February 6, 2024, Newsletter

Dear Friends,

Tangents:
February 5, 1935: Monopoly board game is patented, quickly becoming a family favourite.
February 5, 1945:  Reggae musician Bob Marley was born in St. Ann parish in Jamaica. Go to article >>

Babe Ruth, b. 1895.
Bob Marley, b. 1945.

Super Bowl ticket prices have dropped
… but they still cost a fortune. Tickets to this year’s game remain the most expensive on record, with the average purchase price currently at $9,850.

Should there be a Category 6 for hurricanes?
The idea of adding a Category 6 to the Saffir-Simpson scale has been discussed for years. Read why scientists are advocating for the change.

Event Horizon Telescope spies gargantuan energy jets erupting from nearby supermassive black hole.
Astronomers investigated an active supermassive black hole at the heart of Perseus A using the Event Horizon Telescope, spotting an epic battle between gravity and magnetism.  Full Story: Live Science (2/5)

April 8 total solar eclipse: The best places to stargaze near the path of totality
The April 8 total solar eclipse will be visible from many large cities, but anyone looking for skies free of light pollution should check out one of these dark-sky parks and reserves in the path of totality. Read More.

Bedbugs plagued Britain 1,900 years ago, Roman fort near Hadrian’s Wall reveals
The earliest known evidence of bedbugs in Britain was found at a first-century fort near Hadrian’s Wall. Read More.

RIP: Country singer Toby Keith died Monday after a battle with stomach cancer. He was 62. “He fought his fight with grace and courage,” a statement posted to Keith’s website said. Keith is known for hits including “Red Solo Cup” and “I Wanna Talk About Me.” His 2002 song “Courtesy of the Red, White and Blue (The Angry American),” released in the aftermath of the 9/11 attacks, made him a household name.

PHOTOS OF THE DAY

Srinagar, Kashmir
A fisher casts his net into the Jhelum River. The Kashmir valley received fresh snowfall after prolonged dry weather
Photograph: Saqib Majeed/Sopa Images/Rex/Shutterstock

London, England
Western lowland gorilla Mjukuu holds her newly born baby at London Zoo. The critically endangered western lowland gorilla was born this week after a speedy 17-minute labour. Western lowland gorillas, which inhabit dense and largely remote rainforests in west and central Africa, are classified as critically endangered, with a high risk of becoming extinct.
Photograph: Jonathan Kemeys/ZSL/AFP/Getty Images

​​​​​​​Pedestrians cross the road at Shibuya Crossing.
Photograph: Takashi Aoyama/Getty Images
Market Closes for February 6^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1808, the Milan stock exchange (Borsa Valori di Milano, now called La Borsa Italiana) was established.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 0.4% at 20,957.74 in Toronto.
The move follows the previous session’s decrease of 1%.
Brookfield Corp. contributed the most to the index gain, increasing 2.5%.
Lithium Americas Argentina Corp. had the largest increase, rising 8.6%.
Today, 154 of 225 shares rose, while 66 fell; 10 of 11 sectors were higher, led by financials stocks.
Insights
* The index advanced 1.6% in the past 52 weeks. The MSCI AC Americas Index gained 20% in the same period
* The S&P/TSX Composite is 1.4% below its 52-week high on Jan. 31, 2024 and 12.1% above its low on Oct. 27, 2023
* The S&P/TSX Composite is down 1.3% in the past 5 days and was little changed 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 15.5 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$3.3t
* 30-day price volatility fell to 8.27% compared with 8.34% in the previous session and the average of 10.22% over the past month
================================================================
|Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 35.9405| 0.6| 17/10
Industrials | 20.9818| 0.7| 18/8
Materials | 9.5783| 0.4| 40/9
Energy | 6.6466| 0.2| 24/17
Consumer Staples | 5.6161| 0.6| 9/2
Communication Services | 4.7150| 0.6| 3/1
Utilities | 4.6483| 0.6| 13/2
Consumer Discretionary | 2.4935| 0.3| 10/3
Health Care | 1.7817| 2.9| 4/0
Real Estate | 1.4398| 0.3| 14/6
Information Technology | -7.9803| -0.4| 2/8
================================================================
| | |Volume VS |
| Index | | 20D AVG |YTD Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
Brookfield Corp | 13.0000| 2.5| -29.5| 0.6
Canadian Pacific Kansas | 8.7310| 1.2| -33.9| 8.4
Canadian Natural Resources | 7.8040| 1.3| -13.7| -5.3
Cameco | -3.5190| -1.8| -26.6| 12.4
Bank of Montreal | -3.6800| -0.6| 5.9| -5.3
Restaurant Brands | -4.2110| -1.8| -12.1| -0.6
US
By Rita Nazareth
(Bloomberg) — The world’s biggest bond market rebounded, with traders gearing up for a record $42 billion sale of 10-year Treasuries after a solid start to this week’s ramped-up issuance sizes.
Following a selloff that drove two-year yields to their highest since before the Fed’s December “pivot”, bonds climbed.
A $54 billion sale of three-year notes drew solid demand, bolstering sentiment and making traders shrug off a slew of cautious remarks from Federal Reserve speakers.
The S&P 500 edged up.
Mega-caps were mixed, with Tesla Inc. up and Nvidia Corp. down.
US-listed Chinese stocks rallied on bets the nation will be more forceful to prop up markets.
New York Community Bancorp tumbled 22%.
As expected, a drumbeat of central bank officials echoed Jerome Powell’s signals that the central bank will be in no rush to ease policy.
Fed Bank of Cleveland President Loretta Mester said policymakers will probably gain confidence to cut interest rates “later this year” if the economy evolves as expected.
Her Minneapolis counterpart Neel Kashkari celebrated the substantial improvement made on inflation, but indicated more progress is needed.
“The Fed expects to cut this year, but not right away,” said Chris Low at FHN Financial.
“While we continue to suspect market expectations for five rate cuts this year remains too optimistic, a factor in favor for bond bulls is that inflation-adjusted, or real rates, need to come down as price indexes improve,” said John Lynch at Comerica Wealth Management. “As a result, we suspect three cuts will prove sufficient to balance the risks to growth and inflation in 2024.”
As bonds managed to rebound on Tuesday, stocks barely budged.
Down days in the S&P 500 aren’t necessarily extinct, but they’ve become shallow relative to positive sessions.
Since early January, the gauge has seen an average gain of 0.66% in positive sessions, compared with a 0.45% drop in negative ones.
That’s pushed the ratio of the two to about 1.5 — the highest skew in favor of the bulls this far into a year since 1995, according to data compiled by Bloomberg.
“A period of consolidation across the major averages or a potential period of near-term selling pressure is probably overdue at this point,” said Anthony Saglimbene at Ameriprise.  “Such a development could be healthy in the long term and help recalibrate expectations.”
Citigroup Inc. strategists noted that investor positioning in US technology stocks is so bullish that any selloff could trigger a wider rout.
Wagers on declines in tech-heavy Nasdaq 100 futures have been completely erased, leaving investors overwhelmingly expecting further gains.
“The large consensus positioning is a risk that could amplify a turn in the market,” strategists led by Chris Montagu wrote.
Bullish trends in S&P 500 futures stalled last week, although positioning remains net-long, they said.
Volatile markets are predicted to be the greatest daily challenge for a second year in a row, according to a JPMorgan Chase & Co. electronic trading survey.
Access to liquidity is the biggest concern about market structure, ahead of regulatory change and data costs.
While volatility across asset classes remains relatively contained compared to recent gyrations, the worry is that it could spike if the global economy faces another shock.
Markets are pricing in over a percentage point of rate cuts from the Fed and European Central Bank, though the survey still sees inflation as having the biggest impact on markets in 2024.
In second place is the US election — with a flurry of other votes due around the world as well, plus mounting geopolitical risk.
“While conditions are good, volatility is very possible,” said Brad McMillan at Commonwealth Financial Network. “We saw some turbulence in January, and we aren’t out of the woods with inflation yet. So, while the trends remain positive, risks could increase over the next couple of months. This is something to watch out for but not worry about too much, given the strong economic fundamentals.”

