November 20, 2023 Newsletter

Dear Friends,

Tangents: Happy Monday.

On Nov. 19, 1863, President Abraham Lincoln delivered the Gettysburg Address as he dedicated a national cemetery at the site of the Civil War battlefield in Pennsylvania.  Go to article >>

November 20, 1985: Windows 1.0 released.  Nearly two years after it was announced, Microsoft released its first graphical operating system.

World’s ‘most sought-after’ whisky sells for $2.7 million
This bottle of whisky set the highest record for any spirit or wine sold under the hammer, according to Sotheby’s auction house in London.

10 abandoned places reclaimed by nature
With a lack of human interference, these derelict sites are being reclaimed by plant and animal species.

See 10 decades of Thanksgiving Day parade balloons
Float down memory lane with a visual history of the annual Macy’s Thanksgiving Day Parade.

Roman coins and gems unearthed at ‘magical place’
During ongoing excavations at Claterna, an ancient Roman site in Italy known as the “Pompeii of the North,” archaeologists unearthed 3,000 coins and 50 gems. Read More.

Astronomers spot aurora on the sun for the 1st time
Scientists have spotted an aurora signal caused by electrons accelerating through a sunspot on our star’s surface for the first time ever. Read More.

Scientists just observed Mars’ eerie green nightglow in the visible light spectrum for the very first time.  Full Story: Live Science (11/17)
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PHOTOS OF THE DAY

Anqing, China
A hardened road can be seen winding through a villages in the hinterland of the Dabie mountain range in Anhui province.  Photograph: Costfoto/NurPhoto/Shutterstock.

Tokyo, Japan
Mount Fuj is silhouetted during sunset behind the highrise buildings of the Shinjuku area of the Japanese capital.  Photograph: Richard A Brooks/AFP/Getty Images.

