February 24, 2025, Newsletter

Dear Friends,

Tangents: Happy Monday. ☺
February 24, 1582: The Gregorian Calendar is introduced by Pope Gregory XIII, reforming the Julian calendar and leading to the system most widely used today.
February 24, 1821: Mexico declared its independence from Spain. Go to article.

George Harrison, musician, b. 1943
Steve Jobs, founder of Appe, b.1955.

‘Just the tip of the iceberg’: Why risky asteroids like 2024 YR4 will pester Earth for decades to come
The world is watching as NASA tweaks the odds that asteroid 2024 YR4 will hit Earth. But how threatening is YR4, and how does it compare to other potentially hazardous space rocks? Read More.

Humanoid ‘Protoclone’ robot twitches into action while hanging from ceiling in viral video
Protoclone, an eerily lifelike humanoid robot built for home use, has left social media users aghast. And it’s likely to be the first of many. Read More.

Muscular kangaroos aren’t the only daunting creatures Down Under. Wait until you learn about the cassowary — a massive bird as tall as a person with a large dagger-like claw on each foot

Adults may want to consider revisiting their childhood hobbies, according to a psychologist
There’s a reason you feel drawn to your childhood activities. And you might be surprised at the benefits playfulness adds to your life.

New York Mets’ Juan Soto hits 426-foot homer after signing biggest contract in American sports
Juan Soto’s first at-bat for the New York Mets gave some indication as to why they signed him to one of the biggest contracts in American sports history.

Why there’s an upside-down American flag hanging in Yosemite
The flag was reportedly hung over the side of El Capitan as a sign of protest by employees at Yosemite National Park. Here’s what we know.

MSNBC cancels Joy Reid’s evening show in major programming shakeup
Co-hosts from MSNBC’s “The Weekend” are expected to take over Joy Reid’s 7 p.m. evening timeslot.

RIP Roberta Flack

PHOTOS OF THE DAY

Antequera, Spain
Hudson Bay wolves in an enclosure at the Lobo Park near Malaga. Iberian, European and Hudson Bay wolves live in huge enclosures at the park
Photograph: Jorge Guerrero/AFP/Getty

Birmingham, UK
Birmingham Royal Ballet dancers during a dress rehearsal at the Hippodrome
Photograph: Katja Ogrin/Getty Images

Bordeaux, France
A visitor attends the preview of Egypt of the Pharaohs, an exhibition at Bassins des Lumières, the largest digital art centre in the world
Photograph: Philippe Lopez/AFP/Getty Images
Market Closes for February 24, 2025

