December 29, 2023, Newsletter

Dear Friends,

Tangents: Happy Friday.

1881: Clara Barton founds the American Red Cross, an organization dedicated to providing humanitarian aid.
1890: Massacre at Wounded Knee.
On Dec. 29, On Dec. 29, 1940, during World War II, Germany began dropping incendiary bombs on London.  Go to article >>

Grigori Rasputin, b. 1916.
Marianne Faithful, b.1946.
Jude Law, b.1972.

Kentucky man finds over 700 Civil War-era coins
The year 2023 was a breakout year for archaeological discoveries. It’s no surprise that our most read story in this channel was a bright and shiny finding: that of a Kentucky man who unearthed a bumper crop of Civil War-era coins in his cornfield, all of which have already been sold at auction. It’s intriguing to read about a gold hoard, but I think that these stories also give us a smidgen of hope that we, too, can find buried treasure. Read More.

Burial of possible Alexander the Great courtesan unearthed
Other 2023 findings that resonated with readers include the burial of a Greek courtesan who may have accompanied Alexander the Great’s army. I completely get the appeal of Alexander the Great; I took a semester-long class on the Macedonian king at university. Everything about Alexander was riveting, from his rise to power and conquering streak, to the paranoia that led him to kill his allies, and even his eventual sickness and death. We’re still learning about Alexander and his contemporaries, as is evidenced by this courtesan who was buried with a bronze mirror 2,300 years ago on the road to Jerusalem. Read More.

Other popular archaeological discoveries this year included:

• The Zapotec “entrance to underworld,” which archaeologists discovered under a Catholic church in Mexico thanks to cutting-edge ground-scanning technology. Live Science (12/21)

• The largest-ever genetic family tree reconstructed for Neolithic people in France, which was based on ancient DNA. Live Science (8/8)

• A still-gleaming “octagonal” sword from the Bronze Age of Germany  Live Science (6/15)

• AI blew us away.
• What would Orwell say?
• Luddites may have their way.
• Achilles fights another day.

PHOTOS OF THE DAY

Cape Town, South Africa
People on the beach on a hot day at Muizenberg beach.
Photograph: Rodger Bosch/AFP/Getty Images

Bintaro, Indonesia
People stand on a conveyor belt as they go tubing over artificial snow at trans snow world in Bintaro, an indoor park with a Japanese theme.
Photograph: Yasuyoshi Chiba/AFP/Getty Images