Chandigarh, India
Devotees perform religious rituals as they offer prayers to the solar deity Surya during the Hindu festival of Chhath Puja.  Photograph: AFP/Getty Images.
Market Closes for November 20^th,2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1991, fashion chain Cascade International said Chairman Victor Incendy had disappeared. Incendy had claimed that Cascade had between 255 and 400 stores; in reality, there were fewer than 30. Cascade’s stock was once valued around $200 million. The company’s stores were sold off for $370,000.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the second day, climbing 0.4%, or 70.7 to 20,246.47 in Toronto.
The index advanced to the highest closing level since Sept. 18.
Shopify Inc. contributed the most to the index gain, increasing 1.7%.
Lithium Americas Argentina Corp. had the largest increase, rising 7.2%.
Today, 150 of 227 shares rose, while 70 fell; 9 of 11 sectors were higher, led by financials stocks.
Insights
* This year, the index rose 4.4%, heading for the best year since 2021
* This month, the index rose 7.3%, heading for the biggest advance since November 2020
* The index advanced 1.3% in the past 52 weeks. The MSCI AC Americas Index gained 14% in the same period
* The S&P/TSX Composite is 2.9% below its 52-week high on Feb. 2, 2023 and 8.3% above its low on Oct. 27, 2023
* The S&P/TSX Composite is up 2.7% in the past 5 days and rose 5.9% in the past 30 days
* 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$3.19t
* 30-day price volatility fell to 13.91% compared with 14.34% in the previous session and the average of 14.46% over the past month
================================================================
|Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 25.4148| 0.4| 18/10
Information Technology | 19.7824| 1.2| 9/2
Energy | 12.0596| 0.3| 32/7
Materials | 6.9726| 0.3| 32/19
Real Estate | 3.3376| 0.7| 15/5
Consumer Staples | 1.8578| 0.2| 5/6
Consumer Discretionary | 1.1997| 0.2| 11/2
Health Care | 0.5526| 1.0| 2/1
Utilities | 0.4166| 0.1| 8/6
Industrials | -0.4267| 0.0| 16/10
Communication Services | -0.4715| -0.1| 2/2
================================================================
| | |Volume VS | YTD
| Index | | 20D AVG | Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
Shopify | 13.2100| 1.7|n/a | 103.0
Brookfield Corp | 10.3700| 2.2|n/a | 11.5
Constellation Software | 4.1690| 1.0|n/a | 53.8
Canadian National | -3.1340| -0.5|n/a | -2.2
Suncor Energy | -3.5700| -0.8|n/a | 7.0
Franco-Nevada | -4.6180| -2.1|n/a | -12.4
US
By Rita Nazareth
(Bloomberg) — The stock market extended its powerful November rally ahead of Nvidia Corp.’s results, with Wall Street also breathing a sigh of relief as a $16 billion sale of 20-year Treasuries lured bond buyers.
Shortly after the auction results, US 10-year yields reversed course and fell to around 4.4%.
The S&P 500 closed at the highest since August while the Nasdaq 100 hit a 22-month high.
Both Nvidia and Microsoft Corp. climbed to fresh peaks amid a revival of the artificial-intelligence bid.
In late trading, Zoom Video Communications Inc. rose on better-than-expected sales.
The dollar dropped to an 11-week low.
“We remain positive on equities and expect a broadening of the rallies recently experienced as the US economy continues on a sustainable economic expansion albeit at a modest pace,” said John Stoltzfus, chief investment strategist at Oppenheimer Asset Management.
Traders have also been fixated on Treasury sales, especially after the US recently offered an unusually large premium to sell 30-year securities.
Those auctions have been exerting a growing sway over stocks, underscoring how the path of interest rates is gripping markets of late.
The 20-year bond auction drew yields of 4.78%, compared with the pre-sale level of 4.79%.
After a more than three-decade hiatus, the Treasury resurrected 20-year bonds in May 2020.
Before Monday’s auction, it had not sold the securities during the Thanksgiving week.
They’ve traded at a discount to other long-term maturities — which caused a degree of apprehension ahead of the sale.
“Treasuries offer extremely attractive yields,” according to Principal Asset Management. “And while the potential for capital appreciation might be limited in the face of an impending economic slowdown, the assurance of a steady income from Treasuries makes them a solid option for investors prioritizing stability heading into an uncertain 2024.”
To Peter Boockvar, author of the Boock Report, the auction was actually fairly mixed, with traders focusing more on the lower yield relative to the pricing right before it — rather than the below average bid to cover.
Due to its somewhat “orphaned status” and small size, “I don’t know what to make of the auction in terms of messaging,” he noted.
As the earnings season winds down, investors will be on the lookout for results from a handful of retailers and tech companies.
Nvidia’s quarterly results Tuesday could exceed sky-high investor expectations thanks to strong demand for generative AI.
Best Buy Co., Nordstrom Inc. and Lowe’s Cos. are set to post slumping sales, reflecting the slowdown in discretionary spending.
The S&P 500 is set to rise toward its all-time high early next year, pullback midyear and then rally back toward the highs, according to strategists at Societe Generale SA.
“The S&P 500 should be in ‘buy-the-dip’ territory, as leading indicators for profits continue to improve,” wrote Manish Kabra. “Yet, the journey to the end of the year should be far from smooth” he added, citing an economic downturn, a looming credit selloff, and ongoing quantitative tightening as hurdles traders still need to face.
To some market watchers, the S&P 500’s rally is looking increasingly unsustainable.
Strategists tracked by Bloomberg predicted on average in mid-October that the gauge would end the year at 4,370 — but it is already been trading above 4,500.
To power back to its previous peak, the S&P 500 needs more than just the earnings recovery that appears to be underway — rate cuts are necessary, too.
That’s according to Bloomberg Intelligence’s fair-value model of the US stock benchmark, which says the consensus 2024 price target on the gauge looks too lofty.
The typical post-earnings recession rebound is expected to come against a backdrop of sustained higher interest rates.
That’s likely to limit potential upside for the S&P 500 to around levels the gauge is currently trading at, even in the best-case scenario, based on projections by BI equity strategists Gina Martin Adams and Michael Casper.
“The market as a whole has not yet eclipsed its early-2022 highs, reflecting the push and pull between optimism for a Fed-engineered soft landing and the potential underestimation of economic headwinds,” said Jason Pride and Michael Reynolds at Glenmede.
Meantime, some of Wall Street’s top strategists are divided when it comes to Corporate America’s earnings outlook next year.
While Citigroup Inc.’s Scott Chronert expects profits to hold up even if the economy slips into a recession, JPMorgan Chase & Co. strategist Mislav Matejka says diminishing pricing power would crimp overall revenue and margins regardless of whether growth contracts.
A Citigroup index shows downgrades to US earnings estimates have outnumbered upgrades for nine weeks in a row — the longest streak since February.
Chronert does expect analysts’ estimates for 2024 to drop in the coming quarter — but that would only lower the bar for companies, he said.
And as the dollar rally stalled, it will take some firm real-sector data to challenge the current dovish Fed narrative, according to Win Thin, global head of currency strategy at Brown Brothers Harriman & Co.
“The US economy continues to grow above trend even as the rest of the world slips into recession, while price pressures remain persistent enough that the Fed will not be able to cut rates as soon and by as much as the market thinks,” Thin noted.
“That said, the dollar remains vulnerable until we see a shift in market sentiment and expectations.”
To Solita Marcelli at UBS Global Wealth Management, the dollar should remain stable in the first months of 2024 due to robust economic growth and high interest rates relative to the rest of the world.
Elsewhere, oil extended gains as traders boosted bets that the OPEC+ alliance will intervene in the market to bolster prices.

