March 18, 2025, Newsletter

Dear Friends,

Tangents:

On March 18, 1965, the first spacewalk took place as Soviet cosmonaut Aleksei Leonov left his Voskhod 2 capsule and remained outside the spacecraft for 20 minutes, secured by a tether. Go to article

1931: electric razor debuted.
John Updike, writer, b.1933.

What’s the oldest lake on Earth?
The oldest lake in the world dates back about 25 million years and is also the world’s deepest and most biologically diverse on Earth. Read More.

March 29 solar eclipse: Where and when to see the rare sunrise solar eclipse from North America
A dramatic solar eclipse on March 29 will be the first one visible in North America since April 2024. Here’s how to get the best view of the partial eclipse before it ends. Read More.

Punishing AI doesn’t stop it from lying and cheating — it just makes it hide better, study shows
Scientists at OpenAI have attempted to stop a frontier AI model from cheating and lying by punishing it. But this just taught it to scheme more privately. Read More.

So nice, he gets to do it twice
Conan O’Brien has been tapped to return as host of next year’s Academy Awards ceremony. “I want to hear Adrien Brody finish his speech,” O’Brien joked.

Twister tosses buildings into the air
A resident of Gordo, Alabama, captured footage of an EF-2 tornado as it destroyed several chicken houses. Watch the video here.

PHOTOS OF THE DAY

Zaozhuang, China
A farmer pollinates apricot flowers.
Photograph: Costfoto/NurPhoto/Rex/Shutterstock

Baku, Azerbaijan
Nowruz celebrations at the Fire Temple of Baku in Surakhany district. Nowruz is one of the most important holidays of the Turkic world and considered the harbinger of spring.
Photograph: Resul Rehimov/Anadolu/Getty Images

Gölbaşı district, Turkey
An aerial view of flamingos on a reservoir, which is home to many bird species.
Photograph: Rasit Aydogan/Anadolu/Getty Images
Market Closes for March 18^th, 2025

