November 21, 2023, Newsletter

Dear Friends,

Tangents:
November 21, 1995: Dow Jones tops 5000 for the first time. (P.S. It closed at 35,088.29 today, i.e., here’s one way to get rich – buy stocks and hold for the long term).
November 21^st, 1962: War between China and India ends.  The month-long war began over a border dispute between the two countries and ended with a  unilateral ceasefire by the Chinese.
1783: Man’s first flight in a  balloon.

1985: The first version of Microsoft’s Windows operating system, Windows 1.0, was released.  Go to article >>

Goldie Hawn, b. 1945.
Voltaire, b. 1694

‘Napoleon’ releases in US theaters this week
Director Ridley Scott spoke with CNN about his creative endeavors and the historical epic releasing Wednesday starring Joaquin Phoenix.

A never-before-seen glimpse of the heart of the Milky Way
The James Webb Space Telescope captured a stunning new image of our home galaxy, released by NASA on Monday.

The more than 3,000-year-old site along a riverbank in Serbia contains the footprints of dozens of Bronze Age structures.  Full Story: Live Science (11/20).

JWST discovers ‘Cosmic Vine’ of 20 connected galaxies
The James Webb Space Telescope has discovered a massive chain of 20 galaxies in the early universe, raising questions about the formation of the largest structures in the cosmos. Read More.

Civil War weapons recovered from South Carolina river
Civil War weapons, including an unexploded ordnance, were found during a cleanup project in a South Carolina river.  Read More.

Baboon mummy DNA reveals location of mysterious city
New DNA study on a baboon mummy from ancient Egypt suggests that the lost realm of Punt and the port city of Adulis may have been in the same place, separated by time.  Read More.

A single stamp sold for $2 million at auction.

Area man with no car leaves his town millions after death.

PHOTOS OF THE DAY

Guangzhou, China
The Canton Tower and skyscrapers are illuminated during a rehearsal for the Guangzhou international light festival in Guangdong.  Photograph: VCG/Getty Images.

New York, US
People gather as Saks Fifth Avenue unveils its holiday windows.  Photograph: John Lamparski/Getty Images.

Nature photographer of the year 2023 and mammals category winner – He Looks to the Heavens, Jacquie Matechuk (Canada)
Jacquie Matechuk says: ‘Spanning more than 8,000 km, the Andean mountain range occupies more than a quarter of the land surface in Ecuador. Rich in biodiversity, it’s also home to a unique species called the spectacled bear. Until planning this trip, I knew nothing about them. But as a certified bear guide, I was excited to expand my knowledge and understanding of a new species.’
Photograph: Jacquie Matechuk/2023 NPOTY
Market Closes for November 21^st,2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1999, President Bill Clinton signed into law the Gramm-Leach-Bliley Act—or the “Financial Services Modernization Act”—essentially repealing the Glass-Steagall Act of 1933, which banned banks from the brokerage business.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell 0.7% at 20,109.97 in Toronto.
The move was the biggest since falling 0.9% on Nov. 7 and follows the previous session’s increase of 0.4%.
Toronto-Dominion Bank contributed the most to the index decline, decreasing 1.0%. TransAlta Corp. had the largest drop, falling 6.4%.
Today, 162 of 227 shares fell, while 64 rose; 10 of 11 sectors were lower, led by financials stocks.
Insights
* This year, the index rose 3.7%, heading for the best year since 2021
* This month, the index rose 6.6%, heading for the biggest advance since January
* The index advanced 0.7% in the past 52 weeks. The MSCI AC Americas Index gained 14% in the same period
* The S&P/TSX Composite is 3.5% below its 52-week high on Feb. 2, 2023 and 7.6% above its low on Oct. 27, 2023
* The S&P/TSX Composite is up 0.4% in the past 5 days and rose 5.2% 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$3.21t
* 30-day price volatility rose to 13.93% compared with 13.91% in the previous session and the average of 14.43% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | -54.0138| -0.9| 9/19
Industrials | -27.1927| -1.0| 4/22
Energy | -21.8992| -0.6| 7/33
Consumer Discretionary | -12.8373| -1.7| 0/14
Consumer Staples | -12.4981| -1.4| 0/11
Utilities | -11.1270| -1.4| 1/14
Real Estate | -4.7597| -1.0| 2/18
Information Technology | -4.1115| -0.2| 3/8
Communication Services | -3.5483| -0.5| 1/4
Health Care | -0.9137| -1.6| 0/4
Materials | 16.4005| 0.7| 37/15
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
TD Bank | -11.2900| -1.0|n/a | -3.9
Brookfield Corp | -10.0700| -2.1|n/a | 9.2
Canadian Natural Resources | -8.7820| -1.3|n/a | 20.4
Agnico Eagle Mines | 4.0820| 1.8|n/a | -3.5
Wheaton Precious Metals | 4.4630| 2.2|n/a | 21.7
Barrick Gold | 6.1350| 2.3|n/a | -4.4
US
By Rita Nazareth
(Bloomberg) — Stocks, bonds and the dollar barely budged after the Federal Reserve minutes reiterated the central bank’s cautious approach on interest rates, with traders gearing up for Nvidia Corp.’s results.
The S&P 500 edged lower after hitting “overbought” levels and the Nasdaq 100 underperformed.
As the earnings season winds down, questions on the sustainability of the advance led by the “Big Seven” group of mega-caps have resurfaced, with Nvidia declining from a record.
The bar was set high for the world’s most-valuable chipmaker, whose shares have more than tripled this year — leaving little room for error.
Some $6 trillion in market capitalization has been added to the US equity benchmark in 2023 in a rally fueled by the artificial intelligence boom, Corporate America’s resilience and bets the Fed will pivot to rate cuts next year.
The gains left the index about 5% away from reclaiming its all-time high.
For a market surge that has been predicated squarely on the belief the central bank has completed its hiking cycle and rate cuts are due in 2024, the Fed minutes just underscored the most-recent messaging — officials are still not prepared to declare victory and they have no intention so far to ease policy, according to Quincy Krosby at LPL Financial.
“Today’s sluggish market is a more a function of a short-term overbought market, rather than a market that believes it misinterpreted the Fed,” Krosby noted. “Still, the market believes that the Fed is finished and that the economy will require help with rate cuts in 2024, regardless of the Fed’s messaging.”
“The stock market is once again priced for perfection,” said Matt Maley, chief market strategist at Miller Tabak + Co.  “Since the stock market is more ‘overbought’ right now — than it was ‘oversold’ three weeks ago — investors will need to remain very nimble as we move through the end of November and into December.”
Short-term charts on the S&P 500 are currently sporting a negative divergence between price action (approaching recent 2023 highs) and momentum (lower highs), according to Dan Wantrobski, at Janney Montgomery Scott.  “This is a sign that buying power is weakening even as the S&P looks to test into the low-4600 zone,” Wantrobski noted.
“Markets are now vulnerable to profit taking/consolidation over the near-term. We also believe they are still vulnerable to elevated volatility/correction within the first half of 2024.”
Hedge funds are holding their most-concentrated wagers on US equities than any time in the past 22 years, according to data from Goldman Sachs Group Inc. The most popular bets remain in mega cap tech, with Microsoft Corp., Amazon.com Inc. and Meta Platforms Inc. in Goldman’s list of “Hedge Fund VIPs” this quarter.
To Savita Subramanian at Bank of America Corp., the S&P 500 is set for a fresh high in 2024 because US companies have adapted to higher rates and weathered macroeconomic jolts.
She sees the gauge at a record 5,000 by the end of 2024, which is 10% higher than Monday’s close. Next year will be “a stock picker’s paradise,” they said.
US stocks have “much more upside potential” as they approach decisive bullish breakouts, wrote BofA’s technical strategist Stephen Suttmeier.
If the S&P 500 could surpass the low 4,600s, it would confirm a “bullish cup and handle” pattern from early 2022 — triggering more gains, he added.
“Our base case is for further modest equity gains in 2024, with the S&P 500 Index ending the year around 4,700,” said Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management.  As inflation continues to fall and growth moderates, we are even more positive on quality fixed income. But an unusually wide range of risks could still spoil the outlook.”
For investors stashing record sums in cash, US bond managers overseeing a combined $2.5 trillion have a bit of advice: It’s time to put that money to work.  
That’s the message from Capital Group, DoubleLine Capital, Pacific Investment Management Co. and TCW Group.
Signs of ebbing inflation and softer growth have fueled a 3.6% surge in the Bloomberg US Aggregate Index in November, leaving it with a return of about 0.7% for 2023.
That’s still well short of what cash has earned this year.
But it shows what a real turning point could deliver after a year marked by head fakes over price pressures and Fed policy.
“If people are moving into cash because of 5% rates, we could see that money start trickling back into markets soon.  Inflation is coming under control, and the bond market is now preparing for the Fed to start cutting rates in March,” said Callie Cox at eToro.

