March 18, 2024, Newsletter

Dear Friends,

Tangents: Happy Monday.
March 18, 1974: Most of the Arab oil-producing nations ended their embargo against the United States.  Go to article >>
March 18, 2020: US President Donald Trump & Canadian Prime Minister Justin Trudeau closed the US-Canada border due to COVID-19.

1931: Electric razor debuted.

Sleeping subduction zone could awaken and form a new ‘Ring of Fire’ that swallows the Atlantic Ocean
A modeling study suggests a slumbering subduction zone below the Gibraltar Strait is active and could break into the Atlantic Ocean in 20 million years’ time, giving birth to an Atlantic “Ring of Fire.” Read More.

Have all 8 planets ever aligned?
The solar system’s eight planets will never truly be in a straight line, but they can get close to it. Read More.

Gargantuan volcano on Mars found hidden ‘in plain sight,’ and it could hold potential signs of life
A newly discovered volcano near Mars’ “Labyrinth of Night” could be a “prime” spot to search for life on the Red Planet, scientists say.
Full Story: Live Science (3/15)

Chicago dyed its river green in honor of St. Patrick’s Day
The celebration that took place Sunday is so renowned it even draws visitors from Ireland! Watch the video here.

Beyond the Las Vegas Strip, art is winning big
Most visitors love Las Vegas for the glamorous hotels along the Strip, but the most exciting neighborhood in the city right now is all about art.

Authorities seize 750-pound pet alligator in upstate New York
See you later, alligator!

PHOTOS OF THE DAY

Galapagos biodiversity under threat – in pictures
The North Seymour island dive site.

Chapel Santa Maria degli Angeli, Switzerland.

