January 29, 2025 Newsletter

Dear Friends,

Tangents:
Today is Lunar New Year.  Even if you grew up celebrating this day, you might not know the reasons behind some of the traditions; here’s the significance of the red envelopes you might see. Take a virtual tour around the globe through these joyful photos.

January 29, 1886: The automobile patent is issued to Karl Benz for the Benz Patent-Motorwagen, widely  regarded as the first modern car, revolutionizing transportation.
January 29, 1900 The American League, consisting of eight baseball teams, was organized in Philadelphia. Go to article.

Emmanuel Swedenborg, inventor, philosopher, b. 1688.
Thomas Paine, revolutionary, b. 1737.
Anton Chekhov, writer, b. 1860.
W.C. Fields, actor, b. 1880.

People who can’t ‘see with their mind’s eye’ have different wiring in the brain
People with aphantasia still generate brain activity when attempting to visualize, but that image may be getting lost in translation, a new study suggests. Read More.

New glowing molecule, invented by AI, would have taken 500 million years to evolve in nature, scientists say
An artificial intelligence model has created a new protein that researchers say would have taken 500 million years to evolve in nature — if nature were capable of producing such a thing. Read More.

Boom Supersonic XB-1 smashes the sound barrier, becoming the 1st civil aircraft to go supersonic in US history.  By achieving a top speed of Mach 1.1, Boom Supersonic has broken records and is on course to revive supersonic passenger travel.

Last ice age quiz: How much do you know about Earth’s frosty past?
How did woolly mammoths survive the last ice age? And how thick was the ice over New York City? Test your knowledge by taking our quiz. Read More.

‘Stranded’ astronauts?
Elon Musk on Tuesday said SpaceX will bring home two Starliner astronauts who have been on the International Space Station longer than expected. However, NASA announced that plan months ago.

Why you should clean exercise equipment
The number of harmful bacteria on gym equipment may be whey beyond your expectations … Read why you should frequently sanitize gym surfaces, especially yoga mats.

The Middle East’s first super-luxury train will gleam gold
Dream of the Desert is a train set to whisk people across Saudi Arabia — in style, according to the designs that have just been released.

This designer is making waves with her ‘four-dimensional’ fashion
She’s the sister of Nigerian soccer legend Sunday Oliseh, but with her fashion label Tesslo, Tessy Oliseh-Amaize is making a name for herself in the US fashion scene.

“The supply has been improving, but still not enough to meet with demand”. –— Ryan Delany, the chief analyst at Coffee Trading Academy, a research company that focuses on the global coffee market. This week, coffee prices hit a new high after the Trump administration threatened a 25% tariff on Colombia — the third largest coffee-producing country in the world.

PHOTOS OF THE DAY

Dublin, Ireland
‘Morning breaks in Howth.’
Photograph: Fran Cassidy

Arizona, US
‘Antelope Canyon – nature’s abstract painting.’
Photograph: Art Seaman

Sarajevo, Bosnia and Herzegovina
‘The city at dusk. Is it the only snow we will have this year? It melted in a couple of days.’
Photograph: Stéphane Maïcon
Market Closes for January 29, 2025

