January 31, 2022 Newsletter

Dear Friends,

Tangents: Happy Monday and last day of January.

On Jan. 31, 1865, the House of Representatives passed a constitutional amendment to abolish slavery. Go to article »
January 31, 1606: British provocateur Guy Fawkes, one of the Gunpowder Plot conspirators, who sought to blow up Parliament and to assassinate King James I for his repression of Roman Catholicism, is executed in London.
1958: Explorer I Space Satellite launched.
Franz Schubert, composer, b. 1797.
 
Tonga eruption was so intense, it caused the atmosphere to ring like a bell. 

Cold weather in Miami is causing a lot of falling iguanas.  Don’t worry! They may look lifeless for now, but these reptiles usually rejuvenate when it gets warm again. 

Learn about the first 3 billion years of life on our planet.  This paleontologist can help answer all your questions!

Our brains keep us 15 seconds in the past. (h/t Ellen Kominers)

The internet is totally different with ad blockers.

PHOTOS OF THE DAY

Thousands of starlings take wing at dawn. The birds fly west, leaving the city, and come back at sunset to sleep in parks and trees
CREDIT: Javier Belver/EPA

People walk past lantern decorations in Chinatown on lunar new year’s eve
CREDIT: Kim Kyung-Hoon/Reuters

Families enjoy the snow in Prospect Park, Brooklyn, after a powerful storm
CREDIT: Deccio Serrano/NurPhoto/Rex/Shutterstock

Market Closes for January 31^st, 2022

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1940, the first monthly Social Security check was issued to Ida May Fuller, a 65-year-old retired legal secretary in Ludlow, Vt. Because Social Security launched only three years before she retired, Ms. Fuller had paid a cumulative total of only $24.75 in Social Security taxes. But her initial monthly check was $22.54—and, by the time she died in 1975 at the age of 100, she had collected a total of $22,888.92 in benefits, nearly 1,000 times what she paid in. 
Canada
By Geoffrey Morgan
(Bloomberg) — Shopify Inc. rallied 10.1% Monday to post its biggest one-day gain since early November and led all Canadian tech stocks higher.
The S&P/TSX Composite rose for the second day, climbing 1.7%, or 356.54 to 21,098.29 in Toronto.
The move was the most since rising 1.9% on Dec. 21.
Today, information technology stocks rose 7.2% and led the market higher, as 10 of 11 sectors gained; 209 of 241 shares rose, while 31 fell.
Ballard Power Systems Inc. had the largest increase, rising 12.9%.
Insights
* In the past year, the index had a similar or greater gain two times. The next day, it advanced after both occasions
* This month, the index fell 0.6%
* The index advanced 22% in the past 52 weeks. The MSCI AC Americas Index gained 19% in the same period
* The S&P/TSX Composite is 3.2% below its 52-week high on Nov. 16, 2021 and 22% above its low on Jan. 29, 2021
* The S&P/TSX Composite is up 2.6% in the past 5 days and fell 0.6% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 19 on a trailing basis and 14.7 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.6% 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 13.41% compared with 12.41% in the previous session and the average of 13.28% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
* Information Technology | 121.4340| 7.2| 15/1
* Financials | 90.7244| 1.3| 27/1
* Materials | 44.4440| 1.9| 45/10
* Energy | 28.4219| 0.9| 27/5
* Industrials | 21.7580| 0.9| 25/4
* Consumer Discretionary | 16.4150| 2.2| 13/1
* Consumer Staples | 11.3761| 1.5| 10/1
* Utilities | 10.9441| 1.2| 16/0
* Real Estate | 6.0761| 1.0| 19/5
* Health Care | 5.7784| 4.1| 8/0
* Communication Services | -0.8251| -0.1| 4/3
================================================================
| | |Volume VS| YTD
| Index | | 20D AVG | Change
Top Contributors |Points Move|% Change | (%) | (%)
================================================================
* Shopify | 88.0400| 10.1| 48.5| -29.6
* Brookfield Asset Management | 21.0300| 3.1| 57.2| -8.4
* TD Bank | 20.0000| 1.6| -37.0| 5.0
* Rogers Communications | -1.6100| -1.0| 16.7| 7.0
* Canadian Natural Resources | -2.5050| -0.5| -13.9| 21.0
* Canadian Pacific | -8.4760| -1.4| 17.7| 0.0

