January 24, 2025, Newsletter

Dear Friends,

Tangents: Happy Friday.

January 24, 1935: The first canned beer is sold by the Gottfried Krueger Brewing Company, revolutionizing the beverage industry and consumer convenience.
January 24, 2008: French bank Societe Generale announced it had uncovered a $7.14 billion fraud by a single futures trader.  Go to article

Edith Wharton, writer, b. 1862.
John Belushi, comic actor, b. 1949.

Nature’s hidden secrets are unveiled in photography competition
There were over 11,000 entries in the 2024 Close-up Photographer of the Year competition. These photos emerged victorious.

Now you can have Martha Stewart in your garden
After years of research, a highly fragrant pink and apricot flower named after the lifestyle doyenne has hit the market.

Novak Djokovic retires from Australian Open semifinal due to injury
Novak Djokovic’s quest for a record-extending 25th grand slam title has been cut short at the Australian Open. Read why he stunningly retired from his semifinal match.

Neanderthals’ blood type may help explain their demise, new study finds
Human populations that left Africa evolved quickly whereas Neanderthals stayed the same, according to an analysis of blood group systems. Read More.

More than 1,300 coins buried buried during Roman emperor Nero’s reign found in England
A hoard of 1,368 coins, most of them silver, was discovered in England. Why they were buried is a mystery.  Read More.

Potentially deadly ‘chirping waves’ detected in baffling location near Earth, and scientists are stumped
Chorus waves are mysterious, chirping signals produced by spiraling plasma inside our planet’s magnetic field. But a new detection suggests scientists may understand less
about them than first thought. Read More

‘Queen of icebergs’ A23a is barreling toward a remote South Atlantic island. Millions of animals could be at risk
Iceberg A23a is fast approaching the remote British island of South Georgia and the Sandwich islands. Read More.

PHOTOS  OF THE DAY

Ayrshire, Scotland
Waves and gale-force winds hit the coast next to Turnberry lighthouse
Photograph: Murdo MacLeod/The Guardian

North Tyneside, England
A man takes dogs for a walk on a windswept beach at Tynemouth Longsands
Photograph: Owen Humphreys/PA

​​​​​​​A male northern cardinal puffs up his feathers against the cold at Colonel Samuel Smith Park on the shore of Lake Ontario in Toronto, Canada
Photograph: Anadolu/Getty Images
Market Closes for January 24, 2025