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Always sell half o a double. –Yale Hirsch, 1923-2021.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite advanced slightly to 25,151.26 in Toronto.
The move follows the previous session’s decrease of 1.4%.
Today, materials stocks led the market higher, as 5 of 11 sectors gained; 121 of 220 shares rose, while 97 fell.
Agnico Eagle Mines Ltd. contributed the most to the index gain, increasing 1.7%.
Eldorado Gold Corp. had the largest increase, rising 5.7%.
Insights
* This month, the index fell 1.5%
* The index advanced 17% in the past 52 weeks. The MSCI AC Americas Index gained 17% in the same period
* The S&P/TSX Composite is 2.8% below its 52-week high on Jan. 30, 2025 and 18.4% above its low on Feb. 28, 2024
* The S&P/TSX Composite is down 1.3% in the past 5 days and fell 1.2% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 20.8 on a trailing basis and 18.6 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.8% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$4.06t
* 30-day price volatility fell to 10.95% compared with 11.38% in the previous session and the average of 11.04% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Materials | 22.6485| 0.7| 30/19
Consumer Staples | 17.5706| 1.9| 10/0
Consumer Discretionary | 15.1242| 1.9| 10/1
Communication Services | 3.9456| 0.6| 5/0
Financials | 2.2788| 0.0| 18/7
Real Estate | -1.3831| -0.3| 8/11
Health Care | -1.6040| -2.2| 1/3
Information Technology | -3.6055| -0.1| 5/5
Utilities | -3.6745| -0.4| 4/11
Industrials | -15.6729| -0.5| 20/8
Energy | -31.3921| -0.8| 10/32
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
Agnico Eagle Mines Ltd | 8.0520| 1.7| -20.3| 23.7
Dollarama | 7.7690| 2.8| 36.4| 5.0
Restaurant Brands | 5.4470| 2.7| 9.9| -2.8
Brookfield Corp | -11.3600| -1.4| -15.2| 0.0
Canadian Natural Resources | -11.3900| -1.8| 191.9| -5.6
Canadian National | -14.5900| -2.5| 28.4| -1.2
US
By Rita Nazareth
(Bloomberg) — A slide in most mega caps hit stocks in the final stretch of US trading, with Wall Street gearing up for a pulse check from Nvidia Corp. on the artificial-intelligence technology that has powered the bull market.
The S&P 500 broke below 6,000 and the Nasdaq 100 lost over 1%.
Just days before Nvidia’s earnings, hedge funds’ net exposure to “Magnificent Seven” mega caps hit the lowest since April 2023.
The chipmaker lost 3.1%.
Microsoft Corp. fell as an analyst said the software giant dropped some AI data-center leases.
Apple Inc. rose.
Just ahead of Nvidia’s results Wednesday, hedge funds’ net exposure to “Magnificent Seven” mega caps hit the lowest since April 2023.
Investors have started to boost bets that volatility will come back as Nvidia’s earnings on Wednesday could be the first in a whirlwind of events with the potential to send the market into conniptions.
“There is very little room for Nvidia to disappoint analyst profit expectations this year, given its assumed leadership position in AI, already elevated valuations, and new developments and entrants in the space that could threaten its dominance over time,” said Anthony Saglimbene at Ameriprise.
The S&P 500 lost 0.5%.
The Nasdaq 100 fell 1.2%.
The Dow Jones Industrial Average wavered.
The yield on 10-year Treasuries slid three basis points to 4.4%.
Bonds remained higher after a $69 billion sale of two-year notes drew record demand.
Canada’s dollar and Mexico’s peso fell as President Donald Trump expects tariffs planned to take effect on both countries to go ahead next month.
“The market is churning sideways, driven by investor confusion, a natural consolidation period following recent gains, and seasonal weakness in February,” said Mark Hackett at Nationwide.
“However, the strong macro backdrop, robust earnings, and healthy fund flows argue for a breakout to the upside once momentum returns.”
Positioning in mega-cap growth and tech remains very elevated heading into Nvidia’s earnings release due this week, in the 97th percentile and well above levels implied by earnings growth, according to Deutsche Bank AG strategists including Parag Thatte.
Fourth-quarter earnings are on pace to significantly exceed earnings estimates across capitalizations — nearly doubling the pre-season forecasts — but it hasn’t been enough to satisfy investors as stocks are responding with unusually sour returns, according to Gina Martin Adams and Wendy Soong at Bloomberg Intelligence.
“Disappointments in guidance, revisions and operating margin all share the blame,” the strategists noted.
“Nvidia could still move the needle as the large-cap season wraps up.”
US equities won’t remain unpopular for long given the robust outlook for economic growth and corporate earnings, according to some of Wall Street’s top strategists.
Morgan Stanley strategist Michael Wilson — a bearish voice on US stocks until mid-2024 — said he expects capital to return to US stocks, calling the S&P 500 “the highest quality index” with “the best earnings growth prospects.”
“It’s premature to conclude the rotation away from the US is sustainable,” Wilson wrote in a note.
JPMorgan Chase & Co. strategist Mislav Matejka said a more subdued outlook for big tech was indeed a “meaningful impediment” for a renewed US outperformance more broadly.
However, US earnings growth would need to undershoot the rest of the world to support an outright bearish view, he added.
“Recent economic and survey data do raise some warning flags, but S&P 500 companies delivered strong growth along with continued record profitability last quarter,” said Scott Helfstein at Global X.
“Fundamentals will ultimately win out, but waning sentiment could well lead broad equity indexes sideways for a little while.”
Following double-digit returns for US equities over the past two years, and with valuations now incredibly expensive, investors are increasingly concerned about whether markets have peaked, according to Christian Floro at Principal Asset Management.
“Bull markets don’t just die of old age, however, and history suggests that the Federal Reserve tends to play an outsized role in determining the prevailing market regime based on its monetary policy stance,” he noted.
Most market selloffs larger than 10% since 1965 were triggered by either the Fed pivoting aggressively to a hawkish stance or the Fed staying restrictive for too long, he said.
Floro noted that the current macroeconomic landscape differs meaningfully from past market peaks, particularly as data show little sign of a hard landing.
“A narrow but viable path remains for markets to grind higher, especially if earnings growth continues to deliver as expected,” he noted.
“However, uncertainty around future policy decisions poses a significant risk.  Prudent investors should remain vigilant, balancing optimism with a strategic approach to risk in today’s evolving market environment.”

