December 6, 2023, Newsletter

Dear Friends,

Tangents: St. Nicholas Day, Europe.

December 6, 1865: 13^th Amendment ratified, slavery abolished.
December 6, 1877: Thomas Edison makes the first sound recording.  This invention pioneers the field of sound recording and playback.
December 6, 1957: America’s first attempt at putting a satellite into orbit blew up on the launch pad at Cape Canaveral, Fla. Go to article >>

Macy Gray, b. 1969.
Dave Brubeck, b. 1920.
Alfred Eisenstaedt, photographer, b. 1898.
Ira Gershwin, b. 1896.

World’s oldest tortoise still randy at 191 years old
Jonathan, the world’s oldest tortoise, has turned 191, living through 40 U.S. presidents and 31 St. Helena governors. Read More.

Tablet with oldest Hebrew name of god not what it seems
Researchers say they see no sign of an inscription on a tablet previously thought to contain the Hebrew name for the god Yahweh. Read More.

Gigantic ‘hole’ appears the sun wider than 60 Earths
A monstrous dark patch, known as a coronal hole, recently appeared near the sun’s equator. The temporary gap enables unusually fast solar wind to race toward Earth.  Full Story: Live Science (12/5).

Mercury may have a ‘potentially habitable’ region
Salty glaciers discovered in craters near Mercury’s north pole may have the right conditions for extreme forms of life, new research suggests. Read More.

South Korean artist uses her own body as a canvas
Whimsical, subversive and mind-bending illusions are Dain Yoon’s specialty.

84 billion:
That’s how many page views Wikipedia has received so far in 2023. ChatGPT, the viral AI chatbot, was the most-viewed page on Wikipedia this year with nearly 50 million views, reflecting the world’s interest in artificial intelligence.

PHOTOS OF THE DAY

Prague, Czech Republic
Visitors come to see the Christmas tree and traditional Christmas market in Old Town Square.  Photograph: Tomas Tkacik/Sopa Images/Shutterstock.

New York, US
‘On leaving the Guggenheim Museum, I walked over to the Central Park reservoir and saw this reflection, in the partially frozen water, of the San Remo apartment building on the other side of the park.’
Photograph: Alan Greig/Guardian Community.

