January 7, 2022 Newsletter

Dear Friends,

Tangents: Happy Friday.
1989: Japanese Emperor Hirohito died at age 87.  Go to article »

2015: Two gunmen commit mass murder at the offices of Charlie Hebdo in Paris, shooting twelve people execution style, and wounding eleven others.

A Los Angeles mega mansion could sell for $295 million.  The property has five swimming pools and a moat – because who doesn’t need a moat?

BMW introduces color-changing concept SUV.  It’s basically like picking an outfit every day, but for your car.

Omicron may be the beginning of the end of the pandemic.

Some Eurasian words point to common linguistic ancestors as old as the Ice Age.

Drop a raindrop anywhere in the world and see where it goes.

RIP, Sidney Poitier.
PHOTOS OF THE DAY

Kelvingrove Park under heavy snow amid a Met Office warning of snow stretching from the Highlands through to Glasgow and Edinburgh
CREDIT: Ewan Bootman/REX/Shutterstock

Handout picture released by the Galapagos National Park showing a fissure of the Wolf Volcano after it erupted for the second time in seven year
CREDIT: PARQUE NACIONAL GALAPAGOS/AFP/Getty Images

Surfer Will Santana from Brazil rides a wave during a session at Praia do Norte
CREDIT: Octavio Passos/Getty Images

Market Closes for January 7^th, 2021

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On this day in 1825, the nation’s first great nonfinancial IPO was sold, as the Delaware & Hudson Canal Co. went public at $100 per share. The stock hit $112 that May, slid to $71 over the next three years, then went on to be a stable growth stock for decades.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite advanced slightly to 21,084.45 in Toronto.
Royal Bank of Canada contributed the most to the index gain, increasing 1.4 percent.
Energy Fuels Inc/Canada had the largest increase, rising 6.1 percent.
Today, 112 of 241 shares rose, while 125 fell; 5 of 11 sectors were higher, led by energy stocks.
Insights
* So far this week, the index fell 0.7 percent
* The index advanced 17 percent in the past 52 weeks. The MSCI AC Americas Index gained 20 percent in the same period
* The S&P/TSX Composite is 3.3 percent below its 52-week high on Nov. 16, 2021 and 21.9 percent above its low on Jan. 29, 2021
* S&P/TSX Composite is trading at a price-to-earnings ratio of 19.1 on a trailing basis and 15 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.6 percent on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.37t
* 30-day price volatility fell to 15.47 percent compared with 15.55 percent in the previous session and the average of 14.89 percent over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
* Energy | 32.9464| 1.1| 22/10
* Financials | 30.6541| 0.4| 20/8
* Industrials | 6.3433| 0.3| 10/20
* Health Care | 1.2376| 0.8| 5/3
* Materials | 0.7123| 0.0| 23/28
* Communication Services | -0.7050| -0.1| 4/3
* Utilities | -2.8129| -0.3| 6/10
* Real Estate | -4.2718| -0.7| 11/13
* Consumer Discretionary | -5.1980| -0.7| 4/10
* Consumer Staples | -6.0761| -0.8| 3/8
* Information Technology | -40.5996| -2.0| 4/12
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
* Royal Bank of Canada | 18.9600| 1.4| -5.2| 5.6
* Canadian Pacific | 13.0000| 2.2| -52.4| 5.3
* Canadian Natural Resources | 12.6000| 2.7| -36.2| 11.8
* Waste Connections | -4.1810| -1.4| -36.4| -4.5
* Brookfield Asset Management | -6.7090| -0.9| -37.7| -5.0
* Shopify | -32.1800| -2.8| 32.3| -17.0

