October 30, 2024, Newsletter

Dear Friends,

Tangents:

October 30, 1938: Orson Welles airs his famous radio adaptation of The War of the Worlds, causing widespread panic as listeners believe an alien invasion is actually happening.

October 30, 2000: After beating the Mets in the first Subway Series in forty-four years, the Yankees are given a ticker tape parade.
2003: Lebron James made his NBA debut with the Cleveland Cavaliers. Go to article 

John Adams, 2^nd President, b. 1735.
Fyodor Dostoyevsky, writer, b. 1821.
Emily Post, writer, b. 1872.
Ezra Pound, poet, b. 1885.

1,200-year-old Viking cemetery with ‘stone ship’ burials discovered in Sweden
Archaeologists in Sweden were expecting to find an ancient settlement, but they were surprised to discover a Viking Age cemetery with boat-shaped burial outlines. Read More.

James Webb telescope finds 1st possible ‘failed stars’ beyond the Milky Way — and they could reveal new secrets of the early universe
The James Webb Space Telescope may have found dozens of elusive brown dwarfs — strange objects larger than planets but smaller than stars — beyond the Milky Way for the first time ever. Read More.

New app performs motion capture using just your smartphone — no suits, specialized cameras or equipment needed
Motion capture requires special equipment and infrastructure that can cost upward of $100,000 — but scientists have created a smartphone app and AI algorithm to do the same job. Read More.

New York Yankees stave off World Series elimination
The Yankees beat the Los Angeles Dodgers 11-4 in Game 4, spoiling a historic night for the Dodgers who had hoped for a clean 4-0 sweep in the series. The two teams will face off later today in a high-stakes Game 5.

TikTok’s founder is now China’s richest person
China has a new richest person — and it’s the entrepreneur behind the wildly popular, and controversial, app TikTok.

Gate lice: What they are and why they’re a problem
Some airlines are cracking down on “gate lice,” a not-so-flattering term for those who swarm around airport gates before their designated boarding time.

Oasis is canceling reunion tour tickets sold by resellers
The band is canceling around 50,000 tickets for its British tour dates that were resold on secondary websites like StubHub and Viagogo.

PHOTOS OF THE DAY

Vancouver, Canada
‘Taken from Grouse Mountain chair lift. The city was shrouded in smoke from distant wildfires.’
Photograph: Andy Ireland

Hustai national park, Mongolia
‘Three friends and I rode up a hill on tired and reluctant horses and were greeted by this view.’
Photograph: Janis Michael

​​​​​​​Norfolk, UK
‘The dawn in Cromer looked promising, except for the cloud on the horizon, but that cleared to give some wonderful colours.’
Photograph: David Eberlin
Market Closes for October 30^th, 2024

