November 17, 2023, Newsletter
Tangents: Happy Friday!
Carolann is away from the office for a conference, I will be writing the newsletter on her behalf.
November 17, 1558: Queen Elizabeth I of England ascended to the throne upon the death of her half-sister Queen Mary.
November 17, 1800: Congress met in Washington, DC, for the first time.
What will happen if the Iceland volcano finally erupts?
Experts have warned that an underground magma tunnel between a pair of Icelandic towns could erupt at any moment. But what will this eruption look like? And how far-reaching will its effects be?
4,000-year-old tomb may contain Norway’s 1st farmers
Archaeologists in Norway have discovered a stone-lined tomb from the late Neolithic that holds the remains of at least five people.
2,800-year-old ivory carved with sphinx discovered in Turkey
The artifact is from an Iron Age settlement at Hattusa that was established after the city was abandoned by the Hittites.
Astronauts accidentally drop tool bag during spacewalk
A tool bag that gave astronauts the slip during a spacewalk at the International Space Station is surprisingly bright and can be seen from Earth with binoculars.
James Webb telescope detects ‘fluffy’ alien planet that rains sand
Clouds of silicate sand exist high in exoplanet WASP-107b’s atmosphere, new James Webb Space Telescope observations reveal.
PHOTOS OF THE DAY
Kuwait City, Kuwait
The top of the al-Hamra tower appears above heavy fog
Photograph: Yasser al-Zayyat/AFP/Getty Images
A female deer and a male stag make each other’s acquaintance during rutting season at Bushy Park, south-west London.
Photograph: SWNS/Lesley Marshall
Las Vegas, US
Kevin Magnussen of Denmark drives the Haas F1 VF-23 Ferrari during practice before the Formula One Grand Prix of Las Vegas in Nevada
Photograph: Jared C Tilton/Formula One/Getty Images
Market Closes for November 17th,2023
|Bonds||% Yield||Previous % Yield|
10 Year Bond
10 Year Bond
30 Year Bond
|WTI Crude Future||75.89||72.90|
📈 On this day in 1927, President Calvin Coolidge declared that America was “entering upon a new era of prosperity.” Although Coolidge may not have been the first to use the words “new era,” his remarks christened the bull market of the 1920s.
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose 0.6% at 20,175.77 in Toronto.
The index advanced to the highest closing level since Sept. 20 after the previous session’s little change.
Canadian Natural Resources Ltd. contributed the most to the index gain, increasing 3.7%. Park Lawn Corp. had the largest increase, rising 4.7%.
Today, 139 of 227 shares rose, while 87 fell; 7 of 11 sectors were higher, led by energy stocks.
* This year, the index rose 4.1%, heading for the best year since 2021
* So far this week, the index rose 2.7%
* The index advanced 1.5% in the past 52 weeks. The MSCI AC Americas Index gained 14% in the same period
* The S&P/TSX Composite is 3.2% below its 52-week high on Feb. 2, 2023 and 7.9% above its low on Oct. 27, 2023
* S&P/TSX Composite is trading at a price-to-earnings ratio of 15.4 on a trailing basis and 14.4 times estimated earnings of its members for the coming year
* The index’s dividend yield is 3.3% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.17t
* 30-day price volatility little changed to 14.34% compared with 14.33% in the previous session and the average of 14.45% over the past month
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
Energy | 85.6759| 2.4| 36/4
Financials | 35.2981| 0.6| 21/7
Consumer Discretionary | 7.7962| 1.0| 11/3
Information Technology | 7.5778| 0.4| 7/4
Health Care | 1.4570| 2.7| 4/0
Real Estate | 1.2916| 0.3| 13/8
Communication Services | 0.8822| 0.1| 3/2
Utilities | -0.4519| -0.1| 10/5
Consumer Staples | -0.5762| -0.1| 5/6
Industrials | -0.8144| 0.0| 12/14
Materials | -15.4387| -0.7| 17/34
| | |Volume VS |
| Index | | 20D AVG |YTD Change
Top Contributors |Points Move| % Change | (%) | (%)
Canadian Natural | | | |
Resources | 25.1200| 3.7|n/a | 21.4
Suncor Energy | 16.1100| 4.0|n/a | 7.9
Enbridge | 13.5800| 2.0|n/a | -12.7
Barrick Gold | -3.6810| -1.4|n/a | -7.2
Nutrien | -4.0440| -1.5|n/a | -21.5
Brookfield Corp | -4.2870| -0.9|n/a | 9.1
By Rita Nazareth
(Bloomberg) — US stocks saw small moves after a $2.7 trillion rally in November that was fueled by bets the Federal Reserve will end its hiking cycle to prevent a recession.
The dollar erased its 2023 advance.
The S&P 500 traded above 4,500, notching its third straight week of gains — the longest run since July.
Piles of derivatives contracts tied to stocks and indexes matured — which typically amplifies instability.
Applied Materials Inc. sank on a report it faces a US criminal probe for allegedly violating export restrictions to China. Homebuilders rose as new home construction picked up.
Equities have made a rapid about-face to “overbought” from “oversold” levels — spurring calls they were due for a breather.
