March 26, 2024, Newsletter

Dear Friends,

Tangents:
On March 26, 1979, the Camp David peace treaty was signed by Israeli Prime Minister Menachem Begin and Egyptian President Anwar Sadat at the White House.  Go to article >>
2000: Ex-KGB officer Vladimir Putin is elected President of Russia.

Beethoven, composer, d. 1827.
Robert Frost, poet, b. 1874.
Victor Frankl, psychiatrist, b. 1905.
Tennessee Williams, playwright, b. 1911.
Erica Jong, writer, b. 1942.
Diana Ross, singer, b. 1944.
Keira Knightly, actress, b. 19856,

Centuries-old Aztec texts detail history of their capital, conquests and fall to the Spanish
Three codices from the 16th and 17th century describe historical details about the Aztecs and the area that is now Mexico City. Read More.

The sea ‘began to boil’: Freak volcanic eruption of Santorini 1,300 years ago indicates huge blasts can occur during time of quiet
A giant layer of pumice and ash found buried underwater in the Santorini caldera indicates an eruption in A.D. 726 was much bigger than previously thought. Read More.

April 8 eclipse could bring uptick in fatal car crashes, scientists caution
An analysis of car crashes during the 2017 solar eclipse in the U.S. suggests the upcoming April eclipse could also come with an uptick in fatal accidents. Read More.

Earth hit by radiation from rare ‘double’ X-class solar flare, triggering most powerful geomagnetic storm in 6 years
A recent X-class flare, which was split into two simultaneous explosions, launched a coronal mass ejection that smashed into Earth, triggering the most powerful disruption to our planet’s magnetic field for more than six years.
Read More.

Colorful paintings of daily life uncovered in 4,300-year-old Egyptian tomb
Archaeologists have discovered paintings of daily life in ancient Egypt in a tomb dating back more than 4,300 years.

The must-have tool for soothing sore muscles
If your muscles are feeling a bit tight, this affordable tool can help relieve myofascial pain, ease tension and increase flexibility.

PHOTOS OF THE DAY

Edinburgh, Scotland
The first exhibition at the King’s Gallery in the Palace of Holyroodhouse, which showcases Georgian fashion with works by artists including Gainsborough, Zoffany and Hogarth
Photograph: Jeff J Mitchell/Getty Images

Bells Beach, Australia
Matthew McGillivray of South Africa surfs in his first heat of the 2024 Rip Curl Pro contest
Photograph: Morgan Hancock/Getty Images

