December 28, 2022 Newsletter

Dear Friends,

Tangents:
1879: Tay Bridge disaster: The central part of the Tay Rail Bridge in Dundee, /Scotland, United Kingdom collapses as a train passes over it, killing 75 persons.
2005: Former top Enron Corp. accountant Richard Causey pleaded guilty to securities fraud and agreed to help pursue convictions against Enron founder Kenneth Lay and former CEO Jeffrey Skilling.  Go to article » 

Fourteen discoveries made about human evolution this year.

Vandals destroyed 22,000-year-old sacred cave art.  An indigenous group is devastated and police are searching for the culprits.

Protective gold idols and ‘rejuvenating’ amulets found in ancient Egyptian burials:  Archaeologists have discovered about 20 ancient burials in the city of New Damietta, Egypt, about 95 miles (153 kilometers) northeast of Cairo, according to the Egyptian Ministry of Tourism and Antiquities.  The burials date back to the 26th dynasty (circa 688 B.C. to 525 B.C.), a time when Egypt was independent of foreign rulers and its capital was located at Sais, a city in the Nile Delta.  Full Story: Live Science (12/22)

Attila the Hun raided Rome due to starvation, not bloodlust, study suggests:  Attila the Hun has been depicted as a bloodthirsty barbarian with an “infinite thirst for gold” and power.  But a new study proposes an alternative explanation for his violent incursions: Attila may have carried out his desperate raids to save his people from drought and starvation.  Full Story: Live Science (12/22)

PHOTOS OF THE DAY

Fort Erie, Canada
On the Ontario shoreline of Lake Erie, following a winter storm that swept through much of the province.
Photograph: Zuma Press/Alamy Live News

Cypress, US
This snowy owl on the chimney of a home in California looks down on a crowd of bird watchers and photographers it has attracted
Photograph: Mark Rightmire/AP

Hangzhou, China
A humanoid robot plays the piano at a restaurant in Hangzhou in Zhejiang province
Photograph: VCG/Getty
Market Closes for December 28^th, 2022

