpected parts of the world.

PHOTOS OF THE DAY

Frankfurt, Germany
The moon sets behind buildings on the outskirts of the city
Photograph: Michael Probst/AP

Gold Coast, Australia
Olympic breakdancing athlete Jeff ‘B-Boy J Attack’ Dunne poses during a portrait session
Photograph: Chris Hyde/Getty Images

Northumberland, UK
‘Low Hauxley, near Amble. I was hoping for a sunrise, but it was too cloudy. However, the sun soon came out, giving some great light on the rocks and dunes. Coquet Lighthouse is in the background.’
Photograph: David Eberlin
Market Closes for April 22^nd, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1980, market guru Joe Granville made a prescient call when he told his 1,500 premium paying subscribers to buy stocks. The next day, the Dow surged 4%. Over the longer term, Granville’s advice wasn’t so lucrative. His followers lost 98% of their money between 1980 and 1987, according to financial newsletter expert Mark Hulbert.
By Bloomberg Automation
Canada
(Bloomberg) — The S&P/TSX Composite rose for the fourth day, climbing 0.3%, or 64.58 to 21,871.96 in Toronto.
The index advanced to the highest closing level since April 12.
Royal Bank of Canada contributed the most to the index gain, increasing 1.0%.
Celestica Inc. had the largest increase, rising 5.2%.
Today, 120 of 224 shares rose, while 101 fell; 9 of 11 sectors were higher, led by financials stocks.
Insights
* This month, the index fell 1.3%
* The index advanced 5.7% in the past 52 weeks. The MSCI AC Americas Index gained 21% in the same period
* The S&P/TSX Composite is 2.3% below its 52-week high on April 9, 2024 and 17% above its low on Oct. 27, 2023
* The S&P/TSX Composite is up 0.6% in the past 5 days and fell 0.5% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 18.2 on a trailing basis and 14.9 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.1% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.46t
* 30-day price volatility rose to 8.05% compared with 8.01% in the previous session and the average of 8.12% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 39.5012| 0.6| 20/7
Industrials | 27.4739| 0.9| 17/10
Information Technology | 17.7755| 1.0| 9/1
Consumer Staples | 12.6718| 1.4| 9/2
Energy | 11.9370| 0.3| 20/20
Consumer Discretionary | 10.4302| 1.4| 10/2
Real Estate | 6.8915| 1.5| 19/2
Utilities | 5.9193| 0.7| 8/6
Communication Services | 4.7020| 0.7| 4/1
Health Care | -1.0069| -1.5| 1/3
Materials | -71.7143| -2.7| 3/47
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
RBC | 13.3700| 1.0| 174.9| 1.4
Canadian Pacific Kansas | 13.0300| 1.7| 21.7| 12.9
Couche-Tard | 8.6810| 2.2| -4.7| -0.3
Franco-Nevada | -6.7170| -3.0| 14.0| 10.4
Agnico Eagle Mines | -8.7680| -2.9| 26.9| 17.4
Barrick Gold | -12.5200| -4.3| -1.9| -6.0
US
By Rita Nazareth
(Bloomberg) — Stocks climbed after a $2 trillion selloff, with investors hanging their hopes on whether big tech will meet the lofty expectations for artificial intelligence during the busiest week of the earnings season.
About 180 companies in the S&P 500 — representing over 40% of its market capitalization — are due to report this week.
Stakes are high for the “Magnificent Seven” mega-caps, whose profits are forecast to rise nearly 40% from a year ago, according to Bloomberg Intelligence.
The focus on earnings comes after a rout fueled by geopolitical fears and signals the Federal Reserve will be in no rush to cut rates.
“Just beating consensus estimates for earnings won’t be enough,” said Matt Maley at Miller Tabak + Co. “We’re going to have to see much better guidance from Corporate America if the stock market is going to resume its advance.”
Strategists at Wall Street’s top banks are split on whether companies can deliver on robust forecasts.
While Morgan Stanley’s Michael Wilson said he expects profit growth to improve as the economy strengthens, his counterpart at JPMorgan Chase & Co., Mislav Matejka, argues that hot inflation, a stronger dollar and geopolitical tensions are clouding the outlook.
Nearly two-thirds of 409 respondents in Bloomberg’s Markets Live Pulse survey said they expect earnings to give the US equity benchmark a boost.
That’s the highest vote of confidence for profits since the poll began asking the question in October 2022.
The S&P 500 topped 5,000 — halting a six-day rout.
The Nasdaq 100 rose 1%, with Nvidia Corp. leading gains in big tech.
Apple Inc. was named a top pick for 2024 at Bank of America Corp. on optimism over its upcoming results.