​​​​​​​Hong Kong
Continuous, an installation by the Japanese art collective teamLab that features about 200 large ovoid objects that change colour to music, in Tamar Park
Photograph: Peter Parks/AFP/Getty Images
Market Closes for March 26^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 At a meeting in Geneva that started on this day in 1979, the Organization of the Petroleum Exporting Countries declared that its members would raise the price of crude oil, igniting another round of global inflation
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the third day, dropping 0.1%, or 29.76 to 21,912.52 in Toronto.
Canadian Natural Resources Ltd. contributed the most to the index decline, decreasing 0.9%.
Canada Goose Holdings Inc. had the largest drop, falling 6.7%.
Today, 115 of 224 shares fell, while 105 rose; 8 of 11 sectors were lower, led by energy stocks.
Insights
* This quarter, the index rose 4.6%
* This month, the index rose 2.6%
* The index advanced 12% in the past 52 weeks. The MSCI AC Americas Index gained 31% in the same period
* The S&P/TSX Composite is 1.3% below its 52-week high on March 21, 2024 and 17.2% 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 18.4 on a trailing basis and 15.1 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$3.47t
* 30-day price volatility fell to 8.87% compared with 11.64% in the previous session and the average of 11.69% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Energy | -22.1959| -0.6| 11/29
Materials | -4.3134| -0.2| 18/30
Consumer Staples | -3.3844| -0.4| 6/5
Financials | -2.4593| 0.0| 17/10
Industrials | -1.2020| 0.0| 12/14
Real Estate | -0.9982| -0.2| 12/9
Communication Services | -0.8151| -0.1| 3/2
Utilities | -0.0420| 0.0| 6/9
Information Technology | 1.1577| 0.1| 9/1
Consumer Discretionary | 2.2216| 0.3| 8/5
Health Care | 2.2848| 3.3| 3/1
================================================================
| | |Volume VS |
| Index | | 20D AVG |YTD Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
Canadian Natural Resources | -6.8270| -0.9| -47.0| 17.5
Enbridge | -5.9440| -0.8| -50.8| 1.4
Brookfield Corp | -5.8990| -1.1| -2.9| 4.8
Intact Financial | 2.3440| 0.9| 70.7| 8.3
Nutrien | 2.3860| 1.0| -18.1| -3.4
Dollarama | 3.1070| 1.6| 16.2| 7.9
US
By Rita Nazareth
(Bloomberg) — The stock market failed to hold on to earlier gains after a rally that’s already topped $4 trillion this year, with Nvidia Corp. leading losses in tech mega-caps.
Trading was largely driven by quarter-end positioning.
With the latest bout of equity outperformance, pensions may need to sell roughly $22 billion in global stocks and buy $17 billion of fixed income in order to return to prior asset allocation levels, according to an earlier estimate from Morgan Stanley.
As traders geared up for the Fed’s preferred inflation gauge on Friday — when markets will be closed — they parsed the latest economic readings.
US consumer confidence held steady, durable goods orders climbed while home-price growth accelerated at the fastest rate since 2022.
The S&P 500 hovered near 5,210, with Nvidia halting a six-day rally and dropping 2%.
United Parcel Service Inc. fell as investors saw its long-term sales target as hard to meet.
Former president Donald Trump’s startup Trump Media & Technology Group Corp. surged in its first session as a publicly traded company.
Treasuries rebounded from session lows after a $67 billion sale of five year-notes.
The S&P 500 is on track to notch five straight months of gains from November through March — a feat only accomplished one other time this century in 2013.
That set-up has historically underpinned a secular bull run in US stocks that extended at least a year, according to Jeffrey Hirsch, editor of the Stock Trader’s Almanac.
Since 1950, when the equities benchmark posted a consecutive monthly advance from November to March, the S&P 500 rose the remaining nine months of the year in all 11 instances, with an average gain of 12%, he added.
“Strong price momentum, like we have seen over the past five months, tends to occur in the midst of bull markets and is a sign of underlying strength,” said Lerner at Truist. “The rise has been aided by an economy that has exceeded expectations, forward corporate earnings estimates that have moved to record highs, technology leadership, and expectations that the Federal Reserve will start lowering short-term rates later this year.”
While markets appear to be getting stretched, similar past periods of strength have also tended to be a positive when looking out 12 months — with stocks up every time and showing an average gain of 14%, Lerner added.
“Stocks have moved higher in the first quarter in anticipation of the first rate cuts,” said Anthony Saglimbene at Ameriprise. “We have likely already entered a period where the Federal Reserve is now less likely to surprise the market from here on out.”
Overall, it’s likely that prices keep pushing up into late March given no evidence of technical deterioration, according to Mark Newton at Fundstrat Global Advisors.
“I continue to see the US stock market as being attractive, technically speaking, and do not feel sufficient risk is there to warrant a selloff at this time,” Newton said.
A rally in the S&P 500 to 5,350-5,400 is definitely possible into mid-April — before a consolidation gets underway, he concluded.
For stocks to warrant their multiple expansion in recent months, global central banks must ease monetary policy this year and companies have to deliver healthy earnings growth, according to JPMorgan Chase & Co.’s Marko Kolanovic.
“Overall, if central banks turn out to be more dovish than currently projected, but without this being accompanied by growth disappointments, present equity multiples could be defended,” he wrote this week.
If earnings disappoint and central banks are more restrictive, equity multiples would need to fall, he added.
Bank of America Corp.’s institutional, retail, and hedge fund clients were all net sellers of US equities in the week ended March 22, while corporations purchasing their own shares were the sole net buyers.
“As momentum slows and breadth diverges, we believe the S&P 500 could benefit from a healthy pullback of at least 5% toward its 50-day moving average — a level last tested in early November,” said Craig Johnson at Piper Sandler.
As the big debate unfolds on how concentrated or broad this year’s S&P 500 rally has been, there’s data to support both arguments.
After the year kicked off with gains focused on tech-heavy sectors, the rally has broadened out to other groups like commodities and industrials.
However, looking at the contribution to total returns, 60% of gains in the gauge have been driven by just six stocks: Nvidia Corp., Microsoft Corp., Meta Platforms Inc., Amazon.com Inc., Eli Lilly & Co. and Broadcom Inc.
The artificial intelligence furor gripping the stock market has chipmakers like Nvidia Corp. soaring, making them increasingly crucial to the broader S&P 500 rally.
But the stocks are no longer cheap, adding a new level risk to further gains in the equity benchmark.
The Philadelphia Stock Exchange Semiconductor Index is priced around eight times sales, the highest in at least two decades, according to data compiled by Bloomberg.
The S&P 500, by contrast, is priced around 3 times sales.
Relative to the broader benchmark, the chip index is higher than it was during the dot-com peak in 2000.

