March 12, 2024, Newsletter

Dear Friends,

Tangents:
March 12, 1755: 1^st steam engine in U.S. installed, to pump water from a mine.
March 12, 1938: Hitler invades Austria.  The occupation of Hitler’s homeland is know as Anschluss, which is the German word for annexation.
2009: Disgraced financier Bernard Madoff pleaded guilty in New York to pulling off perhaps the biggest swindle in Wall Street history. Go to article >>

Jack Kerouac, author, b. 1922.
James Taylor, musician, b. 1948.
Charlie “Bird” Parker, musician, d. 1953.

• These are the best countries for wealthy expats.
• Skiers head north to snow-sure Scandinavia as the Alps heat up.

3,300-year-old tablet from mysterious Hittite Empire describes catastrophic invasion of four cities
Researchers think a sacred language inscribed in cuneiform on the tablet suggest the Hittite king visited or lived where the tablet was found in Turkey. Read More.

US government wanted to reverse-engineer alien ships, but never found any, Pentagon UFO report reveals
A long-awaited Pentagon report says there is “no verifiable evidence” of the U.S. government encountering or concealing evidence of alien life. Read More.

More than a third of teens say they spend too much time on their phones
A new study finds more teenagers are craving a social media detox. Read why younger generations are scaling back their tech use.

Scientists discover 100 potential new deep-sea species
Around 100 potential marine species were discovered near New Zealand — including one mystery creature.

Stone Age facial piercings found near wearers’ skulls in Turkey
Archeologists say they’ve discovered earring-like objects thought to be about 11,000 years old. They may be the first prehistoric facial piercings on record.

Most self-driving systems get ‘poor’ ratings — except one
A prominent auto safety group said one hands-free driving system received an “acceptable” rating while most other systems received “poor” grades.

PHOTOS OF THE DAY

Frankfurt, Germany
Stationary trains line up outside the central train station during a strike called by the German train drivers’ union GDL on Tuesday
Photograph: Michael Probst/AP

North Yorkshire, UK
Sally Brooker, a conservation intern, cleans a staircase at Kiplin Hall and gardens as the historic house reopens for the 2024 season. Built in the 1620s for George Calvert, founder of Maryland, in the US, Kiplin Hall has been owned by four families over the centuries
Photograph: Danny Lawson/PA

