April 5, 2024, Newsletter

Dear Friends,

Tangents: Happy Friday!
Carolann is away from the office for a conference, I will be writing the newsletter on her behalf.

April 5^th, 1722: Dutch navigator Jacob Roggeveen is the first European to discover Easter Island / Rapa Nui in the southeastern Pacific
April 5^th, 1792: George Washington exercises the first presidential veto in United States history, rejecting a congressional bill concerning apportionment.
Read more.

The longest-living animals on Earth
The longest-living animals can survive for centuries and millennia, even pausing the aging process altogether. Here are the longest-living animals in the world.

NASA engineers discover why Voyager 1 is sending a stream of gibberish from outside our solar system
Voyager 1 has been sending a stream of garbled nonsense since November. Now NASA engineers have identified the fault and found a potential workaround.

10 weird things that happen during a solar eclipse
Eclipses can be strange. Here are some of the weird things you can expect to experience during the April 8 total eclipse.

How and where to watch the April 8 solar eclipse online for free
On April 8, 2024, a total solar eclipse will be visible across North America and you can watch all the action live from your own home.

PHOTOS OF THE DAY

Sichuan, China
The giant panda Fu Bao at the Wolong national nature reserve in Sichuan. A chartered flight carrying the panda landed in Chengdu this week. Fu Bao was the first giant panda to be born in South Korea to Le Bao and Ai Bao, two pandas leased by China to the country in 2016. The panda is currently under quarantine upon returning to China
Photograph: Li Chuanyou/Xinhua/EPA

Tokyo, Japan
People admire illuminated cherry trees in bloom at Chidorigafuchi Moat at night. Japan’s Meteorological Agency confirmed yesterday that the flowers on a sample Someiyoshino cherry tree in the Yasukuni Shrine were in full bloom 13 days later than average
Photograph: Tomohiro Ohsumi/Getty Images

