March 27, 2024, Newsletter

Dear Friends,

Tangents:
March 27, 1513 Spanish explorer Juan Ponce de Leon sighted Florida.  Go to article >>
March 27, 1871: England and Scotland compete in the first international rugby match.

March 27, 1866: President Andrew Johnson vetoes a civil rights bill which later passes as the 14^th Amendment

William Roentgen, scientist, b. 845
Gloria Swanson, actress, b. 1899
Sarah Vaughan, singer, b. 1924
Mariah Carey, singer, b. 1970.

‘You could almost see and smell their world’: Remnants of ‘Britain’s Pompeii’ reveal details of life in Bronze Age village
Archaeologists are studying a Bronze Age village built on stilts to better understand the lifestyles of the people who lived there. Read More.

Single enormous object left 2 billion craters on Mars, scientists discover
An object that slammed into Mars roughly 2.3 million years ago created 2 billion smaller craters around the main Corinto impact crater, near the Red Planet’s equator. Read More.

Enormous explosions may be visible on the sun during the April 8 solar eclipse
When the moon fully covers the sun on April 8, viewers will have a rare view of the sun’s corona, and everything that explodes out of it.
Full Story: Live Science (3/26)

MIT scientists have just figured out how to make the most popular AI image generators 30 times faster
Scientists have built a framework that gives generative AI systems like DALL·E 3 and Stable Diffusion a major boost by condensing them into smaller models — without compromising their quality. Read More.

Men’s NCAA tournament Final Four is set
You probably weren’t expecting the brackets to look like this! Here are the teams headed to the Final Four following victories by San Diego and Miami.

Easy organization tweaks for your pantry
If you loathe the idea of putting pantry ingredients in clear containers, here’s why you should reconsider your current storage solutions.

‘Succession’ Season 4 opener sets the stage for battles to come
The two-time Emmy-winning HBO show kicked off its final flight of episodes, offering a glimpse into the intense drama ahead. (HBO, like CNN, is a unit of Warner Bros. Discovery.)

PHOTOS OF THE DAY

London, UK
Training sessions on the River Thames in Putney for the Oxford v Cambridge boat race
Photograph: Zac Goodwin/PA

Annemasse, France
‘Spring would not be complete without a picture of cherry blossoms.’
Photograph: Loveleen Saka Momin

