December 2, 2022 Newsletter

Dear Friends,

Tangents: Happy Friday.

December 2, 1969: The Boeing 747 jumbo jet debuted.  Go to article ».
1993: Columbia drug lord Pablo Escobar is shot and killed in Medellin.

George Seurat, artist, b.1859.
Maria Callas, soprano, b. 1923

Beavertown Brewery has brewed a Christmas beer called Frozen Neck, which is infused with “edible glitter for a seasonal snow globe effect in a glass.” (h/t Andrea Felsted)

Massive eruption from icy volcanic comet detected in solar system:   A bizarre, volcanic comet has violently erupted, spewing out more than 1 million tons of gas, ice and the “potential building blocks of life” into the solar system.  The volatile comet, known as 29P/Schwassmann-Wachmann (29P), is around 37 miles (60 kilometers) wide and takes around 14.9 years to orbit the sun. 29P is believed to be the most volcanically active comet in the solar system.  Full Story: Live Science (12/2)

‘Sacred’ owl carvings from Copper Age may actually be children’s toys:  Thousands of years ago, children from the Iberian Peninsula carved pieces of slate into the shape of owls, creating palm-sized toys to play with, a new study suggests.  Originally, archaeologists thought the cartoonlike figures were sacred objects representing deities, used only in rituals. But a new study reveals that they also could have served as children’s toys or amulets.
PHOTOS OF THE DAY

Edinburgh, Scotland
The National Monument of Scotland forms the backdrop for projected images created by artists for the Farnesina digital art experience
Photograph: Jane Barlow/PA

Wehrheim, Germany
Icelandic horses play at a stud farm as snow falls
Photograph: Michael Probst/AP

A snow leopard caught by a camera trap high up in the Indian Himalayas. One of the shortlisted 25 images in the running for the Wildlife Photographer of the Year People’s Choice award at the Natural History Museum
Photograph: Sascha Fonseca/2022 Wildlife Photographer of the Year
Market Closes for December 2^nd, 2022

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 2001, Enron went bankrupt, as the seventh-largest corporation in the U.S. filed for protection from creditors under Chapter 11 of the federal bankruptcy code. The disclosure of the worst accounting scandal in American history vaporized $60 billion in Enron’s stock-market value.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell 0.2% at 20,485.66 in Toronto.
The move follows the previous session’s increase of 0.4%.
Brookfield Asset Management Inc. contributed the most to the index decline, decreasing 3.2%.
Wesdome Gold Mines Ltd. had the largest drop, falling 8.6%.
Today, 130 of 236 shares fell, while 103 rose; 7 of 11 sectors were lower, led by financials stocks.
Insights
* This year, the index fell 3.5%, 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 0.5%
* The index declined 1.3% in the past 52 weeks. The MSCI AC Americas Index lost 12% in the same period
* The S&P/TSX Composite is 7.8% below its 52-week high on April 5, 2022 and 14.6% above its low on Oct. 13, 2022
* S&P/TSX Composite is trading at a price-to-earnings ratio of 13.6 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$3.27t
* 30-day price volatility rose to 14.38% compared with 14.30% in the previous session and the average of 18.59% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | -22.1765| -0.4| 10/19
Information Technology | -10.2890| -0.8| 7/6
Energy | -6.7788| -0.2| 19/19
Real Estate | -5.2069| -1.0| 0/22
Communication Services | -2.8325| -0.3| 1/6
Utilities | -1.8245| -0.2| 7/9
Consumer Staples | -0.7454| -0.1| 7/4
Industrials | 1.2361| 0.0| 14/13
Materials | 1.2682| 0.1| 24/25
Consumer Discretionary | 3.1662| 0.4| 9/5
Health Care | 4.3908| 4.9| 5/2
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
Brookfield Asset Management | -19.8600| -3.2| -3.2| -20.5
Bank of Nova Scotia | -10.0200| -1.7| 36.6| -23.0
Constellation
Software | -7.0870| -2.4| 0.3| -8.5
Nutrien | 5.3060| 1.4| 35.8| 12.5
Bank of Montreal | 6.4090| 1.0| 27.5| -1.3
TD Bank | 6.4690| 0.6| -29.9| -4.8
US
By Rita Nazareth
(Bloomberg) — Stocks and bonds faced a lot of instability, with a hot jobs report fueling bets the Federal Reserve will keep tightening even if officials downshift the pace of hikes this month.
A surge in Treasury 10-year yields fizzled out, while two-year rates — which are more sensitive to imminent Fed moves — remained higher. The S&P 500 almost erased a slide that earlier topped 1%.
The dollar wavered.
Rather than boosting their bets for the Fed’s December meeting, traders increased their wagers on where rates will top out.
Swaps showed a peak of 4.98% before a pullback that still left the contract up eight basis points from where it was before the jobs data.
The current range is between 3.75% and 4%.
US employers added more jobs than forecast and wages surged by the most in nearly a year.
Nonfarm payrolls increased 263,000 in November, while the unemployment rate held at 3.7%.
Average hourly earnings rose twice as much as predicted.
“To have 263,000 jobs added even after policy rates have been raised by some 350 basis points is no joke,” said Seema Shah at Principal Asset Management. “The labor market is hot, hot, hot, heaping pressure on the Fed to continue raising policy rates. What is there in this jobs report to convince them not to take policy rates above 5%?”
That’s why the Fed’s “dot plot”, which the central bank uses to signal its outlook for the path of policy, is in focus at the moment.
Anna Wong at Bloomberg Economics says officials may have to boost their terminal-rate forecast from what they wrote down in the September, possibly to 5.25%.
Fed Bank of Chicago President Charles Evans said rates will need to be raised to a higher peak even as the central bank slows the pace of increases.
He said policymakers were likely to downshift to 50 basis points, after raising rates by 75 basis points at four straight meeting.
Evans remarks are the latest from a central bank official, including Powell earlier this week, to suggest a half-point hike when they gather Dec. 13-14.

