December 9, 2024, Newsletter

Dear Friends,

Tangents: Happy Monday.

December 9, 1979: the World Health Organization declares the eradication of smallpox.  This marked a historic triumph, eliminating a disease that killed millions and shaping global health efforts.
December 9, 2002:  United Airlines filed the biggest bankruptcy in aviation history after losing $4 billion in the previous two years. Go to article

Remembering all your passwords is hard. Let’s make it easier
In the latest podcast episode of “Terms of Service” with CNN Tech Writer Clare Duffy, a cybersecurity expert shares the safest way to Ctrl your passwords and protect yourself from hackers.

Juan Soto agrees to historic deal with the New York Mets
Superstar outfielder Juan Soto and the New York Mets have agreed to a historic 15-year and $765 million deal, according to multiple reports. The contract is reportedly not only the biggest in MLB history but in all professional sports.

Parents are up against the ‘mother lode’ of holiday stress
From high gift expectations to countless festive events, it’s common for parents to feel stress around the holidays. Here are tips to make the season more manageable.

16: That’s how many Pearl Harbor survivors are believed to be alive. On Saturday, thousands of people gathered on the shores of Pearl Harbor to mark the 83rd anniversary of the bombing in 1941. A ceremony was held to honor service members who lived through the Great Depression and fought in World War II.

You have created such a space of joy and togetherness and love.  — Taylor Swift, thanking her fans after performing the final concert of the Eras Tour on Sunday in Vancouver. The official figures of how much money the tour grossed have not been released but it’s been estimated that it will make over $2 billion, making it the highest-grossing tour in history. The current record-holder is Elton John, whose Farewell Yellow Brick Road tour grossed over $900 million.

PHOTOS OF THE DAY

Waves crash into the Mumbles headland near Swansea
Photograph: Phil Rees/Rex/Shutterstock

Antibes, Côte d’Azur, France
‘I was particularly struck by this ethereal sculpture by Nicolas Lavarenne. Its balletic pose on the sea wall seems to defy gravity and gives a different impression from every angle.’
Photograph: Stephen Hallett

