February 15, 2024, Newsletter

Dear Friends,

Tangents:
Carolann is away from the office; I will be writing the newsletter on her behalf.

On February 15, 1965, Canada adopts maple leaf flag: In accordance with a formal proclamation by Queen Elizabeth II of England, a new Canadian national flag is raised above Parliament Hill in Ottawa, the capital of Canada. Read more.
On February 15, 1950, Walt Disney’s animated feature Cinderella opens in theaters across the United States. Read more.
On February 15, 1903, First Teddy bear goes on sale: toy store owner and inventor Morris Michtom places two stuffed bears in his shop window, advertising them as Teddy bears. Read more.

Ancient rock art in Argentinian cave may have transmitted information across 100 generations
A cave in Patagonia houses the oldest known pigment-based rock art in South America.

What would happen if you moved at the speed of light?
In science fiction, people often find a way to move at the speed of light. But you might find yourself asking, could your body survive going so fast? What would happen to it? Read more.

5 beguiling heart-shaped objects found in space
From a ‘potentially hazardous’ asteroid to a pair of galaxies unable to quell their attraction, here are five of the most beautiful heart-shaped objects seen in space.

How a TV show changed an industry?
“The Love Boat” first aired in 1977 and went on to become one of the most successful shows in TV history. Here’s how it transformed the cruise industry

PHOTOS OF THE DAY

Zaporizhzhia, Ukraine
A wintry reflection of the city from Khortytsia Island as the conflict with Russia continues
Photograph: Ukrinform/Rex/Shutterstock

Glen Coe, UK
Wild swimmers brave the clear icy water at the Meeting of Three Waters in Glen Coe in the Scottish Highlands
Photograph: Katielee Arrowsmith/SWNS

New York City, US
People walk through the snow in Central Park
Photograph: Charly Triballeau/AFP/Getty Images
Market Closes for February 15^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1985, the U.S. government began allowing Treasury securities to be carved up. Investors could now hedge more easily against changes in interest rates by trading the interest or principal of a bond, vastly increasing the market’s liquidity.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the second day, climbing 1.6%, or 333.29 to 21,222.69 in Toronto.
The move was the biggest since rising 2% on Dec. 13.
Today, financials stocks led the market higher, as 9 of 11 sectors gained; 200 of 225 shares rose, while 24 fell.
Manulife Financial Corp. contributed the most to the index gain, increasing 8.7%.
Seabridge Gold Inc. had the largest increase, rising 19.1%.
Insights
* In the past year, the index had a similar or greater gain four times. The next day, it advanced three times for an average 0.6% and declined 0.5% once
* So far this week, the index rose 1%
* The index advanced 2.4% in the past 52 weeks. The MSCI AC Americas Index gained 21% in the same period
* The S&P/TSX Composite is 0.1% below its 52-week high on Jan. 31, 2024 and 13.5% above its low on Oct. 27, 2023
* The S&P/TSX Composite is up 1.4% in the past 5 days and rose 0.8% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 16.4 on a trailing basis and 16.3 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.1% 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 rose to 12.43% compared with 11.52% in the previous session and the average of 9.89% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 105.2927| 1.6| 24/3
Energy | 102.8465| 2.9| 39/2
Materials | 48.8504| 2.4| 51/1
Information Technology | 34.5952| 1.8| 7/3
Industrials | 19.0906| 0.6| 22/4
Utilities | 13.8587| 1.7| 15/0
Real Estate | 5.3998| 1.1| 16/4
Communication Services | 4.2054| 0.6| 4/1
Health Care | 0.5184| 0.8| 4/0
Consumer Staples | -0.6469| -0.1| 10/1
Consumer Discretionary | -0.7260| -0.1| 8/5
================================================================
| | |Volume VS | YTD
| Index | | 20D AVG | Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
Manulife Financial | 33.9600| 8.7| 109.0| 13.9
Shopify | 31.6800| 3.4| 43.0| 9.6
Canadian Natural Resources | 25.3800| 4.1| 121.7| -2.4
Constellation Software | -1.6010| -0.3| 40.8| 12.9
Restaurant Brands | -2.8140| -1.2| 48.9| -1.1
Couche-Tard | -5.2240| -1.2| 50.5| 6.7
US
By Rita Nazareth
(Bloomberg) — Wall Street traders looked past mixed economic data, sending stocks and bonds higher before an inflation reading that will help define the Federal Reserve’s next steps.
The S&P 500 hit another record — despite losses in its most-influential group: technology.
A drop in retail sales helped soothe investors’ nerves about overheated consumer demand— especially after all the jitters caused by a strong inflation print earlier this week.
Bonds saw small moves, with Fed swaps fully pricing in a rate cut in June.
The dollar fell.
For months, investors have been dealing with clashing economic narratives.
Progress toward lower inflation has shaped the view that the Fed can cut interest rates from multiyear highs to avoid pushing the US into a recession.
At the same time, the economy has outperformed expectations, giving the central bank cover to delay.
“The data is complicated — a true dichotomy,” said Gina Bolvin president of Bolvin Wealth Management Group. “The market will be volatile as it digests the data and scrutinizes every data point.”
The S&P 500 rose to around 5,030, erasing this week’s losses.
Banks and energy companies rallied, while Tesla Inc. climbed over 6%.
In late hours, Applied Materials Inc. gave a bullish revenue forecast.
Treasury 10-year yields retreated two basis points to 4.23%.
A hotter-than-expected US inflation print earlier this week hasn’t dimmed the outlook for equities, and any selloff is a buying opportunity ahead of a Fed pivot, according to Citigroup strategists.
The team led by Scott Chronert maintained its year-end target for the S&P 500 at 5,100.
They remain overweight tech and recommend adding cyclical exposure via industrial and financial shares.
A seemingly tireless rally in US equities can persist as long as excess liquidity has traders comfortable buying, according to Lisa Shalett at Morgan Stanley Wealth Management.
However, she expects liquidity to dry up later this year.
“As long as there’s excess liquidity in the system, we’re going to have the ability for investors to come in and think that they’re getting a bargain and participate in all asset classes when there’s some evidence of weakness,” Shalett told Bloomberg Television.
The amount of money that investors are parking at a major Fed facility dropped below $500 billion for the first time since 2021.
Market participants have been closely watching the pace at which the so-called RRP drains: Some on Wall Street warn that the draining facility is evidence that excess liquidity has been removed from the financial system — that bank reserve balances aren’t as abundant as policymakers believe.
A hot consumer price index earlier this week roiled financial markets, with traders resetting their bets on Fed rate-cuts in 2024.
Next up is Friday’s producer price index — which wouldn’t normally get as much attention from markets as the CPI — but will be highly scrutinized this time around.
“Tomorrow’s PPI will be closely watched by markets and should drive the near-term direction for the equity and bond markets,” said Larry Tentarelli, chief technical strategist at Blue Chip Daily Trend Report.
Signs that inflation anxiety remains potent included strong demand for Treasury options strategies targeting 10-year yields to exceed 4.4% in the coming weeks, a level last seen in November.
Aside from retail sales, a reading on factory production also pointed to a loss of momentum — but didn’t necessarily signal significant deterioration in the economy.
In fact, Thursday’s data also showed sentiment among homebuilders hit a six-month high and jobless claims declined.
“Today’s weak retail sales and middle-of-the-road jobless claims total may help soothe the market’s nerves in the near term,” said Chris Larkin at E*Trade from Morgan Stanley. “But there may still be an element of ‘altitude sickness’ at work, since the higher the market rallies, the more vulnerable it may be to setbacks when individual economic numbers don’t fit the rate-cutting narrative.”

