February 28, 2024, Newsletter

Dear Friends,

Tangents: Kalevala Day, Finland.
1953: Scientists James D. Watson and Francis H.C. Crick announced they had discovered the double-helix structure of DNA, the molecule that contains the human genes, at Cambridge University. Go to article >>

February 28, 2024: The first Gulf War ends.  The armed conflict had lasted a little over half a year and claimed over 100,000 civilian casualties.

Michel de Montaigne, writer, b. 1553.
Bernadette Peters, actress, b. 1948.

Russian satellite narrowly avoids collision with US spacecraft, and NASA could do nothing to stop it
NASA’s TIMED satellite narrowly avoided hitting a defunct Russian satellite in the early hours of the morning. Read More.

New study finds alarming risks of daily marijuana use
The link between heart disease and marijuana use should be a “call to action,” some health experts say.

Dubai photographer reveals the UAE’s hidden wildlife
When you think of the United Arab Emirates, soaring skyscrapers and modern architecture probably come to mind. But photographer Anish Karingattil is determined to change that. See the stunning photos he captured of local wildlife in the region.

1,000 burials and medieval village found in excavation of abbey destroyed in French Revolution
Excavations at the medieval Beaumont Abbey in France have revealed nearly 800 years of history before the French Revolution shut it down. Read More.

‘Living fossil’ tree frozen in time for 66 million years being planted in secret locations
Wollemi pines — thought to have gone extinct 2 million years ago — were rediscovered in 1994. Scientists are now hoping to reintroduce the species in the wild in a conservation effort that could take centuries. Read More.

3 new moons discovered around Uranus and Neptune will be named after Shakespeare characters and Greek goddesses
The International Astronomical Union has confirmed the existence of three currently unnamed moons. Read More.

Super-realistic prosthetic eyes made in record time with 3D printing
Scientists can now 3D print more-realistic prosthetic eyes in a fraction of the time and effort required by traditional approaches. Read More.

“Former President Trump is set on Thursday to visit the U.S.-Mexico border. I’m guessing to make a break for it?” — SETH MEYERS

“Biden and Trump are scheduled to visit the border in Texas on Thursday. Both of them. They will both be at the border. And if they can get two more senior citizens to go with them, they’ve got themselves a pickleball match.” — JIMMY KIMMEL

“The president is going to see what can be done to solve the border crisis. Trump is going to make sure he doesn’t solve what’s happening at the border. Biden is planning to meet with U.S. border agents, while Trump is planning to sell golden high-tops on the streets of Juárez.” — JIMMY KIMMEL

“If you think these two guys are confused now, wait till they spend a few hours in 100-degree heat.” — JIMMY FALLON

PHOTOS OF THE DAY

Frankfurt, Germany
A man drives his scooter on the outskirts of the city as the sun rises
Photograph: Michael Probst/AP

Greater Manchester, UK
A drone view of a rainbow behind Rochdale town hall and the Seven Sisters residential tower blocks before the upcoming parliamentary byelection
Photograph: Phil Noble/Reuters

