Month: August 2015

Dear Friends,

Tangents:

On this day in 1980, the communist government of Poland signed an accord with striking shipyard workers in the city of Gdansk. Lech Walesa, who led the striking workers, went on to form Solidarity, the first independent labor union to develop in a Soviet bloc country.

August 31, 1896; Gold discovered in the Klondike.

August 31,1800.  Coleridge describes the end of his cross-country walk from Keswick to Dove Cottage, the Wordsworths’ home at Grasmere, in his Notebook.  He and Wordsworth “invented” the idea of walking for pleasure.

Descended.  As I bounded down, noticed the moving stones under the soft moss, hurting my feet.  Ascended that steep and narrow ridge.  On my right that precipice and the morass at its feet.  On my left the twp tarns and another precipice twice as lofty as the other, but its white stones more coated and lined with moss.  Am now at the top of Helvellyn…No words can convey any idea of this prodigious wildness.  That precipice… its ridge, sharp as a  jagged knife, level so long, and then ascending so boldly.  What a frightful bulgy precipice I stand on and to my right how the crag…plunges down like a waterfall, reaches a level steepness, and again plunges!  The moon is above Fairfield almost at the full.  Now descended over a perilous peat-moss then down a hill of stones all dark, and darkling.  I climbed stone after stone down a half-dry torrent and came out at the Raise Gap.  And Oh! My God! How did that opposite precipice look in the moonshine – its name Stile Crags.

Dorothy Wordsworth Journal, August 31, 1800:

At eleven o’clock Coleridge came, when I was walking in the still, clear moonshine in the garden…We sat and chatted till half-past three, W. in his dressing-gown.  Coleridge read us a part of Christabel.

PHOTOS OF THE DAY

Costumed revelers perform in the Notting Hill Carnival in London, Monday. Held each August Bank Holiday since 1966, the Notting Hill Carnival is the largest festival celebration of its kind in Europe. Tim Ireland/AP

A woman watches tropical fish from Okinawan sea on display in a glass tank placed outside Sony Building at Tokyo’s Ginza shopping district on Monday. Koji Sasahara/AP

Market Closes for August 31^st, 2015

Market Index	Close	Change
Dow Jones	16528.03	-114.98   -0.69%
S&P 500	1972.18	-16.69   -0.84%
NASDAQ	4776.508	-51.817   -1.07%
TSX	13859.12	-5.95
		-0.04%

International Markets

Market Index	Close	Change
NIKKEI	18890.48	-245.84
		-1.28%
HANG SENG	21670.58	+58.19
		+0.27%
SENSEX	26283.09	-109.29
		-0.41%
FTSE 100	6247.94	+55.91
		+0.90%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.490	1.444
CND. 30 Year Bond	2.235	2.190
U.S.    10 Year Bond	2.2126	2.1824
U.S. 30 Year Bond	2.9579	2.9103

Currencies

BOC Close	Today	Previous
Canadian $	0.76104	0.75752
US $	1.31398	1.32009
Euro Rate 1 Euro=		Inverse
Canadian $	1.47390	0.67847
US $	1.12170	0.89150

Commodities

Gold	Close	Previous
London Gold Fix	1135.00	1135.00
Oil	Close	Previous
WTI Crude Future	49.20	45.36

Market Commentary:

Canada

By Callie Bost

     (Bloomberg) — Canadian stocks slipped, capping the worst month of trading in nearly a year as concern that global growth will slow sank equities around the world.

     The benchmark Canadian equities index fell 4.2 percent in August, sucked lower in the downdraft created by China’s shock devaluation of its currency on Aug. 11. Equities tumbled as concerns mount that China’s policy makers won’t be able to prop up its markets at the same time Federal Reserve officials signaled they’re preparing to raise interest rates.

     Canadian stocks lost as much as 10 percent in a 19-day drop this month before jumping 6.2 percent in four days last week. The Standard & Poor’s/TSX Composite Index slid less than 0.1 percent to 13,859.12 at 4 p.m. in Toronto. The gauge almost erased a slide of 1.5 percent as energy shares rallied with the price of crude. Volume in S&P/TSX stocks was 27 percent above the 30-day average.

     All of the 10 main industries in the S&P/TSX declined in August, led by an 8.9 percent rout in health-care shares, the most in four years. The group declined 2.1 percent Monday, led by a 2.3 percent slump in Valeant Pharmaceuticals International Inc. ProMetic Life Sciences Inc. slid 2.1 percent.

