May 24, 2024, Newsletter

Dear Friends,

Tangents: Happy Friday!
Carolann is away from the office; I will be writing the newsletter on her behalf.

Mysterious ‘puffy’ planet may finally be explained by James Webb Space Telescope
The exoplanet WASP-107 b is one of the least dense planets ever discovered. New James Webb telescope observations may reveal how the mysterious world got so ‘puffy’.

Black hole spin speed revealed in new study of churning space-time
Scientists have calculated the speed of a spinning supermassive black hole by studying the ‘spaghettified’ remains of a star it destroyed.

DeepMind’s AI program AlphaFold3 can predict the structure of every protein in the universe — and show how they function
AlphaFold3 uses AI to helps scientists more accurately predict how proteins interact with other biological molecules.

Crows can count out loud, startling study reveals
This is the first time an animal other than humans has been seen performing the feat of vocal numeracy.

No, a ‘planetary parade’ will not be visible from Earth on June 3. Here’s what you can really see.
Despite a flurry of online reports about a “planetary parade” of six worlds aligning on June 3, only two planets will be clearly visible from Earth. (And they’ve been visible all month.)

PHOTOS OF THE DAY

Teahupo’o, French Polynesia
The Moroccan surfer Ramzi Boukhiam trains for the WSL Tahiti Pro competition on the island of Tahiti
Photograph: Jérôme Brouillet/AFP/Getty Images

Tokat, Turkey
Shepherds lead their animals to the highlands of the tableland as the weather gets warmer during sunset
Photograph: Anadolu/Getty Images