Nottinghamshire, UK
‘The forecast looked promising for fog and frost, so a visit to the RSPB reserve at Budby South Forest looked worthwhile. We arrived to find sunshine, a temperature of -4C and some beautiful frost. I spotted this lone tree holding on to its autumn colours, surrounded by the frost-covered trees.’  Photograph: David Eberlin/Guardian Community.
Market Closes for December 6^th, 2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1877, Thomas Alva Edison made the world’s first recording of a human voice. He recorded himself saying “Mary had a little lamb.” The inventor later founded one of the predecessors to General Electric.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the third day, dropping 0.5%, or 101.72 to 20,274.21 in Toronto.
The move was the biggest since falling 0.7% on Nov. 21.
Today, energy stocks led the market lower, as 4 of 11 sectors lost; 101 of 227 shares fell, while 117 rose.
Shopify Inc. contributed the most to the index decline, decreasing 4.8%.
Tamarack Valley Energy Ltd. had the largest drop, falling 8.6%.
Insights
* This year, the index rose 4.6%, poised for the best year since 2021
* This quarter, the index rose 3.8%
* The index advanced 1.4% in the past 52 weeks. The MSCI AC Americas Index gained 15% in the same period
* The S&P/TSX Composite is 2.7% below its 52-week high on Feb. 2, 2023 and 8.5% above its low on Oct. 27, 2023
* The S&P/TSX Composite is up 0.8% in the past 5 days and rose 2.7% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 16 on a trailing basis and 14.7 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$3.23t
* 30-day price volatility rose to 12.26% compared with 12.20% in the previous session and the average of 13.77% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Energy | -98.6050| -2.7| 2/37
Information Technology | -45.2161| -2.5| 3/7
Materials | -1.6030| -0.1| 20/30
Health Care | -0.0057| 0.0| 2/1
Financials | 1.0763| 0.0| 17/10
Consumer Discretionary | 3.9920| 0.5| 12/2
Consumer Staples | 4.0453| 0.5| 8/2
Real Estate | 4.0669| 0.9| 17/3
Communication Services | 7.5523| 0.9| 5/0
Industrials | 9.8391| 0.4| 18/7
Utilities | 13.1315| 1.6| 13/2
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
Shopify | -40.7000| -4.8|n/a | 105.7
Canadian Natural Resources | -39.1700| -5.7|n/a | 13.2
Suncor Energy | -21.9700| -5.5|n/a | -4.2
TD Bank | 3.0800| 0.3|n/a | -6.2
Canadian Pacific Kansas | 4.4270| 0.7|n/a | -0.4
Bank of Montreal | 4.7350| 0.8|n/a | -4.9
US
By Rita Nazareth
(Bloomberg) — The rally in bonds around the globe gained further traction, with soft economic readings in both the US and Europe fueling speculation that major central banks will cut rates in the year to come.
Just two days ahead of the US jobs report, data showed the gradual cooling in the labor market that the Fed would like to see.
Private payrolls increased 103,000 last month, trailing estimates and giving further credence to Wall Street’s dovish bid.
Germany’s factory orders unexpectedly fell — highlighting how manufacturing in Europe’s largest economy remains stuck in a rut.
A survey conducted by 22V Research shows investors polled believe the period of economic optimism from September to November is over — with the US labor market loosening in January/February.
To Stan Shipley at Evercore, Wednesday’s ADP Research Institute payrolls tally and other high-frequency metrics suggest “soft” employment growth.
“The slowdown in hiring continues and is becoming more obvious,” said Peter Boockvar, author of the Boock Report. “What I’m mostly focused on right now is the trajectory of activity — and all I see is slowing in multiple places, including now the labor market.”
US 10-year yields extended their decline to 4.12%.
Two-year bond rates edged slightly higher — a healthy sign, according to some traders, after a massive repricing of Fed bets by the front-end of the US curve.
The S&P 500 lost steam amid a slide in energy producers and some mega-caps like Nvidia Corp. and Microsoft Corp.
Oil sank below $70 a barrel as concern about excess supplies overshadowed a report showing shrinking US inventories.
Fed policymakers meet next week for the last time in 2023.
While no change is expected in their target for the federal funds rate, they are scheduled to release quarterly forecasts that could alter market-implied expectations.
Those bets have been gravitating toward more easing next year in response to weaker-than-forecast economic data.
Markets fully priced six quarter-point rate cuts by the European Central Bank in 2024 earlier on Wednesday, a move that would take the key rate to 2.5%.
Although bets were pared slightly later in the day, Deutsche Bank AG helped stoke the dovish sentiment by revising its outlook to also forecast 150 basis points of cuts.
“Inflation fears are melting,” said Prashant Newnaha, a rates strategist at TD Securities. “Central banks believe they have clearly done enough and may need to cut, otherwise real rates may be too high and restrictive.”
While the ADP report isn’t a reliable predictor of the government’s jobs figures, the weaker-than-expected number may set up expectations for Friday’s jobs report to come in “soft”, according to Chris Larkin at E*Trade from Morgan Stanley.
“What we don’t know is how much the markets have already priced in a slowing labor market, or how they will react if Friday’s data comes in stronger than anticipated,” he noted.
Friday’s government print is forecast to show employers added 185,000 jobs in November, according to a Bloomberg survey of economists.
The unemployment rate is seen holding at the highest level in nearly two years.
The combined rally in equities and bonds has been supported by evidence that a soft landing will allow the Fed to cut rates in 2024, according to UBS’s Chief Investment Office, which expects a “softish landing” — but says the pace of the recent rally looks unlikely to be sustained.
“The upside for the S&P 500 is now relatively limited,” said Solita Marcelli at UBS Global Wealth Management. “As growth slows, we believe investors should consider focusing on high-quality stocks from companies with strong returns on invested capital, resilient operating margins, and relatively low debt on their balance sheets.”
Meantime, the Bank of England stepped up warnings about hedge funds shorting US Treasury futures, saying its measure of the net position is now larger than before the “dash for cash” crisis in March 2020.
The net short position has grown to $800 billion from about $650 billion in July, the central bank said, citing calculations based on Commodity Futures Trading Commission data.
That suggests a jump in the so-called basis trade, which is where investors seek to exploit price differences between futures and bonds.
And the heads of Wall Street’s biggest banks took their most direct swing yet at Washington’s plans to force them to set aside more cash as a buffer against losses.