Treasuries wavered ahead of a flurry of bond auctions that will test investors’ appetite after yields hit the highest in 2024.
Hedge funds are getting back to buying global equities, shrugging off broader market volatility to gobble up tech stocks at the fastest pace in two months, according to Goldman Sachs Group Inc.’s trading desk.
New long positions outpaced short sales last week while single stocks saw “the largest notional buying in over a year,” the traders wrote in a note — marking a bullish turn in sentiment after hedge funds had been selling for the prior three weeks.
US earnings updates this week will be key to see if they can keep buoying risk appetite in a higher-for-longer rate environment, according to the BlackRock Investment Institute’s weekly commentary.
“We’re overweight US stocks and see the AI theme broadening,” BII noted.
The challenge to S&P 500 returns this earnings season is that companies will have to produce earnings — and outlooks — that support the already elevated multiples, according to Megan Horneman at Verdence Capital Advisors.
To Marko Kolanovic at JPMorgan, while price action may depend on earnings and could stabilize near-term, the market selloff likely has further to go.
“We remain concerned about continued complacency in equity valuations, inflation staying too hot, further Fed repricing, and a profit outlook where the implied acceleration this year might end up too optimistic,” he noted.
“Concerns about rising interest rates, stubborn inflation, and geopolitical risks aren’t going anywhere — but this week, the tech sector may be ‘calling the shots’,” said Chris Larkin at E*TRADE from Morgan Stanley.
Indeed, the stakes are high for America’s technology behemoths to start delivering on artificial intelligence promises with their earnings poised to decelerate, according to Bank of America Corp. strategists.
Microsoft Corp., Alphabet Inc., Meta Platforms Inc. and Tesla Inc. report results this week — kicking off earnings for the so-called Magnificent Seven.
With AI seen as the key to future profits, its contributions to the earnings mix is a the key focus for traders, a BofA team including Ohsung Kwon and Savita Subramanian said.
Big tech companies are running out of steam as the earnings momentum once enjoyed by the sector faces a cool down, according to UBS Group AG’s Jonathan Golub.
He cut the sector recommendation on the “Big Six” technology stocks — Alphabet, Apple, Amazon.com Inc., Meta, Microsoft and Nvidia — to neutral from overweight.
“Earnings momentum is turning decidedly negative following a surge in profit growth,” Golub said.
US stocks are being supported by company fundamentals, but elevated implicit growth expectations and sentiment are now headwinds, according to Citigroup Inc. strategists.
The team led by Scott Chronert says their analysis projects a 76% probability of first-quarter profits exceeding bottom-up consensus.
However, the likelihood of earnings upside falls to 49% for the remainder of 2024 — suggesting corporates may be reticent to raise guidance.
This week is consequential for markets, with big tech earnings and Friday’s key inflation data having the potential to redefine the near-term trajectory of the market, according to Jeremy Straub at Coastal Wealth.
“If big tech earnings and Friday’s inflation data disappoint, that could extend the duration and depth of this current stock market correction,” he noted. “While it’s possible the stock market has further room to decline, we remain
constructive on stocks for 2024.”
Tempered expectations for Fed interest-rate cuts have rattled US stocks the past few weeks.
But history shows there may be nothing to fear: If the past is any guide, equity markets are likely to fare well in an era of higher-for-longer interest rates.
During previous periods of elevated bond yields, the S&P 500 posted an average price return of 13.9%, compared to an average gain of 6.5% during times rates were falling, according to data from BMO Capital Markets going back to 1990.
“We believe stronger-than-expected growth trends in the US recently should be a positive for the economy and corporate profits, at least through the first half of this year,” said Anthony Saglimbene at Ameriprise. “However, the price paid for that firm fundamental backdrop likely leaves inflation elevated and interest rates higher for longer than most expected at the start of the year.”

