December 7, 2023, Newsletter

Dear Friends,

Tangents: Happy Friday Eve.
Hanukkah begins this evening.

On Dec. 7, 1941, Japanese warplanes attacked the home base of the U.S. Pacific fleet at Pearl Harbor in Hawaii, drawing the United States into World War II. More than 2,300 Americans were killed.
Go to article >>

How to watch one of the sky’s brightest stars ‘blink out’
Betelgeuse, the most famous red supergiant star and one of the sky’s brightest, will disappear for up to 12 seconds during an ultra-rare occultation by asteroid 319 Leona. Read More.

James Webb telescope discovers dark secret of ‘The Brick’
Peering deep into “The Brick,” a dark, chaotic gas cloud at the heart of the Milky Way, the James Webb Space Telescope uncovered secrets that could shake up theories of star formation.
Full Story: Live Science (12/6)

We may finally know how elephants got their trunks
Elephants appear to have evolved their long, grasping trunks as a result of climate change pressures on their ancestors millions of years ago. Read More.

Shroom compound shows promise for bipolar disorder
An early trial hints that psilocybin, the hallucinogen found in “magic mushrooms,” could be a safe and effective treatment for depressive episodes in bipolar II disorder and should be studied further.
Read More.

McDonald’s unveils CosMc’s, its rival to Starbucks
The fast-food chain finally shared more details about its oddly secretive restaurant concept called CosMc’s.

This painting valued at $15,000 turned out to be by Rembrandt
The rare piece from the 1600s sold for nearly $14 million at auction this week after extensive tests revealed it was the work of the Dutch master Rembrandt.

The photographer captured unexpected moments of peace in busy cities
British photographer Oli Kellett has captured beautiful moments of stillness at busy crosswalks around the world. See the photos here.

Taylor Swift named Time’s ‘Person of the Year’
In an interview with Time Magazine, the pop star reflected on her success, saying “This is the proudest and happiest I’ve ever felt.” And yes, she talked about her budding relationship with Kansas City Chiefs tight end Travis Kelce.
PHOTOS OF THE DAY

Batroun, Lebanon
Lightning streaks across the sky over the port city.  Photograph: AFP/Getty Images.

Sydney, Australia
A visitor views work by Tacita Dean at the Museum of Contemporary Art in Sydney. The show is the largest presentation of Dean’s work in the southern hemisphere and brings together recent film works, chalkboard drawings and photographic and print series.  Photograph: Dan Himbrechts/AAP.

