February 9, 2024, Newsletter

Dear Friends,

Tangents: Happy Friday.  Happy New Year – it is the Year of the Dragon.
Happy Super Bowl weekend!!!

Gypsy Rose Lee, burlesque queen, b. 1914
Carole King, songwriter, b. 1942.
Alice Walker, b. 1944.

Everything you need to know about Super Bowl LVII:  Excitement is building around the big game on Sunday! Follow CNN’s Super Bowl coverage for the latest on the competing teams, halftime show,
and of course… Taylor Swift.

Lamar Jackson is named NFL’s Most Valuable Player
The Baltimore Ravens quarterback was named the NFL’s Most Valuable Player on Thursday night, becoming the 11th player in league history to have won the award more than once.

British Vogue features 40 ‘legendary’ cover stars for editor Edward Enninful’s final issue
Naomi Campbell, Miley Cyrus, Jane Fonda, Dua Lipa, Kate Moss and Serena Williams are just some of the names the outgoing editor brought in for his last cover shoot.

Romans kept poisonous, narcotic seeds concealed in bone vials, new discovery reveals
A hollowed-out animal bone was used by Romans to store a stash of poisonous seeds and is the first-ever evidence of the seeds’ use during the Roman era. Read More.

‘We were very surprised’: Magma under Reykjanes Peninsula rushed into Grindavík dike at a shockingly fast rate
Magma flowed into the dike beneath Grindavík at a rate almost 100 times higher than what was seen in the eruptions that took place between 2021 and 2023. Read More.

Massive hydrogen reservoir discovered beneath an Albanian mine could be an untapped source of clean energy .
A portion of ancient oceanic crust that sits atop Albania and hosts one of the largest chromium mines on Earth also contains a huge hydrogen reservoir, offering a potential source of clean energy.  Full Story: Live Science (2/8)
PHOTOS OF  THE DAY

Antarctica
A whale breaches as a Turkish scientific team continue their voyage during the 8th National Antarctic Science Expedition.
Photograph: Sebnem Coskun/Anadolu/Getty Images

Santa Cruz de Tenerife, Spain
Corina Mrazek Gonzalez is proclaimed carnival queen.
Photograph: Ramon de la Rocha/EPA