​​​​​​​Alabama, US
‘Early morning calm over Mobile Bay.’
Photograph: Mark Adams
Market Closes for February 28^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1827, the company behind the Baltimore and Ohio railroad was incorporated, giving rise to an industry that would provide extraordinary growth in the decades to come.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the third day, dropping 0.4%, or 75.13 to 21,243.77 in Toronto.
Shopify Inc. contributed the most to the index decline, decreasing 1.0%.
SSR Mining Inc. had the largest drop, falling 7.9%.
Today, 136 of 225 shares fell, while 89 rose; 10 of 11 sectors were lower, led by industrials stocks.
Insights
* This month, the index rose 1.1%
* The index advanced 5.1% in the past 52 weeks. The MSCI AC Americas Index gained 27% in the same period
* The S&P/TSX Composite is 1% below its 52-week high on Feb. 26, 2024 and 13.7% above its low on Oct. 27, 2023
* The S&P/TSX Composite is up 0.3% in the past 5 days and rose 0.6% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 16.5 on a trailing basis and 17.1 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$3.38t
* 30-day price volatility fell to 11.70% compared with 12.27% in the previous session and the average of 10.24% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Industrials | -19.2970| -0.6| 8/18
Financials | -16.7461| -0.3| 10/17
Information Technology | -9.8269| -0.5| 3/7
Materials | -8.9090| -0.4| 18/34
Consumer Staples | -7.8720| -0.8| 5/6
Real Estate | -5.4452| -1.1| 4/17
Communication Services | -5.0582| -0.7| 1/4
Utilities | -5.0200| -0.6| 9/6
Energy | -2.9220| -0.1| 20/21
Health Care | -0.2726| -0.4| 3/1
Consumer Discretionary | 6.2536| 0.8| 8/5
================================================================
| | |Volume VS |
| Index | | 20D AVG |YTD Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
Shopify | -9.1000| -1.0| -31.6| -0.6
Canadian Pacific Kansas | -7.7530| -1.0| -19.4| 10.0
Couche-Tard | -7.2720| -1.7| 11.7| 8.4
Restaurant Brands | 3.5780| 1.6| -19.5| 0.3
Suncor Energy | 4.1650| 1.0| 12.5| 8.3
National Bank of Canada | 5.6760| 2.3| 79.3| 5.0
US
By Rita Nazareth
(Bloomberg) — Wall Street traders bracing for key inflation data waded through mixed economic figures and remarks from Federal Reserve speakers for clues on the interest-rate outlook.
Equities saw small losses after a report showed the US economy expanded at a slower rate at the end of last year as a downward revision to inventories masked stronger household spending and investment.
The data — seen as “uneventful” by many investors — came just 24 hours before the release of the Fed’s favored inflation gauge.
Following a jump in both the consumer and the producer price indexes, Thursday’s core personal consumption expenditures gauge will likely highlight the bumpy path the central bank faces in achieving its 2% target.
The PCE is seen validating recent commentary from officials showing no rush to ease monetary policy.
“The recent data is ‘noise’ and should be ignored outside of its impact for very short-term market movements,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. “We are more interested in the PCE data.”
The S&P 500 fell to around 5,070. Nvidia Corp. extended its decline from a record.
Apple Inc. dropped, but remained above its $180 technical support.
Tesla Inc. rose.
UnitedHealth Group Inc. sank on news reports that the US Department of Justice initiated an antitrust probe.
Bitcoin pushed past $60,000 in a rally fueled mostly by the launch of US exchange-traded funds holding the token this year.
Treasury 10-year yields slid four basis points to 4.26%.
Three Fed officials said the pace of rate cuts will depend on incoming economic data.
Boston Fed President Susan Collins and New York’s John Williams said the first cut will likely be appropriate “later this year,” while Atlanta’s Raphael Bostic said he’s currently penciling in a cut for sometime this summer.
Treasuries are on track for a second consecutive monthly loss after hotter-than-expected inflation figures curbed Fed wagers.
Traders are currently pricing around 80 basis points of easing by year-end — almost in line with what officials in December indicated as the likeliest outcome.
That would equate to three cuts in 2024 — as the Fed moves have historically been increments of 25 basis points.
To put things in perspective, swaps were projecting almost 150 basis points of cuts this year at the start of February.
To Matt Maley at Miller Tabak, given that long-term Treasury yields have shown significant signs that they have seen a change in trend to the upside this year, Thursday’s inflation data could still shake things up before the week is over.
“If tomorrow’s inflation data pushes yields higher, it just might cause stock investors to finally react to this year’s change in trend in bond yields,” Maley noted.
Bolstered by bets on lower rates and the artificial-intelligence euphoria, equities have posted successive records since the start of 2024 and are now heading toward their fourth consecutive monthly advance.
Such optimism has spurred warnings about either a consolidation or a pullback at this stage.
“We believe there are valuation concerns throughout the markets,” said David Bahnsen, chief investment officer at the Bahnsen Group. “Markets are pricing in unrealistic earnings growth at this point. It is just hard for us to rationalize
entering the indexes at these levels.”
Bahnsen also notes that investors should be “prudent and selective” — avoiding a strategy that simply buys the stocks that go up.
“We expect market breadth to increase,” he added. “The only question is whether or not it increases from the top 5-10 names underperforming or the currently underperforming components of the market increasing — or some combination thereof.”
US stocks have reached a significant inflection point — poised to either “top out or broaden out,” according to Craig Johnson at Piper Sandler.
Technical evidence suggests the next 10% move in the equity market is likely lower than higher, he added.
“We continue to observe overall poor market breadth,” Johnson noted. “A broadening out will favor the financial and healthcare sectors as they are among the largest weightings in the Russell 2000. A topping out would likely result from profit-taking in the ‘Magnificent Seven’ stocks.”
While valuations are higher for the “Magnificent Seven” mega-caps, they are warranted for the group delivering earnings growth that’s “significantly better” than the remaining companies in the S&P 500, according to  Marc Dizard at PNC.
The cohort — which includes giants Nvidia Corp., Meta Platforms Inc., Microsoft Corp., Amazon.com Inc., Alphabet Inc., Apple Inc. and Tesla Inc. — saw its average earnings per share rise 55% in the fourth quarter compared to a year ago, according to data compiled by Bloomberg.
“Right now, the Magnificent Seven names aren’t an area I would over concentrate, but I wouldn’t want to neglect them in a portfolio either,” Dizard said. “So certainly have, and maintain, an exposure to these names – but keep it in context of a more broadly diversified portfolio.”
Goldman Sachs Group Inc.’s Scott Rubner — who recently dubbed Nvidia “the most important stock on planet earth” ahead of its blockbuster earnings — says it has proved impossible to call the peak in this euphoric US stock market.
Retail traders have been lured into this rally just as a Goldilocks scenario — where the economy is running neither too hot nor too cold — has been playing out, prompting analysts quickly to upgrade their year-end targets, Rubner wrote.
March is now a “fuller house” and the rally is “tired,” however there is no catalyst for a potential selloff, he said.