International Markets

Bonds

Currencies

Commodities

MARKET COMMENTARY:
📈 On this day in 1848, workers dredging a stream in Coloma, Calif., struck a bed of soft yellow rock. James Marshall, scooping up a dozen pure gold nuggets exclaims, “Boys, I’ve got ‘er now!” The California gold rush was on.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the ninth day, climbing 0.1%, or 34.41 to 25,468.49 in Toronto.
The index advanced to the highest closing level since Dec. 11.
Brookfield Corp. contributed the most to the index gain, increasing 2.4%.
Bird Construction Inc. had the largest increase, rising 5.3%.
Today, 113 of 222 shares rose, while 104 fell; 7 of 11 sectors were higher, led by financials stocks.
Insights
* This month, the index rose 3%
* So far this week, the index rose 1.6%, heading for the biggest advance since the week ended Nov. 22
* 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 1.4% below its 52-week high on Dec. 9, 2024 and 24.4% above its low on Feb. 13, 2024
* S&P/TSX Composite is trading at a price-to-earnings ratio of 21 on a trailing basis and 17.6 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.7% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$4.01t
* 30-day price volatility fell to 11.69% compared with 11.83% in the previous session and the average of 10.93% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 28.7898| 0.3| 13/13
Materials | 26.3333| 0.9| 36/14
Information Technology | 22.8948| 0.9| 4/5
Consumer Discretionary | 6.3470| 0.8| 9/2
Communication Services | 2.3263| 0.4| 3/2
Real Estate | 1.3227| 0.3| 15/3
Health Care | 0.3439| 0.5| 1/2
Utilities | -0.3734| 0.0| 7/7
Consumer Staples | -6.7819| -0.7| 5/5
Industrials | -20.8686| -0.6| 11/17
Energy | -25.9233| -0.6| 9/34
================================================================
| | |Volume VS | YTD
| Index | | 20D AVG | Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
Brookfield Corp | 20.1900| 2.4| 3.6| 6.0
Shopify | 15.3800| 1.2| 2.3| 1.0
Constellation Software | 9.6410| 1.5| 45.4| 4.2
Nutrien | -5.8060| -2.2| -50.0| 17.7
Suncor | -6.8680| -1.4| -39.4| 8.9
Canadian Natural Resources | -7.3910| -1.1| -57.1| 1.3
USA
By Rita Nazareth
(Bloomberg) — A relentless rally in stocks took a breather near all-time highs, but the market still notched its best start to a presidential term since Ronald Reagan was sworn in to power in 1985.
While a rout in chipmakers weighed on trading Friday, the S&P 500 still climbed 1.7% this week.
That was after President Donald Trump talked up policies to boost the economy and lower taxes, while appearing to soften his stance toward tariffs on China — even as he continued to threaten sweeping action.
The dollar saw its biggest weekly drop since November 2023.
The MOVE Index of expected Treasury volatility hit the lowest since about mid-December.
“It is early days, but nothing that President Donald Trump has said or done has caused a bad reaction in financial markets,” said Chris Iggo at AXA Investment Managers.
“Quite the contrary. It is paying to stay invested.”
An important test to that risk-on mode will be next week’s start of the big-tech earnings season.
Investors are eager to see whether demand for artificial intelligence will live up to sky-high expectations.
The group was buoyed earlier in the week as SoftBank Group Corp., OpenAI, and Oracle Corp. formed a $100 billion joint venture to fund AI infrastructure, an effort unveiled with President Trump.
The S&P 500 fell 0.3% Friday.
The Nasdaq 100 slid 0.6%.
The Dow Jones Industrial Average slipped 0.3%.
A Bloomberg gauge of the “Magnificent Seven” megacaps dropped 0.4%.
The Russell 2000 retreated 0.3%.
Among corporate highlights, Meta Platforms Inc. climbed on plans to invest as much as $65 billion on AI projects in 2025.
Cryptocurrency-linked firms rallied following Trump’s executive order favoring the industry.
Nvidia Corp. led losses in big tech.
A disappointing forecast from Texas Instruments Inc. sent the shares down 7.5%.
In the run-up to next week’s Federal Reserve decision, bonds rose amid data showing a drop in US consumer sentiment and a slight pullback in the growth pace of business activity — though companies remained upbeat about the outlook.
The yield on 10-year Treasuries declined three basis points to 4.62%.
The Bloomberg Dollar Spot Index fell 0.5%.
Oil saw its first weekly drop this year, with Trump calling for lower prices, which tends to ease concerns about inflation.
Russian President Vladimir Putin said he’s ready to discuss energy issues with the US president.
To David Lefkowitz at UBS Global Wealth Management, while US equities will likely be more volatile this year due to periodic concerns about the return on AI investment spending, tariffs and interest rates, any dip will likely be a buying opportunity.
“In our base case, we expect higher tariffs, but we don’t think they will rise to a level that alters the economic growth trajectory,” he noted.
Wall Street also waded through a slew of economic data on Friday, with the highlight being a drop in US consumer sentiment for the first time in six months.
Consumers expect prices will climb at an annual rate of 3.2% over the next five to 10 years.
They see costs rising 3.3% over the next year, the highest since May.
“Despite Wall Street’s recent concerns surrounding inflation, we’ve been able to lean on a fairly strong economy and labor market, while the stock market remains near all-time highs,” noted Bret Kenwell at eToro.
Similar findings from eToro’s quarterly retail investor survey also suggests a feeling of cautious optimism, as a majority of investors expect the bull market to continue in 2025.
However, there’s also a focus on raising cash and being underexposed to assets they expect to do well this year — like AI stocks, he said.
“We’re interpreting investors’ responses as optimistic, but viewing their actions as somewhat cautious, perhaps looking to buy the dip sometime this year. The survey also found that inflation was the top concern among retail investors,” Kenwell noted.
“Disappointment in the stickiness of near-term inflation is likely the main culprit for a dip in consumer sentiment,” said Jeffrey Roach at LPL Financial.
“The Fed still has credibility as long-term inflation expectations remain well anchored. Inflation data make it unlikely that the Fed will cut rates at the March meeting and the probability of a cut in May is a coin flip.”
After cutting rates three times in late 2024, Fed policymakers are expected to hold rates steady until they see inflation make more downward progress toward their 2% target.
Money markets and economists surveyed by Bloomberg are unanimous in expecting Fed Chair Jerome Powell and his colleagues to keep the key benchmark rates in a range of 4.25% to 4.5% next week.
Looking further ahead, rate swaps now favor two quarter-point reductions by year-end, compared to just one such cut seen last week.
“Given our expectation for a somewhat uneventful Fed pause, we look for a modest Treasury market reaction unless Chair Powell surprises with a dovish press conference,” said Oscar Munoz and Gennadiy Goldberg at TD securities.
“We remain long duration and expect the curve to steepen in 2025, but to remain flatter in the near-term.”
To James Egelhof at BNP Paribas Securities Corp., Powell will probably be asked about the tail risk of rate hikes at the press conference.
“We expect him to reply cautiously by indicating they are less likely, but could come into view if needed to secure a soft landing for inflation and growth,” the BNP chief US economist noted.
“The US economy doesn’t get in big trouble until profits fade,” said Don Rissmiller at Strategas.
“With US animal spirits around investment rising, productivity gains are plausible (though not guaranteed). Profits are generally a leading indicator for the economy, however, so we have time to see how this story develops. Stay tuned.”
As the earnings season rolls in, four of the so-called Magnificent Seven companies are expected to report slower quarterly sales next week with cautious consumer sentiment and the adverse effects of a stronger dollar seen as common themes.
While the outlook for Apple Inc. remains clouded by tepid demand for iPhones, investors expect sales momentum to pick up later this year for Tesla Inc. and Microsoft Corp.
“The breakout to record highs has been impressive, given that markets have been sluggish in six of the last seven earnings seasons, reinforcing the ‘buy the dip’ theme that has been a growing trend since the pandemic,” said Mark Hackett at Nationwide.
“If the market is able to sustain this breakout, a tailwind begins to develop as the buyback window reopens.”