Corporate Highlights:
* Verizon Communications Inc. reported continued customer losses and lagging revenue.
* Truist Financial Corp. posted lower first-quarter lending profits than analysts expected as it was forced to pay customers more for deposits with interest rates remaining elevated, and the bank trimmed its revenue guidance for the rest of the year.
* Informatica Inc. said it’s not engaged in takeover talks following reports that discussions with Salesforce Inc. had cooled.
* Kroger Co. and Albertsons Cos. agreed to divest more stores to C&S Wholesale Grocers, seeking to make their planned $24.6 billion merger more appealing to antitrust authorities.
* Viking Holdings Ltd. and its existing shareholders are seeking to raise as much as $1.1 billion in a New York initial public offering, with the cruise operator looking to go public as the travel industry rebounds from its pandemic-era slump.
* ASML Holding NV is weighing options to expand its presence in the Netherlands, after the government committed €2.5 billion ($2.7 billion) to infrastructure and education spending in the region where the company’s headquarters are located.
* Tesla Inc.’s weekend move to slash prices across its range in China risks triggering a new round in the nation’s bruising price war, with Li Auto Inc. immediately responding with discounts and cash rebates on new models.
* Reliance Industries Ltd., led by billionaire Mukesh Ambani, posted a lower-than-expected quarterly profit as a continued weakness in its petrochemicals business and higher taxes offset growth in its consumer unit and a large surge in other income.

Key events this week:
* Eurozone S&P Global Manufacturing PMI, S&P Global Services PMI, Tuesday
* US new home sales, Tuesday
* Tesla, PepsiCo earnings, Tuesday
* BOE chief economist Huw Pill speaks, Tuesday
* Germany IFO business climate, Wednesday
* US durable goods, Wednesday
* IBM, Boeing, Meta Platforms earnings, Wednesday
* US GDP, wholesale inventories, initial jobless claims, Thursday
* Microsoft, Alphabet, Airbus earnings, Thursday
* Japan rate decision, Tokyo CPI, inflation and GDP forecasts, Friday
* US personal income and spending, PCE deflator, University of Michigan consumer sentiment, Friday
* Exxon Mobil, Chevron earnings, 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 1%
* The Dow Jones Industrial Average rose 0.7%
* The MSCI World index rose 0.8%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro was little changed at $1.0652
* The British pound fell 0.1% to $1.2352
* The Japanese yen fell 0.1% to 154.83 per dollar
Cryptocurrencies
* Bitcoin rose 3% to $66,580.85
* Ether rose 1.3% to $3,189.85
Bonds
* The yield on 10-year Treasuries was little changed at 4.61%
* Germany’s 10-year yield declined one basis point to 2.49%
* Britain’s 10-year yield declined two basis points to 4.20%
Commodities
* West Texas Intermediate crude fell 0.3% to $82.85 a barrel
* Spot gold fell 2.6% to $2,329.51 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Jessica Menton, Ryan Vlastelica, Alexandra Semenova, Sagarika Jaisinghani, Kasia Klimasinska, Jan-Patrick Barnert and Elena Popina.
Have a lovely evening.

Be magnificent!

As ever,

Carolann
Do the best you can until you know better.  Then when you know better, do better. –Maya Angelou, 1928-2014.

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