May 14, 2024, Newsletter

Dear Friends,

Tangents:

On May 14, 1948, the independent state of Israel was proclaimed as British rule in Palestine came to an end. Go to article >>.

Thomas Gainsborough, artist, b. 1727.dCate Blanchett, b. 1969

‘Extreme’ geomagnetic storm that painted Earth with auroras this weekend was the most powerful in 21 years
Between Friday and Sunday, people across the world were treated to stunning aurora displays as Earth’s magnetic field experienced its biggest disturbance since October 2003. Read More.

Sketchy stem-cell treatments in Mexico led to drug-resistant infections.
Three U.S. hospital patients contracted drug-resistant infections in Mexico in 2022 and were still being treated as of March 2024. Full Story: Live Science (5/14)

China creates its largest ever quantum computing chip — and it could be key to building the nation’s own ‘quantum cloud’
China’s supersized superconducting chip looks to match the performance of industry leaders like IBM and will be used to help scale up the performance of quantum computers globally. Read More.

Meghan visited Nigeria as a duchess and left an African princess
Learn about Harry and Meghan’s visit to Nigeria, where the Duchess of Sussex explored her Nigerian ancestry after discovering several years ago that she is 43% Nigerian through a genealogy test.

Scientists say they’ve discovered a ‘phonetic alphabet’ in whale calls.
Researchers have identified previously unknown complexity in whale communication with the help of artificial intelligence — although what the whales are saying remains a mystery to human ears.

2024 WNBA season: How to watch as a new era of women’s basketball dawns
Here’s everything you need to know about this year’s highly anticipated WNBA season, which begins today.

RIP David Sanborn
An influential saxophonist who found success across pop, R&B, jazz and more, died Sunday. He was 78. He was diagnosed with prostate cancer in 2018, but continued performing until recently. During the six-time Grammy Award winner’s career, he played with the Rolling Stones and toured with Stevie Wonder and David Bowie.

PHOTOS OF THE DAY

Java, Indonesia
Mount Merapi spews lava down its slopes
Photograph: Devi Rahman/AFP/Getty Images

London, England
Gucci transformed Tate Modern into a jungle for its cruise collection
Photograph: Graeme Robertson/The Guardian

​​​​​​​The village of Debrad in Slovakia
Photograph: Anadolu/Getty
Market Closes for May 14^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1997: Amazon went public on the Nasdaq, offering 3 million shares at an initial price of $18 per share.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite declined slightly to 22,243.34 in Toronto.
Shopify Inc. contributed the most to the index decline, decreasing 1.4%.
GFL Environmental Inc. had the largest drop, falling 3.6%.
Today, 110 of 223 shares fell, while 107 rose; 6 of 11
sectors were lower, led by energy stocks.
Insights
* The index advanced 8.9% in the past 52 weeks. The MSCI AC Americas Index gained 27% in the same period
* The S&P/TSX Composite is 1% below its 52-week high on May 10, 2024 and 19% above its low on Oct. 27, 2023
* The S&P/TSX Composite is little changed in the past 5 days and rose 1.6% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 18.5 on a trailing basis and 15.4 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$3.53t
* 30-day price volatility little changed to 9.49% compared with 9.49% in the previous session and the average of 8.74% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Energy | -34.1606| -0.8| 16/22
Industrials | -17.9217| -0.6| 7/20
Information Technology | -15.9400| -1.0| 5/5
Utilities | -4.3427| -0.5| 2/13
Financials | -3.6676| -0.1| 8/18
Real Estate | -1.0362| -0.2| 5/14
Consumer Discretionary | 0.4370| 0.1| 5/8
Health Care | 0.8319| 1.3| 2/1
Communication Services | 4.7047| 0.7| 5/0
Consumer Staples | 6.0370| 0.7| 9/2
Materials | 49.2410| 1.8| 43/7
================================================================
| | |Volume VS | YTD
| Index | | 20D AVG | Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
Shopify | -9.3790| -1.4| -14.9| -23.2
Constellation Software | -8.8010| -1.7| 15.3| 10.9
Canadian Pacific Kansas | -8.0200| -1.1| -46.0| 5.8
Teck Resources | 4.5560| 2.0| -12.1| 28.0
First Quantum Minerals | 7.7310| 8.7| -2.7| 80.0
Brookfield Corp | 8.0030| 1.3| -26.0| 14.6
US
By Rita Nazareth
(Bloomberg) — A rally in big tech drove stocks close to their all-time highs as bond yields fell, with investors awaiting key inflation data for clues on the Federal Reserve’s next steps.
In the run-up to the consumer price index, Wall Street shrugged off a mixed reading on producer inflation and Jerome Powell’s signals that interest rates will be higher for longer.
The S&P 500 traded just a few points away from its record, with Tesla Inc. and Nvidia Corp. leading gains in the “Magnificent Seven” cohort of mega caps. Meme-stock traders once again piled into GameStop Corp. and AMC Entertainment Holdings Inc.
Underlying US inflation probably moderated in April for the first time in six months, offering a ray of hope that price pressures will start to ease again.
Compared with April 2023, the core CPI is projected to rise 3.6%.
While the annual increase would be the smallest in three years, it would still be too high to warrant rate cuts.
A survey conducted by 22V Research showed 49% of investors expect the market reaction to the CPI report to be “risk-on” —while only 27% said “risk-off.”
“Investors are expecting inflation to fall in April,” said Anthony Saglimbene at Ameriprise.
“Even if the decline is slight, markets are looking for further evidence that the downward trend in inflation remains intact and, importantly, is not in the process of reversing course higher.”
The S&P 500 rose to around 5,247. The gauge would need to top the March 28 closing level of 5,254.35 to notch its 23^rd record in 2024.
Treasury 10-year yields fell four basis points to 4.44%.
US producer prices rose in April by more than projected, though key components that feed into the Fed’s preferred inflation gauge were more muted.
Several categories in the PPI report that are used to calculate the personal consumption expenditures price index eased.
“A more granular look suggests the components that feed into PCE inflation sent mixed signals,” said Krishna Guha at Evercore. “This means that the burden largely remains on CPI.”
The options market is betting that the S&P 500 will move 1% in either direction after Wednesday’s report on consumer prices, based on the price of that day’s at-the-money straddles, according to Andrew Tyler, head of US market Intelligence at
JPMorgan Chase’s trading desk.
“We believe that the stock market will move higher throughout the year on strong corporate profits and consumer spending, but volatility is likely to spike in the meantime, because the inflation data is going to keep the Fed on edge,” said Chris Zaccarelli at Independent Advisor Alliance.
The S&P 500 is unlikely to deliver any more gains from now through the end of the year, according to Goldman Sachs Group Inc.’s David Kostin.
The firm’s chief US equity strategist reiterated his 2024 price target on the benchmark of 5,200 in an interview with Bloomberg Television on Tuesday.
“The probability of a multiple expansion, while possible, is less probable,” Kostin said.
Wagers on rate cuts have sent investor optimism to a two-and-a-half-year high, but stocks will suffer if evidence of “stagflation” materializes, according to Bank of America Corp. strategist Michael Hartnett.
According to BofA’s global poll, a majority of fund managers see the Fed cutting rates in the second half of 2024.
That has lifted sentiment — derived from a combination of cash levels, equity allocation and economic growth expectations — to the highest since November 2021.
Within that mix, however, the outlook for economic growth and corporate profits has deteriorated for the first time this year, the survey showed.
A separate note showed BofA clients were net sellers of US equities last week, though outflows were chiefly led by institutional clients as hedge funds and mom-and-pop investors bought shares.
Meantime, Commodity Trading Advisors increased their exposure to stocks last week and are expected to continue buying this week regardless of the direction taken by the broader market, according to Goldman Sachs.
Equity derivatives and flows specialist Cullen Morgan estimates that CTAs are long $148 billion of global equities, the 92nd percentile, after buying the equivalent of $30 billion last week.