     The resource-rich S&P/TSX has been one of the worst- performing developed markets in the world this year amid the collapse in crude prices, though energy shares rallied 2.6 percent Monday to pare a monthly drop to 3.3 percent.

     Paramount Resources Ltd., Canadian Energy Services & Technology Corp. and Pengrowth Energy Corp. surged more than 12 percent, as oil capped the biggest three-day gain in 25 years.

     A volatility gauge for 60 of the largest, most liquid stocks in Canada jumped 5.8 percent to 24.47. The measure added 78 percent in August, its biggest monthly climb in data back to 2009.

US

By Oliver Renick

     (Bloomberg) — U.S. stocks declined, with the Standard & Poor’s 500 Index posting its worst month in more than three years, as investors harbored concerns about slowing global growth and the impact of a potential interest-rate increase by the Federal Reserve as soon as September.

     Merck & Co. and Celgene Corp. sank at least 2.7 percent to weigh on the health-care group. Yahoo! Inc. and Facebook Inc. slumped more than 1.7 percent to drag technology shares lower. Energy erased an earlier drop along with oil, as Consol Energy Inc. and ConocoPhillips gained more than 4.9 percent. Phillips 66 rose 2.4 percent as Warren Buffett’s Berkshire Hathaway Inc. has amassed a $4.5 billion stake in the oil refiner. Berkshire fell 1.3 percent.

     The S&P 500 lost 0.8 percent to 1,972.18 at 4 p.m. in New York, capping its biggest monthly slide since May 2012. The gauge in earlier trading fell as much as 1.2 percent. The Dow Jones Industrial Average sank 114.98 points, or 0.7 percent, to 16,528.03, completing its worst monthly drop since May 2010. The Nasdaq Composite Index declined 1.1 percent to also finish its steepest retreat since May 2012. About 7.8 billion shares traded hands on U.S. exchanges, 11 percent above the three-month average.

     “There’s so much emotion right now, and in this environment you can come in any morning and have something out of Europe or Asia crossing us and that’s what causes us to move,” said Steve Bombardiere, an equity trader at Conifer Securities LLC in New York. “There were a lot of people who wanted to buy a correction, but after last week they paused and are thinking about how long it is going to last.”

     Equities trimmed their losses in the late morning after energy shares in the benchmark index reversed a 2.5 percent selloff to rally as much as 1.4 percent. The move followed a jump in oil prices after a government report reduced its crude production estimates and OPEC said it’s ready to talk to other global producers to achieve “fair prices.” Stocks have been whipsawed by gains and losses since last week as markets remain subject to sudden shifts in investor sentiment.

     The S&P 500 ended down 6.3 percent this month as China’s currency devaluation on Aug. 11 spurred concern over global growth, erasing more than $5.3 trillion in equity market values worldwide. The benchmark’s 0.9 percent gain last week masked a volatile period in which the S&P 500 plunged the most since 2011 to enter a correction, only to rally more than 6 percent over two days for its best back-to-back gains since the beginning of the bull market in 2009.

     The Chicago Board Options Exchange Volatility Index rose 9.1 percent Monday to 28.43. The measure of market turbulence known as the VIX had a record monthly jump, up 135 percent. More than $2 trillion of share value was erased from U.S. markets between the end of July and the lowest levels of last week, a sum equal to roughly two years of S&P 500 earnings, data compiled by Bloomberg show.

     The S&P 500 had its worst August since 2001, while the Dow’s 6.6 percent drop was its biggest since it fell 15 percent in August 1998.

     While August ranks in the middle among months based on share performance, it has produced some of the worst returns of the year since 2009. During the week ended August 12, 2011, the S&P 500 alternated between gains and losses of at least 4 percent for four days, something never seen in 88 years of data compiled by Bloomberg. In 2013, the S&P 500 fell 3.1 percent in August, one of only two months of negative returns in a year when the index surged 30 percent.                          

     Despite this month’s equities rout, remarks by Federal Reserve Vice Chairman Stanley Fischer suggested the central bank hasn’t ruled out raising interest rates when the Federal Open Market Committee gathers on Sept. 16-17. Bets on a September liftoff climbed after Fischer said there is “good reason” to believe inflation will accelerate. Traders are now pricing in a 40 percent chance the central bank will act in September, up from a one-in-four chance last Wednesday.

