December 13, 2021 Newsletter

Dear Friends,

Tangents:
2000: Republican George W. Bush claimed the presidency 36 days after Election Day.  Go to article »

2003: Former Iraqi President Saddam Hussein is captured near his home town of Tikrit, during Operation Red Dawn by US forces.

Italian bishop apologizes for telling children Santa doesn’t exist.  Looks like someone’s getting coal in his stocking

Lions get loose in a Chinese airport, hilarity ensues.

PHOTOS OF THE DAY
Visitors at the Christmas market
CREDIT: Anadolu Agency/Getty Images
A contestant rides a wave during the Tow Surfing Challenge at Praia do Norte. The area is famous for generating some of the largest waves in the world
CREDIT: Carlos Barroso/EPA
A waxing moon sets behind the dome of the Old College at the University of Edinburgh
CREDIT: Jane Barlow/PA

Market Closes for December 13^th, 2021

International Markets

Bonds

Currencies

Commodities

Market Commentary:
     On this day in 1969, 13 securities salesmen, led by Loren Dunton, met at the O’Hare Inn near Chicago’s airport to analyze what was wrong with the way investments were sold to the American public. The result was the birth of a new profession called “financial planning.”
Canada
By Geoffrey Morgan
(Bloomberg) — Canadian equities fell for a fourth straight day, as a drop in oil prices weighed down Canadian energy stocks. The S&P/TSX Composite declined 0.7 percent, or 142.17 to 20,748.45 in Toronto. The index dropped to the lowest closing level since Dec. 3. Shopify Inc. contributed the most to the index decline, decreasing 3.5 percent. Ener plus Corp. had the largest drop, falling 5.4 percent. Today, 142 of 233 shares fell, while 88 rose; 7 of 11 sectors were lower, led by information technology and energy stocks.
Insights
* This year, the index rose 19 percent, poised for the best year since 2019
* This quarter, the index rose 3.4 percent
* The index advanced 18 percent in the past 52 weeks. The MSCI AC Americas Index gained 25 percent in the same period
* The S&P/TSX Composite is 4.8 percent below its 52-week high on Nov. 16, 2021 and 19.9 percent above its low on Jan. 29, 2021
* The S&P/TSX Composite is down 0.5 percent in the past 5 days and fell 4.7 percent in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 18.7 on a trailing basis and 15.8 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.6 percent on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.31t
* 30-day price volatility rose to 14.22 percent compared with 14.12 percent in the previous session and the average of 11.65 percent over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
* Information Technology | -53.7831| -2.3| 2/13
* Energy | -34.9534| -1.3| 3/20
* Industrials | -34.3577| -1.4| 8/22
* Financials | -33.6398| -0.5| 3/25
* Consumer Discretionary | -6.6067| -0.9| 2/11
* Communication Services | -2.7799| -0.3| 1/6
* Health Care | -1.9953| -1.2| 0/8
* Consumer Staples | 0.5748| 0.1| 6/7
* Real Estate | 2.5978| 0.4| 18/5
* Utilities | 6.9025| 0.7| 12/4
* Materials | 15.8638| 0.7| 33/21
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
* Shopify | -50.9700| -3.5| 63.1| 24.7
* Royal Bank of Canada | -16.8100| -1.3| 99.3| 22.8
* Canadian National | -16.2000| -2.3| 147.3| 15.0
* Agnico Eagle Mines | 3.1530| 3.1| 147.4| -30.2
* TC Energy | 3.8730| 1.0| 56.2| 13.4
* Franco-Nevada | 5.0260| 2.3| 77.5| 6.5

US
By Rita Nazareth
(Bloomberg) — Markets around the globe prepared for a wave of central bank decisions, with traders weighing the potential impacts of less generous monetary settings amid coronavirus challenges and lofty equity valuations. The S&P 500 dropped from a record, while the technology-heavy Nasdaq 100 underperformed major stock benchmarks. A gauge of megacap companies slumped, with electric-vehicle maker Tesla Inc. down about 5%. Apple Inc. slipped after the iPhone maker approached a $3 trillion market value.
Travel shares such as airlines, cruise operators and hotels sank. Bonds and the dollar climbed. A selloff in Bitcoin pushed the world’s largest cryptocurrency closer to a key technical level. About 20 central banks are due to hold meetings this week, with the Federal Reserve seen winding down bond purchases and signaling an interest-rate liftoff in 2022 — heralding a historic pivot to counter the fastest inflation since the 1980s. The European Central Bank, the Bank of England and the Bank of Japan are also set to announce their monetary policy decisions.

