November 6, 2024 Newsletter

Dear Friends,

Tangents:
Gustavus Adolphus Day, Swedish King killed in 1632.

November 6, 1861:  James Naismith, the inventor of basketball, was born in Ontario, Canada. Go to article 
November 6, 1898: the Philippines gains independence from Spain through the Treaty of Paris, marking the end of over three centuries of Spanish rule and the start of U.S. sovereignty.

Adolphe Sax, Saxophone inventor,  b. 1814.
Sally Field, actress, b. 1946.

Maria Shriver, TV reporter, b. 1955.
Binge-worthy YouTube series that are worth spending hours watching
Have you run out of things to watch on your go-to streaming platforms? If so, check out these binge-worthy YouTube series.

The world’s only Michelin-starred ice cream shop
Minimal, a luxe venue in Taiwan, has become the world’s first ice cream establishment to receive a Michelin star.

The skyscrapers where nobody lives
Some elevator test towers around the world have become local landmarks. Read about these peculiar buildings where nobody lives.

Origins of world’s earliest writing point to symbols on ‘seals’ used in Mesopotamian trade
Researchers investigating how the first writing arose identified the motifs on preliterate “cylinder seals” used in the trade of agricultural products and textiles.  Read More.

James Webb telescope spots ‘feasting’ black hole eating 40 times faster than should be possible
Astronomers using the James Webb Space Telescope have spotted a feeding black hole in the early universe that seems to be eating 40 times faster than is theoretically possible.  Read More.

India targets 2028 for Chandrayaan-4 sample-return mission to moon’s south pole
India is eyeing a 2028 launch for its Chandrayaan-4 moon sample-return mission, followed by an uncrewed lunar lander and rover in collaboration with Japan.  Read More.

PHOTOS OF THE DAY

Lewes, UK
Revellers carry torches through the streets of east Sussex during the traditional bonfire night celebrations
Photograph: Glyn Kirk/AFP/Getty Images

Mount Fuji, Japan
The top of the mountain covered in a light dusting of snow
Photograph: Kyodo/Reuters