Corporate Highlights:
* Tobacco stocks gained as a proposed ban on menthol cigarettes and flavored cigars was withdrawn by the Trump administration.
* Verizon Communications Inc. reported fourth-quarter financial results that beat analysts’ estimates, including gains in new mobile-phone and broadband customers.
* American Express Co. profits increased 12% as well-heeled consumers spent more than analysts expected on their credit cards over the holidays, a tailwind the firm said it expects will continue.
* Texas Instruments Inc. gave a disappointing earnings forecast for the current period, hurt by still-sluggish demand and higher manufacturing costs.
* Boeing Co. suffered another quarter of fresh charges and losses, highlighting the long road ahead for Chief Executive Officer Kelly Ortberg as he tries to stabilize the US aircraft manufacturer.
* Novo Nordisk A/S’s experimental shot delivered as much as 22% weight loss in an early-stage trial, boosting investors’ hopes for the drugmaker’s pipeline.

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.3% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.6%
* The Dow Jones Industrial Average fell 0.3%
* The MSCI World Index was little changed
* Bloomberg Magnificent 7 Total Return Index fell 0.4%
* The Russell 2000 Index fell 0.3%
Currencies
* The Bloomberg Dollar Spot Index fell 0.5%
* The euro rose 0.8% to $1.0495
* The British pound rose 1.1% to $1.2487
* The Japanese yen was little changed at 155.91 per dollar
Cryptocurrencies
* Bitcoin rose 1.8% to $105,023.51
* Ether rose 2.7% to $3,335.91
Bonds
* The yield on 10-year Treasuries declined three basis points to 4.62%
* Germany’s 10-year yield advanced two basis points to 2.57%
* Britain’s 10-year yield was little changed at 4.63%
Commodities
* West Texas Intermediate crude was little changed
* Spot gold rose 0.6% to $2,771.32 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Lu Wang, Cecile Gutscher, Julien Ponthus, Robert Brand, Sujata Rao, Winnie Hsu and Jason Scott.

Have a wonderful weekend everyone.

Be magnificent!

As ever,

Carolann
In skating over thin ice, our safety is in our speed. –Ralph Waldo Emerson, 1803-1882.

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
Fax: 778.430.5828
www.carolannsteinhoff.com