International Markets

Bonds

Currencies

Commodities

Market Commentary:
You should give your kids enough money to do anything but not enough money to do nothing. – Warren Buffett.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite fell for the second day, dropping 0.2%, or 54.76 to 24,507.79 in Toronto.
Waste Connections Inc. contributed the most to the index decline, decreasing 1.6%.
Ivanhoe Mines Ltd. had the largest drop, falling 3.9%.
Today, 121 of 222 shares fell, while 97 rose; 7 of 11 sectors were lower, led by materials stocks.
Insights
* This year, the index rose 17%, heading for the best year since 2021
* This month, the index rose 2.1%
* The index advanced 30% in the past 52 weeks. The MSCI AC Americas Index gained 39% in the same period
* The S&P/TSX Composite is 1.7% below its 52-week high on Oct. 21, 2024 and 30.6% above its low on Oct. 30, 2023
* The S&P/TSX Composite is down 0.3% in the past 5 days and rose 2.1% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 19.6 on a trailing basis and 17.1 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$3.89t
* 30-day price volatility fell to 6.68% compared with 6.76% in the previous session and the average of 8.28% over the past month
================================================================
| Index Points | |
Sector Name | Move | % Change | Adv/Dec
================================================================
Materials | -32.8827| -1.0| 8/43
Information Technology | -16.3727| -0.8| 2/8
Industrials | -13.1889| -0.4| 14/13
Financials | -11.0499| -0.1| 16/11
Communication Services | -2.7563| -0.4| 2/3
Consumer Discretionary | -1.9508| -0.2| 3/8
Real Estate | -1.6236| -0.3| 4/13
Health Care | 0.0169| 0.0| 3/1
Utilities | 5.9851| 0.6| 11/4
Energy | 6.6772| 0.2| 26/14
Consumer Staples | 12.3795| 1.3| 8/3
================================================================
| | |Volume VS |
| Index | | 20D AVG |YTD Change
Top Contributors |Points Move| % Change | (%) | (%)
================================================================
Waste Connections | -7.3230| -1.6| 37.9| 24.9
Shopify | -6.7690| -0.7| -17.5| 7.8
Canadian Natural Resources | -5.9500| -0.8| -50.2| 9.4
Capital Power | 3.5330| 7.7| 102.4| 43.5
Couche-Tard | 4.7710| 1.2| -4.4| -4.9
Brookfield Corp | 4.8310| 0.6| -17.1| 41.4
US
By Rita Nazareth
(Bloomberg) — A rout in chipmakers dragged down stocks, with traders also sifting through corporate results and economic data.
In late hours, Meta Platforms Inc. slid while Microsoft Corp. climbed after earnings.
A $300 billion exchange-traded fund tracking the Nasdaq 100 (QQQ) extended losses after the close of regular trading as Meta’s spending guidance failed to enthuse investors.
That’s even after a sales beat.
Microsoft rose as its cloud-computing business and Office software fueled stronger-than-projected quarterly revenue growth.
eBay Inc. dropped after projecting holiday season sales that fell short of analysts’ estimates.
Equities struggled to gain traction Wednesday as a closely watched gauge of semiconductor companies tumbled.
The rout was driven by a slide in Nvidia Corp. and underwhelming results at Advanced Micro Devices Inc. Server maker Super Micro Computer Inc. plunged 33% as Ernst & Young LLP resigned as its auditor.
Alphabet Inc. jumped on better-than-expected sales.
Traders trimmed bets on policy easing after data showing the US economy expanded at a robust pace in the third quarter as household purchases accelerated ahead of the election and the federal government ramped up defense spending.
A measure of underlying inflation rose 2.2%, roughly in line with the Federal Reserve’s target.
“Solid but not blistering growth fits nicely within the current economic backdrop,” said Bret Kenwell at eToro. “Too hot of a print and investors would likely question the Fed’s decision to cut rates by 50 basis points in September, while a weak print could reignite worries about a deteriorating economy.”
Kenwell says investors should cheer for strong economic data — even if that means slower-than-expected rate cuts from the Fed.
“It’s far better to have a strong economy and earnings driving stocks higher rather than hopes of easing monetary policy from the Fed,” he said.
The S&P 500 fell 0.3%.
The Nasdaq 100 slid 0.8%.
The Dow Jones Industrial Average lost 0.2%.
Homebuilders rallied as pending home sales in the US saw their biggest gain since 2020.
Visa Inc. climbed on solid results.
Eli Lilly & Co. got hit after lowering its guidance amid lackluster sales of its weight-loss drug.
Treasury two-year yields, which are more sensitive to imminent Fed moves, rose seven basis points to 4.16%.
UK bonds fell as investors balked at the new government’s plan for historically high debt issuance to help fund investment and stimulate the economy, which could mean higher for longer rates.
Oil rebounded.
The US stock market’s fundamental flows are turning increasingly bullish, which should give equities a fresh jolt once the US election is out of the way.
The elements of a rally are building up — stocks are entering a historically strong season and companies are starting to buy back shares.
Investors may be over-hedged for the series of earnings, US election and central bank risks looming through early November.
And with market volatility declining from the early-August high, systematic investors and options desks may be forced to snap up stocks.
Selling by mutual funds — typically the biggest off loader of stocks — is fading into the end of the month.
That’s set to reverse, with November typically seeing inflows into equities, while at the same time the corporate buyback window is re-opening with an estimate of $6 billion of buying every single day in November, according to Scott Rubner, a managing director
for global markets and tactical specialist at Goldman Sachs.
“Animal spirits” could return to markets in the wake of the US election, Barclays Plc strategists led by Emmanuel Cau wrote in a note, saying as investors appear to be in “wait-and-see” mode into the vote.
Equity inflows were steady in October with caution remaining under the hood and volumes low.
The strategists say that hedge funds and systematic strategies added to their equity positions in October, after largely being on the sidelines in September.
While US stocks may be rising ahead of a potential victory for Donald Trump in next week’s US election, strategists at Citigroup Inc. say a clean sweep for the Republican party will be a signal to sell.
A Trump win is generally seen as good news for stocks because his proposals to lower corporate taxes would likely benefit company earnings. The Citi strategists argue, however, that the “near-euphoric sentiment” that’s driving the S&P 500 toward a sixth straight month of gains is leaving it ripe for a pullback.
Meantime, JPMorgan Chase & Co. strategists said earnings downgrades are dominant across the world, a backdrop that would rarely support equity prices.
Strategists led by Khuram Chaudhry noted that while global equity indexes continue to trade near all-time highs, equity sentiment seems to have peaked and is now mean-reverting, with positive sentiment very likely to dwindle as global consensus earnings downgrades increase.
An earnings sentiment downturn is also evident, showing that the percentage of US stocks with positive earnings revisions has been receding from its April high, according to Tim Hayes at Ned Davis Research.
“Earnings beat rate momentum peaked and is now negative,” said Hayes. “The breadth of positive earnings revisions has weakened. US revisions have declined, with negative implications for future earnings.”
If the earnings sentiment trends continue, they will warn not to ignore indications of significant tape deterioration, especially with other sentiment indicators confirming that peak optimism is behind us, he added.
“In terms of US equities ahead of elections next week, we are still watching the 5,750-5,800 zone for the S&P 500,” said Dan Wantrobski at Janney Montgomery Scott.
“Measuring implications from recent bullish patterns still imply a target range of 6,200. However, we remain concerned regarding stubborn overbought/extended conditions on the longer-term charts.”
He says the index is still vulnerable to a “bigger correction” heading into year-end or (more likely) in the first quarter of 2025.
Companies looking to go public in the US this year have seemingly given up on the traditional window after the Labor Day holiday in September, dashing hopes for a rush of deals ahead of the presidential election.
Proceeds from inaugural share sales on the public markets have brought in $7.7 billion since Sept. 2, data compiled by Bloomberg show.
That’s about one-fifth of total volume so far and significantly lower than this time last year, when Arm Holdings Plc and others raised$9.6 billion.
Meanwhile, this month’s rout in Treasuries is hammering trend-chasing quant investors who had built up bullish positions in bonds, the latest setback for a strategy that has misfired badly at times this year amid market convulsions.
The quants, known as commodity trading advisers, seek to profit from momentum in assets such as bonds, stocks and currencies.
Most recently, they piled into wagers that US government debt would keep rallying as the Fed launched interest-rate cuts, amassing the largest long positions in three years as of late September, according to data compiled by Deutsche Bank AG.
And the price to hedge against swings in the US dollar surged to the highest in nearly two years as traders prepare for the risk of big market moves after next week’s presidential election.
A measure of one-week implied volatility on the Bloomberg Dollar Spot Index rose on Wednesday to the highest since December 2022, when recession fears briefly raced through financial markets.
That indicates traders are preparing for large swings in the currency against major peers like the euro, yen, Chinese yuan and Mexican peso, pushing up the cost of options that protect against such moves.