​​​​​​​Granada, Spain
‘The beauty of mathematics at the Nasrid Palaces in the Alhambra complex.’
Photograph: Nalini Iyanger
Market Closes for December 9, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1931: President Herbert Hoover proposed the creation of the Reconstruction Finance Corp. to provide federal funding to help creditworthy banks, railroads and other companies remain in business. The market viewed it as an act of desperation, and the Dow Jones Industrial Average sank 2.7%.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell 0.3% at 25,625.42 in Toronto.
The move was the biggest since falling 0.6% on Nov. 15 and follows the previous session’s little change.
Shopify Inc. contributed the most to the index decline, decreasing 2.5%.
Bird Construction Inc. had the largest drop, falling 7.1%.
Today, 94 of 219 shares fell, while 123 rose; 7 of 11 sectors were lower, led by energy stocks.
Insights
* This year, the index rose 22%, heading for the best year in at least 10 years
* This quarter, the index rose 6.8%
* The index advanced 26% in the past 52 weeks. The MSCI AC Americas Index gained 31% in the same period
* The S&P/TSX Composite is at its 52-week high and 27.3% above its low on Dec. 13, 2023
* The S&P/TSX Composite is little changed in the past 5 days and rose 3.5% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 21.3 on a trailing basis and 17.8 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.7% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$4.05t
* 30-day price volatility rose to 8.26% compared with 8.19% in the previous session and the average of 8.52% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Energy | -37.1758| -0.9| 25/15
Information Technology | -36.5712| -1.4| 4/6
Financials | -22.8908| -0.3| 10/16
Industrials | -22.2927| -0.7| 11/16
Utilities | -13.1970| -1.3| 3/12
Real Estate | -2.9762| -0.6| 5/14
Communication Services | -0.7730| -0.1| 2/3
Health Care | 1.1496| 1.5| 3/1
Consumer Staples | 2.1046| 0.2| 8/2
Consumer Discretionary | 3.8130| 0.5| 8/3
Materials | 62.4320| 2.1| 44/6
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
Shopify | -35.0500| -2.5| -30.2| 58.4
Bank of Montreal | -17.5400| -2.3| -30.8| 9.0
Enbridge | -15.2700| -1.6| -24.6| 25.9
National Bank of | | | |
Canada | 6.1330| 1.9| -4.1| 34.0
Teck Resources | 8.6840| 4.2| 55.6| 19.4
TD Bank | 13.5900| 1.5| 51.3| -12.8
US
By Rita Nazareth
(Bloomberg) — Stocks retreated after a rally that put the market on pace for its best year since 2019, with traders awaiting key inflation data that will help shape the outlook for Federal Reserve rates.
The S&P 500 dropped from nearly overbought technical levels, following a series of all-time highs.
Nvidia Corp. slid as China opened a probe over suspicions the giant US chipmaker broke anti-monopoly laws around a 2020 deal.
Meantime, Chinese stocks that are listed in the US staged a sharp rally as top leaders in Beijing used their most direct language yet on providing monetary easing and boosting domestic consumption.
Data including Wednesday’s consumer price index will offer Fed officials a final look at the pricing environment ahead of their meeting the following week.
Any indication that progress has stalled on the inflation front could well undercut the chances of a third straight reduction in rates.
“This Wednesday’s inflation data may hold the key to the Fed’s next move,” said Jay Woods at Freedom Capital Markets. “So far results have been in line with economists’ expectations and
haven’t scared the market. However, an upward surprise should raise eyebrows at the Fed and could put another rate cut on pause.”
To Chris Larkin at E*Trade from Morgan Stanley, only a dramatic CPI increase would prevent the Fed from cutting rates in December.
The S&P 500 fell 0.6%. The Nasdaq 100 slid 1%.
The Dow Jones Industrial Average lost 0.4%.
Treasury 10-year yields rose four basis points to 4.19%.
The Bloomberg Dollar Spot Index wavered.
Oil climbed as China signaled bolder stimulus for next year, with traders also keeping an eye on developments in the Middle East.
“On the CPI and other inflation metrics, progress has stalled in recent months,” said Greg McBride at Bankrate. “This upcoming release will be closely scrutinized to see if there is evidence of renewed inflation pressures or signs of further improvement. “The rate of inflation has moderated significantly from a peak of 9 percent in 2022, but remains well above the target of 2%.”
The median projection in a Bloomberg survey of economists calls for a fourth consecutive 0.3% month-over-month increase in the November core CPI, which excludes food and energy for a better snapshot of underlying inflation.
On an annual basis, the core measure probably rose 3.3% for a third month.
“That sort of pace is riding the edge of acceptable inflation levels, highlighting the importance of this week’s release, said Jason Pride and Michael Reynolds at Glenmede. “The Fed is likely leaning toward a 25 basis-point rate cut next week, but only if it is reasonably confident that inflation issues are not re-emerging.”
To Neil Dutta at Renaissance Macro Research, those seeing an inflationary boom keeping the Fed from lowering policy rates can’t use the labor market to press their case.
“A continued cooling in the labor market keeps monetary easing in place,” he noted.
“While the start of Fed easing, the clearing of election uncertainty and ‘animal spirits’ have sustained the bull market, investors have more recently been inundated with arguments linked to market technicals,” said Lisa Shalett at Morgan Stanley Wealth Management. “It is generally good advice to never ‘fight the Fed’ or ‘the tape’.”
She bets positive technicals and seasonality may power US equities another 5%-10%.
“While bears argue that the year-end rally reflects stalling trading volume or ‘window dressing’ by market participants, bulls highlight favorable seasonal tailwinds, calm risk factors, and a supportive fundamental backdrop,” said Mark Hackett at Nationwide. “This optimism, coupled with resilient November jobs data, has helped major equity indexes reach new record highs despite lingering concerns about Fed policy, labor
market risks, and geopolitical unrest.”
The S&P 500 will extend its record-setting rally to 7,100 by the end of next year amid a strong economy, according to Oppenheimer Asset Management, whose outlook is now the most bullish among peers.
Fundamentals “suggest the current resilience of the economy and the stock market appear poised to continue into next year,” the firm’s Chief Investment Strategist John Stoltzfus wrote in a note.
Citigroup Inc. strategists expect mid-single-digit gains for the S&P 500 in 2025 amid increasing volatility, fueled by a soft landing of the US economy, artificial intelligence and Donald Trump’s policy promises.
Their base-case target is 6,500 points for the S&P 500.
The upper scenario is set at 6,900 and lower at 5,100; both the bull- and bear-case scenarios “frame an expectation for increased volatility,” the strategists wrote.
Post-election euphoria and seasonal tailwinds set US equities up for a banner autumn, and so far the positive fall performance is a sign gains can continue even when the calendar year turns, if history is any guide.
Since 1930, after better-than-usual returns in November and December, the S&P 500 has posted a median 3% gain in the subsequent first quarter and has risen more than two thirds of the time, according to Bloomberg Intelligence’s strategists Gina Martin Adams and Michael Casper.
That means the US stock benchmark’s nearly 6% advance last month is helping set the index up for more upside in January, so long as stocks continue their climb over the next few weeks.
Hedge funds net bought US equities for the first time in four weeks with macro products, such as indexes and exchange-traded funds, making up nearly 90% of the net buying, according to Goldman Sachs Group Inc. prime brokerage desk’s report for the week through Dec. 6.
Single stocks were modestly net bought, with long buys slightly outpacing short sales.
Hedge funds net bought information technology stocks at the fastest pace in seven weeks, though the sector is still net sold over the past month.
Industrials was the most net sold sector with last week’s notional short selling being the largest in more than two years.
Buyside US equity futures positioning has moved slightly lower after hitting a new all-time high, while some investors expect see a “significant pullback” on the horizon, according to strategists at RBC Capital Markets led by Lori Calvasina.
Investor exposure to stocks remains above average, but is not at extreme levels, according to Deutsche Bank AG strategists led by Parag Thatte.
Exposure of discretionary investors has pulled back after the post-election surge but remains elevated, they noted.
Positioning in mega-cap growth and tech stocks is elevated, while the gap between cyclicals and defensives has closed.
Exposure to small caps is near the top of its historical band.

