December 2, 2024, Newsletter

Dear Friends,

Tangents: Happy Monday.

December 2, 1969: The Boeing 747 jumbo jet debuted. Go to article
1982: First permanent artificial heart implant.  Dr. Barney Clark received the Jarvik-7 heart, marking a milestone in medical technology and cardiac care.

1823: Monroe Doctrine.
1859: John Brown executed.

George Seurat, artist, b. 1859.
Maria Callas, opera singer, b. 1923.
Britney Spears, singer,  b.1981.

Australian woman finds deadly snake at her feet while driving 50 mph
The woman — who was driving barefoot — managed to pull over and escape being bitten by a tiger snake, one of the world’s most venomous serpents.

Shoppers continue indulging in Black Friday sales, but mostly online
Online shoppers spent $10.8 billion on Black Friday, up by $1 billion from 2023, according to Adobe Analytics.

Meet ‘Blackbird’: A flying taxi that spins and moves in any direction thanks to new propulsion system
CycloTech’s all-electric flying vehicle is capable of controlled descents even in stormy weather with motors similar to those used for tug boats. Read More.

Anglo-Saxons plagiarized a Roman coin — and it’s full of typos
The pagan Anglo-Saxons copied a gold Roman coin with Christian imagery, but they didn’t do a very good job. Read More.

Dramatic NASA images reveal lava coursing near Iceland’s Blue Lagoon
A lava stream from a volcanic eruption in West Iceland is brighter than the lights of the city’s nearby capital, new infrared images show. Read More.

Fat cells have a ‘memory’ of obesity, study finds
Most people who lose weight through dieting will see it creep back up, leading to a cycle of “yo-yo dieting” that’s hard on the body. A new study suggests fat cells keep a memory of previous weight gain, which may help to explain why this happens. Read More.
PHOTOS OF THE DAY

Shanghai, China
A giant cat installation is on display for visitors at the Bund
Photograph: VCG/Getty Images

Tokyo, Japan
Visitors look out at the observation deck on the 25th floor of the Bunkyo civic centre, which has a 330-degree panoramic view of the city
Photograph: Philip Fong/AFP/Getty Images