Corporate Highlights:
* Apple Inc., as it seeks relief from US President Donald Trump’s tariffs on goods imported from China, said that it will hire 20,000 new workers and produce AI servers in the US.
* Microsoft Corp. has canceled some leases for US data center capacity, according to TD Cowen, raising broader concerns over whether it’s securing more AI computing capacity than it needs in the long term.
* Berkshire Hathaway Inc.’s operating earnings surged 71% in the fourth quarter, as higher interest rates lifted the conglomerate’s investment income and its insurance business improved.
* Starbucks Corp. is eliminating 1,100 corporate jobs in a move aimed at increasing efficiency and quickly enacting changes to revitalize the company.
* Domino’s Pizza Inc.’s US sales rose less than expected in the fourth quarter, highlighting the mounting challenge to appeal to cash-strapped Americans.
* Boeing Co. has hired an adviser to market a defense subsidiary that manufactures small, long-range military drones as the plane maker looks to unload businesses that aren’t central to its core commercial and defense operations, according to people familiar with the talks.
* Apollo Global Management Inc. agreed to buy Bridge Investment Group Holdings Inc. for about $1.5 billion in an all-stock deal as the asset manager expands in real estate.
* Strategy, the self-styled Bitcoin treasury company that until recently was known as MicroStrategy, said it acquired $1.99 billion more of the cryptocurrency with the proceeds from last week’s convertible bond sale.

Key events this week:
* US consumer confidence, Tuesday
* Fed’s Lorie Logan, Tom Barkin, Michael Barr speak, Tuesday
* Apple shareholder meeting, Tuesday
* US new home sales, Wednesday
* Nvidia earnings, Wednesday
* Fed’s Raphael Bostic speaks, Wednesday
* Eurozone consumer confidence, Thursday
* US GDP, durable goods, initial jobless claims, Thursday
* Fed’s Jeff Schmid, Beth Hammack, Patrick Harker, Michael Barr, Michelle Bowman speak, Thursday
* Japan Tokyo CPI, industrial production, retail sales, Friday
* US PCE inflation, income and spending, Friday
* Fed’s Austan Goolsbee speaks, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.5% as of 4 p.m. New York time
* The Nasdaq 100 fell 1.2%
* The Dow Jones Industrial Average was little changed
* The MSCI World Index fell 0.4%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro was little changed at $1.0462
* The British pound fell 0.1% to $1.2619
* The Japanese yen fell 0.3% to 149.76 per dollar
Cryptocurrencies
* Bitcoin fell 1.9% to $93,977.75
* Ether fell 5.9% to $2,642.2
Bonds
* The yield on 10-year Treasuries declined three basis points to 4.40%
* Germany’s 10-year yield was little changed at 2.48%
* Britain’s 10-year yield was little changed at 4.56%
Commodities
* West Texas Intermediate crude rose 0.6% to $70.83 a barrel
* Spot gold rose 0.5% to $2,950.91 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Cecile Gutscher, Sujata Rao, Lynn Thomasson, Robert Brand and Catherine Bosley

Have a lovely evening.

Be magnificent!
As ever,

Carolann
Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. –Steve Jobs, 1955-2011.

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