March 19, 2024, Newsletter

Dear Friends,

Tangents:  First day of Spring has arrived!

Limericks from today’s Seattle Times:
That morning when birdsong first woke us,
And the garden was blooming in crocus,
It was daylight saving
That gilded the paving
And brought the new season to focus.  — Griffith H. Williams

The days are increasingly bright,
Filling my heart with delight.
Good tidings they bring,
With robins that sing
Farewell to the long winter’s night. — Dave Taflin

There once was a sad looking tree
It looked like a goner to me
But then came spring
And it put forth its bling
And now I am dancing with glee! — Rhonda Bierma

Swallows return to San Juan Capistrano, yearly since 1776.
March 19, 1911: The first International Women’s Day is observed by over 1 million people in several European countries.
March 19, 1918 Congress approved daylight-saving time.  Go to article >>

Wyatt Earp, lawman, b.1848
Glenn Close, actress, b. 1947

Apple is getting serious about AI
Apple researchers say they’ve developed a complex AI system that can interpret and generate different types of data — such as text and images at the same time — called MM1.

4,000-year-old vial contains ancient red lipstick
This small stone vial contained a red cosmetic that was likely used as a lip coloring thousands of years ago, according to archaeologists.

These are the cities with the world’s worst air pollution
All but one of the 100 cities with the world’s worst air pollution last year were in Asia, according to a new report. View the top air pollution rankings for 2023.

‘Potentially hazardous’ asteroid Bennu contains the building blocks of life and minerals unseen on Earth, scientists reveal in 1st comprehensive analysis
Scientists shared the first comprehensive science results from NASA’s OSIRIS-REx asteroid-sampling mission at the Lunar and Planetary Science Conference, revealing the out-of-this-world makeup
of asteroid Bennu. Read More.

Computing ‘paradigm shift’ could see phones and laptops run twice as fast — without replacing a single component
By letting different processing units — like GPUs, NPUs and hardware accelerators — work in parallel, rather than in sequence, systems can be up to twice as fast and consume 50% less energy. Read More.

Iceland volcano: ‘Most powerful’ eruption yet narrowly misses Grindavik but could still trigger life-threatening toxic gas plume
The submerged volcano in Iceland’s Reykjanes Peninsula has erupted for the fourth time in four months. The resulting lava flow narrowly missed Grindavík but could still reach the sea and potentially unleash a toxic gas plume.
Read More.

PHOTOS OF THE DAY

Xinjiang, China
Tourists enjoy the scenery on the bank of White Sand Lake on Pamir Plateau in Kizilsu Kyrgyz autonomous prefecture
Photograph: China News Service/Getty Images

Stetten, Germany
Fog drifts over a wind energy plant near Stetten, about 12 miles north of Kaiserslautern
Photograph: Michael Probst/AP