Corporate Highlights:
* A dramatic accident on an Alaska Airlines flight last month was apparently triggered by a door plug that hadn’t been properly attached before the plane was delivered by Boeing Co., US investigators said Tuesday.
* UBS Group AG will buy back up to $1 billion in shares this year, as the bank seeks to keep investors focused on the upside of its complex integration of Credit Suisse.
* Palantir Technologies Inc. said that demand for its artificial intelligence products was driving sales, and gave a higher-than-expected profit outlook for 2024.
* Blackwells Capital, an activist investor seeking three board seats at Walt Disney Co., called on the entertainment giant to consider spinning off its famed theme-park properties and splitting into three companies.
* Eli Lilly & Co. forecast 2024 sales ahead of Wall Street estimates as the company rolls out Zepbound, its weight-loss shot that’s widely expected to become the best-selling drug of all time.
* Spotify Technology SA, the music-streaming giant, reported subscriber growth that surpassed Wall Street’s expectations amid international growth.

Key events this week:
* Germany industrial production, Wednesday
* Walt Disney earnings, Wednesday
* Fed’s Adriana Kugler and Tom Barkin speak, Wednesday
* China PPI, CPI, Thursday
* US wholesale inventories, initial jobless claims, Thursday
* Treasury Secretary Janet Yellen speaks at a Senate banking committee hearing on the Financial Stability Oversight Council annual report, Thursday
* Pharma CEOs speak at a Senate panel on prescription drug prices, Thursday
* ECB Chief Economist Philip Lane speaks, Thursday
* ECB publishes economic bulletin, Thursday
* US CPI revisions, Friday
* Germany CPI, Friday
* President Joe Biden hosts German Chancellor Olaf Scholz at the White House, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.2% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.2%
* The Dow Jones Industrial Average rose 0.4%
* The MSCI World index rose 0.5%
Currencies
* The Bloomberg Dollar Spot Index fell 0.3%
* The euro rose 0.1% to $1.0756
* The British pound rose 0.5% to $1.2599
* The Japanese yen rose 0.6% to 147.86 per dollar
Cryptocurrencies
* Bitcoin rose 1.8% to $43,095.73
* Ether rose 4.1% to $2,379.9
Bonds
* The yield on 10-year Treasuries declined seven basis points to 4.09%
* Germany’s 10-year yield declined two basis points to 2.29%
* Britain’s 10-year yield declined six basis points to 3.95%
Commodities
* West Texas Intermediate crude rose 1% to $73.49 a barrel
* Spot gold rose 0.5% to $2,035.80 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Elena Popina and Greg Ritchie.
Have a lovely evening.

Be magnificent!

As ever,

Carolann
Sins committed in the dark are seen in Heaven like sheets of fire. –Chinese Proverb.

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
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www.carolannsteinhoff.com