     The Fed has said it will be appropriate to raise rates when it has seen some further improvement in the labor market and is “reasonably confident” inflation will move back to its 2 percent target over the medium term. Investor attention will focus this week on the government’s August jobs report, due Friday, as the last major data point before the Fed’s meeting.

     “August was a rough month for everybody,” said Michael Block, chief equity strategist at Rhino Trading Partners LLC in New York. “There’s a little scare now where people are getting this feeling from Fischer saying we could see a hike as soon as September, that they don’t care about volatility and that we’re on our own. You could argue a rate hike is good for stocks, but it’s a big unknown and the market is undecided, that’s where the fear is.”

     Nine of the S&P 500’s 10 main groups fell Monday, with utilities, health-care and industrial shares sliding the most. Energy companies were up 1.1 percent as crude oil surged 8.8 percent.

     The health-care group was August’s worst performer in the benchmark index, down 8.1 percent, the steepest monthly decline since February 2009. Amgen Inc. slid 2.6 percent today and had its weakest month in more than seven years. The Nasdaq Biotechnology Index sank 3.1 percent, its largest monthly loss since March 2014.

     Kroger Co. fell 1.7 percent to pace a drop among consumer staples companies. The supermarket chain extended its August decline to 12 percent, the most in a month since January 2009. Drug-store chain CVS Health Corp. retreated 1.7 and lost 9 percent in August, its biggest monthly slide in five years.

     Boeing Co. and Textron Inc. declined at least 1.9 percent to lead industrial companies lower. General Electric Co. and United Technologies Corp. lost more than 1.3 percent. GE had its worst month since January, falling 4.9 percent.

     Netflix Inc. slipped 2.2 percent. The online streaming service said it won’t renew its contract with cable network Epix, preferring to develop original movies rather than stick with films it had to share with other providers.

     Consol Energy rose 5.8 percent amid crude’s biggest three- day gain since 1990, leading energy companies higher. Hess Corp., Marathon Oil Corp. and Chesapeake Energy Corp. each gained at least 3.4 percent. The group pared its monthly decline to 4.7 percent after losing 7.8 percent in July and sliding for the fourth straight month.

 

Have a wonderful evening everyone.

 

Be magnificent!

When the mind and intellect developed, man asked,

Who am I?  who is it before me?

The search for reality began…

Moving one step towards finding the answer to the question,

Who am I, we brought  consciousness from outside to inside.

Wisdom turned the direction of the consciousness within and

we perceived our soul.

The journey of the soul in the outer world was over and the journey within had begun.

Acharya Mahaprajna

As ever,
 

Carolann

 

A wise man will make more opportunities than he finds.

                                     -Francis Bacon, 1561-1626

 

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM

Portfolio Manager &

Senior Vice-President

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

Full Moon this weekend – last in August.

Summer con’t
       -V. Sackville West

This is the tranquil, ancient, wise, sedate
Counsellor yew, not briskly eloquent
But, to the listener, with much to say;
As much as glades that whisper in a wood
But neater and more orderly than they.
But if in lighter mood
You would plant hedges, think upon the gay
Frivolous boundaries that toss their spray In colour on beholden air. 
Seemingly wild, yet not too wild, too rough; 
An art in wildness, even in the bluff
And thorny branches of the hedgerow in May,
Red, rose, or white; or in the cloudy puff
Of ceanothus, blue and powdery;
Or hedge of roses, growing devil-care
-Rose of the World; th’ embroidered Tuscany;
The scented Cabbage, and the Damascene;
Sweet-briar, lovelier named the eglantine;
But above all the Musk
With classic names, Thisbe, Penelope,
Whose nectarous load grows heavier with the dusk
And like a grape too sweetly muscadine.

On this day in 1996, Princess Diana and Prince Charles formally divorced after four years of separation.