​​​​​​​Rebuilding parts of the cathedral has involved applying carpentry methods from the 13th century
Photograph: Stéphane de Sakutin/EPA
Market Closes for December 2, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On Dec. 1, 2009, BlackRock closed a $15.2 billion takeover of Barclays Global Investors from Britain’s Barclays. The cash-and-stock purchase of BGI, the business behind iShares ETFs, would prove a huge winner for BlackRock, helping propel it in the years that followed into becoming the first $10 trillion asset manager.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell 0.2% at 25,590.33 in Toronto.
The move was the biggest since falling 0.6% on Nov. 15 and follows the previous session’s increase of 0.4%.
Today, materials stocks led the market lower, as 6 of 11 sectors lost; 137 of 219 shares fell, while 79 rose.
Shopify Inc. contributed the most to the index decline, decreasing 2.0%.
Lightspeed Commerce Inc. had the largest drop, falling 8.2%.
Insights
* This year, the index rose 22%, heading for the best year in at least 10 years
* This quarter, the index rose 6.6%
* The index advanced 25% in the past 52 weeks. The MSCI AC Americas Index gained 31% in the same period
* The S&P/TSX Composite is at its 52-week high and 27.2% above its low on Dec. 13, 2023
* The S&P/TSX Composite is up 0.7% in the past 5 days and rose 5.5% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 20.4 on a trailing basis and 17.6 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.7% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$4.04t
* 30-day price volatility rose to 8.66% compared with 8.61% in the previous session and the average of 8.46% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Materials | -27.2848| -0.9| 10/39
Energy | -26.3990| -0.6| 9/31
Information Technology | -24.3105| -0.9| 2/8
Industrials | -6.8187| -0.2| 10/17
Real Estate | -2.9736| -0.6| 2/18
Health Care | -2.7967| -3.6| 0/4
Utilities | 1.6116| 0.2| 9/6
Communication Services | 3.1880| 0.5| 5/0
Consumer Discretionary | 7.2295| 0.9| 10/1
Financials | 9.0111| 0.1| 13/12
Consumer Staples | 11.8792| 1.2| 9/1
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
Shopify | -26.9000| -2.0| 59.3| 53.8
Waste Connections | -5.9700| -1.2| -12.4| 35.5
Agnico Eagle Mines Ltd | -5.8640| -1.4| 9.1| 60.2
Nutrien | 5.8610| 2.6| 279.7| -10.1
Couche-Tard | 6.1600| 1.4| -21.9| 6.4
Constellation Software | 7.7570| 1.2| -13.7| 45.8
US
By Rita Nazareth
(Bloomberg) — A rally in the world’s largest technology
companies drove stocks to fresh all-time highs, with Wall Street traders bracing for a barrage of economic data and remarks from Federal Reserve speakers that will help shape the outlook for interest rates.
The S&P 500 notched its 54th closing record this year in a “narrow” advance that saw just a few groups ending higher.
The tech-heavy Nasdaq 100 rose more than 1%, Tesla Inc. led gains in mega caps and Apple Inc. hit a fresh peak.
Treasuries pared losses after Fed Governor Christopher Waller said he’s inclined to vote for a rate cut in December, with swaps pricing in more than 70% of a quarter-point cut this month.
Even after the strongest rally since the early days of the dot-com boom, the S&P 500 still has room to push higher, according to JPMorgan Chase & Co.’s Andrew Tyler.
He says the most popular options trades are wagering the benchmark will hit 6,200 to 6,300 this month.
The gauge ended Monday just shy of 6,050.
The highlight this week will be Friday’s payrolls report, which is expected to show US hiring jumped in November after hurricanes and a major strike undercut job growth a month earlier.
On Wednesday, Fed Chair Jerome Powell participates in a moderated discussion, and investors will await any assessment of the job market and inflation as well as clues to whether the central bank will lower rates in December.
“This week is the last truly important economic data week of 2024,” said Tom Essaye at The Sevens Report.
“If results are ‘Goldilocks,’ then investors will expect a soft landing and a December rate cut. That will keep positive seasonals in place for a year-end grind higher.”
The S&P 500 added 0.2%.
The Nasdaq 100 rose 1.1%.
The Dow Jones Industrial Average fell 0.3%.
Treasury 10-year yields advanced two basis points to 4.19%.
The dollar snapped a three-day losing streak amid a currency warning to BRICS nations by President-elect Donald Trump.
French bonds and stocks came under renewed pressure after Marine Le Pen pledged to topple Prime Minister Michel Barnier’s government after he failed to meet her demands on a new budget.
A year ago, equity investors and strategists braced for a potentially turbulent 2024, worrying about the risk of a hard landing for the US economy and rate cuts that could come too late to prevent it. Heading into the year, few anticipated that the S&P 500’s annual gain would be among the best in history.
“We now find ourselves in the middle of this ‘Goldilocks’ zone, where economic health supports earnings growth while remaining weak enough to justify potential Fed rate cuts,” said Mark Hackett at Nationwide.
“December continues the seasonal tailwind, historically delivering the second-best performance behind November. Other technical tailwinds for the market include financial conditions, sentiment, momentum, and breadth.”
To Sam Stovall at CFRA, after the big November gains, investors still have much to look forward to.
Since World War II, he says the S&P 500 returns in December recorded:
1) the second highest average monthly return
2) the greatest frequency of advance and
3) the lowest standard deviation of returns, which during election years has been nearly 40% below the average for the 11 other months of the year.
“The trends in the equity market remain constructive,” said Craig Johnson at Piper Sandler. “We expect a continued broadening into SMID-caps, which should be a rising tide that lifts all boats.”
December has usually been a stronger month when the market enters the month up solidly year-to-date, according to Bespoke Investment Group.
In the 22 years that the S&P 500 has been up more than 20% in the year through November, the index has averaged a gain of 1.77% in December — with positive returns 77.3% of the time, Bespoke noted.
While the gauge has fallen in December just five of 22 times when it has been up over 20% through November, three of those five December drops came during election years (1936,1980, 1996).
“As the year winds down, investors should be thankful for the bounty of stock returns seen over the last two years.
However, we believe the road ahead could look more challenging than most investors appear willing to recognize at the moment,” said Anthony Saglimbene at Ameriprise.
“That said, we also believe the outlook for next year remains favorable despite the known risks, and stocks could grind higher if fundamental conditions stay on track.”
A more selective stock approach, a realistic assessment of potential fiscal and monetary policy headwinds or tailwinds, and a well-balanced investment strategy could be the keys to navigating what is very likely to be an eventful 2025, he noted.
Seasonal trends in December favor equities in general, but heading into year-end/2025, it’s worth noting that positioning and sentiment are pushing toward extremes, while charts remain overbought against negative divergences in momentum, said Dan Wantrobski at Janney Montgomery Scott.
“The markets are priced to near-perfection, in our opinion, and this still renders them vulnerable to pullbacks as we move toward the first quarter of the new year,” he said.
“Our outlook is for a correction within the magnitude of 10% to 15% to strike at some point during the first half of next year.”
Ed Clissold at Ned Davis Research says that when the S&P 500 has notched at least 50 record highs in a year, the next year the index has risen only two out of seven times, with a median loss of 6.2%.
“The fact that there have not been any breadth thrusts, or an extremely high percentage of stocks rallying together, since the election” — which suggests that the rally is not as broad as it was earlier in the year, he said. “Continued narrowing would set the stock market up for a tougher 2025.”
At Miller Tabak, Matt Maley says that there are indeed concerns about the level of euphoria in the marketplace as many sentiment indicators are reaching extreme levels.
“However, most investors seem to be thinking that this is not something to worry about until next year,” Maley noted.
“As you might imagine, this kind of complacency tells us that a further rally into the end of the year is not a lock, but until we see signs that the market is actually starting to roll back over, it’s hard to raise any warning flags right now.”
Following a significant surge in volatility over the summer, Wall Street’s “fear gauge” — the VIX — has dropped below 14.
The previous regime shift in expected volatility from above 20 to below 14 occurred in the fall of 2023 — leading to a 10% gain in the S&P 500 over the subsequent three months, according to Dean Christians at SentimenTrader.
“Whenever the VIX cycled from above 20 to below 14, the S&P 500 displayed excellent returns and consistency over medium and long-term horizons,” he said.
“That was especially the case a year later, as the world’s most benchmarked index rose in all but one instance and exhibited significance compared to random returns over the study period.”