International Markets

Bonds

Currencies

Commodities

MARKET COMMENTARY:
📈 On this day in 1886, Karl Benz received a German patent for his “motorwagen,” a frail and ungainly vehicle with three wheels and a wooden chassis. It was the world’s first automobile.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the second day, climbing 0.2%, or 53.84 to 25,473.30 in Toronto.
The index advanced to the highest closing level since Dec. 11.
Celestica Inc. contributed the most to the index gain, increasing 6.6%.
NexGen Energy Ltd. had the largest increase, rising 6.7%.
Today, 121 of 222 shares rose, while 96 fell; 4 of 11 sectors were higher, led by energy stocks.
Insights
* This month, the index rose 3%
* The index advanced 20% in the past 52 weeks. The MSCI AC Americas Index gained 22% in the same period
* The S&P/TSX Composite is 1.4% below its 52-week high on Dec. 9, 2024 and 24.5% above its low on Feb. 13, 2024
* The S&P/TSX Composite is up 0.6% in the past 5 days and rose 2.7% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 21 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$4t
* 30-day price volatility fell to 11.40% compared with 11.51% in the previous session and the average of 11.05% over the past month
================================================================
|Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Energy | 39.1303| 0.9| 35/7
Materials | 27.9525| 0.9| 36/13
Financials | 6.7688| 0.1| 14/11
Consumer Staples | 6.0926| 0.6| 6/4
Information Technology | -0.3175| 0.0| 4/5
Health Care | -0.8582| -1.2| 1/3
Industrials | -3.1995| -0.1| 16/12
Utilities | -4.1355| -0.4| 3/12
Consumer Discretionary | -4.6905| -0.6| 3/7
Communication Services | -5.5936| -0.9| 1/4
Real Estate | -7.3115| -1.5| 2/18
================================================================
| | |Volume VS |
| Index | | 20D AVG |YTD Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
Celestica | 7.2860| 6.6| 91.0| 9.3
Canadian Natural Resources | 7.0950| 1.1| -38.4| -0.3
Cameco | 6.9500| 3.3| 35.3| -2.2
Waste Connections | -4.0850| -0.9| 14.0| 5.9
Shopify | -6.2860| -0.4| -1.5| 10.1
RBC | -9.9120| -0.6| 81.2| 1.6
US
By Rita Nazareth
(Bloomberg) — Stocks slipped and bond yields rose, though both pared bigger moves as early concern that the Federal Reserve was growing more worried about inflation got tamped down by Chair Jerome Powell in a press conference.
The S&P 500 trimmed by about half a slide that earlier approached 1%.
Big tech remained under pressure ahead of the start of the group’s earnings season.
In late hours, Microsoft Corp. tumbled 5.5% after its cloud revenue missed estimates.
The Federal Open Market Committee kept the federal funds rate in a range of 4.25%-4.5%.
In a statement, officials repeated that inflation remains “somewhat elevated” but removed a reference to it having made progress toward their 2% goal.
Later, Powell clarified the reference to inflation was just a decision to shorten the sentence, rather than send any sort of meaningful signal.
“Never mind, says Powell,” noted Peter Boockvar, author of The Boock Report.
“Jay Powell in his presser said the tweaks in comments on the labor market and inflation in the FOMC statement should not be interpreted as a signal.”
To Krishna Guha at Evercore, Powell’s press conference is coming across as “appreciably less hawkish” than the statement updates.
The S&P 500 fell 0.5%.
The Nasdaq 100 dropped 0.3%.
The Dow Jones Industrial Average slid 0.3%.
The yield on 10-year Treasuries advanced two basis points to 4.55%.
The Bloomberg Dollar Spot Index was little changed.
The loonie pared losses after the Bank of Canada cut rates, but dropped guidance on any further adjustments to borrowing costs.