US
By Emily Graffeo and Vildana Hajric
(Bloomberg) — U.S. stocks fell, with the S&P 500 posting the worst start to a year since 2016, amid concern the Federal Reserve will be forced to raise rates faster than some investors had anticipated.
After a record close for the S&P 500 on Monday, declines in mega caps such as Tesla Inc., Nvidia Corp. and Alphabet Inc. on Friday left the benchmark ending the start of the new year down 1.9% on the week. The tech-heavy Nasdaq 100 closed down more than 4% on the week.
A hawkish stance in minutes of Fed’s December meeting released mid-week fueled the selloff and a mixed hiring report did little to assuage concerns about a rate hike as early as March.
Overnight index swaps are pricing in about an 88% chance of an interest-rate hike that month, according to data compiled by Bloomberg.
“Overall, this print had mixed messaging,” said Anu Gaggar, global investment strategist for Commonwealth Financial Network.
But “the combination of the decline in unemployment rate to below Fed’s long-term equilibrium level and acceleration in wage growth brings the Fed’s March meeting in play for the first-rate hike of this cycle.”
The December jobs data showed employers added fewer staff than expected while wages rose more than forecast and unemployment dropped below 4%.
Treasury yields have climbed across the board, with the five-year rate rising to pre-pandemic levels, topping 1.50%.
The two-year rate pushed above 0.90%, heading for the biggest weekly spike since October 2019.
The benchmark 10-year yield surpassed the 2021 high, to just shy of 1.80%.

“If the 10-year breaks above 2% on a sustained basis, that to me is an indication that investors are really starting to get worried about sustained inflation,” said Brad McMillan, chief investment officer at Commonwealth Financial Network.
An overtly hawkish stance from the Fed has roiled financial markets at the start of a new year, with investors reassessing how to price assets in an environment of rising interest rates.
The removal of crisis-era accommodation marks a shift not seen in at least three years, a time that also saw a spike in volatility.
While high-growth techs took the brunt of the selloff this week, value stocks have benefited as hedge funds load up on these stocks and dump expensive names, helping fuel the sharpest
stock rotation since March.
“2022 has not seen its usual start of the year rally,” said Florian Ielpo, head of macro at Lombard Odier Asset Management.
“The first week of January is usually a week of positive equity performance: this time, equities declined and value took it all.”
Comments by regional Fed presidents provided some additional insight this week as traders attempted to predict a possible schedule for tightening.
San Francisco Fed President Mary Daly said Friday she favored raising interest rates “gradually” and moving on to shrinking the Fed’s balance sheet more quickly than in the last tightening round.
St. Louis Fed President James Bullard, a more hawkish policy maker, said in a speech Thursday the central bank could raise its target interest rate as soon as March.
Europe’s equity benchmark ended lower Friday, to open the year with a down week.
Consumer prices in the euro area jumped 5% from a year earlier in December, adding pressure on the European Central Bank to join a growing legion of central banks from the Fed to the Bank of England in tightening monetary conditions.
The euro advanced against a broadly weaker dollar.
What to watch this week:
* ECB’s Schnabel speaks on a panel Saturday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.4% as of 4 p.m. New York time
* The Nasdaq 100 fell 1.1%
* The Dow Jones Industrial Average was little changed
* The MSCI World index was little changed
Currencies
* The Bloomberg Dollar Spot Index fell 0.5%
* The euro rose 0.6% to $1.1360
* The British pound rose 0.5% to $1.3594
* The Japanese yen rose 0.2% to 115.56 per dollar
Bonds
* The yield on 10-year Treasuries advanced five basis points to 1.77%
* Germany’s 10-year yield advanced two basis points to -0.04%
* Britain’s 10-year yield advanced two basis points to 1.18%
Commodities
* West Texas Intermediate crude fell 0.5% to $79.09 a barrel
* Gold futures rose 0.3% to $1,794.40 an ounce
–With assistance from Srinivasan Sivabalan, Joanna Ossinger and Denitsa Tsekova.
Have a wonderful weekend everyone.

Be magnificent!
As ever,

Carolann

Know, my son, with how little wisdom the world is governed. –Count Axel Oxenstierna, 1583-1654.

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