Aba, China
Giant pandas enjoy refreshments at the Shenshuping conservation and research centre.
Photograph: VCG/Getty Images
Market Closes for February 9^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1966, the Vietnam War-era bull market hit its peak. The Dow Jones Industrial Average reached 995.15, a high it wouldn’t surpass for another 17 years.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 0.4% at 21,009.60 in Toronto.
The move was the biggest since rising 0.5% on Feb. 1 and follows the previous session’s decrease of 0.2%.
Shopify Inc. contributed the most to the index gain, increasing 3.3%.
Bombardier Inc. had the largest increase, rising 8.5%.
Today, 132 of 225 shares rose, while 89 fell; 8 of 11 sectors were higher, led by financials stocks.
Insights
* So far this week, the index fell 0.4%
* The index advanced 2% in the past 52 weeks. The MSCI AC Americas Index gained 22% in the same period
* The S&P/TSX Composite is 1.1% below its 52-week high on Jan. 31, 2024 and 12.4% above its low on Oct. 27, 2023
* S&P/TSX Composite is trading at a price-to-earnings ratio of 16.2 on a trailing basis and 16 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$3.32t
* 30-day price volatility rose to 8.07% compared with 7.97% in the previous session and the average of 9.92% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 47.8886| 0.7| 22/5
Information Technology | 44.2288| 2.2| 7/3
Industrials | 12.8939| 0.4| 15/11
Utilities | 4.0810| 0.5| 13/2
Consumer Staples | 4.0592| 0.5| 6/4
Communication Services | 2.9167| 0.4| 3/2
Real Estate | 2.4092| 0.5| 16/5
Health Care | 0.3273| 0.5| 3/0
Energy | -5.2580| -0.1| 17/22
Consumer Discretionary | -10.0368| -1.3| 7/6
Materials | -13.5332| -0.6| 23/29
================================================================
| | |Volume VS |
| Index | | 20D AVG |YTD Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
Shopify | 32.6900| 3.3| -7.3| 18.4
Bank of Nova Scotia| 13.0600| 2.5| -24.5| -1.9
RBC | 7.9420| 0.6| -78.5| -2.2
BCE | -3.5720| -1.1| 63.0| -3.2
Teck Resources | -3.9970| -2.4| 57.3| -11.1
Magna Intl | -9.9060| -6.7| 81.9| -6.0
US
By Rita Nazareth
(Bloomberg) — Wall Street notched a milestone, with the S&P 500 topping 5,000 amid a renewed rally in big tech and hopes the Federal Reserve will soon be able to cut rates — bolstering the outlook for corporate profits.
Emboldened by bets on a soft landing and the power of artificial-intelligence — equities closed at another all-time high, defying doomsayers and warnings about an overstretched market.
“The S&P 500 is the best single barometer of confidence in Corporate America’s earnings power and the strength of the economy,” said George Ball, chairman of Sanders Morris. “The direction of the S&P 500 reflects whether the economy and earnings are improving or deteriorating.”
A few days ahead of the key consumer price index, investors breathed a sigh of relief as a government report — which is usually ignored by markets — confirmed inflation progress at end of 2023.
In the immediate aftermath of the data, Treasuries rose — but quickly reversed that move.
The two-year yield went back to levels seen since before the Fed’s December “pivot.”
Fed Bank of Atlanta President Raphael Bostic said he’s “laser focused” on returning inflation to target, and his Dallas counterpart Lorie Logan said she sees no urgency to cut rates.
To David Donabedian at CIBC Private Wealth US, the current economic backdrop supports Wall Street’s bullish momentum.
“The market has pivoted from believing the Fed would be its savior to deciding it doesn’t need a savior with the economy supporting it,” Donabedian noted.
With the S&P 500’s new 5,000-point milestone, the question is: what’s next for the index?
Performance for the gauge has been positive after reaching major milestones, according to Adam Turnquist at LPL Financial.
Of the last nine, the index posted a 12-month average return of 10.4% — with 78% of occurrences producing positive results, he noted.
“A close above this closely watched level will undoubtedly create headlines and further feed fear of missing out emotions,” Turnquist noted. “Outside of a potential sentiment boost, round numbers such as 5,000 often provide a psychological area of support or resistance for the market.”
For now, that’s “just a big round number,” according to Matt Maley at Miller Tabak + Co.
“Of course, if the market rolls over in any meaningful way from this level, that will change things,” he noted. “A failure at that level would make it a new key resistance level. Either way, the stock market has seen a fabulous rally this year. So unless any decline becomes a substantial one, it won’t mean a whole lot for the big picture.”
“While some will say it is just another number in the vast sea of numbers that we digest every day, this one is a bit different,” said Kenny Polcari at SlateStone Wealth. “5,000 represents a new millennium, and so it does create additional excitement. So I would expect the excitement to continue for a bit more.”
Another reason sustaining the stock market’s strength to start the year is certainly the outlook for corporate profits.
With earnings season around two-thirds done, companies are solidly beating expectations.
Some 80% of S&P 500 companies reporting results this earnings cycle have surprised to the upside, handily exceeding the 10-year average of 74%, according to Bloomberg Intelligence data through Friday morning.
Analysts are responding by lifting projections.
Wall Street now sees fourth-quarter earnings growing 6.5% from a year earlier for S&P 500 members on average — which would be the best since mid-2022 — and up from a meager projection of 1.2% in early January, according to BI.
“The fourth-quarter earnings season has been stronger than expected, giving investors confidence that the healthy economy could continue driving corporate profits,” said Arthur Hogan at B. Riley Wealth.
To Mark Hackett at Nationwide, the strong momentum has brought skeptical institutional and retail investors back into the market — which has a compounding effect on the rally — though it is increasingly driving questions of sustainability.
Indeed, despite all the optimism, warnings about a stretched market keep piling — with the S&P 500 trading above “overbought” technical levels.
“We remain cautious,” said Dan Wantrobski at Janney Montgomery Scott. “On this front, we note narrowing of breadth, ongoing divergences in momentum, overbought conditions in leadership areas, and sentiment that can approach extremes relatively quickly.”
With US equities now trading at 21 times forward earnings amid lofty interest rates and little demand for cheap hedges against the backdrop of low volatility levels, bulls and bears are wrestling over the sustainability of this rally, according to Jose Torres at Interactive Brokers.
“Are we entering a new era of loftier valuations due to rising productivity, increased retail participation, and money shifting from the East to the West?” Torres said. “Or is this a ‘bubblicious mania’ that will end in tears as wild speculation takes over markets? In the end, only time will tell, but my intuition keeps me in the bearish camp.”
Michael Hartnett at Bank of America Corp. says that a speedy rally that sent US stocks on a record-setting spree is now close to triggering several sell signals.
The bank’s custom bull-and-bear indicator rose to 6.8 in the week through Feb. 7, Hartnett wrote in a note.
A reading above 8 would suggest the bullish trend has run too far, flashing a contrarian signal to sell, the strategist said.
“Bear positioning in 2023 was markets’ best friend,” Hartnett said. But after investors bought the S&P 500 during last year’s 24% rally, that exposure is “flipping from tailwind to headwind.” He cautioned that “in bubbles, markets show little respect for positioning,” or for valuation. “They solely respect policy and real interest rates,” he said.
The equity market strength despite changing Fed expectations and higher interest rates is notable given the sharp reactions to the Fed in recent years, said Nationwide’s Hackett.
“A less emotional market is a positive sign, though investors must fight against the complacency that is a natural reaction to such a strong and steady bull run,” he added.
To Bret Kenwell at eToro, while stocks may be a bit overheated at the moment, it doesn’t mean the markets are about to go off the rails.
“While it may eventually lead to some profit taking in the short term, this is still a bull market. Until we see material weakness in the economy, it’s hard to get bearish on stocks,” Kenwell noted.