Wall Street’s Reaction to Fed:
* Ivan Feinseth at Tigress Financial Intelligence:
Overall, nothing is really changed in the Fed’s outlook. Powell believes that inflation remains on a slow but steady downtrend and the labor market and housing markets have started to firm which has helped to lift the stock prices.
* Scott Colyer at Advisors Asset Management:
Powell’s comments are simply that they want to see more information but that they feel they have made long term progress on inflation and the labor markets remain strong.
This is a win on both mandates.
* Frank Monkam at Buffalo Bayou Commodities:
I don’t think the Fed did anything catastrophic yet.
They were hawkish a little bit, but there’s nothing really to derail a potential move of the lows if earnings were to come in favorably.
I think it’s a good opportunity to keep in some dry powder going into earnings and buy the dip in US stocks.
* David Russell at TradeStation:
The statement was a little hawkish, but policymakers are on hold with a long break until the March meeting.
Data between now and then will set the tone for that next big decision.
* Seema Shah at Principal Asset Management:
Yet, in terms of guidance, the reality is that the Fed is simply trying to respond to the data and the new administration’s policies as they unfold.
At times like these, when government policy – particularly tariff policy – is so uncertain, they do not have a forecasting edge.
Keeping policy rates on hold until a clear direction starts to emerge is sensible.
But make no mistake, if next month brings a second consecutive soft inflation print, coupled with a slight weakening in jobs growth, we may start to hear a renewed dovish tone to Fedspeak.
* Sameer Samana at Wells Fargo Investment:
We would continue to focus on why the Fed won’t cut anytime soon, specifically a strong economy and labor, which bodes well for solid corporate earnings growth.
We would be buyers of U.S. large-cap, and the energy, communications services, financials, and industrials sectors on pullbacks.
* Greg McBride at Bankrate:
The progress toward 2% inflation has stalled out, and the Fed knows it.
They gave no indication in their post-meeting statement that a resumption of rate cuts is likely at the next meeting in March.
It will take a run of good inflation data to get us there, whenever that may be.
* Jeffrey J. Roach at LPL Financial:
With the data we have currently, the Fed would likely hold rates unchanged at their March 19 meeting.
Solid income growth for most households over the past year has kept services inflation elevated.
Businesses are expanding operations, consumers have a healthy appetite for travel and leisure, and animal spirits are still elevated.
These conditions make it difficult for the Fed to cut rates without reigniting broad inflation pressures.
Aside from the Fed decision, traders focused on the start of the mega cap earnings season.
While profits from the Magnificent Seven behemoths are still rising — and far outpacing the rest of the market — growth is projected to come in at the slowest pace in almost two years.
Those briefings have headier stakes now, thanks to DeepSeek. The US tech behemoths are under increasing scrutiny for their spending on artificial intelligence and the meager returns they’re generating from the technology, as virtually all of Wall Street tries to understand how the Chinese AI upstart managed, seemingly overnight, to catch up at what appears to be a sliver of the cost.
The recent volatility among tech giants has been particularly worrisome for Wall Street, as the S&P 500’s leadership hasn’t been this concentrated in more than 20 years.
Data shows that less than one-third of index members were able to outperform the S&P 500 during the past two years, as Bank of America Corp. strategist Michael Hartnett has called out.
That resembles the run-up to the dot-com bubble at the end of the 1990s, when a similarly slim cadre of stocks were beating the benchmark.
The risks for markets from such concentration have been on display this week, as the DeepSeek jolt wiped out half a trillion dollars of Nvidia’s market value.
“The DeepSeek correction in tech stocks has not changed the overall concentration problem in the S&P 500,” said Torsten Slok at Apollo.
“Investors in the S&P 500 continue to be dramatically over-exposed to the tech sector.”
The tech-led selloff in US equities at the start of this week was just a blip, given the positive outlook for the economy, according to Goldman Sachs Group Inc. strategists.
That slump isn’t a harbinger of a sustained decline in stocks, the Goldman team led by Peter Oppenheimer wrote in a note.
“Most bear markets are triggered by expectations of falling profits driven by fears of recession,” which has a low probability of occurring in the next 12 months, the strategists said.
US stocks are at a critical juncture where a disorderly selloff in artificial intelligence-related stocks risks sinking the broader market, according to Pictet Wealth Management.
Although US equities remain a top pick at the firm, valuations look vulnerable after a 70% rally in the S&P 500 since late 2022 that was driven by a small group of tech stocks, according to Geraldine Sundstrom, head of investment offering at Pictet Wealth.
“This type of concentration typically doesn’t last forever and we feel stocks will mean revert to an environment where the performance is broader,” Sundstrom said at a media roundtable event in London.
The advent of cheaper artificial intelligence models is a “net positive” for global equity markets as it will fuel incremental growth, bring forward efficiency gains and drive inflation lower, according to JPMorgan Chase & Co. strategists Dubravko Lakos-Bujas.
“The DeepSeek selloff is an example of an unexpected surprise that cut right through the market’s crown jewels, the Magnificent Seven,” said David Laut at Abound Financial.
“While the markets have staged a nice rebound since Monday’s declines, a larger correction doesn’t happen without the crown jewels being stolen or at least threatened, and that’s exactly what happened on Monday. A larger correction in AI is still possible.”
Laut also noted that this week’s stock market volatility is a window of what to expect this year. 

