January 12th, 2024, Newsletter

Dear Friends,

Tangents: Happy Friday.

January 12^th, 1969: Led Zeppelin’s self-titled first album was released.  Go to article >>
January 12, 1967: James Bedford is frozen with intent of future resuscitation.  Bedford was the first human to be cryonically preserved; his body awaits resuscitation in Scottsdale, Arizona.
1755: Tsarina Elizabeth established the first university in Russia.

Lasers reveal ancient settlements deep in the Amazon
Archaeologists used lasers to view an ancient civilization hidden in the Amazon rainforest. Read More.

The bullet’s inscriptions hint that Indigenous people in Spain supported the would-be dictator, Julius Caesar, during the Roman civil war.
Full Story: Live Science (1/11) .

Einstein Probe with unique ‘lobster eye’ deployed
The Einstein Probe has left Earth to survey the cosmos for X-ray signals from feeding black holes, colliding neutron stars and exploding stars. Read More.

Fruit bats could lead to new diabetes treatments
Scientists are studying how fruit bats can handle such sugary diets in order to potentially uncover new ways to manage humans’ glucose levels. Read More.

Catch data from 2012 to 2019 reveal shark deaths from fishing increased from 76 million to 80 million per year. Researchers stress that more action is needed to save threatened species.
Full Story: Live Science (1/10)

PHOTOS OF THE DAY

Apeldoorn, Netherlands
Cyclists compete in the men’s elimination race during the first day of the UEC European Track Cycling Championships at the Omnisport indoor arena
Photograph: John Thys/AFP/Getty Images

Carlos Pérez Naval was named young photographer of the year, capturing a Moorish gecko on a wall in Spain.
Photograph: Carlos Pérez Naval

​​​​​​​A photographer covering the Dakar Rally motor race managed to capture a herd of camels crossing the dunes in Saudi Arabia.
Photograph: Patrick Hertzog/AFP/Getty Images
Market Closes for January 12^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1906, the Dow Jones Industrial Average, a few months short of its tenth birthday, closed above 100 for the first time, finishing the day at 100.25.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 0.3% at 20,990.22 in Toronto.
The move follows the previous session’s decrease of 0.3%.
Cameco Corp. contributed the most to the index gain, increasing 7.1%. NexGen Energy Ltd. had the largest increase, rising 11.1%.
Today, 142 of 225 shares rose, while 80 fell; 7 of 11 sectors were higher, led by materials stocks.
Insights
* So far this week, the index rose 0.3%
* The index advanced 3.9% in the past 52 weeks. The MSCI AC Americas Index gained 20% in the same period
* The S&P/TSX Composite is at its 52-week high and 12.3% above its low on Oct. 27, 2023
* S&P/TSX Composite is trading at a price-to-earnings ratio of 16.5 on a trailing basis and 15.2 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$3.31t
* 30-day price volatility little changed to 10.84% compared with 10.85% in the previous session and the average of 10.76% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Materials | 35.8278| 1.6| 46/6
Energy | 35.5543| 1.0| 33/7
Industrials | 19.5362| 0.7| 15/9
Information Technology | 14.2250| 0.8| 8/2
Communication Services | 3.6567| 0.5| 4/1
Real Estate | 1.2130| 0.2| 11/10
Health Care | 0.2041| 0.3| 2/2
Utilities | -2.5535| -0.3| 4/11
Consumer Discretionary | -2.6074| -0.3| 4/9
Consumer Staples | -9.9557| -1.1| 6/5
Financials | -23.2760| -0.4| 9/18
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
Cameco | 13.5000| 7.1| 108.0| 17.2
Constellation Software | 11.4500| 2.4| 59.2| 8.7
Canadian National | 10.0400| 1.5| 1.2| 1.6
Nutrien | -7.4350| -3.0| 31.6| -8.0
Couche-Tard | -9.0660| -2.2| -7.3| 0.0
RBC | -10.9800| -0.8| -26.4| -1.3
US
By Rita Nazareth
(Bloomberg) — Treasury two-year yields dropped to the lowest level since May as a surprise decline in producer prices reinforced bets on Federal Reserve rate cuts this year.
Traders are pricing in an 80% chance of a Fed reduction in March — up from a little over 50% a week ago.
Friday’s economic data came a day after a hotter-than-estimated reading on consumer prices — underscoring the bumpy path officials face in bringing inflation to the 2% target.
Investors also sifted through bank results as the US earnings season kicked off, while watching geopolitical developments ahead of Monday’s Martin Luther King Jr. Day.
“We suspect there is little to dissuade the market from pressing the March cut trade,” said Ben Jeffery at BMO Capital Markets. “Let us not forget the geopolitical escalations in the Red Sea and the implied headline risk — relevant from both a flight-to-quality and supply-side inflation perspective.”
Two-year US yields fell 10 basis points to 4.15%.
Traders priced in about 20 basis points of easing for March.
Given that Fed rate changes historically have been increments of 25 basis points, swap contracts still show bets on the first cut in May.
The S&P 500 wavered, while notching a weekly gain.
Microsoft Corp. overtook Apple Inc. to become the world’s most valuable publicly traded company.
Bitcoin slid.
Oil rose as the US and its allies launched airstrikes against Houthi rebels in Yemen.
Among the key reasons for the decline of inflation over the past year were a drop in energy costs and supply chains that had largely ironed out their pandemic strains.
The Red Sea turmoil is hampering both of those disinflationary forces that central bankers were hoping could help them finish the job.
“This is a world in which we are fragile to begin with on the supply side, and then you get this additional shock,” Mohamed El-Erian, president of Queens’ College, Cambridge, and a Bloomberg Opinion columnist, said Friday in an interview on Bloomberg Television.
To Chris Larkin at E*TRADE from Morgan Stanley, it may be a bit of stretch to describe today’s cooler-than-expected inflation numbers as a “surprise” given that producer prices have already retreated faster than consumer figures for quite a while.
“The market has tended to run with any data that fits the ‘falling inflation means lower interest rates’ narrative, but we’ll see if that storyline bumps up against the reality of a market that has already priced in multiple rate cuts,” he noted.
Yet the Fed can still take solace in inflation that’s slowed since peaking in mid-2022, with the trend of diminishing price pressures explaining why policymakers are penciling in reductions in interest rates in 2024.
Investors have slashed expectations for hawkish surprises from the Fed this year, while they see a growing risk of such moves from central banks in the euro zone and other regions, Bank of America’s latest monthly sentiment survey shows.
The number of respondents who anticipate a more hawkish move on policy than market pricing fell to 33% in the bank’s latest poll, from 51% in December.
Despite the slide, “the Fed is still viewed as more likely to deliver a hawkish surprise than others,” BofA strategists including Ralf Preusser wrote in a note.
Economists at Barclays expect an earlier start to Fed easing — now calling for the first one in March instead of June.
“Given the recent progress on inflation, we think the FOMC will be comfortable cutting rates without needing to see a substantial weakening of the economy or the labor market,” Marc Giannoni and Jonathan Millar wrote.
After the big fourth-quarter rally in US stocks, investors are shifting gears to what companies have to show for it in their earnings scorecards.
Not much is baked into expectations, so there’s room for an upside surprise: Analysts project that S&P 500 members will see fourth-quarter profits grow 1.1% on average from a year earlier, which would be the smallest positive figure since before the pandemic, data compiled by Bloomberg Intelligence show.
The equities benchmark surged 11% last quarter, the best performance since 2020.
On Friday morning, leaders at some of Wall Street’s biggest banks took turns calling an end to the record run for their biggest source of revenue.
Wells Fargo & Co. surprised analysts by predicting a 9% drop in net interest income for 2024, while Citigroup Inc. forecast a modest drop this year.
Even JPMorgan Chase & Co., which sees its 2024 haul holding up at 2023 levels, predicts it will drop off over the course of the year. 