Corporate Highlights:
* Intel Corp. Chief Executive Officer Pat Gelsinger was forced out after the board lost confidence in his plans to turn around the iconic chipmaker, adding to turmoil at one of the pioneers of the technology industry.
* Super Micro Computer Inc. said an independent review of its business found no evidence of misconduct but recommended that the server maker appoint new top financial and legal leadership.
* MicroStrategy Inc. sold 3.7 million shares over the past week and used the proceeds to buy another $1.5 billion worth of Bitcoin, the fourth consecutive weekly purchase announced by the crypto hedge fund proxy.
* Roughly 66,000 Volkswagen AG workers across Germany abandoned their posts on Monday, the first wave of temporary walkouts triggered by a stalemate over how to slash costs at the carmaker’s namesake brand.
* Stellantis NV Chief Executive Officer Carlos Tavares’s surprise departure leaves the maker of Jeep SUVs and Peugeot cars without clear leadership at a time of significant upheaval in the industry.

Key events this week:
* Fed’s Adriana Kugler and Austan Goolsbee speak, Tuesday
* Eurozone S&P Global Eurozone Services PMI, PPI, Wednesday
* US factory orders, US durable goods, Wednesday
* Fed’s Jerome Powell and Alberto Musalem speak, Wednesday
* Fed’s Beige Book, Wednesday
* Eurozone retail sales, Thursday
* US initial jobless claims, Thursday
* Eurozone GDP, Friday
* US jobs report, consumer sentiment, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.2% as of 4 p.m. New York time
* The Nasdaq 100 rose 1.1%
* The Dow Jones Industrial Average fell 0.3%
* The MSCI World Index rose 0.3%
Currencies
* The Bloomberg Dollar Spot Index rose 0.5%
* The euro fell 0.7% to $1.0499
* The British pound fell 0.6% to $1.2653
* The Japanese yen rose 0.1% to 149.55 per dollar
Cryptocurrencies
* Bitcoin fell 2.2% to $95,657.76
* Ether fell 2.5% to $3,615.53
Bonds
* The yield on 10-year Treasuries advanced two basis points to 4.19%
* Germany’s 10-year yield declined five basis points to 2.03%
* Britain’s 10-year yield declined three basis points to 4.21%
Commodities
* West Texas Intermediate crude was little changed
* Spot gold fell 0.2% to $2,637.24 an ounce

This story was produced with the assistance of Bloomberg Automation.
Have a lovely evening.

Be magnificent!
As ever,

Carolann
When small men attempt great enterprises, they always end by reducing them to the level of their mediocrity. –Napoleon Bonaparte, 1769-1821.

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 (Text Only)
Toll Free: 1.877.430.5895
Fax: 778.430.5828
www.carolannsteinhoff.com