​​​​​​​Barcelona, Spain
Runners take part in the 45th Barcelona Marathon. The annual 42km urban circuit is held this year under the slogan ‘make it yours’
Photograph: Alejandro García/EPA
Market Closes for March 12^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈  On this day in 2009, Bernie Madoff was sent to jail after confessing to one of the largest frauds in history. The former chairman of the Nasdaq Stock Market pleaded guilty to 11 felony counts in relation to the global, multibillion-dollar Ponzi scheme he managed for more than a decade.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the second day, climbing 0.3%, or 61.81 to 21,831.02 in Toronto.
The index advanced to the highest closing level in at least a year.
Shopify Inc. contributed the most to the index gain, increasing 1.9%.
Celestica Inc. had the largest increase, rising 3.6%.
Today, 110 of 225 shares rose, while 109 fell; 7 of 11 sectors were higher, led by industrials stocks.
Insights
* This quarter, the index rose 4.2%
* The index advanced 10% in the past 52 weeks. The MSCI AC Americas Index gained 33% in the same period
* The S&P/TSX Composite is 0.3% below its 52-week high on March 8, 2024 and 16.8% above its low on Oct. 27, 2023
* The S&P/TSX Composite is up 1.4% in the past 5 days and rose 3.6% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 18.4 on a trailing basis and 14.9 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.1% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.45t
* 30-day price volatility rose to 12.10% compared with 12.08% in the previous session and the average of 11.80% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Industrials | 24.9966| 0.8| 19/7
Information Technology | 19.0597| 1.0| 7/3
Energy | 17.2566| 0.5| 25/14
Financials | 16.4521| 0.2| 17/10
Consumer Discretionary | 7.0976| 0.9| 10/3
Consumer Staples | 5.9223| 0.6| 7/4
Health Care | 0.0813| 0.1| 2/1
Real Estate | -0.4779| -0.1| 8/12
Communication Services | -6.5364| -0.9| 0/5
Utilities | -9.4235| -1.1| 1/14
Materials | -12.6414| -0.5| 14/36
================================================================
| | |Volume VS | YTD
| Index | | 20D AVG | Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
Shopify | 16.3300| 1.9| -31.1| -0.1
Canadian Pacific Kansas | 8.9160| 1.1| 14.4| 16.6
RBC | 8.3260| 0.6| -60.5| 1.3
Telus | -2.2350| -0.9| 5.1| -2.1
Constellation Software | -2.4630| -0.5| 20.1| 15.0
Barrick Gold | -3.6780| -1.4| -19.1| -11.8
US
By Rita Nazareth
(Bloomberg) — Stocks climbed to a fresh record as the latest inflation figures did little to alter bets the Federal Reserve will cut rates this year — even if officials keep a more cautious stance for now.
An equity decline that lasted just a few minutes gave way to are bound that pushed the S&P 500 up more than 1%.
Notwithstanding the fact that the consumer price index continued to show signs of “stickiness,” the overall report came only slightly above economist estimates.
While that’s not ideal for a central bank trying to get close to its 2% target, the CPI was not a shocker to traders dreading another post-inflation rout.
“Fears have been circulating prior to the release for an extra-hot print, which appears to have boosted markets as they failed to materialize,” said Josh Jamner at ClearBridge Investments. “Overall, there should be relatively little market impact from today’s release given it is largely consistent with the prior understanding of the disinflationary process.”
The S&P 500 closed around 5,175.
Tech led gains on Tuesday, with Oracle Corp. soaring 12% amid a spike in bookings in cloud computing. Nvidia Corp. rallied over 7%.
Boeing Co. extended its 2024 losses to almost 30%.
Treasuries remained lower after a $39 billion sale of 10-year notes and a growing slate of new corporate bonds.
For a glimpse of how traders were on guard before Tuesday’s CPI print, consider the CBOE One-Day Volatility Index — a measure of cost in S&P 500 options with maturities of no more than 24 hours.
The gauge closed Monday at the highest level since October, a sign of heightened anxiety.
It has since pulled back, along with its more famous 30-day volatility index known as the VIX.
On Monday, the options market was more concerned about a potentially big S&P 500 move post-CPI than it was about the Fed’s rate decision next week, Citigroup Inc. analysts said.
That was based on a strategy known as at-the-money straddle — when a trader buys an equal number of calls and puts with the same strike price and expiration.
Following a few swings in the immediate aftermath of the CPI results, a relative sense of calm prevailed, with equities rebounding.
In fact, Tuesday’s advance on the back of a strong inflation print marks a break from how stocks have traded on CPI days since the Fed started hiking rates.
A 1% move of in the S&P 500 or larger has only happened on a handful of occasions on the day of the CPI release since March 2022.
Most of the time, however, gains were on the back of lower — not higher — core inflation.
“It’s proving difficult to see what may stop the market’s momentum, as earnings, inflation, and interest rates are moving in the right direction,” said Skyler Weinand at Regan Capital.
The S&P 500 will deliver stronger-than-expected earnings in 2024, powered by resilient economic growth and artificial intelligence breakthroughs, according to Bank of America Corp. strategists — who are now among Wall Street’s most bullish profit forecasters.
The team including Ohsung Kwon and Savita Subramanian raised their earnings-per-share estimate to $250 from $235, tying with BMO Capital Markets and Deutsche Bank AG for the most optimistic outlook among strategists tracked by Bloomberg.
Subramanian last week raised her S&P 500 target to 5,400.
As a flurry of Wall Street forecasters bump up their optimism toward US stocks in lockstep, Morgan Stanley’s Mike Wilson won’t budge, arguing he sees no justification to upgrade his outlook given an absence of broad earnings growth.
The strategist stuck to his year-end S&P 500 forecast of 4,500 in an interview on Tuesday with Bloomberg Surveillance Radio, even as a growing list of peers at firms including Bank of America Corp., Goldman Sachs Group Inc., and UBS Group AG have raised projections for the benchmark.
“A lot of folks have raised their price targets because of higher multiples,” Wilson said. “We’re not willing to do that.”
The stock market may be rallying, but the yield curve remains inverted — which suggests that there are plenty of investors who are still concerned about economic conditions this year, according to Weinand at Regan Capital.
“While a recession would naturally steepen out the yield curve to positive territory, we think the yield curve can steepen this year without a recession,” he noted. “Investors will eventually realize that we can achieve a soft landing and
that sentiment shift can push 10-year Treasury bond yields back above 2-year Treasury bond yields.”
The Fed is widely expected to hold interest rates steady for a fifth straight meeting when policymakers gather March 19-20.
Much of the focus by investors will be on the Federal Open Market Committee’s quarterly forecasts for rates, including whether fresh employment and inflation figures have prompted any changes.
While Tuesday’s CPI reading may breathe new life into the sticky inflation narrative, whether it actually delays rate cuts is a different story, according to Chris Larkin at E*TRADE from Morgan Stanley.
“Sticky doesn’t necessarily mean overheating,” Larkin noted.
To Bret Kenwell at eToro, regardless of whether the inflation print is ideal, investors mostly want to know whether they can count on what’s expected — and right now, that’s for a June rate cut.
Swaps are pricing in nearly 70% odds that the central bank will start easing in June and enact at least three quarter-point cuts over the course of 2024.