Corporate Highlights:
* JPMorgan Chase & Co. closed out the most profitable year in US banking history with its seventh consecutive quarter of record net interest income and a surprise forecast that the windfall may continue this year.
* Wells Fargo & Co.’s fourth-quarter costs came in higher than expected, swollen by severance charges and the bank’s contribution to replenish the Federal Deposit Insurance Corp.’s main fund after bank failures last year.
* Citigroup Inc. said it will eliminate 20,000 roles in a move that will save it as much as $2.5 billion as part of Chief Executive Officer Jane Fraser’s quest to boost the Wall Street giant’s lagging returns.
* Bank of America Corp.’s earnings fell short of expectations as the bank’s numerous charges in the fourth quarter cut into profit and the firm’s fixed-income traders posted a surprise drop in revenue.
* BlackRock Inc. clients jumped into its long-term funds in the fourth quarter, adding $63 billion to ETFs and other products in a sign investors put cash to work as stock and bond markets surged.
* Delta Air Lines Inc. backed away from its 2024 profit target as persistently high costs counter the gains from a rebound in international travel.
* The US Federal Aviation Administration said it will increase its oversight of Boeing Co.’s production and manufacturing  operations, a day after it opened a formal investigation into the plane maker over last week’s accident on a 737 Max 9 jet.
* Lockheed Martin Corp. and NASA plan to give the public a sneak peek of a plane that could pave the way for airlines to dramatically speed up flights.
* Some Dish Network Corp. creditors are examining legal options including sending a default notice to the company after it moved prized assets out of bondholders’ reach, according to people with knowledge of the matter.
* UnitedHealth Group Inc. reported higher fourth-quarter medical costs than Wall Street analysts expected, even as overall results beat estimates.

Some of the main moves in markets:
Stocks
* The S&P 500 was little changed as of 4 p.m. New York time
* The Nasdaq 100 was little changed
* The Dow Jones Industrial Average fell 0.3%
* The MSCI World index rose 0.3%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro fell 0.2% to $1.0950
* The British pound fell 0.1% to $1.2745
* The Japanese yen rose 0.3% to 144.92 per dollar
Cryptocurrencies
* Bitcoin fell 5.1% to $43,796.86
* Ether fell 1.2% to $2,572.03
Bonds
* The yield on 10-year Treasuries declined two basis points to 3.94%
* Germany’s 10-year yield declined five basis points to 2.18%
* Britain’s 10-year yield declined five basis points to 3.79%
Commodities
* West Texas Intermediate crude rose 1% to $72.73 a barrel
* Spot gold rose 0.9% to $2,047.15 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Cecile Gutscher, Naomi Tajitsu, Elena Popina and Michael Mackenzie.

Have a wonderful weekend everyone.

Be magnificent!
As ever,

Carolann
Second thoughts are ever wiser. –Euripides, c.480-c.406 BC.

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