​​​​​​​Magelang, Indonesia
People take part in the lantern festival during the commemoration of Vesak Day 2568 BE (Buddhist era) at Borobudur Temple in Central Java. Vesak Day is observed during the full moon in May or June to celebrate the birth, enlightenment to nirvana, and passing of Siddhartha Gautama, the founder of Buddhism
Photograph: Aditya Irawan/NurPhoto/Rex/Shutterstock
Market Closes for May 24^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On May 25, 2006, former Enron Chairman Kenneth Lay and former President Jeffrey Skilling were convicted of fraud and conspiracy in relation to the company’s December 2001 collapse.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 0.5% at 22,320.87 in Toronto.
The move follows the previous session’s decrease of 0.7%.
Toronto-Dominion Bank contributed the most to the index gain, increasing 2.3%.
Celestica Inc. had the largest increase, rising 5.6%.
Today, 159 of 223 shares rose, while 59 fell; 9 of 11 sectors were higher, led by financials stocks.
Insights
* This month, the index rose 2.8%
* So far this week, the index fell 0.6%, heading for the biggest decline since the week ended April 12
* The index advanced 12% in the past 52 weeks. The MSCI AC Americas Index gained 28% in the same period
* The S&P/TSX Composite is 1% below its 52-week high on May 21, 2024 and 19.4% above its low on Oct. 27, 2023
* S&P/TSX Composite is trading at a price-to-earnings ratio of 18 on a trailing basis and 15.6 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 fell to 8.82% compared with 9.20% in the previous session and the average of 9.04% over the past month
================================================================
|Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 52.4316| 0.8| 23/4
Energy | 23.9421| 0.6| 34/6
Materials | 18.3411| 0.7| 39/11
Industrials | 11.6991| 0.4| 19/8
Consumer Staples | 5.8931| 0.6| 7/3
Information Technology | 4.8881| 0.3| 4/5
Utilities | 4.1851| 0.5| 11/3
Consumer Discretionary | 3.8782| 0.5| 7/6
Health Care | 0.2487| 0.4| 2/2
Real Estate | -0.0693| 0.0| 10/9
Communication Services | -5.3428| -0.8| 3/2
================================================================
| | |Volume VS| YTD
|Index Points| | 20D AVG | Change
Top Contributors | Move |% Change | (%) | (%)
================================================================
TD Bank | 21.1000| 2.3| -22.9| -9.7
Constellation Software | 13.2200| 2.6| 13.7| 16.2
Canadian Natural Resources | 8.3310| 1.1| 34.9| 20.6
Nutrien | -3.0090| -1.1| 36.4| 7.8
BCE | -3.5090| -1.2| 34.8| -12.0
Shopify | -11.1500| -1.7| -32.8| -24.5
US
By Rita Nazareth
(Bloomberg) — Stocks rose after data showed American consumers tempered inflation expectations, bolstering sentiment regarding prospects for Federal Reserve rate-cuts this year.
The S&P 500 rebounded after a two-day slide.
When traders come back from the holiday weekend, the “T+1” rule will come into effect — making US equities settle in one day rather than two.
Treasuries barely budged after Fed Governor Christopher Waller said he still thinks the neutral interest-rate is relatively low, while warning that unsustainable fiscal spending could alter that trend.
Wall Street got a degree of relief as University of Michigan data showed consumers expect prices to climb at a 3.3% annual rate over the next year, down from the 3.5% expected earlier in the month.
“After further review, the consumer is not as pessimistic about the inflation trajectory,” said Jeff Roach at LPL Financial. “Consumer spending could slow, easing up inflationary pressures from the demand side of the economy.”
In a session of low trading volume, the S&P 500 reclaimed the 5,300 mark, erasing this week’s losses.
The Nasdaq 100 hit a fresh all-time high, led by gains in Nvidia Corp. and Apple Inc.
Crypto stocks climbed as the Securities and Exchange Commission paved the way for the eventual launch of the first US exchange-traded funds investing directly in Ether.
US 10-year yields fell one basis point to 4.46%, with the bond market closing early ahead of the Memorial Day holiday.
The dollar halted a four-day winning run.
The yen fluctuated as Japan’s top currency official reiterated his stance to take steps against excessive moves. Oil and gold edged up.
The consumer outlook dimmed in May as growing cracks in the foundation of the labor market and the realization that interest rates may remain higher for longer weighed on the collective mood, according to Jim Baird at Plante Moran Financial Advisors.
“Will they continue to spend or begin to retrench in anticipation of tougher sledding ahead?” Baird noted. “That’s the unanswered question. If May’s sentiment index provides any indication of the near-term direction, a more pessimistic
consumer is likely to tighten their proverbial purse strings a bit in the coming months.”
The Fed’s favored inflation gauge — the core PCE deflator due next Friday — will likely moderate to the slowest monthly pace yet this year, according to Stuart Paul at Bloomberg Economics. However, the moderation was likely related to a sharp drop in volatile airfares — while easing financial conditions continued to boost inflation.
To Quincy Krosby at LPL Financial, the report could offer the market a decidedly positive catalyst if the data comes in cooler than expectations.
“Absent that, even if the PCE remains steady, the market could be satisfied that inflation remains somewhat contained,” she noted. “But yesterday’s market action suggests that investors and traders alike are losing patience with the Fed’s
inability to quell prices that insist on rising.”
Minutes from the two-day Federal Open Market Committee gathering ending May 1 released Wednesday showed that, while participants assessed monetary policy was “well positioned,” various officials mentioned a willingness to tighten further if warranted.
Goldman Sachs Group Inc. economists including Jan Hatzius moved their forecast for the Fed’s first rate cut to September from July.
“Earlier this week, we noted that comments from Fed officials suggested that a July cut would likely require not just better inflation numbers but also meaningful signs of softness in the activity or labor market data,” they wrote.
Florian Ielpo at Lombard Odier Asset Management remarks that it was another week indeed dominated by “Fed anxiety.”
“Let’s however remember that despite rising rates, company earnings appear resilient, subtly suggesting that the impact of what’s typically seen as positive economic news might be less straightforward,” Ielpo said.
Similar to the actual path of inflation itself, mentions of the word on S&P 500 company earnings calls have rolled over, according to Ryan Grabinski at Strategas Securities.
“However, it is still elevated to pre-pandemic levels, similar to the actual rate of inflation today,” he said. “It will be telling to see how companies deal with elevated inflation over the next several quarters, but given the upward trajectory in margins, it would seem the base case is to continue to push cost on to the consumer.”
To Deutsche Bank AG’s Binky Chadha, the stock market can keep soaring to all-time highs even if the Fed forgoes rate reductions this year as the economy and earnings are growing.
Meantime, Bank of America Corp. strategist Michael Hartnett says the rally in global equity markets is at risk of overheating, saying that rising breadth could trigger a contrarian sell signal.
While concentrated markets have not historically led to bad returns, it is usually a sign of a healthier economy when breadth is better, according to Ross Mayfield at Baird Private Wealth Management.
“And while there was some angst last year over heavy concentration in Big Tech stocks, the market has broadened out significantly in recent months,” he noted.
In a bull market with no crashes, no sudden spikes in volatility and no lasting correction, cautious investors are struggling to find effective ways to hedge their positions. 
Buying put options, a traditional choice for protecting against downturns, has failed to pay off for investors wary of the rally that pushed stocks around the globe to new all-time highs.
Volatility sellers pushed the VIX Index down to the lowest level since 2019 this month and the S&P 500 Index has gone more than 300 days without a dropping 2% in a single session.

