November 28, 2023, Newsletter

Dear Friends,

Tangents: Full moon tonight. Take a look at the night sky and marvel at the beauty. J

November 28, 1813: Beethoven’s Symphony No. 7 premieres in Vienna, showcasing the composer’s innovative and emotional musical style.

November 28, 2001: Enron Corp., once the world’s largest energy trader, collapsed after would-be rescuer Dynegy Inc. backed out of an $8.4 billion deal to take it over.  Go to article >>

Why don’t we remember being babies?
The inability to remember your first few years of life is called infantile amnesia. But why does it happen.  Read More.

Big blob of hot water may be making El Niño act weirdly
El Niño is in full swing and will likely remain “strong” this winter, but its effect on weather patterns in the U.S. depends on the behavior of an unusually warm blob in the western Pacific,
experts say. Read More.

AI can predict when massive rogue waves will strike next
Rogue waves are giant walls of water that are highly unpredictable and can cause immense damage — but artificial intelligence has now been used to work out when and where they might strike. Read More.

Taylor Swift is sending her ‘Eras Tour’ to streaming services.
The pop star’s wildly successful concert film will be available on streaming platforms starting on her birthday, December 13.

Stephen Colbert is calling in sick
The “Late Show” host canceled his shows this week to recover from surgery for a ruptured appendix.

PHOTOS OF THE DAY

Wuhan, China
Fog shrouds residential buildings in the city in central Hubei province
Photograph: AFP/Getty Images

Adapting for tomorrow – Salinas de Maras, Peru
The ponds in Salinas de Maras have been used for salt extraction since the pre-Inca period, and have been in continuous operation since then. Located in the Sacred Valley, the Salinas consist of approximately 4,500 salt pans, set in stepped terraces of irregular stone walls that follow the Qaqahuiñay hill. These traditional salt mining practices have a lower environmental impact than industrial methods, such as mining and evaporation from brine ponds
Photograph: Marina Abello/EPOTY23

Hong Kong
A mural depicting a resting cat by the street artist Vladi is photographed by a man outside a hotel
Photograph: Peter Parks/AFP/Getty Images
Market Closes for November 28^th,2023