​​​​​​​Montreal, Canada
A pedestrian makes their way across an icy road as a spring storm brings more than 20cm of snow
Photograph: Canadian Press/Rex/Shutterstock
Market Closes for April 5^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1990, the estimated cost of bailing out failed savings & loan companies—pegged just one year earlier at $158 billion—was revised by government forecasters to $285 billion to $350 billion. “We all erred dramatically on the side of underestimating the problem,” said U.S. Senator Jake Garn (R-Utah).
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 1% at 22,264.38 in Toronto.
The move was the biggest since rising 1.6% on Feb. 15 and follows the previous session’s decrease of 0.3%.
Royal Bank of Canada contributed the most to the index gain, increasing 1.7%.
OceanaGold Corp. had the largest increase, rising 8.8%.
Today, 171 of 224 shares rose, while 51 fell; all sectors were higher, led by financials stocks.
Insights
* In the past year, the index had a similar or greater gain 18 times. The next day, it advanced 12 times for an average 0.8% and declined six times for an average 0.5%
* So far this week, the index rose 0.4%
* The index advanced 10% in the past 52 weeks. The MSCI AC Americas Index gained 27% in the same period
* The S&P/TSX Composite is at its 52-week high and 19.1% above its low on Oct. 27, 2023
* S&P/TSX Composite is trading at a price-to-earnings ratio of 18.6 on a trailing basis and 15.3 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$3.5t
* 30-day price volatility rose to 7.46% compared with 7.08% in the previous session and the average of 10.29% over the past month
================================================================
|Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 52.5148| 0.8| 24/3
Materials | 50.7810| 2.0| 40/10
Energy | 29.2818| 0.7| 31/9
Information Technology | 24.9497| 1.4| 9/1
Industrials | 23.6284| 0.8| 18/9
Consumer Staples | 13.9626| 1.6| 10/1
Consumer Discretionary | 8.9476| 1.2| 10/3
Real Estate | 4.5709| 0.9| 18/3
Communication Services | 2.3624| 0.3| 3/2
Health Care | 1.2147| 1.6| 3/1
Utilities | 0.3874| 0.0| 5/9
================================================================
| | |Volume VS | YTD
| Index | | 20D AVG | Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
RBC | 23.0200| 1.7| 39.6| 3.8
Canadian Natural Resources | 13.4300| 1.7| -20.8| 27.1
Constellation Software | 12.8300| 2.6| -35.1| 10.8
Enbridge | -3.5670| -0.5| -26.3| 0.7
TC Energy | -4.3520| -1.1| -44.8| 0.3
TD Bank | -5.2110| -0.5| 90.5| -5.8
US
By Rita Nazareth
(Bloomberg) — The stock market ended the week on a positive note after a blowout jobs report signaled the US economy will continue to power Corporate America — even if that means the potential for still elevated interest rates.
All major groups in the S&P 500 gained, with the gauge rising more than 1%. Wall Street decided to look at the glass half full on Friday based on the premise that if the economy is still so strong, there would be no real urgency for the Federal Reserve to start easing policy.
That triggered another hawkish reprice in the bond market.
Treasury yields climbed, with traders dialing back their projections for Fed cuts in 2024 to about 65 basis points — or less than what the central bank forecast last month.
US payrolls swelled by 303,000 in March, topping all estimates.
The unemployment rate edged lower to 3.8%, wages grew at a solid clip, and workforce participation rose, underscoring the strength of a labor market that’s driving the economy.
“Bang! Employment up, rate cuts need to come out,” said George Mateyo at Key Wealth. “The Fed will likely need to reconsider its current stance of three rate cuts this year.  But, the reason for this likely change in posture is bullish – the economy is doing well.”
The S&P 500 topped 5,200, though Friday’s advance didn’t prevent the gauge from notching its worst week since January.
Meta Platforms Inc. led gains in megacaps.
Tesla Inc. closed away from session lows as Elon Musk denied a report saying the carmaker had called off plans for a less-expensive vehicle.
Treasury 10-year yields rose nine basis points to 4.40%.
Brent oil held above $90 amid geopolitical tensions.
“It’s hard to find anything wrong with the March Jobs report,” said Steve Wyett at BOK Financial. “The only people who might be disappointed in today’s report are those looking for relief from Fed rate cuts. We still expect the next move from the Fed to be to lower rates, but there is little sense of urgency at the moment.”
To the extent that consumer spending and corporate profits are more important to investors than how soon — and how many times — the Fed will cut rates, then stocks can move higher, according to Chris Zaccarelli at Independent Advisor Alliance.
“The number of rate cuts and whether they begin in June or July isn’t as important as whether the Fed is in rate-cutting mode or not,” he note. “To put it another way, 4 or 3 or 2 rate cuts in 2024 are all equally good for the stock market. But if we went to zero rate cuts or a rate hike, then all bets are off and that would be categorically bad.”
Friday’s jobs report indicates that the economy remains resilient even in the face of fading expectations of Fed cuts, says Glen Smith at GDS Wealth Management.
“The fact that the labor market is so strong shows that companies and the economy are adapting to high interest rates,” he noted.
Mohamed El-Erian still expects Fed officials to cut interest rates twice this year, even as a solid jobs report pushes traders to rethink the timing.
“If this Fed is continuously overly data dependent, then maybe we don’t get cuts,” El-Erian, the president of Queens’ College, Cambridge and a Bloomberg Opinion columnist, said on Bloomberg Television. “But I am hoping that they will see through the backward-looking data and look forward.”
Traders ceased fully pricing in a Fed rate cut before September after the March employment report.
Swap contracts that predict the central bank’s rate decisions trimmed the probability of rate cut in June to about 52%.
For July, the probability dropped below 100%.
Fed Bank of Dallas President Lorie Logan said it’s too soon to consider cutting rates, citing recent high inflation readings and signs that borrowing costs may not be holding back the economy as much as previously thought. Governor Michelle Bowman also expressed her concern about potential upside risks to inflation, reiterating it’s “still not yet” time to lower rates.
Jerome Powell has said strong hiring on its own isn’t enough to delay policy easing, but Friday’s jobs report — especially when paired with a pickup in key inflation numbers at the start of 2024 — raise the possibility of later or fewer cuts this year.
“There is no weakness in the job market which would impel the Fed to quickly cut, but no tightness which would prohibit a cut either,” said Preston Caldwell at Morningstar. “Fed decisions in upcoming meetings will hinge mainly on the inflation data.”
Officials will see fresh figures on consumer and producer prices next week, followed by the March reading of their preferred inflation gauge — the personal consumption expenditures price index — before their April 30-May 1 meeting.
“Our base case remains that the Fed will cut rates in June with a total of three cuts by the end of 2024, but some softening of both the labor market data and the inflation data is likely required for that to happen,” said Brian Rose at UBS Global Wealth Management. “Next week, markets are likely to focus on the CPI data for March — which we expect to show a smaller monthly increase than in the prior two months.”
The evolution of consumer price inflation remains the key determinant of easing in the short term — which raises the stakes for next week’s CPI report, according to Oscar Munoz and Gennadiy Goldberg at TD Securities.
“We remain of the view that the June meeting remains live in terms of when the Fed could begin to cut rates.” To David Russell at TradeStation, while a June rate cut might be at risk, next week’s CPI number will probably be a “bigger litmus test” for the Fed. “The bears haven’t won yet,” he said.

Corporate Highlights:
* United Airlines Holdings Inc. is calling off an investor meeting scheduled for early next month because it would “send the wrong message” to celebrate its performance in the wake of a series of headline-grabbing safety incidents.
* Johnson & Johnson agreed to acquire Shockwave Medical Inc. for about $13.1 billion to bolster its expansion into making medical devices to treat heart disease.
* Meta Platforms Inc. asked a judge to dismiss the US Federal Trade Commission’s antitrust lawsuit seeking to break up the company, saying the agency can’t prove consumers would be better off without its acquisitions of Instagram and WhatsApp.
* Chesapeake Energy Corp.’s $7.4 billion takeover of Southwestern Energy Co. has been delayed until the second half of the year after antitrust regulators demanded more details from the natural gas explorers.