Metz, France
A visitor looks at The False Mirror by the Belgian surrealist painter René Magritte in the Pompidou-Metz museum
Photograph: Jean-Christophe Verhaegen/AFP/Getty Images
Market Closes for December 29^th, 2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 0.1% at 20,958.44 in Toronto.
The move follows the previous session’s decrease of 0.4%.
Toronto-Dominion Bank contributed the most to the index gain, increasing 0.4%.
NexGen Energy Ltd. had the largest increase, rising 2.7%.
Today, 113 of 225 shares rose, while 105 fell; 7 of 11 sectors were higher, led by financials stocks.
Insights
* This year, the index rose 8.1%, poised for the best year since 2021
* This quarter, the index rose 7.3%, heading for the biggest advance since the second quarter of 2021
* This month, the index rose 3.6%
* So far this week, the index rose 0.4%
* The index advanced 7.6% in the past 52 weeks. The MSCI AC Americas Index gained 24% in the same period
* The S&P/TSX Composite is 0.6% below its 52-week high on Dec. 27, 2023 and 12.1% above its low on Oct. 27, 2023
* S&P/TSX Composite is trading at a price-to-earnings ratio of 16.4 on a trailing basis and 15.1 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$3.31t
* 30-day price volatility fell to 10.79% compared with 10.80% in the previous session and the average of 11.36% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 17.9042| 0.3| 17/10
Industrials | 10.3475| 0.4| 15/10
Energy | 9.4582| 0.3| 26/13
Consumer Staples | 5.5160| 0.6| 9/2
Utilities | 3.7260| 0.4| 12/1
Communication Services | 3.2327| 0.4| 5/0
Consumer Discretionary | 1.0524| 0.1| 6/6
Health Care | -0.3676| -0.6| 3/1
Real Estate | -0.6027| -0.1| 8/13
Materials | -9.0080| -0.4| 9/43
Information Technology | -12.2003| -0.7| 3/6
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
TD Bank | 4.7280| 0.4| -18.6| -2.3
Canadian National | 4.4480| 0.7| -71.9| 3.6
Canadian Natural Resources | 2.8030| 0.4| -41.5| 15.5
Magna Intl | -0.9310| -0.6| -54.6| 2.9
Teck Resources | -1.1930| -0.7| -55.2| 10.6
Shopify | -12.3900| -1.4| -51.2| 119.4
US
By Rita Nazareth
(Bloomberg) — Wall Street’s final session of 2023 saw stocks taking a breather near all-time highs.
For bulls defying every doomsday scenario, that was just a blip for a market notching its longest weekly advance since 2004.
The uneventful Friday before the holiday had US equities halting a five-day advance.
Signs of exhaustion emerged after an over $8 trillion surge in the S&P 500 this year, with the gauge still notching its ninth straight week of gains.
Traders have looked past Federal Reserve uncertainty, recession angst and geopolitical risks. And many who came into 2023 dreading all that have ended up scrambling to chase the rally.
“The market shows signs of fatigue and undoubtedly needs to consolidate,” said Quincy Krosby at LPL Financial.
“As long as participation remains broad, the bullish sentiment should carry the indexes as they navigate geopolitical and domestic scenarios, and an overarching positive consensus that 2024 will be a similarly strong year.”
Fueled by the artificial-intelligence boom, stretched positioning and the “fear of missing out,” the S&P 500 soared 24% in 2023, while the Nasdaq 100 had its best year since 1999.
Chipmakers saw their biggest annual gain in more than a decade, led by major AI players Nvidia Corp. and Advanced Micro Devices Inc.
After a year of massive swings and numerous head fakes, the US 10-year yield ended 2023 pretty close to where it began.
It’s an almost farcical conclusion to 12 months of trading that saw it tumble to as low as 3.25% in the wake of March’s banking crisis — only to surpass 5% just a few months later.
Benchmark 10-year US rates rose to almost 3.9% on Friday.
The dollar was little changed on the day, but posted its worst year since 2020.
Key inflation data endorsing a growing narrative that central bankers will aggressively cut rates in 2024 fueled solid gains for both equities and bonds in the last two months.
The rally was also driven by Fed Chair Jerome Powell’s dovish pivot at the December policy meeting.
“The notion that the major central banks have surely done enough to quell the inflationary surge of 2022-23 is powering the rally,” said Brian Barish at Cambiar Investors LLC. “It’s not hard to imagine new things for the markets to be concerned by, such as elections, the sizable bond funding requirements of the US government, and/or any notion that inflation resurges anew. But for now, there’s not much news and not a lot of sellers.”
Former Treasury Secretary Lawrence Summers said investors are probably underestimating inflation risk as markets move swiftly toward expectations for Fed easing.
“I think there’s still a risk that the market is probably underestimating: that we’re not going to quite make as much progress on inflation as people hope, and that there’s not going to be quite as much room for Fed easing as people hope,” Summers said on Bloomberg Television’s Wall Street Week with David Westin.
Equity markets have gone up so quickly that they’re highly vulnerable to a pullback if the US economy slips into even a mild recession, according to RBC Global Asset Management.
Rate cuts are likely to happen in 2024, but the global economy hasn’t yet absorbed the full impact of almost two years of tightening, RBC economist Eric Lascelles said.
“What’s baked into the cake is a sizable jump in earnings, which is really only achievable in a soft-landing scenario,” Lascelles said.
The lack of anxiety is also visible in the market’s favorite volatility gauge — the VIX — which has held below 13 this week, near pre-pandemic lows and well below the five-year average.
That low reading “could be suggestive of a degree of investor complacency, even exuberance,” said Russ Mould, investment director at AJ Bell.
To Adam Turnquist at LPL Financial, momentum remains overbought but bullish.
“While extremely overbought conditions raise the odds of a temporary pause or pullback, longer-term returns have been positive and above average based on comparable periods,” he noted.
Following a nine-week winning streak, the S&P 500 has posted average and median 12-month forward returns of 8.1% and 12.2%, respectively, Turnquist said, citing data going back to 1950.
Seven out of nine occurrences produced positive results, he noted.
Elsewhere, oil posted its biggest annual drop since 2020 as war and OPEC+ production cuts failed to propel prices higher in a year dominated by supply growth outside of the grouping.
Emerging-market currencies closed out their best year since 2017 as the outlook for lower interest rates in the US revived investor appetite for risk.

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.3% 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 0.3%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro fell 0.2% to $1.1039
* The British pound was little changed at $1.2744
* The Japanese yen rose 0.2% to 141.07 per dollar
Cryptocurrencies
* Bitcoin fell 1% to $42,042.01
* Ether fell 1.8% to $2,304.86
Bonds
* The yield on 10-year Treasuries advanced three basis points to 3.88%
* Germany’s 10-year yield advanced eight basis points to 2.02%
* Britain’s 10-year yield advanced four basis points to 3.54%
Commodities
* West Texas Intermediate crude fell 0.6% to $71.36 a barrel
* Spot gold fell 0.1% to $2,063.18 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Joanna Ossinger, Matthew Burgess, Divya Patil, Robert Brand and Elena Popina.

Have a wonderful weekend everyone.  Happy New Year!

Be magnificent!
As ever,

Carolann
Remember to look up at the stars and not down at your feet. –Professor Stephen Hawking,  1942-2018.

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