December 1, 2022 Newsletter

Dear Friends,

Tangents: Happy Friday Eve.
1913:  The first drive-in automobile service station opened, in Pittsburgh. Go to article »
1991: A referendum is held in Ukraine asking voters if they wanted an “Act of Declaration of Independence” from the Soviet Union.  Nearly 29 million (92.3%) of those registered to vote supported the motion.
1891: Basketball created.
1955: Rosa Parks arrested.

Prince William and Kate are in the US for their first trip in eight years.  The royals have arrived! See photos of the Prince and Princess of Wales sitting courtside at the Boston Celtics vs. Miami Heat game.

These are the world’s most expensive cities to live in 2022:  If you want to live in one of these desirable cities, you might spend extra on housing, gas, and food. Prime example: $20 avocado toast in Los Angeles…

Merging galaxies captured in new Webb telescope image.  NASA shared a new image displaying the beautiful chaos of two galaxies merging. Take a look here.

Lamborghini’s new supercar is designed to go off-road.  The luxury automaker says this new $300,000 vehicle is meant to be driven on dirt roads — and will be its last purely gasoline-powered supercar.
PHOTOS OF THE DAY

London, England
The newly restored Nativity by Piero Della Francesca is displayed at the National Gallery
Photograph: Leon Neal/Getty Images

Berlin, Germany
A statue of Moses is surrounded by scaffolding during restoration work at the city’s cathedral
Photograph: John MacDougall/AFP/Getty Images

Hawaii, US
An eruption of the Mauna Loa volcano illuminates the night
Photograph: Go Nakamura/Reuters
Market Closes for December 1^st, 2022

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1919, the Chicago Mercantile Exchange opened for its first day of trading. Total volume in 45 minutes of trading: three lots of egg futures. In the days before chicken coops had aluminum roofs to keep temperatures moderate year-round, hens laid eggs regularly only in spring, so egg buyers had to hedge their supplies the rest of the year.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the third day, climbing 0.4%, or 72.19 to 20,525.45 in Toronto.
The index advanced to the highest closing level since June 9.
Toronto-Dominion Bank contributed the most to the index gain, increasing 2.6%.
OceanaGold Corp. had the largest increase, rising 13.5%.
Today, 149 of 236 shares rose, while 85 fell; 9 of 11 sectors were higher, led by materials stocks.
Insights
* This year, the index fell 3.3%, poised for the worst year since 2018
* This quarter, the index rose 11%, heading for the biggest advance since the second quarter of 2020
* So far this week, the index rose 0.7%
* The index advanced 0.3% in the past 52 weeks. The MSCI AC Americas Index lost 11% in the same period
* The S&P/TSX Composite is 7.6% below its 52-week high on April 5, 2022 and 14.8% above its low on Oct. 13, 2022
* The S&P/TSX Composite is up 0.9% in the past 5 days and rose 5.2% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 13.7 on a trailing basis and 13 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$3.26t
* 30-day price volatility fell to 14.30% compared with 14.76% in the previous session and the average of 18.94% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Materials | 42.2492| 1.7| 44/7
Information Technology | 36.6828| 3.1| 13/1
Financials | 13.6915| 0.2| 19/10
Industrials | 8.5028| 0.3| 13/13
Health Care | 4.5937| 5.4| 4/3
Consumer Staples | 3.5412| 0.4| 9/2
Real Estate | 3.4462| 0.7| 18/4
Consumer Discretionary | 3.1224| 0.4| 8/6
Communication Services | 2.9832| 0.3| 5/2
Utilities | -4.6355| -0.5| 8/7
Energy | -41.9791| -1.1| 8/30
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
TD Bank | 28.7400| 2.6| 16.2| -5.3
Shopify | 24.7500| 5.5| 27.5| -66.5
Barrick Gold | 12.9200| 4.8| -3.6| -4.3
Enbridge | -7.5280| -1.0| -73.8| 11.3
Nutrien | -9.4250| -2.4| -13.5| 11.0
CIBC | -30.9900| -7.7| 195.0| -18.9
US
By Rita Nazareth
(Bloomberg) — Stocks saw a lot of instability near a key technical level, with traders awaiting the all-important jobs report for clues on the Federal Reserve’s next policy steps.
The dollar fell with bond yields.
A fight took place around the S&P 500’s 200-day moving average — an indicator seen by some analysts as portending the continuation of a move when breached.
The equity gauge struggled for direction after crossing that mark in a rally driven by Jerome Powell’s signals of a downshift in the pace of hikes.
Amid all the choppiness, the Cboe Volatility Index fell below 20, the lowest since August.
“The shallower the pullback, the better the odds of the market moving further higher,” said Fawad Razaqzada, market analyst at City Index and Forex.com. “The bears, meanwhile, will need to defend this bearish trend line and push the market back below the 200 day, if they want to keep this year’s bearish trend intact now that we are heading into the final month of the year.”
Equities closed almost flat after slumping on data showing American manufacturing contracted in November for the first time since May 2020.
The report added to concern that Fed hikes will raise the odds of a recession and tempered optimism with news that a gauge of consumer prices had the second-smallest increase this year.
The Bloomberg Dollar Spot Index sank to its lowest since June.
The Treasury rally gathered steam amid a pullback in expectations for Fed tightening.
Bets on where the central bank rate will peak have now dropped below 4.9%, according to swap markets.
The current benchmark sits in a range between 3.75% and 4%.
Fed Bank of New York President John Williams said further hikes are needed to curb inflation.
The central bank’s Vice Chair for Supervision Michael Barr said officials have more work to do in tightening monetary policy, though they could slow the pace of rate increases later this month.
The Fed Bank of Chicago appointed Austan Goolsbee, an economist and former adviser to President Barack Obama, as its new chief to replace Charles Evans, who retires in January.
In an Oct. 31 Bloomberg Radio interview, Goolsbee said a peak for the benchmark federal funds rate around 5% “kind of makes sense to me.”
The remarkably resilient US jobs market is beginning to cool, but Friday’s employment report will fall far short of the turning point Fed officials are seeking in their battle to beat back inflation.
There are signs labor demand is ebbing, but a bigger slowdown is needed to bring that demand more in line with labor supply in order to contain wage growth.
The median projection in a Bloomberg survey of economists calls for payrolls to rise 200,000 in November and hourly earnings to climb 4.6% from a year ago.
Worries about how far central bankers will go to rein in inflation have kept investors on edge, and equities volatile.
JPMorgan Chase & Co.’s Dubravko Lakos-Bujas said sharp declines await US stocks in the first half of 2023 against the backdrop of a mild recession and Fed hikes.
The prediction adds to calls from strategists at Goldman Sachs Group Inc. and Deutsche Bank AG that American equities are in for a wild ride next year.
“The next mountain needing to be conquered, and will be the 2023 focus I believe, is the economic consequences to such a sharp rise in interest rates, the higher cost of capital that both businesses and households have to deal with and the recession it creates,” said Peter Boockvar, chief investment officer at Bleakley Financial Group.