PHOTOS OF THE DAY

Morning fog floats during sunrise near village of Sormas, west of Budapest, Hungary, Friday. Gyorgy Varga/MTI/AP

A group of hikers are seen silhouetted against the moon in Tijuana, Mexico, Thursday. On Saturday a perigee moon coincides with a full moon creating a ‘supermoon’ when it will pass by the earth at its closest point, local media reported. Jorge Duenes/Reuters

Market Closes for August 28^th, 2015

Market Index	Close	Change
Dow Jones	16643.01	-11.76   -0.07%
S&P 500	1984.16	-3.50   -0.18%
NASDAQ	4828.324	+15.616   +0.32%
TSX	13820.88	+54.21
		+0.39%

International Markets

Market Index	Close	Change
NIKKEI	19136.32	+561.88
		+3.03%
HANG SENG	21612.39	-226.15
		-1.04%
SENSEX	26392.38	+161.19
		+0.61%
FTSE 100	6247.94	+55.91
		+0.90%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.444	1.461
CND. 30 Year Bond	2.190	2.208
U.S.    10 Year Bond	2.1824	2.1876
U.S. 30 Year Bond	2.9103	2.9269

Currencies

BOC Close	Today	Previous
Canadian $	0.75752	0.75749
US $	1.32009	1.32014
Euro Rate 1 Euro=		Inverse
Canadian $	1.47616	0.67743
US $	1.11823	0.89427

Commodities

Gold	Close	Previous
London Gold Fix	1135.00	1119.00
Oil	Close	Previous
WTI Crude Future	45.36	42.56

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose to cap the biggest four-day rally since 2011 as the benchmark index continued to climb back from an almost two-year low.

     Equities have jumped 6.2 percent in four days after plunging the most in almost four years Monday. Investor sentiment has swung wildly amid concern China’s growth is slowing while the U.S. economy unexpectedly advanced more than analysts’ estimates.

     The Standard & Poor’s/TSX Composite Index is up 2.9 percent for the week, the most since January. Raw-materials and energy producers jumped at least 2.3 percent Friday. The Bloomberg Commodity Index, a basket of 22 major resource prices, advanced for a second day with crude soaring 6.3 percent after Thursday’s 10 percent rally to cap the biggest two-day gain since 2009.

     The benchmark equities index rose 98.40 points, or 0.7 percent, to 13,865.07 at 4 p.m. in Toronto. The S&P/TSX is still down 4.2 percent for the month, headed for a fourth straight monthly decline, the longest such streak since September 2011.

     A volatility gauge for 60 of the largest, most liquid stocks in Canada fell 5.7 percent to 23.12. The measure touched an all-time high of 38.15 on Monday.

     The resource-rich Canadian benchmark equity gauge has been one of the worst-performing developed markets in the world this year amid a collapse in crude prices. China unexpectedly devalued the yuan on Aug. 11, further fueling concerns about global growth and the demand for commodities from oil to copper.

     Teck Resources Ltd. climbed 3 percent. The diversified miner has soared 27 percent in two days, the most since 2009, after announcing a plan to combine its copper-and-gold projects in Chile with Goldcorp Inc. to cut costs.

     Barrick Gold Corp. jumped 4.3 percent as gold producers surged. The group has rallied 8.2 percent in two days, rebounding from a 2001 low Wednesday.

     Canadian Natural Resources Ltd. and Suncor Energy Inc. increased more than 1 percent. Energy producers have surged 6.9 percent this week, the best performance since December. Oil in New York sustained a rebound above $40 a barrel, after a 10 percent rally Thursday that was the biggest in more than six years, recovering from the lowest level since February 2009 on Monday.

     Bank of Nova Scotia slipped 0.6 percent after posting quarterly profit less than year-ago figures, while adjusted earnings topped estimates by a penny. Canadian banks have climbed 3.9 percent this week, the most since February, as the nation’s six largest lenders all beat profit estimates.

US

By Oliver Renick and Lu Wang

     (Bloomberg) — U.S. stocks ended little changed, with the Standard & Poor’s 500 Index on track for its worst month since May 2012, as equities found some respite from the wide swings prevalent earlier this week.

     Energy companies advanced as oil capped its biggest two-day gain since 2009, with Chevron Corp. and Transocean Ltd rising more than 3.5 percent. Intel Corp. and Facebook Inc. gained at least 1.4 percent to boost technology shares. Wal-Mart Stores Inc. lost 1.7 percent, leading consumer staples lower amid a weaker consumer confidence reading. Pfizer Inc. and Johnson & Johnson slumped at least 1 percent to weigh on the health-care group. Freeport-McMoRan Inc. gained 3 percent after Carl Icahn took a stake in the company.