* 3M Co. named aerospace veteran William Brown as its new chief executive officer, a move aimed at providing fresh direction for a company mired in mounting legal liabilities and a much-diminished stock price.
* Boeing Co.’s aircraft deliveries trailed rival Airbus SE’s last month as the US plane-maker dealt with the growing fallout from an early-January accident that has since plunged the company into crisis.
* United Airlines Holdings Inc. has told Boeing to stop building 737 Max 10 jets for the carrier, opting to switch to a smaller variant and the rival Airbus SE A321 until the US plane-maker can pull the stretched single-aisle through its long-delayed certification.
* Southwest Airlines Co. plans to cut capacity this year, halt most hiring and review its spending plans in response to reduced aircraft deliveries from Boeing Co., the plane-maker facing regulatory and criminal investigations in the wake of a near-catastrophic accident in January.
* Kohl’s Corp. reported same-store sales in the fourth quarter that missed the average analyst estimate, suggesting the department store chain struggled to attract shoppers during the crucial holiday shopping season.

Key events this week:
* Eurozone industrial production, Wednesday
* ECB Governing Council member Yannis Stournaras speaks, Wednesday
* Volkswagen, Adidas earnings, Wednesday
* US PPI, retail sales, initial jobless claims, business inventories, Thursday
* China property prices, Friday
* Japan’s largest union federation announces results of annual wage negotiations, just ahead of Bank of Japan policy meeting, Friday
* Bank of England issues inflation survey, Friday
* US industrial production, University of Michigan consumer sentiment, Empire Manufacturing, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 1.1% as of 4 p.m. New York time
* The Nasdaq 100 rose 1.5%
* The Dow Jones Industrial Average rose 0.6%
* The MSCI World index rose 0.9%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro was unchanged at $1.0926
* The British pound fell 0.2% to $1.2794
* The Japanese yen fell 0.5% to 147.68 per dollar
Cryptocurrencies
* Bitcoin fell 1% to $71,389.82
* Ether fell 1.3% to $3,980.55
Bonds
* The yield on 10-year Treasuries advanced six basis points to 4.15%
* Germany’s 10-year yield advanced three basis points to 2.33%
* Britain’s 10-year yield declined three basis points to 3.95%
Commodities
* West Texas Intermediate crude fell 0.2% to $77.79 a barrel
* Spot gold fell 1.2% to $2,156.94 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Lu Wang, Felice Maranz, David Marino, Tatiana Darie, Michael Mackenzie and Ye Xie.

Have a lovely evening.

Be magnificent!

As ever,

Carolann
If you  don’t like change, you are going to like irrelevance even less.-General Eric Shinseki, b. 1942.

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