​​​​​​​Lake Bohinj, Slovenia
‘We all love a blue sky, but the moody clouds lift this image of my son sitting on a jetty.’
Photograph: Bruce Carr
Market Closes for March 27^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 2000: Technology stocks set a record for industry representation in the S&P 500, while Cisco Systems became the world’s most valuable corporation, worth $548 billion. Over the next year, tech stocks lost more than half their value, and Cisco shed over $425 billion.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 0.9% at 22,107.08 in Toronto.
The move was the biggest gain since March 7 and follows the previous session’s decrease of 0.1%.
Today, materials stocks led the market higher, as 10 of 11 sectors gained; 193 of 224 shares rose, while 30 fell.
Toronto-Dominion Bank contributed the most to the index gain, increasing 1.5%.
Mag Silver Corp. had the largest increase, rising 9.5%.
Insights
* This quarter, the index rose 5.5%
* This month, the index rose 3.5%
* 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 0.4% below its 52-week high on March 21, 2024 and 18.3% above its low on Oct. 27, 2023
* The S&P/TSX Composite is up 0.3% in the past 5 days and rose 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 15.1 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3% 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 8.25% compared with 8.87% in the previous session and the average of 11.50% over the past month
================================================================
|Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Materials | 64.6011| 2.8| 45/5
Financials | 53.0376| 0.8| 22/5
Industrials | 30.8382| 1.0| 25/2
Energy | 15.4347| 0.4| 37/4
Consumer Discretionary | 8.9174| 1.1| 11/2
Utilities | 7.0307| 0.9| 12/3
Communication Services | 5.9502| 0.8| 4/1
Real Estate | 5.4974| 1.1| 21/0
Health Care | 3.2512| 4.6| 4/0
Consumer Staples | 1.4801| 0.2| 7/3
Information Technology | -1.4727| -0.1| 5/5
================================================================
| | |Volume VS |
| Index | | 20D AVG |YTD Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
TD Bank | 15.2600| 1.5| -10.7| -3.9
RBC | 14.8500| 1.1| -34.0| 1.7
Barrick Gold | 10.9200| 4.2| -35.0| -8.1
Open Text | -1.6160| -1.6| -38.0| -5.5
Fairfax Financial | -2.3320| -1.0| -25.3| 20.1
US
By Rita Nazareth
(Bloomberg) — Wall Street traders sent stocks higher in the final stretch of a quarter that saw the market surge almost 10%, with many institutional investors potentially rebalancing their portfolios.
In another volatile session, the S&P 500 closed at a record after almost erasing gains earlier Wednesday.
Apple Inc. and Tesla Inc. — this year’s laggards in the mega-cap space — climbed, while Nvidia Corp. fell.
The Dow Jones Industrial Average added over 1%.
The Nasdaq 100 underperformed.
Treasuries rose, with the market set to close at 2 p.m. New York time on Thursday before the holiday.
Every quarter-end, institutional investors check their market exposures to make sure they meet strict allocation limits between equities and bonds, as well as between domestic and international shares.
With stocks set to cap another strong quarter, pension funds are likely to sell an estimated $32 billion in equities to rebalance their positions, according to Goldman Sachs Group Inc.
“At the end of almost every quarter, we hear chatter around Wall Street that there is going to have to be some big rebalancing play,” said Matt Maley at Miller Tabak + Co. “Maybe the quarterly rebalancing that everybody talks about each quarter, but rarely has much impact, just might create some more interesting moves before the week (and quarter) are over.”
The S&P 500 approached 5,250.
Merck & Co. rallied as a new drug for a rare form of high blood pressure got US approval.
Former President Donald Trump’s Trump Media & Technology Group Corp. powered higher after a stellar Nasdaq debut.
Treasury 10-year yields declined four basis points to 4.19%.
Traders also awaited Federal Reserve Governor Christopher Waller’s remarks at an event after the close.
To Thierry Wizman at Macquarie, Waller may offer a “rebuke of Jay Powell’s dovishness.”
“While not dismissing the prospect of a June cut, Waller may point to sturdy US aggregate demand and ‘sticky’ inflation in the January and February data to justify fewer rate cuts than the median ‘dots’ imply,” Wizman noted.
Gentle rate cuts could create a mildly supportive environment for risk assets — which could also be helped by a high level of cash on the sidelines, according to Kristina Hooper at Invesco.
“For those who believe that such cuts are already priced into stocks and fixed income, I would argue that there are other catalysts” Hooper said. “Keep in mind there is a high level of cash sitting on the sidelines, some of which could rotate into equities and fixed income, especially if rates begin to fall and/or more investors develop a fear of missing out.”
To illustrate, she cited the fact that money-market assets peaked in the fourth quarter of 2008 before dropping significantly.
“It seems no coincidence that cash started to move off the sidelines just as stocks began a strong and lengthy multi-year rally in March of 2009,” she concluded.
After the S&P 500 soared about 25% since late October, many have flagged concern that positioning is stretched and stocks are more vulnerable to short-term profit taking.
A blistering five-month rally in US equities has indeed seen valuations soar, but plenty of corners in the S&P 500 are still historically cheap.
At the sector level, eight of 11 groups trade at a discount compared to pre-pandemic levels — while only technology, materials, and industrials are trading at a premium, according to Bloomberg Intelligence data.
Meanwhile, nearly three fourths of the gauge trade below its capitalization-weighted price-to-book ratio — a measure that compares market capitalization to book value, used to find undervalued pockets of the market, BI’s analysis showed.
A similar share of companies, 71%, carry forward-price-to earnings multiples beneath the index level, with roughly half below their average before Covid.
“Multiples for the next year appear much loftier than they seem for the S&P 500 index, distorted by analysts’ conservative forecasts for an earnings recovery from the 2022-2023 profit recession,” said a BI team led by Gina Martin Adams.
Trailing 12-month S&P 500 earnings per share contracted 13% from the March 2022 high — well short of the median 25.8% peak-to-trough drop in economic contractions since the 1969-1970 recession, and 16.8% excluding the 2007-09 and 2020 extreme outliers, the BI strategists noted.
Only two recessions — 1980 and 1969-1970 — had shallower drops in earnings.
S&P 500 EPS on median jumped 15.6% in the first 12 months after each recessionary trough since 1969 (excluding 2007-09 and 2020), the analysis showed.
“Perhaps reflecting the smaller-than-usual drop that occurred in this cycle, consensus forecasts a mere 11.1% rise in earnings over the next year,” the strategists concluded.

Corporate Highlights:
* Amazon.com Inc. says it’s investing an additional $2.75 billion in Anthropic, completing a deal it made last year to back the artificial intelligence startup and expand a partnership between the companies.
* Robinhood Markets Inc., best known for offering commission-free trading, is rolling out a credit card to US consumers as it looks to become a broader financial-services company.
* Carnival Corp. slightly raised its outlook for 2024 amid record setting demand for cruises. However, the company also cited a negative impact related to the collapse of Francis Scott Key Bridge in Baltimore and is continuing to feel the effects of conflict in the Red Sea region.
* Fisker Inc. dramatically reduced the price of the Ocean sport utility vehicle — its only model — as the electric-car maker struggles to stay in business.

Key events this week:
* 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 rose 0.9% as of 4 p.m. New York time
* The Nasdaq 100 rose 0.4%
* The Dow Jones Industrial Average rose 1.2%
* The MSCI World index rose 0.6%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro was little changed at $1.0827
* The British pound was little changed at $1.2638
* The Japanese yen rose 0.2% to 151.33 per dollar
Cryptocurrencies
* Bitcoin fell 1.5% to $68,745.2
* Ether fell 2.2% to $3,495.85
Bonds
* The yield on 10-year Treasuries declined four basis points to 4.19%
* Germany’s 10-year yield declined six basis points to 2.29%
* Britain’s 10-year yield declined four basis points to 3.93%
Commodities
* West Texas Intermediate crude was little changed
* Spot gold rose 0.7% to $2,194 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Jan-Patrick Barnert, Michael Msika and Alexandra Semenova.
Have a lovely evening.

Be magnificent!
As ever,

Carolann
Out of suffering have emerged the strongest souls; the most massive characters are seared with scars. –Edwin H. Chapin, 1814-1880.

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