January 22, 2025 Newsletter

Dear Friends,

Tangents:
January 22, 1970 The Boeing 747 went on its first regularly scheduled commercial flight, from New York to London. Go to article.
1973: Roe vs Wade decision.
January 22, 1984: The apple Macintosh, the first mass-market personal computer with a revolutionary graphical user interface, was introduced during Super Bowl XVIII.

Franci Bacon, statesman, b. 1561.
Lord Byron, poet, b. 1788.

China’s ‘artificial sun’ shatters nuclear fusion record by generating steady loop of plasma for 1,000 seconds
A nuclear fusion reactor in China, dubbed the “artificial sun,” has broken its own record to bring humanity one step closer to near-limitless clean energy. Read More.

Archaeologists discover rare liquid gypsum burial of ‘high-status individual’ from Roman Britain
A Roman-era cemetery, found ahead of a construction project in England, holds an unusual burial at its center. Read More.

‘Herculean’ 2.5-billion-pixel mosaic shows our closest galactic neighbor like never before — and took more than a decade to create
The new composite image, which combines hundreds of photos from the Hubble Space Telescope, shows the Andromeda Galaxy with more than 200 million individually resolved stars. Read More.

World’s fastest supercomputer ‘El Capitan’ goes online — it will be used to secure the US nuclear stockpile and in other classified research
The world’s fastest supercomputer “El Capitan” can reach a peak performance of 2.746 exaFLOPS, making it the planet’s third exascale computer. Read More.

Cosmic voids may explain the universe’s acceleration without dark energy
New research suggests that dark energy isn’t needed to explain the acceleration in the expansion of the universe — instead suggesting giant voids in space are creating an illusion. Read More.

A major investment in artificial intelligence
Three top tech firms announced that they will create a new company, called Stargate, to grow AI infrastructure in the US.

Sparkling water and weight loss
Carbonated drinks known as sparkling, fizzy, seltzer and soda waters are thought to impact the waistline. Health experts weigh in.

PHOTOS OF THE DAY

Frankfurt, Germany
Commuters drive through a frozen forest toward the fog-shrouded city
Photograph: Michael Probst/AP

Rotterdam, Netherlands
Sunlight breaks through the mist over a waterway in the Dutch city where heavy fog has caused road accidents and flight cancellations
Photograph: Mouneb Taim/Anadolu/Getty Images

​​​​​​​New Orleans, US
Two friends take advantage of a rare fall of snow in City Park. The Louisiana city had not had any snow since 2009 and this week’s 10in broke the record of 2.7in set in 1963
Photograph: Michael DeMocker/Getty Images
Market Closes for January 22, 2025