Corporate Highlights:
* Citigroup Inc.’s Chief Financial Officer Mark Mason said the Wall Street giant remains on track to deliver full-year revenue that’s in line with the firm’s earlier guidance despite a slump in trading revenue.
* Apple Inc., seeking to reverse a decline in Mac and iPad sales, is preparing several new models and upgrades for early next year, according to people familiar with the situation.
* Advanced Micro Devices Inc., taking aim at a burgeoning market dominated by Nvidia Corp., unveiled new so-called accelerator chips that it said will be able to run artificial intelligence software faster than rival products.
* Exxon Mobil Corp. plans to raise share buybacks 14% as the oil giant accelerates crude production in the US Permian Basin, boosted by its $60 billion acquisition of Pioneer Natural Resources Co.
* Toll Brothers Inc.’s executives pointed to “solid” demand in recent weeks as mortgage rates pulled back from two-decade highs.
* Tesla Inc. suffered a blow in its labor dispute in Sweden after an appeals court withdrew an injunction allowing the company to pick up license plates for new cars directly from the manufacturer.
* McDonald’s Corp. is looking to hit 50,000 locations around the world by 2027 in what the company calls the fastest expansion spurt in its history.
* Carson Block said he’s short Blackstone Mortgage Trust, saying the publicly traded real estate investment trust is exposed to a perfect storm of economic conditions hitting commercial real estate and may face a liquidity crisis.
* Merck KGaA’s experimental multiple-sclerosis drug failed in late-stage trials, a blow to the German company’s plans to drive growth with another blockbuster medicine.

Key events this week:
* China trade, forex reserves, Thursday
* Eurozone GDP, Thursday
* Germany industrial production, Thursday
* US wholesale inventories, initial jobless claims, Thursday
* Germany CPI, Friday
* Japan household spending, GDP, Friday
* Reserve Bank of Australia’s head of financial stability Andrea Brischetto speaks at Sydney Banking and Financial Stability conference, Friday
* US jobs report, University of Michigan consumer sentiment, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.4% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.6%
* The Dow Jones Industrial Average fell 0.2%
* The MSCI World index fell 0.1%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro fell 0.3% to $1.0763
* The British pound fell 0.3% to $1.2556
* The Japanese yen fell 0.1% to 147.37 per dollar
Cryptocurrencies
* Bitcoin fell 0.2% to $43,792.41
* Ether fell 0.8% to $2,255.69
Bonds
* The yield on 10-year Treasuries declined four basis points to 4.12%
* Germany’s 10-year yield declined five basis points to 2.20%
* Britain’s 10-year yield declined eight basis points to 3.94%
Commodities
* West Texas Intermediate crude fell 4.2% to $69.31 a barrel
* Spot gold rose 0.4% to $2,026.75 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Garfield Reynolds, Greg Ritchie and William Shaw.
Have a lovely evening.

Be magnificent!
As ever,

Carolann
One of the secrets of a long and fruitful life is to forgive everybody everything every night before you go to bed. –Bernard Mannes Baruch, 1870-1965.

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