December 27, 2024 Newsletter

Dear Friends,

Tangents: Happy Friday!
Carolann is away from the office; I will be writing the newsletter on her behalf.

December 27, 1831: British naturalist Charles Darwin set out on a voyage to the Pacific Ocean aboard the HMS Beagle. Darwin’s discoveries during the nearly five-year journey helped form the basis of his theories on evolution. Go to article
December 27, 1867:  Ontario & Quebec legislatures hold 1st meeting
December 27, 1945: International Monetary Fund and The International Bank for Reconstruction and Development are formally established with signing of articles of agreement by member countries, ratifying Bretton Woods Conference findings, based on ideas of economists Harry Dexter White and John Maynard Keynes
December 27,  : Dow Jones Industrial Average hits record 3792.93

National Fruitcake Day: In the United States, this day celebrates the often-divisive holiday treat, fruitcake, with various festivities and culinary activities.🍰

2024’s most exciting technology advancements
AI dominated tech news this year, but has the technology actually been improving? We review the leaps we’ve seen, as well as what’s new in the world of quantum computing. Read more.

What is quantum supremacy?
We may be on the cusp of quantum supremacy. But what does that actually mean? Read more.

Early human ancestor ‘Lucy’ was a bad runner, and this one tendon could explain why
By digitally modeling muscles and tendons for the skeleton of Lucy (Australopithecus afarensis), researchers determined that our hominin ancestors could run well but topped out around 11 mph. Read more.

Kawah Ijen: The volcano in Indonesia that holds the world’s largest acidic lake at its heart
Kawah Ijen is an active volcano on the island of Java with an extremely acidic crater lake and gas emissions that produce blue flames upon contact with oxygen in Earth’s atmosphere. Read more.

Parker Solar Probe survives historic closest-ever flyby of the sun, NASA confirms
On Christmas Eve, NASA’s Parker Solar Probe flew closer to the sun than any human-made object ever — a stunning technological feat that scientists liken to the historic Apollo moon landing in 1969. Now, we know it survived. Read more.

PHOTOS OF THE DAY

Deer cross a road in the Taunus forest near Frankfurt, Germany
Photograph: Michael Probst/AP

New York, US
People view Winter Reflections, part of a mile-long illuminated trail called Lightscape, at the Brooklyn botanical garden
Photograph: Sarah Yenesel/EPA