Corporate Highlights:
* Another activist investor — Barington Capital Group — is urging Macy’s Inc. to take drastic steps to boost its stock price.
* T-Mobile US Inc. Chief Executive Officer Mike Sievert warned investors to “be cautious” about the telecom company’s fourth-quarter results, which will be “back-end loaded.”
* A Morgan Stanley analyst admits he missed the boat on Reddit Inc.’s huge post-initial public offering gains. Yet he feels there’s still time to jump aboard.
* Mondelez International Inc., the snacks and sweets company, is exploring an acquisition of iconic US chocolate maker Hershey Co., in a potential deal that would create a food giant with combined sales of almost $50 billion, according to people familiar with the matter.
* MicroStrategy Inc. bought another $2.1 billion in Bitcoin while its combination of equity and fixed-income securities sales to finance the rapidly increasing acquisitions draws increased scrutiny.
* Apollo Global Management Inc. has been added to the S&P 500 in the latest quarterly weighting change, joining alternative asset manager Blackstone Inc. on the world’s most-watched equity gauge. Workday Inc. has been included too.
** The two companies will replace Qorvo Inc. and Amentum Holdings Inc. The changes are set to go into effect prior to the open of trading on Dec. 23.
* Warner Bros. Discovery Inc. reached an early renewal of an agreement to provide networks such as TNT and CNN to Comcast Corp.’s roughly 12.8 million cable-TV customers.
* Nippon Steel Corp. clarified its spending plans at US mills owned by United States Steel Corp. as part of last-ditch efforts to win over workers and politicians for its bid to buy the Pittsburgh-based steelmaker.

Key events this week:
* China trade, Tuesday
* Australia rate decision, Tuesday
* US CPI, Wednesday
* Canada rate decision, Wednesday
* ECB rate decision, Thursday
* US initial jobless claims, PPI, Thursday
* Eurozone industrial production, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.6% as of 3:06 p.m. New York time
* The Nasdaq 100 fell 1%
* The Dow Jones Industrial Average fell 0.4%
* The MSCI World Index fell 0.5%
Currencies
* The Bloomberg Dollar Spot Index rose 0.1%
* The euro fell 0.1% to $1.0554
* The British pound was little changed at $1.2752
* The Japanese yen fell 0.8% to 151.26 per dollar
Cryptocurrencies
* Bitcoin fell 2.9% to $97,174.71
* Ether fell 5% to $3,793.84
Bonds
* The yield on 10-year Treasuries advanced four basis points to 4.20%
* Germany’s 10-year yield advanced one basis point to 2.12%
* Britain’s 10-year yield was little changed at 4.27%
Commodities
* West Texas Intermediate crude rose 1.5% to $68.24 a barrel
* Spot gold rose 1% to $2,659.04 an ounce

This story was produced with the assistance of Bloomberg Automation.

Have a lovely evening.

Be magnificent!

As ever,

Carolann
Few rich men own their property. Their property owns them. -Robert Ingersoll, 1833-1899.

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 (Text Only)
Toll Free: 1.877.430.5895
Fax: 778.430.5828
www.carolannsteinhoff.com