January 5, 2024, Newsletter

Dear Friends,

Tangents:  Happy Friday.
It is the Twelfth Night – the evening before the Epiphany.
110 years ago today, on Jan. 5, 1914, Henry Ford, head of the Ford Motor Company, introduced a minimum wage scale of $5 per day.  Go to article >>
January 5, 1968: The Prague Spring begins.  The period of political liberalization in Czechoslovakia began wit the election of Alexander Dubček as the country’s leader.

Medieval belt buckle of ‘dragon’ eating frog discovered
Archaeologists in the Czech Republic thought they’d found a unique object, but they have since learned of at least three more. Read More.

1st partial-heart transplant is growing with baby
Heart valves transplanted as part of the first partial-heart transplant in a human are now growing along with the infant who received them. Read More.

New images showcase true colors of Neptune and Uranus
Astronomers have used telescope data to color-correct Voyager 2 images of Neptune and Uranus, revealing that the planets have a similar pale hue.

12 books we’re excited to read in 2024
These are some of the most anticipated titles this year across a variety of literary genres.

The most iconic 1999 style moments are turning 25 this year
From Pamela Anderson’s big pink hat to the all-leather dress codes of “The Matrix,” these are the standout looks that defined the end of the millennium.

Twins born 40 minutes apart have birthdays in different years
A New Jersey family has welcomed twins who were born not only on different days — but in different years!

The Paris Olympics Will Showcase Iconic Landmarks and a new Sport
The Eiffel Tower, the Seine River and other famous spots will double as event venues at the 2024 games.

PHOTOS OF THE DAY

London, England
Fireworks light up over the London Eye to celebrate the turn of the year.
Photograph: Hollie Adams/Reuters

Flamingos explore the wetlands during the migration season in Kuwait City.
Photograph: Anadolu/Getty Images