​​​​​​​Newbridge, UK
Surfers test out Lost Shore Surf Resort, set in a 60-acre country park, that generates up to 1,000 waves an hour
Photograph: Jeff J Mitchell/Getty Images
Market Closes for November 6, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the fourth day, climbing 1%, or 249.55 to 24,637.45 in Toronto.
The move was the biggest since rising 1.2% on Sept. 19.
Today, financials stocks led the market higher, as 5 of 11 sectors gained; 126 of 221 shares rose, while 94 fell.
Shopify Inc. contributed the most to the index gain, increasing 3.7%.
IA Financial Corp. had the largest increase, rising 16.2%.
Insights
* In the past year, the index had a similar or greater gain 18 times. The next day, it advanced 12 times for an average 0.4% and declined six times for an average 0.7%
* This year, the index rose 18%, heading for the best year since 2021
* The index advanced 25% in the past 52 weeks. The MSCI AC Americas Index gained 35% in the same period
* The S&P/TSX Composite is 1.1% below its 52-week high on Oct. 21, 2024 and 26.5% above its low on Nov. 8, 2023
* The S&P/TSX Composite is up 0.5% in the past 5 days and rose 2% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 19.5 on a trailing basis and 17 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.8% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$3.86t
* 30-day price volatility rose to 8.14% compared with 7.67% in the previous session and the average of 7.83% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Financials | 129.7771| 1.6| 23/4
Energy | 68.2399| 1.6| 37/4
Information Technology | 63.1793| 3.1| 10/0
Industrials | 46.9433| 1.5| 22/5
Consumer Staples | 20.3178| 2.1| 9/2
Consumer Discretionary | -1.0219| -0.1| 5/6
Health Care | -2.4515| -3.0| 0/4
Real Estate | -4.5412| -0.9| 3/16
Communication Services | -7.6775| -1.1| 2/3
Utilities | -11.9646| -1.3| 4/11
Materials | -51.2527| -1.7| 11/39
================================================================
| | |Volume VS |
| Index | | 20D AVG |YTD Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
Shopify | 34.5500| 3.7| -5.1| 10.7
Manulife Financial | 25.8700| 5.0| 62.0| 48.8
Brookfield Corp | 23.5700| 3.0| 33.1| 49.4
Intact Financial | -8.4710| -2.5| 70.8| 30.0
Agnico Eagle Mines Ltd | -9.3530| -2.3| 44.7| 59.8
Wheaton Precious Metals | -9.8360| -3.4| 27.9| 34.1
US
By Rita Nazareth
(Bloomberg) — Stocks hit all-time highs, US yields jumped and the dollar saw its best day since 2022, with investors mapping out Donald Trump’s return to presidency and the potential for Republicans to win both houses of Congress.
The S&P 500 climbed 2.5% on bets the newly elected president will enact pro-growth policies that will boost Corporate America.
The benchmark had its best post-Election Day in history, according to data compiled by Birinyi Associates Inc. and Bloomberg.
A gauge of small caps rallied 5.8% amid speculation they will benefit from Trump’s protectionist stance, while wagers on lower taxes and reduced regulation lifted banks.
Insurers focused on the Medicare market jumped on expectations the government will pay higher rates to companies that provide private versions of the US health program for seniors.
Wall Street’s “fear gauge” — the VIX — tumbled the most since August. Trading volume on stocks spiked.
The Dow Jones Transportation Average jumped to a fresh high after a three-year drought of records, finally confirming the strength of its industrial counterpart.
The breakout is a bullish sign to followers of an investing framework known as Dow Theory that says synchronized gains in both gauges portend better times ahead for the broad market.
“For now, investor sentiment is pro-growth, pro-deregulation, and pro-markets,” said David Bahnsen, chief investment officer at The Bahnsen Group.
“There is also an assumption that M&A activity will pick up and that more tax cuts are coming or the existing ones will be extended. This creates a strong backdrop for stocks.”
Treasury yields climbed across the curve, with the move led by longer-term bonds as traders slashed wagers on the scope of rate cuts by the Federal Reserve. Investors have doubled down on bets for policies such as tax cuts and tariffs that could trigger price pressures.
The moves also signal worries that Trump’s proposals will fuel the budget deficit and spur higher bond supply.
US 10-year yields advanced 17 basis points to 4.44%.
A dollar gauge added 1.3%, with the yen leading losses in major currencies and the euro down 1.8%.
The Mexican peso was almost flat after sinking as much as 3.5%.
Bitcoin, viewed by many as a so-called Trump trade after he embraced digital assets during his campaign, hit a record high.
Commodities came under pressure, with gold and copper tumbling.
Oil edged lower.
“The biggest takeaway from last night is that we received certainty that the market craves,” said Ryan Grabinski at Strategas.  “This will allow both business and consumer confidence to improve. Attention now should shift to the Fed meeting tomorrow. The 10-year is approaching the 4.5% level, that’s the level risk assets ran into some trouble in the last 24 months.”
The S&P 500 hovered near 5,930, notching its 48th record this year.
The Nasdaq 100 added 2.7%.
The Dow Jones Industrial Average climbed 3.6%.
A gauge of the “Magnificent Seven” mega caps hit a fresh all-time high, led by Tesla Inc.’s 15% surge.
Trump Media & Technology Group Corp. jumped 5.8%.
In late hours, Qualcomm Inc., the world’s biggest seller of smartphone processors, gave a bullish sales forecast.
With many investors braced for a prolonged period of uncertainty, simply gaining some clarity on the outcome is providing a sigh of relief, according to Keith Lerner at Truist.
He says the market currently appears more focused on the positive aspects of Trump’s agenda with less emphasis on the potential of tariffs and wider policy outcomes.
“Markets are pricing in most of the positives today, though the backdrop is complex, and rates, deficit concerns, the potential for fewer Fed rate cuts, and tariffs could eventually provide a counterbalance to today’s upside price shock, he noted. “Still, the weight of the evidence in our work indicates the bull market still has some longevity left, and we are sticking with the primary market uptrend.”
At Macquarie, Thierry Wizman says traders have to be mindful about pushing the “yield story much further.”
“If there’s a surprise coming from Trump in the next few months (at least relative to hyped-up expectations), it will be about fiscal restraint — rather than fiscal irresponsibility. When the market realizes this, long-term UST yields could stabilize or decline.”
To Mark Haefele at UBS Global Wealth Management, the bond selloff has gone too far. He expects the Fed to stay on a path toward lower rates.
Fed officials are widely expected to lower their benchmark interest rate on Thursday by a quarter percentage point, a move that will come on the heels of a half-point cut in September.
They have projected one more quarter-point cut this year, in December, and an additional full point of reductions in 2025, according to the median estimate released in September.
“The Fed is still likely to cut by 25 basis points at Thursday’s meeting and likely to cut again in December,” said Yung-Yu Ma at BMO Wealth Management. “As we move into 2025, we believe it’s possible that we only see two or three cuts for the year depending on the mix of policy and growth that plays out.”
The makeup of Congress will also be key going forward.
Democrats’ hopes to control the US House are fading, with Republicans increasingly confident they will hold unified control in Washington ahead of next year’s big fights over tax cuts and spending.
Democrats need a net gain of just four House seats to wrest the slim majority from Republicans, but GOP gains in races in Pennsylvania, Michigan and North Carolina have offset losses in New York, putting the party ahead in its bid to retain control of the chamber.
A “Red Wave,” consisting of Republican control of the executive and legislative branches, has occurred only eight times since World War II, according to Sam Stovall at CFRA.
Under this scenario, the S&P 500 posted its highest average annual price increase for a Republican President at 12.9%, accompanied by a 75% frequency of advance, he said.
The best return under a Democratic President occurred just six times under a split-Congress scenario, during which the S&P 500 gained an average 16.6% in price and rose 83% of the time.
“Assuming the House goes Republican, we expect that a Red Sweep outcome will play out in a similar fashion to the 2016 playbook but to a lesser degree given a more mature economic backdrop and higher equity valuations,” said Jeff Schulze at ClearBridge Investments. “Business animal spirits could be rekindled once again from Trump’s pro-business approach.”
Schulze says that which could lead to a more robust capital expenditures and investment environment.
A more favorable corporate tax regime, full extension of the Tax Cuts and Jobs Act, and a lighter regulatory touch should outweigh the potential headwinds from increased tariffs and reduced immigration on corporate profits.
“We expect cyclical leadership to continue in the coming months as the market anticipates stronger economic growth and better earnings delivery from this cohort than is currently priced,” Schulze noted.
“Favorable macro drivers still dominate, and the prospect of a Republican sweep and lower taxes is adding to the market enthusiasm,” said Ma at BMO. “That may get tempered in the coming weeks by more details regarding tariff policy or a continued rise in long-term Treasury yields, but for the past two years we’ve said that the environment is favorable for risk- taking and that remains the case.”
In addition, the potential for extension of personal tax cuts under a Republican sweep are only marginally positive for the equity markets, he noted.
Corporate tax cuts are much more significant, and while there have been promises to do more on this front, they come with unclear stipulations, including requirements that companies keep manufacturing operations in the US,” Ma concluded.
The stock-market surge unleashed by Trump’s presidential victory is triggering buy signals for rules-based investment funds, adding fuel to the rally.
“The year-end rally starts today and may be higher than investors were expecting,” Scott Rubner, a tactical specialist at Goldman Sachs Group Inc., wrote in a note to clients Wednesday.
Behind it, he cited “unwinds of election hedges, re-levering, Buybacks, FOMO, Vanna,” a type of buying tied to the periodic expiration of option contracts.
“Markets hate uncertainty and now that the election is officially over, stocks are soaring today,” said Ryan Detrick at Carson Group. “Optimism over tax cuts, a still dovish Fed, and a potentially better economy are part of it, but the reality is the economy has been quite solid all year, so this really isn’t anything new. Back to your regularly scheduled bull market is how we see it.”
At Ameriprise, Anthony Saglimbene says animal spirits through year-end could push major averages higher as the overhang of the election is removed and investors look to put excess cash to work in equities “Finally, US stocks may see tailwinds from not only the election results but a retreat in volatility hedging, corporations moving out of their buyback blackout periods as the earnings season winds down, and strong fourth-quarter seasonality factors (particularly in election years).”
The surge in small caps suggests the performance of the US stock market will broaden from the big-tech cohort following Trump’s re-election, according to Vincent Juvyns at JPMorgan Asset Management.
Chris Senyek at Wolfe Research says he remains bullish on stocks into year-end.
“With Donald Trump winning the 47th Presidency of the United States, we believe that markets will heavily favor financials, US-based industrials (transports), energy, and crypto today and into year-end, he said. “We think more offensive tech outperforms as well with semis outperforming. By style, we’d own value, equal weight, small-cap and year-to-date laggards.”