International Markets

Bonds

Currencies

Commodities

MARKET COMMENTARY:
📈 On this day in 2008, as the subprime crisis gathered steam, the Federal Reserve surprised markets with the deepest cut in interest rates in more than two decades.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the seventh day, climbing 0.1%, or 29.87 to 25,311.50 in Toronto.
The index advanced to the highest closing level since Dec. 12.
Today, industrials stocks led the market higher, as 6 of 11 sectors gained; 122 of 222 shares rose, while 97 fell.
Cameco Corp. contributed the most to the index gain, increasing 5.6%.
AtkinsRealis Group Inc. had the largest increase, rising 7.2%.
Insights
* This month, the index rose 2.4%
* The index advanced 21% in the past 52 weeks. The MSCI AC Americas Index gained 25% in the same period
* The S&P/TSX Composite is 2.1% below its 52-week high on Dec. 9, 2024 and 23.7% above its low on Feb. 13, 2024
* The S&P/TSX Composite is up 2.1% in the past 5 days and rose 2.9% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 20.9 on a trailing basis and 17.5 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.8% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.98t
* 30-day price volatility little changed to 11.81% compared with 11.81% in the previous session and the average of 10.83% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Industrials | 40.9487| 1.3| 22/6
Information Technology | 24.9521| 1.0| 10/0
Consumer Staples | 7.0684| 0.7| 10/0
Health Care | 0.5996| 0.8| 2/2
Communication Services | 0.4208| 0.1| 2/3
Real Estate | 0.1170| 0.0| 4/16
Energy | -0.9581| 0.0| 26/15
Materials | -1.3372| 0.0| 26/23
Consumer Discretionary | -1.5675| -0.2| 5/6
Utilities | -10.7027| -1.1| 1/14
Financials | -29.6701| -0.4| 14/12
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
Cameco | 13.0500| 5.6| 36.5| 9.6
Canadian Pacific Kansas | 9.4140| 1.3| -0.3| 8.4
Constellation Software | 8.1570| 1.3| -21.9| 1.2
Enbridge | -9.3060| -0.9| 70.5| 5.6
Brookfield Corp | -10.4500| -1.2| -32.3| 2.6
RBC | -13.7800| -0.8| 88.6| 0.5
USA
By Rita Nazareth
(Bloomberg) — A rally in big tech fueled by optimism over artificial intelligence and a batch of earnings from corporate heavyweights sent stocks to the brink of their record highs.
Equities extended this year’s advance, with the S&P 500 briefly topping 6,100.
Netflix Inc. surged 9.7% amid its biggest-ever subscriber gain.
Nvidia Corp. led gains in mega caps while Oracle Corp. soared 6.7% on a $100 billion joint venture with SoftBank Group Corp. and OpenAI, an effort unveiled with President Donald Trump that further boosts prospects for the AI mania that has powered the bull market.
“We stay risk-on and expect earnings to fuel equities,” said BlackRock Investment Institute strategists including Jean Boivin and Wei Li.
“Even in a higher-rate environment, we still think stocks can keep pushing higher as long as fundamentals stay strong.”
To Matt Maley at Miller Tabak, if this earnings season is a good one, it’s a rally that could have legs.
However, it will take more than merely “beating expectations” to fuel a further advance of significance.
Despite a recent broadening attempt of the market beyond a handful of mega caps, tech led the way on Wednesday — and most companies in the S&P 500 actually fell.
Poor breadth has been a major concern of investors, especially among those nervous about sky-high valuations and frothy AI stocks.
JP Morgan Chase & Co.’s chief Jamie Dimon told CNBC there are signs that the stock market is overheated, with asset prices “kind of inflated.”
Meantime, Cathie Wood, the founder of ARK Investment Management, told Bloomberg’s ETF IQ that Trump’s regulatory and growth agenda will revive the market for US initial public offerings.
The S&P 500 rose 0.6%.
The Nasdaq 100 climbed 1.3%.
The Dow Jones Industrial Average added 0.3%.
A Bloomberg gauge of the “Magnificent Seven” mega caps gained 1.3%.
The Russell 2000 fell 0.6%.
The yield on 10-year Treasuries advanced two basis points to 4.6%.
The Bloomberg Dollar Spot Index wavered.
“Markets are reacting positively to the initial wave of Trump policies, with investors showing enthusiasm reminiscent of the run-up to the election as they breathe a sigh of relief over the tariff announcements and the early stages of earnings season,” said Mark Hackett at Nationwide.
Hackett also noted  hat while the bar for earnings is high, the market is showing impressive resilience.
“A breakout to a fresh record high would energize the bulls, as earnings seasons have been choppy in recent quarters,” he concluded.
After the S&P 500 soared 24% in 2023 and 23% in 2024, lofty valuations brought some discussion on whether the benchmark will be able to achieve such a performance again this year.
Back-to-back annual gains of over 20% for the S&P 500 do not necessarily make US equities due for a pullback, as history shows the market has typically continued to deliver solid, albeit more muted, returns in the following year,” said Jeff Schulze at ClearBridge Investments.
“Further, the current rally is far from the longest without a correction.”
Schulze also noted that earnings growth has largely been concentrated amongst a small group of stocks in recent years.
This is expected to shift in 2025 with a broadening of earnings participation, which should lead to improved relative performance for small/mid cap and value laggards.
“While we continue to watch the new administration’s next moves closely, investor should not lose sight of the fundamentals that remain favorable for US equities,” said Solita Marcelli at UBS Global Wealth Management.
“Without taking any single-name views, we continue to like technology, utilities, and financials, and see value in utilizing structured strategies to navigate near-term volatility.”
The stock market’s “January effect” is taking shape so far, with stocks performing strongly throughout the month, according to John Creekmur at Creekmur Wealth Advisors.
“Investors are now more focused on earnings and hopes for tax cuts and deregulation from the new Trump administration, and less so about worries of fewer Federal Reserve rate cuts this year,” he noted.
The Nasdaq 100 has nearly doubled since the start of 2023, adding $14 trillion in value in the process.
Evercore ISI’s Rich Ross is prepared for that rally to continue, shrugging off fears of a familiar nemesis: bond yields.
Treasury rates jumped to multi-month highs last week as investors parsed economic data for clues on the Federal Reserve’s next interest-rate cut.
The yield on the US 10-year has since pulled back after hitting a relative strength reading that usually signals a retreat.
Pair that with positive technical signals and the Nasdaq 100 and S&P 500 Index both appear poised to hit fresh all-time highs in the first quarter, according to Ross.
“At the end of the day technology remains in an outstanding position to continue to lead this market higher,” Ross said.

