December 27, 2023 Newsletter

Dear Friends,

Tangents: Full moon tonight.
This month’s full moon is also known as the “cold moon,” a term coined by Native Americans — specifically the Mohawk people — in reference to the cooler temperatures typically associated with December in the Northern Hemisphere. (Though climate change is quickly making the winter months warmer.)
Other names for the final full moon of the year include the “Snow Moon,” the “Winter Maker Moon,” and even the “Moon When the Deer Shed Their Antlers,” a nod to the fact that the antlers of many deer species — including deer, elk, moose and caribou — begin to fall off around this time as breeding season comes to a close. The animals will grow another, usually larger, set next year.

Dec. 27, 1979: Soviet forces seized control of Afghanistan. President Hafizullah Amin, who was overthrown and executed, was replaced by Babrak Karmal. Go to article >>
Dec. 27, 1991: The Soviet Union, the world’s first communist state, is officially dissolved.

Johannes Kepler, astronomer, b.1571.
Louis Pasteur, chemist, b.1822.
Marlene Dietrich, b. 1901.

A tip for coffee connoisseurs
A recent study suggests that this secret ingredient makes for better coffee.

How to reduce your risk of early dementia
A new study finds that there’s a lot we can do proactively to prevent it.

New Alzheimer’s drug slightly slows cognitive decline. Experts say it’s not a silver bullet.
Experts weigh in on whether the newly approved Alzheimer’s treatment lecanemab is worth taking. Read More

The sun’s explosive peak is coming. Are we ready?
Our home star spits out solar storms in a waxing and waning pattern known as the 11-year solar cycle. NASA and NOAA initially predicted the sun would reach its peak, or solar maximum, sometime in 2025. But senior writer Harry Baker was covering each solar temper tantrum individually and noticed an uptick in activity. Then, a source at the National Center for Atmospheric research said their models showed an earlier and stronger solar maximum than NASA. Harry broke the story in June, and in October, scientists revised their solar maximum estimate. Read More

PHOTOS OF THE DAY

County Antrim, UK
Tourists at the Dark Hedges near Armoy. The tunnel of trees became famous when it was featured in Game of Thrones and now attracts significant numbers of tourists from around the world. Six of the trees have been removed and remedial work is being carried out on several others
Photograph: Liam McBurney/PA

Paris, France
The sun casts an orange light over the Seine River
Photograph: Anadolu/Getty Images