Corporate Highlights:
* Apple Inc., racing to add more artificial intelligence capabilities, is nearing the completion of a critical new software tool for app developers that would step up competition with Microsoft Corp.
* Alphabet Inc. sank after a report that ChatGPT owner OpenAI is developing a web search product that would compete with Google.
* Microsoft Corp. will make four exclusive Xbox games available for Nintendo Co.’s Switch and Sony Group Corp.’s PlayStation, sharing homegrown titles with rivals in the first significant way as the company looks to boost revenue in a stagnant gaming market.
* Digital World Acquisition Corp., the blank-check firm that’s been looking to take Donald Trump’s media company public, soared after receiving a long-awaited nod from the US Securities and Exchange Commission.
* The Justice Department plans to scrutinize the new streaming service proposed by Walt Disney Co., Fox Corp. and Warner Bros. Discovery Inc. over concerns it could harm consumers, media rivals and sports leagues.
* Nvidia Corp., the chipmaker at the heart of an artificial intelligence spending boom, disclosed investments in Arm Holdings Plc, SoundHound AI Inc. and the biotech company Recursion Pharmaceuticals Inc.

Key Events This Week:
* US housing starts, PPI, University of Michigan consumer sentiment, Friday
* San Francisco Fed President Mary Daly speaks, Friday
* Fed Vice Chair for Supervision Michael Barr speaks, Friday
* ECB executive board member Isabel Schnabel speaks, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.6% as of 4 p.m. New York time
* The Nasdaq 100 rose 0.2%
* The Dow Jones Industrial Average rose 0.9%
* The MSCI World index rose 0.8%
Currencies
* The Bloomberg Dollar Spot Index fell 0.4%
* The euro rose 0.4% to $1.0771
* The British pound rose 0.2% to $1.2596
* The Japanese yen rose 0.4% to 149.96 per dollar
Cryptocurrencies
* Bitcoin fell 0.1% to $51,701.41
* Ether rose 1.7% to $2,826.92
Bonds
* The yield on 10-year Treasuries declined two basis points to 4.23%
* Germany’s 10-year yield advanced two basis points to 2.36%
* Britain’s 10-year yield advanced one basis point to 4.05%
Commodities
* West Texas Intermediate crude rose 2% to $78.17 a barrel
* Spot gold rose 0.6% to $2,004.17 an ounce
This story was produced with the assistance of Bloomberg Automation.

Have a lovely evening.

Be magnificent!
As ever,

Shabnam
“Where there is no novelty, there can be no curiosity.”– Aphra Behn

Shabnam Mohammadpourmarzbali
Assistant to Carolann Steinhoff
Queensbury Securities Inc.,
St. Andrew’s Square,
Suite 340A, 730 View St.,
Victoria, B.C. V8W 3Y7

Tel: 778.430.5808
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www.carolannsteinhoff.com