Comments:
* “U.S. stocks were under pressure as many investors began to fear a trading life without a Fed safety net. A wrath of central bank rate decisions this week will likely show stocks will have to move higher without the help of central bankers,” wrote Edward Moya, senior market analyst at Oanda.
* “The Fed’s pivot to a more aggressive tapering schedule poses a larger risk for asset prices than most investors believe. Good news, supply is improving, but will it arrive at the wrong time?”, wrote Morgan Stanley strategists including Mike Wilson.
* “As long as the Fed doesn’t provide a materially hawkish surprise this Wednesday (something that’s possible, but unlikely), stocks can rally into year-end on momentum, even if valuations are again stretched,” wrote Tom Essaye, a former Merrill Lynch trader who founded “The Sevens Report” newsletter.

The ghost of the tech bubble could soon come back to haunt investors as hefty valuations may be threatened by the likely tightening of monetary policy. The S&P 500’s long-term price-to-earnings ratio — which compares the current price with the 10-year average real earnings per share — has reached 37, a level last seen in 2000. “Valuations are extremely high on almost any metric,” Deutsche Bank AG strategists said in a note. Inflation expectations among U.S. consumers rose to a new high of 6% for the coming year, according to the latest consumer survey of the Federal Reserve Bank of New York.  The study showed that Americans foresee faster price increases for items like rent and food, which take up a big chunk of household spending and can’t easily be substituted.
Corporate highlights:
* Losses for a basket of meme stocks are mounting, with traders shifting away from riskier assets. GameStop Corp. and AMC Entertainment Holdings Inc. have been the biggest drags on the group since mid-November.
* Pfizer Inc. agreed to buy Arena Pharmaceuticals Inc. in a deal valued at about $6.7 billion that brings potential therapies targeting immuno-inflammatory diseases.
* Bristol Myers Squibb Co. climbed as the drugmaker said it will raise its dividend and buy back up to $15 billion in shares.
* Harley-Davidson Inc. jumped after saying it would list its electric-motorcycle unit publicly through a merger with a blank-check company.

Here are some key events this week:
* Euro zone industrial production, Tuesday.
* U.S. PPI, Tuesday.
* China releases November industrial output, retail sales data, Wednesday.
* Fed rate decision, Wednesday.
* U.S. business inventories, retail sales, empire manufacturing, Wednesday.
* BOE rate decision, Thursday.
* ECB rate decision, Thursday.
* U.S. housing starts, initial jobless claims, industrial production, Thursday.
* BOJ monetary policy decision, Friday.
* S&P Dow Jones Indices quarterly rebalance effective after markets close, Friday.
* “Quadruple witching” day in the U.S. market, when options and futures on indexes and equities expire, Friday.
Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.9% as of 4 p.m. New York time
* The Nasdaq 100 fell 1.5%
* The Dow Jones Industrial Average fell 0.9%
* The MSCI World index fell 0.8%
Currencies
* The Bloomberg Dollar Spot Index rose 0.4%
* The euro fell 0.3% to $1.1284
* The British pound fell 0.5% to $1.3209
* The Japanese yen fell 0.1% to 113.60 per dollar
Bonds
* The yield on 10-year Treasuries declined six basis points to 1.42%
* Germany’s 10-year yield declined four basis points to -0.38%
* Britain’s 10-year yield declined four basis points to 0.70%
Commodities
* West Texas Intermediate crude fell 0.7% to $71.18 a barrel
* Gold futures rose 0.2% to $1,788.10 an ounce
–With assistance from Andreea Papuc, Abigail Moses, Vildana Hajric, Emily Graffeo and Michael Msika.
Have a lovely evening.

Be magnificent!

As ever,

Carolann

No life ever grows great until it is focused, dedicated, and disciplined. -Harry Emerson Fosdick, 1878-1969.

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