Corporate Highlights:
* Oracle Corp. climbed after the Information reported the company is close to a deal for a $10 billion cloud contract with Elon Musk’s artificial intelligence startup xAI.
* Alphabet Inc.’s Google said it’s rolling out a version of its ubiquitous search engine that includes responses written by artificial intelligence, in one of the most significant overhauls since the iconic gateway to the internet was founded decades ago.
* Boeing Co. delivered 24 commercial jets in April, its lowest monthly tally since February 2022, as the plane maker slowed production of its workhorse 737 Max and 787 Dreamliner widebody to focus on improving quality.
* Home Depot Inc.’s string of negative sales extended into a sixth straight quarter as the big-box retailer struggles to overcome a weak housing market and lower demand for big-ticket items.
* Tencent Holdings Ltd. reported a far better-than-projected 62% surge in earnings while rival Alibaba Group Holding Ltd.’s profit plunged, highlighting the growing divergence between China’s twin internet powerhouses during a rocky post-Covid recovery.
* Comcast Corp. will offer customers a streaming bundle that includes Apple TV+, Netflix and its own Peacock service as it tries to reduce subscriber churn, Chief Executive Officer Brian Roberts said Tuesday at an investor conference.
* Hydrogen producer Plug Power Inc. surged after the Biden administration offered the US company a conditional commitment for $1.66 billion in loan guarantees to build up to six facilities.
* Verizon Communications Inc. is interested in buying back US Cellular Corp.’s stake in its Los Angeles business if the companies can agree on a reasonable price, the chief of Verizon’s consumer division said.

Key events this week:
* China rate decision, Wednesday
* Eurozone industrial production, GDP, Wednesday
* US CPI, retail sales, business inventories, empire manufacturing, Wednesday
* Minneapolis Fed President Neel Kashkari speaks, Wednesday
* Japan GDP, industrial production, Thursday
* US housing starts, initial jobless claims, industrial production, Thursday
* Philadelphia Fed President Patrick Harker speaks, Thursday
* Cleveland Fed President Loretta Mester speaks, Thursday
* Atlanta Fed President Raphael Bostic speaks, Thursday
* China property prices, retail sales, industrial production, Friday
* Eurozone CPI, Friday
* US Conf. Board leading index, Friday

–With assistance from Carly Wanna, Julien Ponthus and Sagarika
Jaisinghani.

Have  a wonderful evening everyone.

Be magnificent!

As ever,

Carolann
The bitterest tears shed over graves are for words left unsaid and deeds left undone. –Harriet Beecher Stowe, 1811-1896.

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