International Markets

Bonds

Currencies

Commodities

Market Commentary:
📈 On this day in 1895, the first automobile race in U.S. history was held in Chicago. It took the winner, Frank Duryea, more than 10 hours to complete the 54-mile course, traveling at around 7 miles per hour through a snowstorm. The race helped set the stage for the era of the automobile, which would reshape the American economy in the 20th century.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite advanced slightly to 20,036.77 in Toronto. The move follows the previous session’s decrease of 0.4%.
Barrick Gold Corp. contributed the most to the index gain, increasing 5.0%. Osisko Mining Inc. had the largest increase, rising 6.8%.
Today, 107 of 227 shares rose, while 118 fell; 2 of 11 sectors were higher, led by materials stocks.
Insights
* This year, the index rose 3.4%, heading for the best year since 2021
* This month, the index rose 6.2%, heading for the biggest advance since January
* The index declined 0.9% in the past 52 weeks. The MSCI AC Americas Index gained 15% in the same period
* The S&P/TSX Composite is 3.9% below its 52-week high on Feb. 2, 2023 and 7.2% above its low on Oct. 27, 2023
* The S&P/TSX Composite is down 0.4% in the past 5 days and rose 6.9% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 15.3 on a trailing basis and 14.5 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 fell to 12.87% compared with 13.48% in the previous session and the average of 14.30% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Materials | 56.1344| 2.5| 39/13
Energy | 23.8911| 0.7| 21/19
Utilities | -0.2234| 0.0| 8/7
Health Care | -0.2892| -0.5| 1/3
Real Estate | -1.6667| -0.4| 8/12
Consumer Discretionary | -2.0384| -0.3| 5/9
Communication Services | -3.9717| -0.5| 1/4
Consumer Staples | -6.1216| -0.7| 1/9
Information Technology | -6.1607| -0.3| 4/7
Industrials | -7.6841| -0.3| 9/17
Financials | -47.7714| -0.8| 10/18
================================================================
| | |Volume VS| YTD
|Index Points | | 20D AVG | Change
Top Contributors | Move | % Change | (%) | (%)
================================================================
Barrick Gold | 13.7400| 5.0|n/a | 2.0
Canadian Natural | | | |
Resources | 12.9100| 1.9|n/a | 18.0
Agnico Eagle Mines | 11.5500| 4.8|n/a | 3.0
Bank of Montreal | -6.3800| -1.2|n/a | -11.6
RBC | -7.9050| -0.7|n/a | -7.8
Bank of Nova Scotia| -22.4500| -4.5|n/a | -13.2
US
By Rita Nazareth
(Bloomberg) — Treasuries extended their November rally, the dollar fell and stocks edged higher on speculation the Federal Reserve is done with interest-rate hikes and will be able to ease policy next year.
Fed swaps are now anticipating over 100 basis points of rate cuts by the end of 2024. In a speech entitled “Something Appears to Be Giving,” Governor Christopher Waller — one of the most-hawkish officials — said he’s “increasingly confident that policy is currently well positioned to slow the economy and get inflation back to 2%.” While acknowledging the many uncertainties, his colleague Michelle Bowman refrained from telegraphing an imminent hike.
To Peter Williams at 22V Research, the chances of a dovish pivot or reset seem to be increasing even as Fed-induced recession odds recede.
“It is growing expectations that the Fed and other major central banks are basically done with hiking interest rates,” said Fawad Razaqzada, market analyst at City Index and Forex.com. “Markets are getting a bit over excited, but traders
are just looking to take advantage of the momentum — and will be asking questions later.”
Two-year yields dropped 14 basis points to around 4.75%.
The dollar fell to its lowest since August.
After swinging between small gains and losses, the S&P 500 managed to close with a small advance.
The gauge, which is trading near “overbought” levels, is still headed toward one of its biggest November gains on record.
Bitcoin climbed back above $38,000.
Also speaking Tuesday, Chicago Fed President Austan Goolsbee said the inflation slowdown this year has been the biggest such drop in 71 years. His New York counterpart John Williams called the decline encouraging.
On the economic front, US consumer confidence rose for the first time in four months in November, aided by more optimistic views about the outlook for the labor market.
Home prices hit a fresh record high, according to seasonally adjusted data from S&P CoreLogic Case-Shiller.
The good news for investors is that recession isn’t here yet, this makes an end-of-year rally likely, according to Lauren Goodwin at New York Life Investments.  In past economic cycles, markets don’t tend to price in recession until jobless claims are rising and earnings are in outright decline — signs that recession has already arrived, she noted. “Modest slowdowns in inflation and employment growth mean that a ‘Fed relief rally,’ accompanied by rallies in stocks, bonds and credit as we are seeing now, can be sustained,” Goodwin said. “Our concern is that this late cycle limbo is no different than those of the past: a moment of Goldilocks before the very reason that inflation is moderating – slowing economic growth and employment – becomes clear in the data.”
The most-active investors in the Treasury market are as bullish as they’ve ever been, according to a weekly survey conducted by JPMorgan Chase & Co. since 1991.
JPMorgan’s Treasury client survey for the week ended Nov. 27 found that 78% of active clients were positioned long relative to their benchmark, up from 56% the previous week. None of them were positioned short for a second straight week, for a 78% net long position that was the biggest in the history of the survey. The remaining respondents were neutral.
Meantime, the recent sharp pullback in volatility as year-end approaches creates hedging opportunities given the cloudy outlook for equities, according to Goldman Sachs Group Inc. strategist Christian Mueller-Glissmann. “After the recent equity rally, we believe there is an attractive entry point to hedge the risk of a retracement,” he noted. “Cross-asset volatility has continued to reset lower, supported by markets further embracing the ‘inverse’ Goldilocks backdrop in the US with faster-than-expected inflation normalization and growth remaining resilient.”
Bank of America Corp. clients were net buyers of US equities last week, with institutional and retail investors leading purchases while hedge funds offloaded shares.
Clients funneled $2.6 billion into US stocks, with inflows to both individual names and exchange-traded funds, quantitative strategists led by Jill Carey Hall said.
This month’s rally in the S&P 500 is now running out of steam, according to Citigroup Inc. strategist Chris Montagu. He said futures flows last week were “mixed,” leaving net positioning in the benchmark index looking “slightly bearish.”
A Bloomberg Intelligence model known as the Market Regime Index — which clusters periods into three phases dubbed accelerated growth (green), moderate growth (yellow) and decline (red) — has remained stuck in the middle for the past nine months. That suggests that equity-return expectations should remain average until the Fed shifts away from raising interest rates to cutting them, according to BI’s chief equity strategist Gina Martin Adams and senior associate analyst Gillian Wolff.
Hedge funds piled into bullish dollar bets this month despite the currency’s slide on softening US economic data and increasing expectations that the Fed’s most aggressive rate-hiking cycle in a generation is near an end.
A metric of leveraged funds’ net longs on the greenback against eight currencies rose to its highest level since February 2022 as of Nov. 21, according to data from the Commodity Futures Trading Commission aggregated by Bloomberg.
It stood at net long 103,042 contracts, just above a previous year-to-date high seen in April, after bottoming around a net short position of around 72,000 contracts in March.
“The US dollar has been weakening across the board as the market becomes increasingly convinced that the next move from the US central bank will be to cut interest rates, possibly as early as the second quarter,” Razaqzada noted.
Elsewhere, oil snapped a three-session losing streak as OPEC+ members continued negotiations over output levels.