More Comments:
* Steven Blitz at TS Lombard: In sum, the Fed is far from done – 75 is on the table for the Dec. meeting, although given all the communication around slowing to 50 it will be hard for them to back away at this point. Nevertheless, a long tack for raising rates means a higher terminal rate.
* Callie Cox at eToro: A strong job market gives the Fed more basis to hold rates higher for longer, even if they start slowing hikes down. A high-rate environment is a challenging one to invest in, and we could be in for a tougher slog to the highs until inflation comes down significantly.
* Ronald Temple at Lazard Asset Management: Investors need to reassess their optimism regarding the end of policy tightening – both the level of terminal rates, and how long the Fed keeps rates there.
* Chris Zaccarelli at Independent Advisor Alliance: This jobs report is another example of why the Fed is going to be fighting inflation for a much longer period than many currently expect. Next year is likely to be a volatile one as a
weakening economy and tight financial conditions is our base case.
* Krishna Guha at Evercore ISI: We are confident that the report will have no effect on the decision to slow the pace of Fed rate hikes to 50bp in Dec. But it means the median Fed official will likely write down a peak rate of 5% to 5.25% rather than 4.75% to 5% and the Fed will maintain a hawkish tone at that meeting.
* David Russell at TradeStation Group: The Fed also has to think about their credibility. After clearly signaling a turn away from 75 basis points, they’re unlikely to change that two weeks from now. Instead, we’ll probably see more hawkish projections on the dot plot. 

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.1% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.4%
* The Dow Jones Industrial Average was little changed
* The MSCI World index fell 0.2%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro rose 0.1% to $1.0533
* The British pound rose 0.3% to $1.2281
* The Japanese yen rose 0.8% to 134.31 per dollar
Cryptocurrencies
* Bitcoin rose 0.6% to $17,030.7
* Ether rose 1.2% to $1,291.66
Bonds
* The yield on 10-year Treasuries declined three basis points to 3.48%
* Germany’s 10-year yield advanced four basis points to 1.86%
* Britain’s 10-year yield advanced five basis points to 3.15%
Commodities
* West Texas Intermediate crude fell 1.3% to $80.16 a barrel
* Gold futures fell 0.2% to $1,811.70 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Cecile Gutscher, Isabelle Lee and Edward Bolingbroke.
Have a wonderful weekend everyone.

Be magnificent!
As ever,

Carolann

On this earth, in the final analysis, each of us gets exactly what he deserves.  But only the successful recognize this. –Georges Simenon, 1903-1989.

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