Corporate Highlights:
* Netflix Inc. reported its biggest quarterly subscriber gain in history, buoyed by its first major live sporting events and the return of Squid Game.
* Salesforce Inc. Chief Executive Officer Marc Benioff said there will be “thousands” of deals for its new Agentforce AI product in the current fiscal quarter.
* Samsung Electronics Co. plans to launch an ultrathin version of its Galaxy S25 phone in the first half of this year, beating Apple Inc. to a promising new category.
* Alphabet Inc.’s Google won a UK court ruling to block Russian media firms from seizing the tech giant’s global assets to recover Russian court-imposed fines that have now accrued interest equal to many times more than the world’s economy combined.
* United Airlines Holdings Inc. expects a solidly profitable first quarter as the carrier capitalizes on strong demand during the winter months, a surprising shift from a normally sluggish travel period.
* Procter & Gamble Co. organic sales surpassed estimates on higher volume, a change from earlier quarters where most of the company’s growth came from price hikes.
* Johnson & Johnson warned Wall Street about the perils of the strong dollar. Now the drug and device maker is saying analysts failed to hear the message.
* Abbott Laboratories is forecasting lower-than-expected first- quarter earnings but full-year profit in line with Wall Street estimates as the health care company points to strong demand for its medical devices as a growth driver this year.
* Ally Financial Inc. fourth-quarter earnings surged as its net interest margin beat analysts’ estimates and expenses and provisions for bad debt declined.

Key events this week:
* Eurozone consumer confidence, Thursday
* US jobless claims, Thursday
* Bank of Japan policy meeting, Friday
* Eurozone HCOB Manufacturing & Services PMI, Friday
* US University of Michigan consumer sentiment, existing home sales, S&P Global Manufacturing & Services PMI, Friday

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 1.3%
* The Dow Jones Industrial Average rose 0.3%
* The MSCI World Index rose 0.5%
* Bloomberg Magnificent 7 Total Return Index rose 1.3%
* The Russell 2000 Index fell 0.6%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro fell 0.2% to $1.0412
* The British pound fell 0.3% to $1.2317
* The Japanese yen fell 0.7% to 156.54 per dollar
Cryptocurrencies
* Bitcoin fell 2.3% to $104,337.28
* Ether fell 2.3% to $3,255.98
Bonds
* The yield on 10-year Treasuries advanced two basis points to 4.60%
* Germany’s 10-year yield advanced two basis points to 2.53%
* Britain’s 10-year yield advanced four basis points to 4.63%
Commodities
* West Texas Intermediate crude fell 0.5% to $75.43 a barrel
* Spot gold rose 0.4% to $2,756.78 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Cecile Gutscher, Sujata Rao, Robert Brand and Aya Wagatsuma.

Have a lovely evening everyone.

Be magnificent!
As ever,

Carolann
Often man is preoccupied with human rules and forgets the inner law. -Antoine the Healer, 1846-1912.

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 (Text Only)
Toll Free: 1.877.430.5895
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www.carolannsteinhoff.com