International Markets

Bonds

Currencies

Commodities

Market Commentary:
It was never my thinking that made the big money for me.  It was always my sitting.  Got that?  My sitting tight! -Jesse Livermore, 1877-1940.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell 0.3% at 24,706.07 in Toronto.
The move follows the previous session’s increase of 0.9%.
Shopify Inc. contributed the most to the index decline, decreasing 2.6%.
Celestica Inc. had the largest drop, falling 4.5%.
Today, 119 of 220 shares fell, while 95 rose; 6 of 11 sectors were lower, led by information technology stocks.
Insights
* This quarter, the index was little changed
* The index advanced 13% in the past 52 weeks. The MSCI AC Americas Index gained 8.7% in the same period
* The S&P/TSX Composite is 4.5% below its 52-week high on Jan. 30, 2025 and 15.1% above its low on June 17, 2024
* The S&P/TSX Composite is up 1.9% in the past 5 days and fell 3.7% 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 15 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.9% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.99t
* 30-day price volatility little changed to 14.80% compared with 14.79% in the previous session and the average of 12.81% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Information Technology | -52.1220| -2.2| 2/8
Industrials | -19.3356| -0.6| 7/21
Financials | -19.2260| -0.2| 6/19
Consumer Staples | -8.7014| -0.9| 4/6
Real Estate | -4.0370| -0.8| 3/17
Health Care | -0.3817| -0.6| 1/3
Consumer Discretionary | 1.3210| 0.2| 6/5
Utilities | 1.5553| 0.2| 10/4
Communication Services | 2.3665| 0.4| 3/2
Energy | 7.6436| 0.2| 25/15
Materials | 11.8709| 0.4| 28/19
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
Shopify | -30.9500| -2.6| -34.1| -12.2
Constellation Software | -12.9500| -2.0| -3.4| 3.5
Canadian Pacific Kansas | -8.0490| -1.1| 18.2| 2.1
Agnico Eagle Mines Ltd | 2.8480| 0.5| -17.8| 34.6
Canadian Natural Resources | 3.8470| 0.6| -16.3| -3.4
Brookfield Corp | 5.8320| 0.8| -21.4| -9.7
US
By Rita Nazareth
(Bloomberg) — Heavy selling resumed in Wall Street’s largest technology companies, with American shares snapping a two-day rebound amid signs investors are paring exposure in US risk assets.
European stocks gained.
One day before a Federal Reserve decision that will be parsed for an assessment on how President Donald Trump’s trade policies are affecting the economy, US equities slid, with mega caps hitting the lowest since September.
Nvidia Corp. sank 3.4% despite laying out plans to expand its AI reign with robots and desktop systems.
Data showing hot import prices didn’t help market sentiment either.
Treasuries rose after a solid $13 billion sale of 20-year bonds.
Gold climbed to a fresh record.
Investors have slashed holdings of US equities by the most on record while cash levels jumped, according to Bank of America Corp.’s latest survey.
Just about a month ago, stocks were making new highs on expectations that Trump administration policies would stoke growth.
Those assumptions may now be under threat if the economy slows and big bets on artificial intelligence don’t pay off.
“Because investors’ favorite stocks have suffered so much, it’s likely impacting investor sentiment disproportionately,” said Bret Kenwell at eToro.
“Historically, similar levels in sentiment have coincided with at least a short-term bottom in US stocks, although it’s not clear that we’ve seen a capitulatory type move that generally marks the bottom.”
Following a rapid stock selloff, talks about a “Fed put” to rescue investors have risen.
But anyone expecting some reassurance at the March meeting will be disappointed, according to Anna Wong at Bloomberg Economics.
“Sticky inflation and higher inflation expectations raise the bar for Fed cuts,” said Lauren Goodwin at New York Life Investments.
“The Fed is likely to need to see a stronger deterioration in financial conditions and the economic growth outlook before pre-emptively cutting with inflation figures so strong.”
Using 2018’s insurance cuts as a guideline, Goodwin said an equity market valuation decline of at least 20% would be required to push the Fed to act.
The S&P 500 fell 1.1%.
The Nasdaq 100 slid 1.7%.
The Dow Jones Industrial Average lost 0.6%.
Tesla Inc. slid 5.3%.
Meta Platforms Inc. became the last of the Magnificent Seven stocks to lose its year-to-date gain.
Alphabet Inc. agreed to acquire cybersecurity firm Wiz Inc. for $32 billion in cash.
The yield on 10-year Treasuries dropped one basis point to 4.29%.
The dollar fluctuated.
With Fed officials expected to hold rates steady on Wednesday, the market will focus on officials’ updated economic projections and Chair Jerome Powell’s press conference for clues about the path ahead.
For now, policymakers have signaled they’re in a wait-and-see mode as they seek further progress on inflation and greater clarity on the economic impact of Trump’s policies.
“The Fed likely holds tight here,” said Scott Helfstein at Global X.
“Fed Chair Powell has repeatedly said that the risks to price stability and full employment are balanced. That is likely still true, but risks to both are rising. This is not time to sell and go away, but perhaps time to review long-term strategy against near-term volatility.”
A survey conducted by 22V Research shows investors are watching the Fed more closely than the prior three meetings.
But there’s no real consensus on the market reaction — with 34% of respondents saying “risk-off”, 27% “risk-on” and 39% “mixed/negligible.”
The tally also revealed there’s no consensus on whether Powell will express concern over the recent moves higher in consumer inflation expectations.
“Our survey respondents think the current tariff environment will still lead to 50 basis point of cuts in 2025, but the skew has shifted to more cuts,” said Dennis DeBusschere, founder of 22V.
“The last time we asked was pre-tariff announcements and equity drawdowns.”
“Time will tell if the decision and meeting offers relief from the pain for the S&P 500,” according to Bespoke Investment Group strategists.
“If there is one silver lining though, historically, Fed days when rates have been left unchanged have tended to see solid gains.”
Bespoke also analyzed the average intraday path of the S&P 500 on Fed days based on whether or not the S&P 500 has been in the midst of correction.
“Whereas the S&P 500 has tended to rally throughout the session on Fed days when the market is rallying (which is the bulk of Fed days), the moves have been more volatile when the S&P 500 is in a correction,” the strategists said.
For times when rates were left unchanged and the S&P 500 was in the middle of a correction, the index has tended to fall after the rate decision, but by the close it has averaged a slightly larger gain than the norm for all Fed days.
As the S&P 500 slid into a correction last week, Bank of America Corp. clients bought US equities — with the sectors they favored indicating they weren’t betting on an economic contraction.
There were “bigger inflows into cyclical than defensive sectors in aggregate, suggesting that clients weren’t positioning for recession,” quantitative strategist Jill Carey Hall wrote in a research note.
Even after the 10% correction in US large caps, earnings expectations embedded in stock prices are extremely high — at levels achieved only four times since the tech bubble 25 years ago — and may remain a challenge to equities, according to Gina Martin Adams and Michael Casper at Bloomberg Intelligence.
“Consensus has taken down estimates for the first half but is still holding onto forecasts for a robust second-half recovery that doesn’t appear likely without a major near-term change at the Federal Reserve or with taxes,” they said.

Key events this week:
* Bank of Japan rate decision, Wednesday
* Federal Reserve rate decision, Wednesday
* China loan prime rates, Thursday
* Bank of England rate decision, Thursday
* US Philadelphia Fed factory index, jobless claims, existing home sales, Thursday
* Eurozone consumer confidence, Friday
* Fed’s John Williams speaks, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 1.1% as of 4 p.m. New York time
* The Nasdaq 100 fell 1.7%
* The Dow Jones Industrial Average fell 0.6%
* The MSCI World Index fell 0.6%
* Bloomberg Magnificent 7 Total Return Index fell 2.5%
* The Russell 2000 Index fell 0.9%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro rose 0.2% to $1.0946
* The British pound rose 0.1% to $1.3006
* The Japanese yen was little changed at 149.30 per dollar
Cryptocurrencies
* Bitcoin fell 2% to $82,293.57
* Ether fell 1.6% to $1,904.2
Bonds
* The yield on 10-year Treasuries declined one basis point to 4.29%
* Germany’s 10-year yield was little changed at 2.81%
* Britain’s 10-year yield was little changed at 4.64%
Commodities
* West Texas Intermediate crude fell 1% to $66.92 a barrel
* Spot gold rose 1.2% to $3,035.76 an ounce

–With assistance from Sujata Rao, Allegra Catelli, John Viljoen and Aya Wagatsuma.
Have a lovely evening.

Be magnificent!
As ever,

Carolann
Defeat isn’t bitter, if you don’t swallow it. –Clarence Darrow, 1857-1938.

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 (Text Only)
Toll Free: 1.877.430.5895
Fax: 778.430.5828
www.carolannsteinhoff.com