February 27, 2023 Newsletter

Dear Friends,

Tangents: Happy Monday.
February 27, 425: The University of Constantinople is founded by Emperor Theodosius II at the urging of his wife Aelia Eudocia.
February 27, 1997 Legislation banning most handguns in Britain went into effect. Go to article » 

Henry Longfellow, poet, b. 1807.
Rudolph Steiner, philosopher, educator, b.1861.
Joanne Woodward, actress, b. 1930.
Elizabeth Taylor, actress, b. 1932.
Ralph Nader, advocate, b.1934.

Black-coffee drinkers are ​​a shrinking minority.

Scientists attempt to solve the Chaco Canyon mystery. (h/t Scott Duke Kominers)

Rare black hole 1 billion times the mass of the sun could upend our understanding of galaxy formation: A rare supermassive black hole found hiding at the dawn of the universe could indicate that there were thousands more of the ravenous monsters stalking the early cosmos than scientists thought — and astronomers aren’t sure why.
The primordial black hole is around 1 billion times the mass of our sun and was found at the center of the galaxy COS-87259. Full Story: Live Science (2/24)

450-mile-wide solid metal ball forms Earth’s innermost core, earthquake waves reveal: Scientists have harnessed powerful waves from earthquakes to measure Earth’s innermost layer and found that our planet’s center is a 450-mile-wide (725 kilometers) ball of solid iron-nickel alloy.
Previously, many researchers believed that Earth had four distinct layers — the crust, the mantle, a liquid outer core and a solid inner core. But in the past couple of decades, scientists have proposed that the inner core actually consists of two layers, referred to as the inner core and the innermost inner core. Full Story: Live Science (2/24)

Detecting life on Mars may be ‘impossible’ with current NASA rovers, new study warns
The current generation of Mars rovers may have trouble confirming any signs of ancient life on the Red Planet because their scientific instruments aren’t up to snuff, according to new research.
Scientists conducted tests on sedimentary rocks in the Red Stone region of Chile’s Atacama Desert, one of the oldest and driest deserts on Earth and a geological analog to ancient sites on Mars that two NASA rovers are currently exploring. Full Story: Live Science (2/24)

PHOTOS OF THE DAY

Northern lights seen across the UK – in pictures
The northern lights over Stonehenge in Wiltshire
Photograph: Nick Bull/pictureexclusive.com

St Andrews, UK
The northern lights above the Scottish town.
Photograph: Payton Cooney/St Leonard’s School/PA