Loch Lomond, UK
Early morning light and mist at Firkin Point on Loch Lomond in Scotland
Photograph: Murdo MacLeod/The Guardian
Market Closes for January 5^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1999, Amazon said fourth-quarter sales hit $250 million, more than triple a year earlier. Its surging shares made it the most traded stock on the Nasdaq, adding fuel to the tech bubble.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the second day, climbing 0.3%, or 66.2 to 20,937.55 in Toronto.
The move was the biggest since rising 0.6% on Dec. 27.
Shopify Inc. contributed the most to the index gain, increasing 1.5%.
Precision Drilling Corp. had the largest increase, rising 5.3%.
Today, 138 of 225 shares rose, while 75 fell; 8 of 11 sectors were higher, led by financials stocks.
Insights
* So far this week, the index was little changed
* The index advanced 7.3% in the past 52 weeks. The MSCI AC Americas Index gained 23% in the same period
* The S&P/TSX Composite is 0.7% below its 52-week high on Dec. 27, 2023 and 12% above its low on Oct. 27, 2023
* S&P/TSX Composite is trading at a price-to-earnings ratio of 16.4 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$3.3t
* 30-day price volatility little changed to 10.60% compared with 10.59% in the previous session and the average of 11.05% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 33.8776| 0.5| 19/8
Energy | 16.7464| 0.5| 29/10
Information Technology | 14.6865| 0.8| 6/4
Utilities | 3.6962| 0.4| 9/5
Communication Services | 2.7639| 0.3| 3/2
Real Estate | 2.5653| 0.5| 18/1
Materials | 2.2587| 0.1| 27/18
Health Care | 1.1662| 1.9| 3/1
Consumer Discretionary | -0.3117| 0.0| 9/4
Consumer Staples | -1.0848| -0.1| 6/5
Industrials | -10.1585| -0.4| 9/17
================================================================
| | |Volume VS | YTD
| Index | | 20D AVG | Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
Shopify | 12.3900| 1.5| -7.9| -3.5
RBC | 8.4340| 0.6| -20.0| 0.5
Fairfax Financial | 6.4550| 3.3| 39.2| 4.9
Franco-Nevada | -2.1230| -1.1| -43.7| 0.2
Waste Connections | -2.3240| -0.7| 35.1| -1.1
Canadian Pacific Kansas | -5.5390| -0.8| -31.0| 0.3
US
By Cristin Flanagan
(Bloomberg) — Equities had a dour start to the year as traders clung to wagers that a March interest rate cut was still on the table after a slew of mixed jobs and US service sector data.
The S&P 500 eked out a 0.2% gain as Friday closed the stock market’s worst week since late October.
The equities benchmark kicked off the new year by snapping its nine-week bull run.
The Nasdaq 100 also squeezed out a small advance after five days of losses.
The first few days of the year started off with a selloff in 2023’s big tech winners, including Apple Inc. and Nvidia Corp.
The downbeat tone of the shortened holiday week signals rough waters ahead for equities in the first half, according to Fundstrat Global Advisors LLC’s Tom Lee.
The jobs data “adds to misery of early 2024,” he said.
“The first four trading days of 2024 have been a terrible start for equities,” Lee wrote in a note to clients. “The year tends to play out in January. Meaning, this turmoil in the first week of trading is telling us to brace for a challenging year.”
The strategist, who was one of the few to forecast last year’s bull run, still expects a rally in the latter half of the year.
Richmond Fed President Thomas Barkin said Friday the labor market was moving in a steady, softening pattern and the Federal Reserve can lower rates as the economy normalizes and confidence grows about the downward path of inflation.
Friday’s strong jobs report initially battered stocks and bonds but a brief rebound was staged after data showing the US service sector slowed in December but remained above a key level that indicates expansion.
Treasuries ended Friday lower after a choppy session, notching a weekly slide.
The yield on the 10-year rose to 4.05%.
US bonds were whipsawed after data showing nonfarm payrolls rose by 216,000, a larger than expected gain and the unemployment rate held steady at 3.7% in December.
The jobs report initially cooled wagers on faster and deeper rate cuts from the Fed.
But swaps traders eventually reformed bets on roughly 140 basis points of easing this year, with about a 70% chance of a decrease in March.
Some on Wall Street kept faith in the central bank’s ability to cool the economy while side-stepping a downturn.
“Clearly, the economy is strong enough as of now to withstand the Fed’s currently elevated interest rates,” according to Jeremy Straub, chief executive officer of Coastal Wealth.
Treasury Secretary Janet Yellen was also optimistic the world’s largest economy was on the right path after declaring the US had achieved a much-anticipated soft landing.
But many were skeptical about the prospect of deeper rate cuts after the payrolls report — noting the devil was in the details.
The data did little to change the views of economists at Goldman Sachs Group Inc. and JPMorgan as the banks reiterated their forecasts on rate cuts.
“This number does question the confidence of the market around the March cut,” said Lindsay Rosner a portfolio manager at Goldman Sachs Asset Management.
“We’ve got three inflation prints between now and the March meeting. Every number counts.”
Investors will get a taste next Thursday.
Consumer inflation for the year is projected to come in at 3.2%, according to economists surveyed by Bloomberg.
Investors will also be watching the financial sector next Friday as JPMorgan Chase & Co. and other big banks kick off earnings.
BMO Capital’s Ian Lyngen said Friday’s better-than-expected jobs report “affords the Fed plenty of flexibility to delay cutting rates early in 2024.”
Vital Knowledge’s Adam Crisafulli was even more circumspect: “Hourly wage growth ran hot and the participation rate sank, all of which suggests markets are far off the mark in terms of what they’re pricing in for 2024 Fed easing.”
What Bloomberg Economics Says: Any thoughtful examination of the December jobs report and ISM Services survey shows the labor market is sending concerning signs, if not outright recessionary signals.
If the sharp plunge in the ISM Services employment index is correct, the labor market is weaker than at the worst point of the 2001 recession.
Jobless claims data (Thurs.) in coming weeks will be particularly signaling – as this is about the time of year when firms lay off temporary workers.— Economists led by Anna Wong Earlier, Citigroup Inc. strategists recommended buying
global stocks at times of weakness and said don’t chase rallies as this year offers less upside than 2023.
In corporate news, Tesla Inc. is recalling more than 1.6 million cars in China over issues with the driver-assistance system.
Deal speculation swirled Friday afternoon.
Synopsys Inc. is in advanced talks to acquire engineering software provider Ansys Inc. for about $35 billion while Southwestern Energy Co. and Chesapeake Energy Corp. are near a $17 billion merger, according to reports.
In China, shadow banking giant Zhongzhi Enterprise Group Co. filed for bankruptcy.
The downfall marks one of China’s biggest-ever corporate collapses, putting more stress on already fragile consumer and investor sentiment.
The dollar edged lower after being whipsawed by the data.
Oil climbed, cementing a weekly gain, as simmering tensions in the Middle East and North Africa eclipsed signs of weakening US demand.

Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.2% as of 4 p.m. New York time
* The Nasdaq 100 rose 0.1%
* The Dow Jones Industrial Average was little changed
* The MSCI World index was little changed
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro was little changed at $1.0939
* The British pound rose 0.3% to $1.2720
* The Japanese yen was little changed at 144.76 per dollar
Cryptocurrencies
* Bitcoin fell 1.2% to $43,960.51
* Ether fell 1.2% to $2,248.57
Bonds
* The yield on 10-year Treasuries advanced five basis points to 4.05%
* Germany’s 10-year yield advanced three basis points to 2.16%
* Britain’s 10-year yield advanced six basis points to 3.79%
Commodities
* West Texas Intermediate crude rose 2.4% to $73.91 a barrel
* Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Alex Nicholson, Edward Bolingbroke, Allegra Catelli, Cecile Gutscher and Sujata Rao.

Have a wonderful weekend everyone.

Be magnificent!
As ever,

Carolann
We don’t remember days, we remember moments. –Cesare Pavese, 1908-1950.

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