London, UK
Art handlers pose with the work Sunday Afternoon by LS Lowry at Christie’s auction house. The work has not been publicly displayed for 57 years
Photograph: Neil Hall/EPA
Market Closes for March 19^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1792, Wall Street crashed for the first time ever. On “Black Monday,” 6% Treasury bonds lost 10% of their value and shares in the Bank of the United States dropped 12%. Speculator William Duer, a friend of Alexander Hamilton, had borrowed too much money and was about to be thrown in debtors’ prison, spreading panic through the cobblestone streets of downtown Manhattan.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 0.1% at 21,860.58 in Toronto.
The move follows the previous session’s decrease of 0.1%.
Alimentation Couche-Tard Inc. contributed the most to the index gain, increasing 1.9%.
Gildan Activewear Inc. had the largest increase, rising 10.8%.
Today, 126 of 224 shares rose, while 96 fell; 7 of 11 sectors were higher, led by financials stocks.
Insights
* This quarter, the index rose 4.3%
* The index advanced 13% in the past 52 weeks. The MSCI AC Americas Index gained 32% in the same period
* The S&P/TSX Composite is 0.7% below its 52-week high on March 13, 2024 and 17% above its low on Oct. 27, 2023
* The S&P/TSX Composite is little changed in the past 5 days and rose 2.8% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 18.3 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 11.34% compared with 11.37% in the previous session and the average of 11.96% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 18.0785| 0.3| 16/11
Energy | 15.3942| 0.4| 34/7
Consumer Discretionary | 11.4893| 1.5| 11/2
Information Technology | 9.4977| 0.5| 5/5
Consumer Staples | 7.9636| 0.9| 6/5
Real Estate | 1.0388| 0.2| 13/7
Health Care | 0.6759| 1.0| 3/1
Communication Services | -0.8032| -0.1| 2/3
Utilities | -1.1147| -0.1| 7/8
Industrials | -6.5415| -0.2| 18/9
Materials | -32.2975| -1.4| 11/38
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
Couche-Tard | 7.6610| 1.9| -19.5| 5.5
Constellation Software | 6.7900| 1.3| -35.8| 13.6
TD Bank | 5.9560| 0.6| 6.7| -5.7
Canadian National | -4.0800| -0.6| -42.1| 5.1
Barrick Gold | -5.7690| -2.2| -47.5| -13.5
Canadian Pacific Kansas | -15.5100| -2.0| -18.5| 13.7
US
By Rita Nazareth
(Bloomberg) — Wall Street traders gearing up for the Federal Reserve decision sent stocks to fresh all-time highs amid gains in several big techs.
Equities erased losses after a rebound in the “Magnificent Seven” cohort of tech mega-caps — dubbed the “most-crowded trade” by Bank of America Corp.
Nvidia Corp. rose on bets its new chips will fuel a rally that’s already added $1 trillion to the company’s value this year.
Bonds also gained after a rout that saw traders pushing back their timetable for rate cuts.
Investors should buy the dip in stocks in the case of pullbacks amid a backdrop of good economic growth and inflation normalization, according to Goldman Sachs Group Inc. strategists led by Christian Mueller-Glissmann.
“While equity momentum has somewhat supported broader risk appetite, we see limited implications of a continued reversal barring a material US rate shock,” they said.
The S&P 500 approached 5,180. Treasuries pushed higher, with a $13 billion sale of 20-year bonds drawing strong demand.
The yen slid as the Bank of Japan refrained from signaling any future hikes after scrapping the last negative interest rate regime.
Wall Street is so divided on whether the US stock market’s meteoric rise has gone too far, too fast that even Bank of America’s own strategists disagree.
There is little evidence that the frenzy for artificial-intelligence is pushing the market into bubble territory, according to BofA’s Savita Subramanian.
Her view runs counter to what the firm’s chief investment strategist Michael Hartnett said last week.
“There’s no broad spread euphoria,” Subramanian said in a joint interview with Jill Carey Hall, the firm’s head of small-and mid-cap strategy on Bloomberg Television. “The risks are sitting outside of the public market,” adding that private credit and private equity, along with regional banks are where credit risks are bubbling up.
The latest BofA fund manager survey showed that investors were split on whether or not artificial intelligence stocks are in a bubble — with 40% saying “yes” and 45% answering “no.”
Bullish positioning softened for US equities last week, according to Citigroup strategists led by Chris Montagu.
While S&P 500 and Nasdaq positioning remains net long — and moderately extended — the current setup leaves less positioning risks for both indexes, they noted.
A survey conducted by 22V Research showed that 56% of investors think the next 10% move in the S&P 500 will be higher.
In addition, the poll revealed that 37% expect a “risk-on” reaction to the Fed’s decision, 33% said “risk-off” and 31%, “negligible/mixed.”
With the Fed expected to hold rates steady for a fifth consecutive meeting on Wednesday, attention will shift to the central bank’s projections in the so-called dot plot.
The summary of economic projections will reveal whether still-robust data are giving officials cause to dial back intentions to cut rates — or whether their outlook for three reductions this year remains on track.
“Whether the rise in yields and the dollar can continue comes crucially down to whether the Fed validates the hawkish narrative or not,” said Win Thin and Elias Haddad at Brown Brothers Harriman. “If Jerome Powell can stick to the hawkish script, the message will remain consistent and market reaction will likely be limited. If he veers from the script and delivers a dovish tilt, then market reaction will likely be quite violent.”
Mark Cabana at BofA said that if the Fed’s dots show only two cuts in 2024, the two-year note will tumble 10 basis points, the dollar will rally and risk assets will “take it on the chin to some extent.”
Speaking in a Bloomberg Television interview Tuesday, Cabana said if the dots show three cuts — the base case for BofA economists — the two-year note will then rally five basis points, the dollar will weaken and risk will be on.
The Fed will also begin in-depth discussions about its balance sheet this week, including when and how to slow the pace at which the central bank drains excess cash from the financial system.
Since 2022, the Fed has been letting as much as $60 billion in Treasuries and as much as $35 billion in agency-backed mortgage debt mature each month and roll off its balance sheet, a process known as quantitative tightening.
“In our view, commentary around plans for the Fed’s balance sheet will be at least as important as remarks around the potential timing of rate cuts,” said Chris Senyek at Wolfe Research. “While we don’t expect an official QT tapering
announcement until the May meeting, we’re hoping for color around the potential timing and pace of the wind down.”
The Fed has expressed a preference for eventual return to a Treasury-only portfolio — so the MBS runoff pace is expected to continue, though the Fed might be more flexible to extend the timeline, slowing QT, according to Naomi Fink at Nikko Asset Management.
“There’s also a bias toward coupon securities, which means the Fed over time has to increase its T-bill holdings relative to its coupon holdings, which all else equal, argues for waning support for the long-end of the curve,” Fink noted.