Valldemossa, Spain
Towns across the Balearic island of Mallorca, including Valldemossa and Lluc, were blanketed in snow and temperatures dropped to minus 2 degrees Celsius
Photograph: Jaime Reina/AFP/Getty Images
Market Closes for February 27^th, 2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1891, David Samoff, future president of Radio Corporation of America, was born in Uzlian, Russia.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the second day, climbing 0.2%, or 40.94 to 20,260.13 in Toronto.
The move was the biggest since rising 0.4% on Feb. 13.
Canadian Pacific Railway Ltd. contributed the most to the index gain, increasing 1.3%. Uni-Select Inc. had the largest increase, rising 16.6%.
Today, 135 of 236 shares rose, while 98 fell; 6 of 11 sectors were higher, led by materials stocks.
Insights
* This month, the index fell 2.4%
* The index declined 4% in the past 52 weeks. The MSCI AC Americas Index lost 9.9% in the same period
* The S&P/TSX Composite is 8.8% below its 52-week high on April 5, 2022 and 13.4% above its low on Oct. 13, 2022
* The S&P/TSX Composite is down 1.2% in the past 5 days and fell 2.2% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 13.2 on a trailing basis and 12.7 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.2% 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 7.63% compared with 7.62% in the previous session and the average of 9.23% over the past month
================================================================
|Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Materials | 29.7545| 1.3| 41/9
Industrials | 15.1067| 0.6| 17/9
Energy | 10.6735| 0.3| 27/12
Consumer Discretionary | 4.8104| 0.7| 8/6
Financials | 1.0580| 0.0| 16/13
Real Estate | 0.5721| 0.1| 16/6
Health Care | -1.7524| -2.1| 1/6
Communication Services | -2.3372| -0.2| 0/5
Utilities | -5.5548| -0.6| 3/13
Consumer Staples | -7.8581| -0.9| 1/10
Information Technology | -9.2397| -0.7| 5/9
================================================================
| | |Volume VS |
| Index | | 20D AVG |YTD Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
Canadian Pacific | 8.4230| 1.3| -25.6| 3.9
RBC | 7.8930| 0.6| -55.7| 8.4
First Quantum Minerals | 5.1960| 5.0| 6.8| -1.3
Shopify | -4.0310| -0.9| -38.9| 16.9
TD Bank | -7.0240| -0.6| -33.5| 3.3
TC Energy | -7.3450| -1.9| 35.6| 2.2
US
By Vildana Hajric and Peyton Forte
(Bloomberg) — US stocks ended Monday with modest gains after fluctuating for the final stretch of the trading session as investors attempted to come to terms with Federal Reserve policy that could remain restrictive for longer than previously expected.
The S&P 500 and the Nasdaq 100 bounced back after a dismal week for Wall Street.
The 10-year Treasury yield declined to hover around 3.92%.
A dollar index retreated.
Gold and copper rose.
Investors have been recalibrating their forecasts for where rates will end up, especially since inflation hasn’t been moderating as the Fed expected.
Traders are pricing US rates to peak at 5.4% this year, compared with about 5% just a month ago.
Investors remained on the edge after Fed Governor Philip Jefferson firmly stood by the central bank’s 2% inflation goal on Monday.
The fresh US data that investors are contending with on Monday point to an economy that remains robust despite the Fed’s persistent rate hikes.
US pending home sales rose last month by the most since June 2020, which could keep pressure on the Fed to stay hawkish.
Meanwhile, orders for durable goods fell, in their steepest decline since April 2020, underscoring a pullback in bookings for commercial aircraft.
But excluding transportation equipment, durable goods orders rose more than expected.
Orders placed with US factories for business equipment also rose in January as companies continued to make longer-term capital investments despite uncertainty about where the economy is headed.
“We have had a bit of a repricing in markets in February where there is more concern that central banks will have more work to do,” Sam Lynton-Brown, global head of macro strategy at BNP Paribas, said on Bloomberg Television. “The view we have is that there’s still some further room to run on that repricing.
So either equities are at risk to come lower or rates are at risk to head higher.”
In the near-term, both scenarios could play out if the markets price in a more hawkish policy outlook for the Fed, he said.
The risk-reward for equities remains poor, JPMorgan strategists led by Marko Kolanovic wrote in a note.
“The risk-reward of holding bonds at this level of short-term yields looks better than equity (earnings yield) than any time since the great financial crisis,” they wrote.
For now, a more optimistic outlook for earnings estimates is helping ease fears that inflation will remain entrenched even as growth slows, drawing investors back to stocks.
Those treading into this market risk are falling into a “bull trap” according to Michael Wilson, chief US equity strategist at Morgan Stanley.
That view was echoed by Torsten Slok, chief economist at Apollo Global Management.
“A generation of investors has since 2008 been taught that they should buy on dips, but today is different because of high inflation, and credit markets and equity markets are underestimating the Fed’s commitment to getting inflation down to 2%,” Slok wrote in a note.

Key events this week:
* US wholesale inventories, Conf. Board consumer confidence, Tuesday
* China manufacturing PMI, non-manufacturing PMI, Caixin manufacturing PMI, Wednesday
* Eurozone S&P Global Eurozone Manufacturing PMI, Wednesday
* US construction spending, ISM Manufacturing, light vehicle sales, Wednesday
* Eurozone CPI, unemployment, Thursday
* US initial jobless claims, Thursday
* Eurozone S&P Global Eurozone Services PMI, PPI, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.3% as of 4:01 p.m. New York time
* The Nasdaq 100 rose 0.7%
* The Dow Jones Industrial Average rose 0.2%
* The MSCI World index fell 1.2%
Currencies
* The Bloomberg Dollar Spot Index fell 0.3%
* The euro rose 0.6% to $1.0608
* The British pound rose 0.9% to $1.2057
* The Japanese yen rose 0.2% to 136.25 per dollar
Cryptocurrencies
* Bitcoin fell 1% to $23,335.77
* Ether fell 1.1% to $1,624.06
Bonds
* The yield on 10-year Treasuries declined two basis points to 3.93%
* Germany’s 10-year yield advanced four basis points to 2.58%
* Britain’s 10-year yield advanced 15 basis points to 3.80%
Commodities
* West Texas Intermediate crude fell 0.9% to $75.67 a barrel
* Gold futures rose 0.4% to $1,824 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Alice Atkins, Cecile Gutscher, Isabelle Lee and Cristin Flanagan.
Have a lovely evening.

Be magnificent!
As ever,

Carolann
Start where you are.  Use what you have.  Do what you can. –Arthur Ashe, 1943-1993.

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