International Markets

Bonds

Currencies

Commodities

Market Commentary:
In the world of investing being average means you are one of the best students in the class. -Robert R. Julian.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell 1.1% at 19,284.10 in Toronto.
The move was the biggest since falling 1.2% on Dec. 19 and follows the previous session’s increase of 0.8%.
Today, energy stocks led the market lower, as all sectors lost; 197 of 236 shares fell, while 38 rose.
Canadian Natural Resources Ltd. contributed the most to the index decline, decreasing 2.4%.
Tilray Brands Inc. had the largest drop, falling 7.9%.
Insights
* This year, the index fell 9.1%, poised for the worst year since 2018
* This quarter, the index rose 4.6%
* This month, the index fell 5.7%
* The index declined 9.2% in the past 52 weeks. The MSCI AC Americas Index lost 22% in the same period
* The S&P/TSX Composite is 13.2% below its 52-week high on April 5, 2022 and 7.9% above its low on Oct. 13, 2022
* The S&P/TSX Composite is up 0.4% in the past 5 days and fell 5.4% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 12.8 on a trailing basis and 12.2 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.3% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.16t
* 30-day price volatility rose to 12.44% compared with 12.11% in the previous session and the average of 14.45% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Energy | -68.1703| -1.9| 2/37
Financials | -58.2488| -1.0| 4/25
Industrials | -22.5949| -0.9| 5/21
Information Technology | -17.2958| -1.6| 3/11
Communication Services | -14.8448| -1.6| 0/6
Utilities | -11.9835| -1.4| 2/14
Materials | -9.3382| -0.4| 15/34
Real Estate | -8.1827| -1.6| 2/21
Consumer Staples | -7.0723| -0.9| 1/10
Health Care | -3.0967| -4.3| 0/7
Consumer Discretionary | -1.7189| -0.2| 4/11
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
Canadian Natural Resources | -13.9900| -2.4| 12.1| 41.5
Enbridge | -12.0200| -1.6| -35.6| 6.9
Shopify | -11.7500| -3.1| -25.2| -74.5
Dollarama | 1.6660| 1.1| -41.6| 27.7
Franco-Nevada | 1.9850| 0.8| -45.4| 6.4
First Quantum Minerals | 3.1750| 2.9| -35.9| -5.3
US
By Stephen Kirkland
(Bloomberg) — US stocks fell for a second day on concern that the end of China’s zero-Covid policy could lead to a rise in cases around the world.
The S&P 500 dropped to the lowest level since early November, albeit in thin holiday trading, with volume about 20% below the 30-day average.
Tech shares remained under pressure, even as Tesla Inc. halted a seven-day rout prompted by concerns about ebbing demand.
The 10-year Treasury yield pushed to 3.88% and a gauge of the dollar rose to highs of the day late in the session.
Sentiment soured after Italian health authorities said they would begin testing all arrivals from China for Covid after almost half of the passengers on two flights to Milan were found to have the virus.
If a new strain is found, officials may impose stricter curbs on travel from China, the Health Ministry said.
The US said later it would require all air passengers aged 2 years and older originating from China to get a Covid-19 test no more than two days before their departure.
The still-cautious mood is damping hopes for a rally in the last trading week of 2022 after a brutal year for financial markets.
Global equities have lost a fifth of their value, the largest decline since 2008 on an annual basis, and an index of global bonds has slumped 16%.
The dollar has surged 7% and the US 10-year yield has jumped to above 3.80% from just 1.5% at the end of 2021 as the Federal Reserve pursued an aggressive rate-hike path to rein in inflation.
“We think investors have become way too pessimistic given where we are in the rate hiking cycle,” wrote Nancy Tengler, CEO and chief investment officer at Laffer Tengler Investments.
Following one of the fastest rate-hiking regimes in history, “we expect the economy to slow materially or enter recession at some point in 2023.
To be sure a severe recession would be bearish for stocks, yet given the resilience of the U.S. economy and the tight labor market, we are expecting a slowdown or shallow and brief recession.
That could allow stocks to rally in the second half of 2023.”
In a bid to revive Hong Kong as a finance hub, the city will end some of its last major Covid rules, scrapping gathering limits to vaccination checks and testing for travelers.
Still, while the dismantling of Covid curbs may be a boost for the global economy, there’s concern about inflation pressures that could prompt the policy makers in the US to maintain tight monetary policy.
“Now that we’re almost a year into this bear market, at its low I think we were almost off 30%, we’ve seen enough to let us know that OK, we want to be on-guard for additional opportunities in that new year,” said Wells Fargo Investment Institute’s Sameer Samana on Bloomberg TV.  
On China reopening, “being as quickly as it’s happening probably complicates the Fed’s job with respect to putting a little bit of a bid under oil prices, putting a little bit of a bid under inflation globally, to aggregate demand.
That’s going to be one of the biggest things that we’ll be watching in the first half.”
The Fed’s aggressive tightening policy is taking a toll on the housing market.
Data Wednesday showed US pending home sales fell for a sixth month in November to the second-lowest on record.  
With borrowing costs roughly double where they were at the start of the year, home sales, and therefore prices, have been declining for months.
Elsewhere in markets, oil dipped amid thin liquidity as investors weighed the fallout from a Russian ban on exports to buyers that adhere to a price cap. 
Key events this week:
* US initial jobless claims, Thursday
* ECB publishes economic bulletin, Thursday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 1.2% as of 4 p.m. New York time
* The Nasdaq 100 fell 1.3%
* The Dow Jones Industrial Average fell 1.1%
* The MSCI World index fell 0.9%
Currencies
* The Bloomberg Dollar Spot Index rose 0.3%
* The euro fell 0.3% to $1.0609
* The British pound was little changed at $1.2020
* The Japanese yen fell 0.7% to 134.48 per dollar
Cryptocurrencies
* Bitcoin fell 0.6% to $16,584.91
* Ether fell 1.4% to $1,193.93
Bonds
* The yield on 10-year Treasuries advanced four basis points to 3.88%
* Germany’s 10-year yield declined two basis points to 2.50%
* Britain’s 10-year yield advanced two basis points to 3.66%
Commodities
* West Texas Intermediate crude fell 1.1% to $78.64 a barrel
* Gold futures fell 0.6% to $1,812 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Richard Henderson, Robert Brand, Peyton Forte and Vildana Hajric.
Have a lovely evening.

Be magnificent!
As ever,

Carolann

Blow, blow, thou winter wind,
Thou art not so unkind
As man’s ingratitude…

Freeze, freeze, thou bitter sky,
That does not bite so nigh
As benefits forgot:
Though thou the waters warp,
Thy sting is not so sharp
As friend remembered not… –William Shakespeare, 1564-1616.

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