Corporate Highlights:
* Cryptocurrency-linked stocks slipped as Bitcoin extended a retreat following a record daily outflow from the world’s biggest exchange-traded fund for the token.
* MicroStrategy Inc. made its second multi-million dollar purchase of Bitcoin in a little more than a week, raising the company’s holdings to more than 1% of all the cryptocurrency that will ever be issued.
* Nvidia Corp. Chief Executive Officer Jensen Huang said his company is well placed to grab an outsized chunk of worldwide spending on data center equipment because of the variety of chips and software it’s producing.
* Michael Dell is unloading shares in his namesake computer company for the first time in almost three years as Dell Technologies Inc.’s stock soars on artificial-intelligence optimism.
* Macy’s Inc. has opened its books to Arkhouse Management Co. and Brigade Capital Management, the investment firms pushing to take over the famous US department store chain.
* Boeing Co. has been exploring the sale of at least two of its defense businesses, as the beleaguered aircraft manufacturer fights through its biggest crisis in years.
* Chevron Corp.’s discussions with Exxon Mobil Corp. and China’s Cnooc Ltd. over a prolific oil field off the shores of Guyana ended “abruptly” a few weeks ago, Chief Executive Officer Mike Wirth said.
* Gildan Activewear Inc., the Canadian clothing manufacturer that owns the American Apparel brand, says it has “several” potential buyers interested in a friendly takeover.

Key events this week:
* 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 0.3%
* The Dow Jones Industrial Average rose 0.8%
* The MSCI World index rose 0.2%
Currencies
* The Bloomberg Dollar Spot Index rose 0.2%
* The euro was little changed at $1.0865
* The British pound was little changed at $1.2721
* The Japanese yen fell 1.2% to 150.90 per dollar
Cryptocurrencies
* Bitcoin fell 4.4% to $64,398.15
* Ether fell 5% to $3,334.02
Bonds
* The yield on 10-year Treasuries declined two basis points to 4.30%
* Germany’s 10-year yield declined one basis point to 2.45%
* Britain’s 10-year yield declined three basis points to 4.06%
Commodities
* West Texas Intermediate crude rose 0.9% to $83.44 a barrel
* Spot gold fell 0.1% to $2,157.63 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Farah Elbahrawy, Ye Xie, Michael Mackenzie, Alexandra Harris and Jessica Menton.

Have  a lovely evening.

Be magnificent!
As ever,

Carolann
A good rule of thumb for many things in life holds that things take longer to happen than you thing they will, and then happen faster than you thought they could. –Larry Summers, b.1954.

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