“We do not think the macroeconomic conditions for a sustained market rally are yet in place,” said Mark Haefele, chief investment officer at UBS Global Wealth Management, who sees the cumulative impact of hikes weighing on economic growth and corporate profits.
From a technical standpoint, however, history offers encouraging signs for US stocks once they break above a longer-term trend line after spending months below it.
In the previous 13 times the S&P 500 was beneath the 200-day moving average for more than six months and then closed above it, the index posted an average return of 12% over the next six months and 19% a year later, according to Ryan Detrick, chief market strategist at Carson Group.
Jonathan Krinsky at BTIG notes that while a big rally got the US equity gauge through its 200-day moving average, it also took it right to the downtrend line from the January highs.
“The slope of the 200-DMA is often more important than whether price is above or below it,” he added. “Consider in 2002, there were several rally attempts that did get above the declining 200-DMA, only to fail and roll over to new lows.”

Key events this week:
* US unemployment, nonfarm payrolls, Friday
* ECB’s Christine Lagarde speaks, Friday
Some of the main moves in markets:
Stocks
* The S&P 500 was little changed as of 4 p.m. New York time
* The Nasdaq 100 was little changed
* The Dow Jones Industrial Average fell 0.6%
* The MSCI World index rose 0.8%
Currencies
* The Bloomberg Dollar Spot Index fell 1%
* The euro rose 1.1% to $1.0523
* The British pound rose 1.5% to $1.2243
* The Japanese yen rose 2% to 135.35 per dollar
Cryptocurrencies
* Bitcoin fell 1.1% to $16,914.09
* Ether fell 1.9% to $1,271.94
Bonds
* The yield on 10-year Treasuries declined 10 basis points to 3.51%
* Germany’s 10-year yield declined 12 basis points to 1.81%
* Britain’s 10-year yield declined six basis points to 3.10%
Commodities
* West Texas Intermediate crude rose 0.9% to $81.26 a barrel
* Gold futures rose 3.3% to $1,817.20 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Vildana Hajric, Peyton Forte and Michael Msika.
Have a lovely evening.

Be magnificent!
As ever,

Carolann

There’s only a razor’s edge between self-confidence and hubris. –Jack Welch, 1935-2020.

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