Corporate Highlights:
* Cryptocurrency shares climbed as Bitcoin advanced beyond $47,000.
* New York Community Bancorp’s chief executive officer and other insiders bought more than 200,000 shares of the stock, which has lost about half its value since last week’s shock announcement of a dividend cut and larger loan-loss provisions.
* Cisco Systems Inc. is cutting thousands of jobs as the largest maker of computer networking equipment restructures its business to focus on high-growth areas, Reuters reported.
* Expedia Group Inc. named Ariane Gorin as chief executive officer of the online travel company, succeeding Peter Kern, who has been in the role since 2020.
** Separately, Expedia reported gross bookings of $21.7 billion in the fourth quarter, missing analysts’ average estimate of $22 billion.
* PepsiCo Inc. gave a full-year sales forecast that fell short of analysts’ estimates and reported a drop in volumes in the North America beverage and Quaker foods units.
* Exxon Mobil Corp.’s exploratory drilling off the coast of Guyana will be “well south” of the disputed territory that Venezuela claims as its own, according to a senior company executive.
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 1%
* The Dow Jones Industrial Average fell 0.1%
* The MSCI World index rose 0.4%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro was little changed at $1.0787
* The British pound rose 0.1% to $1.2630
* The Japanese yen was little changed at 149.29 per dollar
Cryptocurrencies
* Bitcoin rose 5% to $47,581.03
* Ether rose 2.8% to $2,492.76
Bonds
* The yield on 10-year Treasuries advanced two basis points to 4.18%
* Germany’s 10-year yield advanced three basis points to 2.38%
* Britain’s 10-year yield advanced four basis points to 4.09%
Commodities
* West Texas Intermediate crude rose 0.4% to $76.55 a barrel
* Spot gold fell 0.4% to $2,025.38 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Denitsa Tsekova, Alexandra Semenova, Julien Ponthus, Carmen Reinicke and Carly Wanna.
Have a wonderful weekend everyone.

Be magnificent!
As ever,

Carolann
The truth is in nature, and I shall prove it. -Paul Cezanne, 1839-1906.

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