London, UK
Crowds gather to view a new Banksy artwork – a stencil of a person and spray-painted tree foliage on a wall behind a leafless tree – near Finsbury Park in north London
Photograph: Adrian Dennis/AFP/Getty Images
Market Closes for March 18^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1850, Henry Wells, William G. Fargo, and John Butterfield joined their separate companies into a single firm, American Express Co., with a monopoly over express shipping in the Northeast. AmEx at first specialized in shipping small valuables like bond certificates, currency, and financial contracts—plus live poultry, pianos, and firecrackers.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite declined slightly to 21,837.18 in Toronto.
The move follows the previous session’s increase of 0.1%.
Alimentation Couche-Tard Inc. contributed the most to the index decline, decreasing 3.4%.
BlackBerry Ltd. had the largest drop, falling 6.8%.
Today, 104 of 224 shares fell, while 116 rose; 6 of 11 sectors were lower, led by materials stocks.
Insights
* This quarter, the index rose 4.2%
* The index advanced 13% in the past 52 weeks. The MSCI AC Americas Index gained 31% in the same period
* The S&P/TSX Composite is 0.8% below its 52-week high on March 13, 2024 and 16.8% above its low on Oct. 27, 2023
* The S&P/TSX Composite is up 0.3% 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 18.2 on a trailing basis and 15 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$3.46t
* 30-day price volatility fell to 11.37% compared with 11.89% in the previous session and the average of 11.99% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Materials | -17.1582| -0.7| 14/34
Consumer Staples | -14.5060| -1.6| 6/5
Financials | -6.8537| -0.1| 14/12
Information Technology | -6.5455| -0.3| 6/4
Utilities | -6.4156| -0.8| 4/10
Communication Services | -4.2235| -0.6| 1/4
Consumer Discretionary | 0.9946| 0.1| 1/12
Health Care | 2.1726| 3.3| 4/0
Real Estate | 4.0996| 0.8| 19/2
Industrials | 13.0609| 0.4| 15/12
Energy | 23.4134| 0.6| 32/9
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
Couche-Tard | -14.6100| -3.4| 9.6| 3.6
TD Bank | -14.1500| -1.4| 20.9| -6.3
Constellation Software | -9.1530| -1.8| 36.5| 12.1
Restaurant Brands | 4.6320| 2.0| 80.5| 5.4
Canadian National | 7.1500| 1.0| 6.2| 5.7
Canadian Natural Resources | 8.1020| 1.1| 28.1| 14.5
US
By Rita Nazareth
(Bloomberg) — Tech giants led gains in stocks at the start of a week that will bring a raft of central-bank decisions from the US to England and Japan.
Equities rebounded from a recent pullback, with mega-caps outpacing the broader market.
Alphabet Inc. jumped as Bloomberg News reported Apple Inc. is in talks to build Google’s Gemini artificial-intelligence engine into the iPhone.
In late hours, Nvidia Corp.’s chief Jensen Huang showed off new chips aimed at extending his company’s dominance of AI computing.
“Investors shouldn’t lose sight of the areas that continue to drive the bulk of corporate profits,” said Anthony Saglimbene at Ameriprise. “In our view, the profit growth associated with  Big Tech today stands in stark contrast to the profitless companies that drove the tech wreck at the turn of the century.”
Wall Street is also gearing up for more insights on the Federal Reserve’s resolve to ease as central banks set policy for almost half the global economy.
The week features the world’s biggest agglomeration of decisions for 2024 to date, including judgments on the cost of borrowing for six of the 10 most-traded currencies.
The S&P 500 halted a three-day slide, the Nasdaq 100 rose 1% and a gauge of the “Magnificent Seven” tech mega-caps climbed twice as much.
US two-year yields hovered near 2024 highs as expectations for Fed cuts continued to erode.
The yen fluctuated after a news report the Bank of Japan is poised to end its policy of guiding government bond yields — known as yield curve control.
“It’s a jam-packed week of central bank meetings,” said Win Thin and Elias Haddad at Brown Brothers Harriman. “There are sure to be some surprises and so today’s calm is likely to give way to greater volatility ahead.”
Ahead of the Fed decision, Japan will face a monumental moment in its history — with the nation expected to end its negative interest rate regime — the world’s last.
Traders betting on the outcome of the BoJ’s decision have boosted their positions in yen futures to the highest since 2007.
Bank of America Corp. strategists said that an end to YCC would only have a limited impact on the appetite for US Treasuries.
Bond investors who were once convinced that the Fed would start cutting rates this week are painfully surrendering to a higher-for-longer reality.
Treasury yields have climbed as data continued to point to persistent inflation, causing traders to push back their timetable for US monetary easing.
Swaps are currently pricing in less than 50% odds of a June rate cut.
Goldman Sachs Group Inc. economists led by Jan Hatzius changed their forecast to call for three quarter-point Fed cuts this year — instead of four.
The change, which brings the forecast in line with the median forecast policymakers made in December, is “mainly because of the slightly higher inflation path,” they said.
“After last week’s double-dose of hot inflation data, everyone will be wondering whether the Fed is rethinking a June cut,” said Chris Larkin at E*TRADE from Morgan Stanley. “The market will need to like what it sees in the Fed’s statement on Wednesday, and get confirmation from Jerome Powell that two months of sticky inflation numbers won’t derail the Fed’s game plan.”
Investors will be keenly focused on the US central bank’s projections — the dot plot — to gauge how many rate cuts policymakers are expecting to deliver this year.
To Krishna Guha at Evercore, the Fed will firm up its tone following hotter inflation reports – but will continue to point to a market-friendly base case of three cuts this year starting June.
“We think he will say the Committee will be patient and take as long as needed to accumulate sufficient confidence – underlining June is not guaranteed and the Fed would delay to July/September if necessary, Guha noted.
Traders will also be interested to see whether the Fed changes its views for 2025-2026 and the “neutral rate” — the level seen as neither stoking growth or holding it back.
“The Fed has been quite reluctant to change their neutral rate estimate,” said Neil Dutta at Renaissance Macro Research.
“Raising neutral would be one way to signal to markets that a deep easing cycle is unlikely.”
Wall Street will listen carefully to any signs from Powell on the phase out of quantitative tightening, known as QT.
While a handful expect the Fed to announce or even begin slowing the unwind of its balance sheet as early as May, others don’t see a tapering starting until the second half of the year.
It looks like the Fed will begin to taper QT this year — and hints to that effect could be a positive for Treasury  markets — allowing yields to drift sideways or down, according to David Kelly at J.P. Morgan Asset Management.
“For investors, this isn’t exactly a rallying cry to buy bonds,” Kelly noted. “However, it does suggest the potential for a relatively stable financial environment, allowing equities to continue to move higher and fixed income to play its traditional role of providing income and diversification to portfolios.”
US stocks will beat Treasuries over the next month, according to the latest MLIV Pulse survey.
That’s the fifth consecutive poll in which majority of respondents opted for equities, the longest streak of pro-stocks bias since the survey started asking the question in August of 2022.
Recent data has painted an ambiguous picture about the growth and inflation trends in the US economy, but it’s best not to over-analyze each data point and instead be clear-headed about the general direction of travel, said Jason Draho at UBS Global Wealth Management.
“It’s a fairly healthy US macro environment, and it should stay that way,” Draho said. “The Fed is likely to communicate the same message this week, and it seems inclined to do what it can to support that outlook. This is directionally positive for financial markets, and that’s not even accounting for the AI tailwind. Speed bumps, or turbulence, more aptly, aren’t enough to derail the soft-landing trajectory.”
In earnings this week, FedEx Corp.’s outlook on Thursday will provide hints on the state of the US economy after the bellwether previously forecast a slight revenue decline this fiscal year because of “volatile macroeconomic conditions.”
Nike Inc., Lululemon Athletica Inc., General Mills Inc., and Darden Restaurants Inc. results will show whether consumers are pulling back on spending or trading down, especially with inflation hanging around.