​​​​​​​Nanjian Yi, China
Winter cherry blossoms in Nanjian Yi autonomous county, Yunnan province
Photograph: Xinhua/Rex/Shutterstock
Market Closes for December 27^th, 2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the third day, climbing 0.6%, or 134.72 to 21,015.91 in Toronto.
The index advanced to the highest closing level in at least a year.
Shopify Inc. contributed the most to the index gain, increasing 1.6%.
Lithium Americas Corp. had the largest increase, rising 3.8%.
Today, 160 of 225 shares rose, while 60 fell; all sectors were higher, led by financials stocks.
Insights
* This year, the index rose 8.4%, poised for the best year since 2021
* This quarter, the index rose 7.5%, heading for the biggest advance since the second quarter of 2021
* This month, the index rose 3.9%
* The index advanced 7.7% in the past 52 weeks. The MSCI AC Americas Index gained 25% in the same period
* The S&P/TSX Composite is at its 52-week high and 12.4% above its low on Oct. 27, 2023
* The S&P/TSX Composite is up 1.9% in the past 5 days and rose 4.5% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 16.5 on a trailing basis and 15.2 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.2% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.3t
* 30-day price volatility fell to 10.66% compared with 11.40% in the previous session and the average of 11.59% over the past month
================================================================
|Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 40.3111| 0.6| 21/5
Energy | 22.4071| 0.6| 26/14
Information Technology | 20.0186| 1.1| 5/5
Materials | 15.6764| 0.7| 37/14
Industrials | 13.3179| 0.5| 21/5
Consumer Staples | 9.9570| 1.2| 8/2
Real Estate | 3.9363| 0.8| 18/3
Communication Services | 3.6724| 0.5| 5/0
Consumer Discretionary | 2.7532| 0.4| 7/6
Health Care | 1.3689| 2.3| 4/0
Utilities | 1.3010| 0.2| 8/6
================================================================
| | |Volume VS |
| Index | | 20D AVG |YTD Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
Shopify | 13.5700| 1.6| -47.8| 120.1
Canadian Natural Resources | 10.6100| 1.6| -73.5| 16.9
Brookfield Corp | 7.1990| 1.4| -52.4| 26.4
Celestica | -0.4840| -1.5| -47.8| 155.3
Cameco | -0.7580| -0.4| -36.3| 87.8
Brookfield Renewable Partners | -1.0710| -2.0| -14.8| 1.5
US
By Rita Nazareth
(Bloomberg) — Stocks struggled to find solid ground after approaching a record on speculation the Federal Reserve will cut rates in 2024.
With just a few days left before the year is over, equities barely budged.
While some traders cited an old Wall Street adage that says “never short a dull market,” concerns have surfaced amid overbought levels and warnings about overly dovish Fed bets.
The S&P 500 wavered near its all-time high — a feat recently achieved by the Nasdaq 100 and the Dow Jones Industrial Average that’s fueled a debate on whether investors should be worried or celebrating.
“Perhaps the most important question is: what has the S&P 500 done after it has climbed out of its hole?” said Ed Clissold at Ned Davis Research. “Did the rally to new highs leave the market overbought and in need of a correction? Or was it a breakout to a new up leg? History sides with the latter.”
The S&P 500 has outperformed its long-term average one-, three-, six-, and 12-months later, Clissold noted.
The one-month returns are not quite as strong, suggesting a short-term overbought condition in some cases.
One year later, the gauge has risen 13 out of 14 times by a median of 13.4%.
The S&P 500 traded less than 0.5% away from its all-time high of 4,796.56. Strong demand for a$58 billion sale of five-year notes sent bond yields slumping.
That followed Tuesday’s surprisingly solid two-year auction that drew buyers seeking to lock in higher yields before the Fed starts easing policy.
Benchmark 10-year Treasury rates sank to around 3.8% — the lowest since July.
Traders have stepped up bets on rate cuts as early as March, according to Fed swaps pricing.
That view has gained momentum since policymakers updated their forecasts this month to show they expect to reduce rates at a stronger pace than indicated in their previous projections.
To Jose Torres at Interactive Brokers, optimism about the Fed having potentially won the war against inflation is excessive as data in coming months will likely persuade officials to delay rate cuts until May at the earliest.
“Markets have priced in the dovish pivot and stocks never discount the same news twice,” said Tom Essaye, a former Merrill Lynch trader who founded The Sevens Report newsletter.
“As we start 2024, markets will need to see new, positive catalysts to send the S&P 500 to new all-time highs.”
In another sign of possible overexuberance, 90% of the stocks in the S&P 500 are currently trading above their 50-day averages, according to Sam Stovall at CFRA.
“Despite the possibility of a pause after recovering all that was lost in the 2022 bear market, history reminds us that the S&P 500 typically enjoyed a post-recovery gain of 10% in four months before stumbling into another decline of 5% or more— none of which became a new bear market,” Stovall noted.
Bespoke Investment Group said the Goldman Sachs US Financial Conditions Index has gone from rapid tightening to rapid easing.
The gauge is currently at the lowest since August 2022.
Rapid easing in the past has been followed by strong periods for both large and small-cap equities, Bespoke noted.
“Asset prices continue to march slowly higher towards year- end,” said Louis Navellier, chief investment officer at Navellier & Associates.  “January may see some delayed profit- taking, but there’s still plenty of money on the sidelines to pick up any bargains that may be created.”
For many traders, the soft-landing scenario that investors see for next year points to further gains in US stocks.
But it also dims the prospect of another stretch of wild outperformance for the technology giants that dominated in 2023.
With added fuel from the artificial-intelligence boom, the group rose almost 100% through mid-July, compared with roughly 20% for the S&P 500.
But as confidence in the economy grew after the Fed’s July interest-rate hike, which investors now see as the last of this cycle, the tech titans’ gains became more muted.
“If you were fortunate enough to own the ‘Magnificent 7’ in 2023, look to trim and rebalance back to where you were at the start of 2023,” said Michael Landsberg at Landsberg Bennett Private Wealth Management. “We still like the majority of those names, but trimming after big runs makes sense.”
Landsberg also noted he expects to see a meaningful broadening of stock-market participation in 2024 “as it’s not healthy to have such a small number of heavily owned stocks
drive overall market performance.”
In corporate news, Apple Inc. won a court ruling temporarily pausing a US sales ban on its newest smartwatches.
The New York Times Co. sued Microsoft Corp. and OpenAI Inc. for the use of content to help develop artificial intelligence services.
Traders also kept an eye on the latest geopolitical developments.
Shipping giant Hapag-Lloyd AG said it will keep its vessels away from the Red Sea even after the launch of a US-led taskforce to protect the key trade route from militant attacks.
Oil retreated from its highest close in almost a month as key technical gauges flashed weakness amid thin holiday trading.
Elsewhere, Bitcoin recovered amid renewed speculation that the US securities regulator is getting close to approving an exchange-traded fund investing directly in the biggest token. 

Key events this week:
* Japan industrial production, retail sales, Thursday
* US wholesale inventories, initial jobless claims, Thursday
* UK Nationwide house prices, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.1% as of 4 p.m. New York time
* The Nasdaq 100 rose 0.2%
* The Dow Jones Industrial Average rose 0.3%
* The MSCI World index rose 0.5%
Currencies
* The Bloomberg Dollar Spot Index fell 0.4%
* The euro rose 0.6% to $1.1106
* The British pound rose 0.6% to $1.2798
* The Japanese yen rose 0.4% to 141.79 per dollar
Cryptocurrencies
* Bitcoin rose 2.7% to $43,470.76
* Ether rose 5.8% to $2,353.2
Bonds
* The yield on 10-year Treasuries declined 11 basis points to 3.79%
* Germany’s 10-year yield declined eight basis points to 1.90%
* Britain’s 10-year yield declined seven basis points to 3.44%
Commodities
* West Texas Intermediate crude fell 2.3% to $73.84 a barrel
* Spot gold rose 0.5% to $2,077.97 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Richard Henderson, Winnie Hsu, Robert Brand, Krystof Chamonikolas, Felice Maranz, Elena Popina and Carmen Reinicke.

Have a lovely evening.

Be magnificent!
As ever,

Carolann
Know thyself. –Inscription at the entrance to Temple of Apollo at Delphi.

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