Global stock funds attracted $23.5 billion in the week through Nov. 15, the second-biggest inflows of the year, Bank of America Corp. noted, citing data from EPFR.
After an “epic risk rally,” investors should offload those assets as technical and macroeconomic headwinds are building, according to Michael Hartnett, chief investment strategist at BofA. “Fade it,” he noted.
The dollar saw its worst week in four months amid bets the currency has already peaked, with softer-than-expected economic data reinforcing bets the Fed is done with rate hikes.
Ten-year US yields were little changed.
Oil climbed, but posted its fourth straight weekly drop on supply pressures.
Following a softer-than-expected inflation report, the Bloomberg US Aggregate index has gained 1.2% this week through
Thursday and is up 0.4% for the year. The benchmark, which tracks $25 trillion of investment-grade government and corporate debt, posted a record loss of 13% in 2022 and declined 1.5% the previous year.
The index has never slid three straight years.
Franklin Templeton’s Sonal Desai said this week’s bond- market rally has gone too far, too fast. “Markets are priced for beyond the perfect landing,” she told Bloomberg Television. “There do remain risks to inflation and there isn’t enough data to support the rate cuts priced for next year.”
Traders also kept a close eye on the latest Fedspeak. Fed Vice Chair for Supervision Michael Barr reiterated officials are likely at or near the end of their tightening campaign.
Yet Fed Bank of San Francisco President Mary Daly said policymakers aren’t certain inflation is on a path to their 2% target.
“While it is unlikely the Fed will raise rates, investors are jumping ahead too quickly embracing rate cuts,” said David Donabedian, chief investment officer of CIBC Private Wealth US. “Some time in 2024, the Fed will start to lower rates. But we are in a waiting game.”
After the recent rally, the S&P 500 has been consolidating in a tight range, with the gauge having “bandwidth” to pull back further over the short run — without breaking the initial
support at 4,350-4,400, said Dan Wantrobski at Janney Montgomery Scott.
Meantime, valuations of high-quality stocks — those with high profitability and low leverage — have become significantly more expensive compared to both the overall market and their low-quality counterparts, an analysis by Bloomberg Intelligence found.
The other times in the recent past when quality commanded such high valuation premiums were in 2020 and 2008-2009, both times of turmoil. These periods pushed people to seek safety in high-quality investments, leading to the valuation spikes.
“Quality stocks have historically outperformed in the late stages of the business cycle, including in periods of economic contraction, which should offer portfolio protection if the economy slows more than we expect,” said Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management.
As earnings season draws to a close, so does the S&P 500’s profit recession. Earnings are up 4% year-over-year with over 90% of S&P 500 firms having reported results for the third quarter, meaning a three-quarter streak of earnings declines is likely done, data compiled by BI show.
Traders are gearing up for a few more earnings from retailers and tech companies next week.
Best Buy Co., Nordstrom Inc. and Lowe’s Cos. are set to post slumping sales, while Nvidia Corp.’s quarterly results could still exceed sky-high investor expectations thanks to strong demand for generative artificial intelligence.
* Sam Altman, one of the most prominent figures in the world of artificial intelligence, is leaving OpenAI with the company’s board saying he wasn’t always “candid” and that it had lost confidence in him as a leader.
* Amazon.com Inc. is cutting hundreds of employees in the division responsible for its voice-activated Alexa assistant, according to a memo sent to employees.
* ChargePoint Holdings Inc. announced the sudden resignation of its longtime chief executive officer while posting disappointing quarterly revenue.
* Gap Inc. reported profit that exceeded forecasts and a smaller-than-expected drop in comparable sales.
* Ross Stores Inc., a discount department store chain, reported comparable sales that beat estimates.
* Moody’s Investors Service on Thursday lowered its outlook for Tyson Foods Inc. as it expects the largest US meat producer to keep burning cash in the coming 12 to 18 months.
* Elon Musk’s SpaceX is poised to launch its deep-space Starship rocket system Saturday from South Texas for the second time ever.
Some of the main moves in markets:
* The S&P 500 rose 0.1% as of 4 p.m. New York time
* The Nasdaq 100 was little changed
* The Dow Jones Industrial Average was little changed
* The MSCI World index rose 0.3%
* The Bloomberg Dollar Spot Index fell 0.4%
* The euro rose 0.5% to $1.0908
* The British pound rose 0.4% to $1.2460
* The Japanese yen rose 0.7% to 149.69 per dollar
* Bitcoin rose 1.5% to $36,503.45
* Ether fell 0.6% to $1,943.44
* The yield on 10-year Treasuries was little changed at 4.44%
* Germany’s 10-year yield was little changed at 2.59%
* Britain’s 10-year yield declined five basis points to 4.10%
* West Texas Intermediate crude rose 3.9% to $75.75 a barrel
* Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Farah Elbahrawy, Esha Dey, Jessica Menton, Katrina Compoli and Alexandra Semenova.
Have a wonderful weekend everyone.
“It is better to fail in originality than to succeed in imitation.”– Herman Melville
Assistant to Carolann Steinhoff
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