Key events this week:
* China trade, forex reserves, Thursday
* UK BOE rate decision, Thursday
* Fed rate decision, Thursday
* US University of Michigan consumer sentiment, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 rose 2.5% as of 4 p.m. New York time
* The Nasdaq 100 rose 2.7%
* The Dow Jones Industrial Average rose 3.6%
* The MSCI World Index rose 1.6%
* Bloomberg Magnificent 7 Total Return Index rose 4.2%
* The Russell 2000 Index rose 5.8%
Currencies
* The Bloomberg Dollar Spot Index rose 1.3%
* The euro fell 1.8% to $1.0735
* The British pound fell 1.2% to $1.2886
* The Japanese yen fell 1.9% to 154.57 per dollar
* The Mexican peso was little changed at 20.1071
Cryptocurrencies
* Bitcoin rose 10% to $76,115.17
* Ether rose 11% to $2,692.21
Bonds
* The yield on 10-year Treasuries advanced 17 basis points to 4.44%
* Germany’s 10-year yield declined two basis points to 2.40%
* Britain’s 10-year yield advanced three basis points to 4.56%
Commodities
* West Texas Intermediate crude fell 0.2% to $71.87 a barrel
* Spot gold fell 3% to $2,661.25 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Lu Wang, Elena Popina and Matt Turner.

Have a lovely evening.

Be magnificent!
As ever,

Carolann
Better to light a candle than to curse the darkness. -Chinese Proverb.

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 (Text Only)
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www.carolannsteinhoff.com