US
By Vildana Hajric and Emily Graffeo
(Bloomberg) — U.S. equities ended a volatile month with a rally Monday as dip buyers emerged from last week’s jitters on central bank policy.
The S&P 500 rose 1.9% while the tech-heavy Nasdaq 100 added 3.3%, securing the best two-day rallies the indexes have seen since April and November 2020, respectively.
Traders were braced for instability following the stock market’s swings in and out of a correction after hawkish commentary from the Federal Reserve on Wednesday.
Instead, it was a slow march higher as traders increase their bets the Fed will begin successive rate hikes in March.
The dollar was weaker while Treasury yields rose.
“Until the market and the Fed stop leapfrogging each other in terms of interest rate expectations, the market will stay volatile,” wrote Deutsche Bank strategist Jim Reid, adding he wouldn’t be surprised by a swing in late trading.
The Nasdaq 100 has already recovered 6.6% from a low on Thursday, which can partly be explained by some short covering with traders buying back shares of the richly-valued tech stocks they previously bet against.
Short interest as a percentage of float for constituents in the index reached a roughly nine-month high earlier this month, according to a note from Wells Fargo.
That “provides fuel for a short covering rally,” said Christopher Harvey, head of the bank’s equity strategy.
There remains speculation over whether the fed funds rate might increase 25 or 50 basis points at the start of the Fed’s tightening cycle.
Yet, Michael O’Rourke, chief market strategist  at Jones trading Institutional Services, said it didn’t matter.
“Debating between 25 and 50 basis point for March is the equivalent to deciding between using a cup or a bucket to start emptying a swimming pool. One is larger than the other, but the difference is negligible relative to the task,” he said.
This week a flurry of companies from Alphabet Inc. to Exxon Mobil Corp. are expected to report financial results, potentially adding to the market’s volatility.
So far this quarter the stellar run of corporate profitability has continued. Of the 172 S&P 500 companies that have posted results so far, 81% have met or exceeded expectations, and profits have come in about 5% above the levels predicted.
“Equities are right now in a tug-of-war between better economy, better fundamentals and tighter money supply,” Troy Gayeski, chief market strategist at FS Investments, said by phone.
“You’re going to have to deal with market angst but the good news is the economy is on very firm footing and it would take another major exogenous shock, like a pandemic, or some type of major geopolitical situation” to really disrupt the economy and cause a recession, he added.
The MSCI World Index ended January with its worst monthly performance since March 2020.
Brent crude posted its best January in at least 30 years, with some predicting prices will surpass $100 a barrel.
And Bitcoin traded around $38,400, paring back a drop of almost 20% since the start of 2022. 
What to watch this week:
* Earnings are due from Alphabet, Amazon, Exxon Mobil, Ford Motor, Meta Platforms, Qualcomm, Sony, Spotify, UBS Group
* Reserve Bank of Australia rate decision, Tuesday
* Manufacturing PMIs, including euro zone, Tuesday
* OPEC+ meeting on output, Wednesday
* Euro zone CPI, Wednesday
* Bank of England, European Central Bank rate decisions, Thursday
* Fed Board of Governors confirmation hearing, Thursday
* U.S. factory orders, initial jobless claims, durable goods, Thursday
* U.S. payrolls report for January, Friday
* Winter Olympics kick off in China, Russia’s President Vladimir Putin due to attend opening ceremony, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 1.9% as of 4:01 p.m. New York time
* The Nasdaq 100 rose 3.3%
* The Dow Jones Industrial Average rose 1.2%
* The MSCI World index rose 1.8%
Currencies
* The Bloomberg Dollar Spot Index fell 0.6%
* The euro rose 0.7% to $1.1233
* The British pound rose 0.3% to $1.3447
* The Japanese yen rose 0.2% to 115.07 per dollar
Bonds
* The yield on 10-year Treasuries advanced one basis point to1.78%
* Germany’s 10-year yield advanced six basis points to 0.01%
* Britain’s 10-year yield advanced six basis points to 1.30%
Commodities
* West Texas Intermediate crude rose 1.7% to $88.33 a barrel
* Gold futures rose 0.7% to $1,799.40 an ounce
–With assistance from Srinivasan Sivabalan, Joanna Ossinger, Cormac Mullen and Sunil Jagtiani.
Have a lovely evening.

Be magnificent!
As ever,

Carolann

The best form of saying is being. –Che Guevara, 1928-1967.

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