​​​​​​​Nanjing, China
A snake-shaped lantern is illuminated during the China Qinhuai festival in the run-up to the Chinese new year, the year of the snake, in Jiangsu province
Photograph: VCG/Getty Images
Market Closes for December 27, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell 0.2% at 24,796.40 in Toronto.
The move was the biggest since falling 0.6% on Dec. 19 and follows the previous session’s increase of 0.4%.
Shopify Inc. contributed the most to the index decline, decreasing 2.2%.
ATS Corp. had the largest drop, falling 3.3%.
Today, 117 of 223 shares fell, while 103 rose; 8 of 11 sectors were lower, led by information technology stocks.
Insights
* This year, the index rose 18%, poised for the best year since 2021
* This quarter, the index rose 3.3%
* This month, the index fell 3.3%
* So far this week, the index rose 0.8%
* The index advanced 18% in the past 52 weeks. The MSCI AC Americas Index gained 23% in the same period
* The S&P/TSX Composite is 4.1% below its 52-week high on Dec. 9, 2024 and 21.2% above its low on Feb. 13, 2024
* S&P/TSX Composite is trading at a price-to-earnings ratio of 20.4 on a trailing basis and 17 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.8% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.93t
* 30-day price volatility fell to 10.44% compared with 10.46% in the previous session and the average of 8.80% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Information Technology | -34.7495| -1.3| 1/9
Industrials | -14.2818| -0.5| 12/16
Consumer Staples | -2.9827| -0.3| 5/5
Materials | -2.5485| -0.1| 24/27
Consumer Discretionary | -2.1904| -0.3| 7/4
Real Estate | -1.3359| -0.3| 10/10
Communication Services | -1.1867| -0.2| 3/2
Utilities | -0.9842| -0.1| 7/8
Health Care | 0.5043| 0.7| 3/1
Energy | 2.7158| 0.1| 17/24
Financials | 6.6346| 0.1| 14/11
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
Shopify | -29.4700| -2.2| -35.5| 51.3
Canadian National | -4.0690| -0.7| -67.4| -11.7
Brookfield Corp | -3.6160| -0.4| -22.0| 55.1
Bank of Montreal | 4.2410| 0.6| -10.9| 6.7
Bank of Nova Scotia| 4.2700| 0.6| -37.6| 20.2
RBC | 8.2250| 0.5| -43.2| 30.1
US
By Rita Nazareth
(Bloomberg) — A selloff in the world’s largest technology companies hit stocks in the final stretch of a stellar year.
In another session of slim trading volume — which tends to amplify moves — the S&P 500 lost 1.1% and the Nasdaq 100 slipped 1.4%.
While every major industry succumbed to Friday’s slide, tech megacaps bore the brunt of the selling.
That’s after a torrid surge that saw the group dubbed “Magnificent Seven” account for more than half of the US equity benchmark’s gains in 2024.
“I think Santa has already come. Have you seen the performance this year?” said Kenny Polcari at SlateStone Wealth.
“It’s Friday, next week is another holiday-shortened week, volumes will be light, moves will be exaggerated. Don’t make any major investing decisions this week.”
Steve Sosnick at Interactive Brokers says that while Friday was shaping up to be a quiet holiday-season day, he’s been fielding more inquiries than expected.
“The best I can figure out is that there are large accounts, pension funds and the like, who need to rebalance their holdings before year-end,” he said.
The S&P 500 and the Nasdaq 100 trimmed this week’s gains.
The Dow Jones Industrial Average slipped 0.8% Friday.
A gauge of the “Magnificent Seven” sank 2%, led by losses in Tesla Inc. and Nvidia Corp.
The Russell 2000 index of small caps dropped 1.6%.
The yield on 10-year Treasuries rose four basis points to 4.62%.
The Bloomberg Dollar Spot Index wavered.
Funds tied to several of the major themes that have driven markets and fund flows over the past three years stumbled during the week ending Dec. 25, according to data compiled by EPFR.
Redemptions from cryptocurrency funds hit a record high while technology sector funds extended their longest outflow streak since the first week of 2023, the firm said.
This year’s rally in US equities has driven the expectations for stocks so high that it may turn out to be the biggest hurdle for further gains in the new year.
And the bar is even higher for tech stocks, given their massive surge in 2024.
A Bloomberg Intelligence analysis recently found that analysts estimate a nearly 30% earnings growth for the sector next year, but tech’s market-cap share of the S&P 500 index implies closer to 40% growth expectations may be embedded in the stocks.
“The market’s largest companies and other related technology darlings are still being awarded significant premiums,” said Jason Pride and Michael Reynolds at Glenmede.
“Excessive valuations leave room for downside if earnings fail to meet expectations. Market concentration should reward efforts to regularly diversify portfolios.”
John Belton at Gabelli Funds says valuation alone is not a reason to be bearish on the US equity market, but impacts risk/reward in the near-term.
Yet Belton notes the “Magnificent Seven” still look like a well-positioned group.
“I remain bullish on the tech sector, despite concerns about high valuations,” saidDavid Miller at Catalyst Funds.
“The growth potential, particularly driven by AI, justifies these valuations, as it significantly enhances productivity for companies.”
“Large cap valuations appear expensive, and the US economy sits in the late stage. As a result, the road ahead may be shorter than the bull market’s age alone would suggest,” said Pride and Reynolds at Glenmede.
While the current boom from 2022 to present has seemed quite extraordinary it has been the second shortest bull market, with the second smallest cumulative gains, since 1928, they noted.
Historically, bull markets that were both late cycle and had premium valuations at the two-year mark lasted on average 38 months.
“The combination of a young bull market, a late-cycle expansion and premium valuations justifies a neutral risk posture given the relatively balanced implications for risk assets,” the Glenmede strategists concluded.
To Tom Essaye at The Sevens Report, sentiment is no longer euphoric and markets will start the year with regular investors much more balanced in their outlook — and that would be a “good thing as it reduces air pocket risk,” but advisors have largely ignored the recent volatility.
“It’s fair to say that this recent dip in stocks has taken the euphoria out of individual investors, but it has not dented advisors’ sentiment,” he said.
“And if we get bad political news or Fed officials pointing towards a ‘pause’ in rate cuts, that likely will cause more short, sharp drops.”

Some of the main moves in markets:
Stocks
* The S&P 500 fell 1.1% as of 4 p.m. New York time
* The Nasdaq 100 fell 1.4%
* The Dow Jones Industrial Average fell 0.8%
* The MSCI World Index fell 0.6%
* Bloomberg Magnificent 7 Total Return Index fell 2%
* The Russell 2000 Index fell 1.6%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro was little changed at $1.0425
* The British pound rose 0.4% to $1.2580
* The Japanese yen was little changed at 157.92 per dollar
Cryptocurrencies
* Bitcoin fell 1.3% to $94,497.53
* Ether was little changed at $3,335.93
Bonds
* The yield on 10-year Treasuries advanced four basis points to 4.62%
* Germany’s 10-year yield advanced seven basis points to 2.40%
* Britain’s 10-year yield advanced six basis points to 4.63%
Commodities
* West Texas Intermediate crude rose 0.8% to $70.20 a barrel
* Spot gold fell 0.7% to $2,615.73 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Robert Brand, Julien Ponthus and Chiranjivi Chakraborty.

Have a wonderful weekend!

Be magnificent!
As ever,

Shab
“To be prepared is half the victory.”– Miguel de Cervantes

Shab Mohammadpour

Assistant to Carolann Steinhoff
Queensbury Securities Inc.,
St. Andrew’s Square,
Suite 340A, 730 View St.,
Victoria, B.C. V8W 3Y7

Tel: 778.430.5808
Toll Free: 1.877.430.5895
Fax: 778.430.5828
www.carolannsteinhoff.com