Madrid, Spain
A visitor looks at a painting called Kneeling Nun by the Swedish painter Martin Van Meytens, with its front side on the right and the reverse seen in a mirror, as part of the Reversos exhibition, which presents the hidden sides of renowned paintings, at the Prado Museum.  Photograph: Thomas Coex/AFP/Getty Images.
Market Closes for December 7^th, 2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1999, Standard & Poor’s added Yahoo to the S&P 500. Stock in the internet portal surged 32% in a single week.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite advanced slightly to 20,278.51 in Toronto.
The move follows the previous session’s decrease of 0.5%.
Shopify Inc. contributed the most to the index gain, increasing 1.1%.
Athabasca Oil Corp. had the largest increase, rising 10.1%.
Today, 113 of 227 shares rose, while 112 fell; 7 of 11 sectors were higher, led by information technology stocks.
Insights
* This year, the index rose 4.6%, poised for the best year since 2021
* This quarter, the index rose 3.8%
* So far this week, the index fell 0.9%
* The index advanced 1.5% in the past 52 weeks. The MSCI AC Americas Index gained 16% 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 little changed in the past 5 days and rose 3.6% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 15.9 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$3.21t
* 30-day price volatility fell to 11.90% compared with 12.26% in the previous session and the average of 13.61% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Information Technology | 15.2126| 0.9| 8/3
Utilities | 3.8512| 0.5| 6/9
Materials | 2.6180| 0.1| 22/30
Communication Services | 2.4870| 0.3| 4/1
Industrials | 2.0759| 0.1| 20/7
Real Estate | 0.5376| 0.1| 6/15
Financials | 0.1437| 0.0| 15/11
Health Care | -0.2361| -0.4| 1/3
Consumer Discretionary | -0.2854| 0.0| 9/5
Consumer Staples | -0.8224| -0.1| 7/4
Energy | -21.2769| -0.6| 15/24
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
Shopify | 9.0270| 1.1|n/a | 108.0
Nutrien | 4.2520| 1.7|n/a | -25.4
RBC | 4.1960| 0.4|n/a | -2.4
Couche-Tard | -3.0100| -0.8|n/a | 29.4
Canadian Pacific Kansas | -5.9250| -0.9|n/a | -1.3
TD Bank | -20.2800| -1.9|n/a | -8.0
US
By Rita Nazareth
(Bloomberg) — A rally in mega-caps spurred a rebound in stocks on speculation the artificial-intelligence boom will keep fueling market gains.
Traders brushed off any jitters surrounding Friday’s US jobs report to reignite the trade that’s driven the Nasdaq 100 up over 45% this year.
Optimism around AI resurfaced, with Alphabet Inc. up almost 5.5% a day after Google released Gemini, the “largest and most-capable AI model” it has ever built.
Advanced Micro Devices Inc. also rallied after pledging its new accelerator chips will run AI software faster than rival products.
“Artificial intelligence has potential to drive productivity gains sharply higher in 2024 and beyond,” said Yung-Yu Ma at BMO Wealth Management. “Resilience, adaptability and innovation have been hallmarks of the economy in 2023, and we see those factors carrying us through in 2024 as well.”
The Nasdaq 100 rose 1.5% and the S&P 500 halted a three-day drop.
Treasuries saw small moves, with the 10-year yield edging higher to around 4.15%.
Hawkish signals from the Bank of Japan drove the yen up about 2.5%.
The dollar fell.
Krishna Guha at Evercore says he’s not “buying the idea” that the BOJ will seriously consider a surprise hike in December.
“We think January is much more plausible,” he noted. “While it is asserting a serious option to go in January, it is actually leaning more to a later hike in April. So while the direction of travel is right, today’s tactical trades have likely overshot.”
In a week jam-packed with labor-market readings, data showed continuing applications for US jobless benefits fell by the most since July.
Despite the decline, continuing claims are still near a two-year high amid growing evidence of a cooling labor market.
“The jobless claims release today wasn’t particularly eventful in itself,” said Craig Erlam at Oanda. “The jobs report tomorrow is really significant, particularly the wages component.”
Optimism about disinflation and potential rate cuts next year played a big part in the recent stock rally.
Yet a reading of cross-asset volatility shows risks aren’t as muted as they may appear.
The gap between the MOVE Index, which tracks interest-rate volatility, and the VIX gauge of stock price swings has once again widened — suggesting rate markets remain choppy and could spark stress for equities at any time.
Marko Kolanovic at JPMorgan Chase & Co. warned clients that equities and other risk assets won’t be able to sustain any potential rallies without substantial rate cuts by central banks — and he doesn’t anticipate that unless markets drop severely or the economy stalls.
For that reason, he said investors should opt for cash or bonds over stocks.
“This is a catch-22 situation,” Kolanovic said. “This would imply that we would need to first see some market declines and volatility during 2024 before easing of monetary conditions and a more sustainable rally.”
US stocks are already reflecting an optimistic outlook on economic growth, leaving them “vulnerable” to any macro shocks, according to Goldman Sachs Group Inc. strategists including Ryan Hammond and David Kostin.
“We believe much of the optimistic scenario is already reflected in US equity prices today,” they wrote.
Meantime, Bank of America Corp.’s quant strategists say that after the big tech-fueled rally in 2023, the S&P 500 has the potential to rise next year — even without their support.
Concerns about narrow market breadth are “misplaced” as bull markets in the past four decades — outside of the dotcom bubble — have always ended with far better breadth, they noted.
“Unlike this year during which the ‘Magnificent 7’ did 70% of the work, we expect broader leadership,” said Savita Subramanian, referring to contributions from the likes of Apple, Nvidia and Microsoft to the rally.

Corporate Highlights:
* Tesla Inc.’s Dojo supercomputer project lead Ganesh Venkataramanan has left the company, according to people familiar with the matter, a setback to the automaker’s self-driving technology efforts.
* Dish Network Corp. surged after the US Federal Communications Commission approved its merger with EchoStar Corp.
* JetBlue Airways Corp. boosted its full-year financial outlook, citing better-than-expected bookings and operational performance this fall.
* Dollar General Corp. reported comparable sales that were better than the average analyst estimate, a sign that Chief Executive Officer Todd Vasos is having some early success in improving results after taking the helm for a second time in October.
* GameStop Corp., the video-game retailer, reported sales that fell short of analysts estimates.
* Elon Musk’s SpaceX has initiated discussions about selling insider shares at a price that values the closely held company at $175 billion or more, according to people familiar with the matter.
* ChargePoint Holdings Inc.’s steep revenue drop, triggered in part by the US auto strike, took a back seat to the electric car charging network company’s long-term potential as investors pushed share prices to a three-week high.

Key events this week:
* 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 rose 0.8% as of 4 p.m. New York time
* The Nasdaq 100 rose 1.5%
* The Dow Jones Industrial Average rose 0.2%
* The MSCI World index rose 0.5%
Currencies
* The Bloomberg Dollar Spot Index fell 0.4%
* The euro rose 0.3% to $1.0795
* The British pound rose 0.2% to $1.2589
* The Japanese yen rose 2.4% to 143.73 per dollar
Cryptocurrencies
* Bitcoin fell 1.3% to $43,260.85
* Ether rose 4.3% to $2,344.03
Bonds
* The yield on 10-year Treasuries advanced four basis points to 4.14%
* Germany’s 10-year yield declined one basis point to 2.19%
* Britain’s 10-year yield advanced two basis points to 3.97%
Commodities
* West Texas Intermediate crude rose 0.4% to $69.67 a barrel
* Spot gold rose 0.2% to $2,029.26 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Jan-Patrick Barnert and Michael Msika.
Have a lovely evening.

Be magnificent!
As ever,

Carolann
The truth is incontrovertible.  Panic may resent it, ignorance may deride it, malice may distort it, but there it is. –Winston Churchill,1874-1965.

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