Corporate Highlights:
* Lowe’s Cos. cut its forecast, underscoring the shift away from big home-renovation projects after the pandemic boom.
* Best Buy Co.’s same-store sales fell by more than expected in the third quarter after what the retailer called “uneven consumer demand.”
* Kohl’s Corp. reported a seventh-straight drop in comparable sales, pointing to an ongoing decline in foot traffic and a broader shift away from consumer spending on discretionary goods like apparel.
* Abercrombie & Fitch Co. boosted its forecast on the back of stronger-than-expected third-quarter sales as the retro brand’s comeback continues to resonate with teens and young millennials.
* Dick’s Sporting Goods Inc. raised its profit forecast as strong demand for sports gear overcame concerns of a slowdown in spending ahead of the holiday season.
* Broadcom Inc.’s deal with software maker VMware Inc. has received a list of conditions it must meet to get approval from Chinese regulators, the final hurdle for the companies’ $61 billion merger.
* Zoom Video Communications Inc. reported better-than-expected revenue on strong enterprise sales.
* Ford Motor Co. is reducing capacity and hiring plans at a battery plant it’s building in Michigan because it sees weaker demand for electric vehicles.

Key events this week:
* 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 fell 0.2% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.6%
* The Dow Jones Industrial Average fell 0.2%
* The MSCI World index fell 0.2%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro fell 0.3% to $1.0912
* The British pound rose 0.2% to $1.2536
* The Japanese yen was unchanged at 148.39 per dollar
Cryptocurrencies
* Bitcoin fell 1.3% to $36,957.33
* Ether fell 1.6% to $1,992.87
Bonds
* The yield on 10-year Treasuries declined two basis points to 4.40%
* Germany’s 10-year yield declined four basis points to 2.57%
* Britain’s 10-year yield declined two basis points to 4.10%
Commodities
* West Texas Intermediate crude was little changed
* Spot gold rose 1.1% to $1,999.09 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Jason Scott, Tassia Sipahutar, Pearl Liu, Thyagaraju Adinarayan, Robert Brand, Michael Mackenzie and Elena Popina.
Have a lovely evening.

Be magnificent!
As ever,

Carolann
In the history of the world, no one has ever washed a rented car. -Lawrence Summers, b. 1954.

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