Corporate Highlights:
* Trump Media and Technology Group Corp. launched a financial- services and fintech brand dubbed Truth.Fi, with a focus on crypto and customized exchange-traded funds.
* Hewlett Packard Enterprise Co. representatives met with Donald Trump’s antitrust enforcers on Tuesday over its $14 billion bid to buy Juniper Networks Inc., according to people familiar with the matter.
* Apple Inc. has been secretly working with SpaceX and T-Mobile US Inc. to add support for the Starlink network in its latest iPhone software, providing an alternative to the company’s in- house satellite-communication service.
* ASML Holding NV reported booking orders worth twice as much as analysts expected, as the artificial intelligence boom fuels demand for its chipmaking machines.
* Nasdaq Inc. Chief Executive Officer Adena Friedman said she expects a strong environment for initial public offerings in the second quarter and balance of 2025 as investors gain confidence from stabilizing interest rates and inflation.
* Alibaba Group Holding Ltd. published benchmark scores and touted what it called world-leading performance with its new artificial intelligence model release.
* Starbucks Corp. reported better-than-expected quarterly results, luring back lapsed customers with coffee-focused ads and by removing extra charges for nondairy milk.
* T-Mobile US Inc. reported fourth-quarter results that beat analysts’ projections, benefiting from continued growth in wireless subscribers and home internet customers.
* Cigna Group plans to limit patients’ out-of-pocket expenses for medications as the insurer faces pressure from Washington over its role in prescription costs.
* Bankrupt Spirit Airlines Inc. rejected a new acquisition offer from the parent of Frontier Airlines but said it remains open to a long-discussed combination of the budget carriers.
* Spotify Technology SA won dismissal of a lawsuit alleging it made a change to its premium service that cheated songwriters out of royalties.
* A judge ordered Paramount Global to hand over some internal files to a pension fund that’s raising questions about the acquisition by Skydance Media, which shifts control of the storied Hollywood studio to producer David Ellison.

Key events this week:
* Eurozone ECB rate decision, consumer confidence, unemployment, GDP, Thursday
* US GDP, jobless claims, Thursday
* Apple, Deutsche Bank earnings, Thursday
* US personal income & spending, PCE inflation, employment cost index, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.5% as of 3:59 p.m. New York time
* The Nasdaq 100 fell 0.3%
* The Dow Jones Industrial Average fell 0.3%
* The MSCI World Index fell 0.3%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro fell 0.2% to $1.0411
* The British pound was little changed at $1.2439
* The Japanese yen rose 0.1% to 155.35 per dollar
Cryptocurrencies
* Bitcoin rose 4% to $104,279.26
* Ether rose 2.8% to $3,138.57
Bonds
* The yield on 10-year Treasuries advanced two basis points to 4.55%
* Germany’s 10-year yield advanced two basis points to 2.58%
* Britain’s 10-year yield was little changed at 4.62%
Commodities
* West Texas Intermediate crude fell 1.2% to $72.91 a barrel
* Spot gold fell 0.3% to $2,755.12 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Jessica Menton, Natalia Kniazhevich, Margaryta Kirakosian, Sujata Rao and Aya Wagatsuma.

Have a lovely evening.

Be magnificent!
As ever,

Carolann
Training is potent. Training toward higher and higher, and ever higher ideals is worth any man’s thought and labor and diligence. –Mark Twain, 1835-1910.

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