Corporate Highlights:
* The long-awaited delivery event of Tesla Inc.’s Cybertruck on Thursday is a “big moment” for the company, Wedbush analyst Dan Ives said.
* Morgan Stanley was downgraded at Societe Generale to hold.
* Micron Technology Inc., the largest US maker of computer memory semiconductors, warned that it’s spending more than expected on operations.
* Boeing Co. was upgraded at RBC Capital Markets to outperform as the shares are in the early stages of “a significant shift in sentiment” amid strong demand.
* PG&E Corp. said it will pay out a dividend for the first time in about six years as part of efforts by the California utility giant to restore its financial health after emerging from bankruptcy.
* Zscaler Inc., a security software company, affirmed a forecast for 2024 calculated billings that fell slightly short of estimates at the midpoint.
* Bristol Myers Squibb Co. agreed to pay as much as $2.3 billion to collaborate with Avidity Biosciences Inc. on developing drugs to treat rare heart conditions.
* Adobe Inc.’s planned $20 billion purchase of design software maker Figma Inc. risks being blocked by Britain’s competition watchdog unless it offers up remedies to solve competition issues.
* Panama’s top court ruled against a law approving a contract with First Quantum Minerals Ltd., throwing into doubt the future of one of the world’s biggest copper operations.

Key events this week:
* New Zealand rate decision, Wednesday
* OECD releases biannual economic outlook, Wednesday
* Eurozone economic confidence, consumer confidence, Wednesday
* Bank of England Governor Andrew Bailey speaks, Wednesday
* US wholesale inventories, GDP, Wednesday
* Cleveland Fed President Loretta Mester speaks, Wednesday
* Fed releases its Beige Book, Wednesday
* China non-manufacturing PMI, manufacturing PMI, Thursday
* OPEC+ meeting, Thursday
* Eurozone CPI, unemployment, Thursday
* US personal income, PCE deflator, initial jobless claims, pending home sales, Thursday
* China Caixin Manufacturing PMI, Friday
* Eurozone S&P Global Manufacturing PMI, Friday
* US construction spending, ISM Manufacturing, Friday
* Fed Chair Jerome Powell to participate in “fireside chat” in Atlanta, Friday
* Chicago Fed President Austan Goolsbee speaks, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.1% as of 4 p.m. New York time
* The Nasdaq 100 rose 0.3%
* The Dow Jones Industrial Average rose 0.2%
* The MSCI World index rose 0.3%
Currencies
* The Bloomberg Dollar Spot Index fell 0.4%
* The euro rose 0.3% to $1.0988
* The British pound rose 0.5% to $1.2693
* The Japanese yen rose 0.8% to 147.49 per dollar
Cryptocurrencies
* Bitcoin rose 3.3% to $38,265.88
* Ether rose 2.5% to $2,065.51
Bonds
* The yield on 10-year Treasuries declined five basis points to 4.33%
* Germany’s 10-year yield declined five basis points to 2.50%
* Britain’s 10-year yield declined four basis points to 4.17%
Commodities
* West Texas Intermediate crude rose 2% to $76.38 a barrel
* Spot gold rose 1.4% to $2,041.36 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Jason Scott, Tassia Sipahutar, Alex Nicholson, Carter Johnson, Masaki Kondo, Michael Msika, Michael Mackenzie and Edward Bolingbroke.

Have a lovely evening.

Be magnificent!
As ever,

Carolann
The rock of the world was founded securely on a fairy’s wing. -F. Scott Fitzgerald, 1896-1940.

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