Corporate Highlights:
* The top US auto-safety regulator expanded its investigation into Waymo, the autonomous-vehicle subsidiary of Alphabet Inc., after more incidents were identified in which the company’s cars were involved in collisions or may have violated traffic laws.
* Workday Inc. tumbled after the software company cut its full- year forecast for subscription revenue and said customers were being more cautious with orders.
* Elon Musk’s SpaceX has initiated discussions about selling existing shares at a price that could value the closely held company at roughly $200 billion, according to people familiar with the matter.
* Health-care payments software firm Waystar Holding Corp. is moving ahead with a planned US initial public offering that’s expected to launch as soon as Tuesday, according to people familiar with the matter.
* Eli Lilly & Co. will spend $5.3 billion to boost production of a key ingredient in its weight-loss and diabetes shots after the treatments’ explosive popularity led to shortages.
* Novo Nordisk A/S’s blockbuster diabetes drug Ozempic cut patients’ risk of dying in a kidney-disease study, the latest research pointing to the medicine’s usefulness in a constellation of disorders.

Some market moves:
Stocks
* The S&P 500 rose 0.7% as of 4 p.m. New York time
* The Nasdaq 100 rose 1%
* The Dow Jones Industrial Average was little changed
* The MSCI World Index rose 0.5%
Currencies
* The Bloomberg Dollar Spot Index fell 0.2%
* The euro rose 0.3% to $1.0849
* The British pound rose 0.3% to $1.2740
* The Japanese yen was unchanged at 156.93 per dollar
Cryptocurrencies
* Bitcoin rose 2.1% to $69,175.88
* Ether fell 0.3% to $3,746.38
Bonds
* The yield on 10-year Treasuries declined one basis point to 4.46%
* Germany’s 10-year yield declined one basis point to 2.58%
* Britain’s 10-year yield was little changed at 4.26%
Commodities
* West Texas Intermediate crude rose 1.1% to $77.75 a barrel
* Spot gold rose 0.2% to $2,334.41 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Alexandra Semenova, Sagarika Jaisinghani, Jan-Patrick Barnert, and Vince Golle.

Have a wonderful weekend everyone.

Be magnificent!

As ever,

Shabnam
“Creativity is a habit, and the best creativity is a result of good work habits.”– Twyla Tharp

Shabnam Mohammadpourmarzbali
Assistant to Carolann Steinhoff
Queensbury Securities Inc.

340A – 730 View Street
Victoria BC  V8W 3Y7
Tel: 778-430-5851
Fax: 778-430-5828