Corporate Highlights:
* Apple Inc. iPhone shipments in China fell about 33% in February from a year earlier, according to official data, extending a slump in demand for the flagship device in its most important overseas market.
* Dell Technologies Inc. cut 13,000 employees over the last fiscal year, a steeper reduction in headcount than initially announced.
* McDonald’s Corp. will bring Krispy Kreme Inc.’s doughnuts to its restaurants across the US, marking the burger chain’s latest effort to attract diners for breakfast and all-day snacking.
* Short sellers are still betting billions of dollars that the rally in cryptocurrency-linked stocks fueled by a surge in Bitcoin will eventually end.
** Total short interest, or the amount that contrarian traders have pledged against crypto stocks, has increased to nearly $11 billion this year, according to a report from S3 Partners LLC on Monday. More than 80% of total short interest in the sector are bets against MicroStrategy Inc. and Coinbase Global Inc.
* Michael Novogratz’s Galaxy Digital Holdings Ltd. swung to a profit in the fourth quarter, bolstered by rising digital asset prices and increased trading volumes.
* Viking Therapeutics Inc. unveiled results from an early study of its experimental weight-loss pill, a product expected to  compete with popular obesity shots.
* Rite Aid Corp. is nearing a deal with key bondholders and other creditor groups that will allow the pharmacy chain to avoid a liquidation, according to people with knowledge of the matter.

Key events this week:
* China industrial profits, Wednesday
* Bank of England issues financial policy committee minutes, Wednesday
* Eurozone economic confidence, consumer confidence, Wednesday
* Fed Governor Christopher Waller speaks, Wednesday
* UK GDP revision, Thursday
* US University of Michigan consumer sentiment, initial jobless claims, GDP, Thursday
* Japan unemployment, Tokyo CPI, industrial production, retail sales, Friday
* US personal income and spending, PCE deflator, Friday
* Good Friday. Exchanges closed in US and many other countries in observance of holiday. US federal government is open.
* San Francisco Fed President Mary Daly speaks, Friday
* Fed Chair Jerome Powell speaks, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.3% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.4%
* The Dow Jones Industrial Average was little changed
* The MSCI World index fell 0.1%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro was little changed at $1.0830
* The British pound was little changed at $1.2625
* The Japanese yen fell 0.1% to 151.58 per dollar
Cryptocurrencies
* Bitcoin fell 2% to $69,538.32
* Ether fell 1.9% to $3,561.06
Bonds
* The yield on 10-year Treasuries declined two basis points to 4.23%
* Germany’s 10-year yield declined two basis points to 2.35%
* Britain’s 10-year yield declined two basis points to 3.97%
Commodities
* West Texas Intermediate crude fell 0.6% to $81.49 a barrel
* Spot gold rose 0.3% to $2,177.89 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Jessica Menton, Jeran Wittenstein, Lu Wang and Tatiana Darie.
Have a lovely evening.

Be magnificent!
As ever,

Carolann
Never forget what a man says to you when he is angry. -Henry Ward Beecher, 1813-1887.

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