Corporate Highlights:
* Apple Inc. shareholders rejected a labor-backed request for an artificial intelligence transparency report, which would have delved into whether the company is using the technology ethically.
* Microsoft Corp. said it’s investigating reports that its Copilot chatbot is generating responses that users have called bizarre, disturbing and, in some cases, harmful.
* Nvidia Corp. insiders stepped up stock sales after the chipmaker’s blowout earnings report last week sent shares soaring to another record.
* Coinbase Global Inc., the biggest US cryptocurrency exchange, experienced a spate of outages Wednesday on its retail platform.
* US regulators issued an ultimatum to Boeing Co. in the wake of a near-catastrophic accident last month, giving the US plane manufacturer 90 days to devise a plan to fix what it called “systemic” quality-control issues.
* Walt Disney Co. and billionaire Mukesh Ambani’s conglomerate have signed a binding pact to merge their media operations in India, creating a sector behemoth valued at $8.5 billion in one of the world’s fastest-growing entertainment markets.
* Bayer AG’s Monsanto unit persuaded a California judge to slash by more than 90% a $332 million jury award to a former land surveyor who blamed his cancer on the company’s Roundup weedkiller.

Key Events This Week:
* Germany CPI, unemployment, Thursday
* US consumer income, PCE deflator, initial jobless claims, Thursday
* Fed’s Austan Goolsbee, Raphael Bostic and Loretta Mester speak, Thursday
* China official PMI, Caixin manufacturing PMI, Friday
* Eurozone S&P Global Manufacturing PMI, CPI, unemployment, Friday
* BOE chief economist Huw Pill speaks, Friday
* US construction spending, ISM Manufacturing, University of Michigan consumer sentiment, Friday
* Fed’s Raphael Bostic and Mary Daly speak, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.2% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.5%
* The Dow Jones Industrial Average was little changed
* The MSCI World index fell 0.3%
Currencies
* The Bloomberg Dollar Spot Index rose 0.1%
* The euro was little changed at $1.0838
* The British pound fell 0.2% to $1.2660
* The Japanese yen fell 0.1% to 150.69 per dollar
Cryptocurrencies
* Bitcoin rose 6.4% to $60,389.51
* Ether rose 1.5% to $3,298.7
Bonds
* The yield on 10-year Treasuries declined four basis points to 4.26%
* Germany’s 10-year yield was little changed at 2.46%
* Britain’s 10-year yield declined one basis point to 4.18%
Commodities
* West Texas Intermediate crude fell 0.6% to $78.43 a barrel
* Spot gold rose 0.2% to $2,033.82 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Carly Wanna and Thyagaraju Adinarayan.
Have a lovely evening.

Be magnificent!
As ever,

Carolann
He who has a why to live for can bear almost any how. –Friedrich Nietzsche, 1844-1900.

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