Corporate Highlights:
* Nasdaq Inc. said it has resolved a technology glitch that disrupted premarket trading for almost three hours.
* The boss of Exxon Mobil Corp. said Monday that it has no interest in buying Hess Corp. outright, despite taking Chevron Corp. to arbitration over its proposed $52 billion merger with the other company.
* Fisker Inc. is pausing production for the next six weeks as the electric-vehicle maker looks to rein in inventory and avoid possibly having to file for bankruptcy.
* B. Riley Financial Inc., the boutique investment bank under attack from short sellers about its dealings with a former business partner, failed to file its audited results after an extension period ended.
* PNC Financial Services Group Inc. announced Monday that it’s launched a national advertising campaign to persuade customers that its bank is “brilliantly boring.”
* The head of United Airlines Holdings Inc. told customers that the carrier is reviewing a series of recent mishaps involving its planes, promising any lessons learned would “inform our safety training and procedures” across the company.
* Encyclopedia Britannica Inc., the education technology company and publisher of books including the Merriam-Webster dictionary, is seeking a valuation of about $1 billion its initial public offering, according to people with knowledge of the matter.

Key events this week:
* Bank of Japan rate decision, Tuesday
* Germany ZEW survey expectations, Tuesday
* European Central Bank Vice President Luis de Guindos speaks, Tuesday
* US housing starts, Tuesday
* Eurozone consumer confidence, Wednesday
* Fed rate decision; Chair Jerome Powell holds news conference, Wednesday
* Reddit’s IPO, Wednesday
* ECB’s Christine Lagarde speaks, Wednesday
* Eurozone S&P Global Services PMI, S&P Global Manufacturing PMI, Thursday
* Bank of England rate decision, Thursday
* US Conference Board leading index, existing home sales, initial jobless claims, Thursday
* Nike, FedEx earnings, Thursday
* Japan CPI, Friday
* Germany IFO business climate, Friday
* Atlanta Fed President Raphael Bostic speaks, Friday
* ECB’s Robert Holzmann and Philip Lane speak, Friday
Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.6% as of 4 p.m. New York time
* The Nasdaq 100 rose 1%
* The Dow Jones Industrial Average rose 0.2%
* The MSCI World index rose 0.5%
Currencies
* The Bloomberg Dollar Spot Index rose 0.2%
* The euro fell 0.2% to $1.0869
* The British pound was little changed at $1.2727
* The Japanese yen fell 0.1% to 149.19 per dollar
Cryptocurrencies
* Bitcoin fell 1.9% to $66,996.2
* Ether fell 4.2% to $3,481.26
Bonds
* The yield on 10-year Treasuries advanced three basis points to 4.33%
* Germany’s 10-year yield advanced two basis points to 2.46%
* Britain’s 10-year yield declined one basis point to 4.09%
Commodities
* West Texas Intermediate crude rose 2.3% to $82.93 a barrel
* Spot gold rose 0.2% to $2,160.04 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Michael Mackenzie, Alexandra Harris, Jan-Patrick Barnert, Michael Msika, Craig Stirling, Felice Maranz, Kasia Klimasinska, Robert Fullem, Carter Johnson and Ye Xie.
Have a lovely evening.

Be magnificent!

As ever,

Carolann
Do what you can, with what you have, where you are. –Theodore Roosevelt, 1858-1919.

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