Corporate Highlights:
* Carvana Co. reported higher-than-expected results for the most recent quarter, buoyed by resilient used-car demand and pricing, and sounded a bullish note for its full-year earnings outlook.
* Clorox Co. raised its annual profit guidance after increased advertising helped the bleach maker fully regain the market share that it lost when a cyberattack disrupted production last year.
* MGM Resorts International reported lower-than-expected sales and profit for the third quarter amid a slowdown in Las Vegas betting.
* DoorDash Inc. beat Wall Street’s expectations on virtually every key earnings metric, allowing the delivery service to post its first operating profit since the start of the pandemic.
* Caterpillar Inc., the maker of iconic yellow bulldozers, reduced its sales outlook from a slowdown in construction activity around the world.
* AbbVie Inc. raised its full-year profit forecast as demand for its top-selling anti-inflammatory drugs, Rinvoq and Skyrizi, exceeded expectations.
* Humana Inc. issued a more optimistic 2024 forecast after third-quarter profit exceeded expectations, breaking with larger peers that have struggled to contain medical costs.
* Walt Disney Co. won the rights to broadcast the annual Grammy music awards in a 10-year deal that wrests the show from its longtime home on Paramount Global’s CBS.
* Bitcoin hedge-fund proxy MicroStrategy Inc. posted a third consecutive quarterly loss after taking an impairment charge against the value of its roughly $18 billion stockpile of the cryptocurrency.
* Airbus SE will replace the head of its commercial aircraft business and stick with a goal to deliver about 770 aircraft this year, underscoring the plane maker’s focus on ironing out supply-chain glitches that have hampered production plans.

Key events this week:
* China Manufacturing and non-manufacturing PMI, Thursday
* Bank of Japan rate decision, Thursday
* Eurozone CPI, unemployment, Thursday
* US personal income, spending and PCE inflation data, initial jobless claims, Thursday
* Amazon, Apple earnings, Thursday
* China Caixin manufacturing PMI, Friday
* US employment, ISM manufacturing, Friday

Some of the main moves in markets:
Stocks
* The S&P 500 fell 0.3% as of 4 p.m. New York time
* The Nasdaq 100 fell 0.8%
* The Dow Jones Industrial Average fell 0.2%
* The MSCI World Index fell 0.3%
Currencies
* The Bloomberg Dollar Spot Index fell 0.1%
* The euro rose 0.4% to $1.0861
* The British pound fell 0.4% to $1.2969
* The Japanese yen was little changed at 153.29 per dollar
Cryptocurrencies
* Bitcoin fell 0.7% to $71,824.88
* Ether rose 1.3% to $2,655.02
Bonds
* The yield on 10-year Treasuries advanced three basis points to 4.28%
* Germany’s 10-year yield advanced five basis points to 2.39%
* Britain’s 10-year yield advanced four basis points to 4.35%
Commodities
* West Texas Intermediate crude rose 2.5% to $68.92 a barrel
* Spot gold rose 0.5% to $2,787.59 an ounce

This story was produced with the assistance of Bloomberg Automation.
–With assistance from Robert Brand and Rheaa Rao.
Have a lovely evening.

Be magnificent!
As ever,

Carolann
Children have never been very good at listening to their elders, but they have never failed to imitate them. –James Baldwin, 1924-1987.

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)
Toll Free: 1.877.430.5895
Fax: 778.430.5828
www.carolannsteinhoff.com