Corporate Highlights:
* Nearly all of OpenAI’s employees have threatened to quit and follow ousted leader Sam Altman to work at the company’s biggest  investor, Microsoft, unless the current board resigns, leaving the future of the high-profile artificial intelligence startup increasingly uncertain.
* Boeing Co. rallied after Deutsche Bank AG upgraded the shares to buy as aircraft deliveries are beginning to accelerate.
* NRG Energy Inc. is replacing Chief Executive Officer Mauricio Gutierrez following a dispute over the company’s $2.8 billion acquisition of Vivint Smart Home Inc. — a transaction Elliott Investment Management LP has called the “worst deal” of the decade in the power and utilities industry.
* Bayer AG dropped the most in its history after suffering major courtroom and drug-development setbacks that raise pressure on its new leader to outline a turnaround plan.
* Bristol Myers Squibb Co. and 2seventy bio Inc. slumped after saying the Food and Drug Administration will convene an advisory committee meeting to review data around an application for a cancer drug, and that a decision on the application won’t be made by the target action date of Dec. 16.
* C3.ai Inc., a software maker that has worked to capitalize on interest in artificial intelligence, cut workers last week, citing employee performance and the need for cost savings.

Key events this week:
* ECB President Christine Lagarde and German Finance Minister Christian Lindner speak, Tuesday
* US existing home sales, Tuesday
* FOMC issues minutes from the Nov. 1 policy meeting, Tuesday
* Nvidia’s earnings, Tuesday
* Canada’s update to the government’s fiscal and economic outlook, Tuesday
* Eurozone consumer confidence, Wednesday
* US initial jobless claims, University of Michigan consumer sentiment, durable goods, Wednesday
* Bank of Canada Governor Tiff Macklem speaks, Wednesday
* Eurozone S&P Global Manufacturing & Services PMI, Thursday
* Thanksgiving holiday — US markets closed — Thursday
* ECB publishes account of October policy meeting, Thursday
* Germany IFO business climate, Friday
* US S&P Global Manufacturing PMI, Friday
* Black Friday, traditional kick-off for the US holiday shopping season
* ECB’s Christine Lagarde speaks, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.7% as of 4 p.m. New York time
* The Nasdaq 100 rose 1.2%
* The Dow Jones Industrial Average rose 0.6%
* The MSCI World index rose 0.7%

* The Bloomberg Dollar Spot Index fell 0.4%
* The euro rose 0.2% to $1.0942
* The British pound rose 0.4% to $1.2507
* The Japanese yen rose 0.9% to 148.34 per dollar
Cryptocurrencies
* Bitcoin rose 1.4% to $37,540.81
* Ether rose 2.5% to $2,033.75
Bonds
* The yield on 10-year Treasuries declined two basis points to 4.41%
* Germany’s 10-year yield advanced two basis points to 2.61%
* Britain’s 10-year yield advanced two basis points to 4.12%
Commodities
* West Texas Intermediate crude rose 2.3% to $77.60 a barrel
* Spot gold fell 0.2% to $1,977.69 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Carter Johnson, Ye Xie, Matthew Burgess, Tassia Sipahutar, Robert Brand, Jeran Wittenstein, Elizabeth Stanton, Alexandra Semenova, Sagarika Jaisinghani, Edward Bolingbroke and Vassilis Karamanis.
Have a lovely evening.

Be magnificent!
As always,

Carolann
How bitter a thing it is to look into happiness through another man’s eyes. –Willaim Shakespeare, 1564-1616.

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