     The S&P 500 rose 0.1 percent to 1,988.87 at 4 p.m. in New York, with the gauge posting its best three-day advance since November 2011. The Dow Jones Industrial Average lost 11.76 points, or 0.1 percent, to 16,643.01. The Nasdaq Composite Index added 0.3 percent, and the Russell 2000 Index climbed 0.8 percent. About 7.9 billion shares changed hands on U.S. exchanges, 13 percent above the three-month average.

     “The market just may be tired,” said Cam Albright, head of investment strategy at Wilmington Trust in Baltimore. The firm oversees $76 billion. “Perhaps we’re due for a day less traumatic than what we’ve had. There has been a lot of price action in both directions, perhaps traders just made a chance to catch their breath.”

     The Chicago Board Options Exchange Volatility Index slipped 0.2 percent to 26.05 Friday. The measure of market turbulence known as the VIX has dropped 36 percent in four days, after a record six-day jump sent the gauge to its highest level since October 2011.

     The S&P 500 traded Friday in the narrowest range in almost two weeks. The index’s 0.9 percent gain for the week masks a volatile period in which the benchmark plunged the most since 2011 to enter a correction, only to rally more than 6 percent over two days. The gauge is down 5.5 percent for the month.

     The benchmark index yesterday capped its best two-day rally since the beginning of the bull market in 2009, helped by data showing stronger-than-expected U.S. economic growth. The Dow had its strongest back-to-back advance since December 2008. Global equities had lost as much as $8.4 trillion in value after China’s unexpected devaluation of the yuan earlier this month spurred concern the world’s second-biggest economy was on the brink of a deeper slowdown.

     “We’re not done with all the volatility in equities,” said Andrew Brenner, the head of international fixed income for National Alliance Capital Markets. “I think the worst is over, but are we out of the woods yet? No — we’re still going to have a lot of volatility.”

     U.S. data today showed consumer spending climbed in July as incomes grew, showing the biggest part of the U.S. economy was off to a good start to the quarter. Wages rose by the most this year, and the report showed inflation remained tame. A separate report showed consumer confidence declined in August to a three- month low as recent stock-market turbulence weighed on Americans’ outlook for the economy in the coming year.

     Inflation is the theme at an annual symposium in Jackson Hole, Wyoming this week where Federal Reserve officials and economists have also been discussing market fallout from China’s slowdown that has cast doubt on whether the Fed will raise rates next month. Traders are now pricing in a 38 percent chance the central bank will act in September, up from a one-in-four chance two days ago.

     St. Louis Fed Bank President James Bullard said in a Bloomberg Television interview Friday that while world financial markets are volatile, U.S. fundamentals are good and the interest rate-setting Federal Open Market Committee shouldn’t alter its forecast for the economy. Cleveland Fed President Loretta Mester also told Bloomberg TV she thinks the economy is strong enough to withstand higher interest rates.

     Fed Vice Chairman Stanley Fischer, speaking on CNBC, said the central bank hadn’t decided on whether to raise its target at the next meeting.                       

     Five of the S&P 500’s 10 main groups rose Friday, with energy shares the top performers while stretching their three- day rally to almost 11 percent, the most since November 2011.

West Texas Intermediate crude surged more than 6 percent after rising 10 percent Thursday. Health-care and financial companies lost the most today.

     Raw-materials companies climbed for a third day as commodities rallied. Alcoa Inc. surged 6.2 percent, bringing its three-day advance to 16 percent, the most in more than six years. Newmont Mining Corp. added 2.8 percent, while International Paper Co. rose 1.3 percent.

     United Continental Holdings Inc. rallied 7.1 percent, the most since November, while Activision Blizzard Inc. gained 4.6 percent after the two companies were added to the S&P 500.

     Baxalta Inc. led a slide in the health-care group, losing 3.2 percent. People with knowledge of the matter said the drugmaker is in talks to make an acquisition to bolster its status as an independent company as it tries to fend off a $30 billion takeover offer from Shire Plc. Mylan NV slumped 2.2 percent after shareholders voted in favor of moving forward with a $33 billion hostile bid for over-the-counter drugmaker Perrigo Co.

     Kroger Co. joined Wal-Mart to pace the retreat in consumer staples, falling 1.7 percent. Wal-Mart is down 9.8 percent in August, and on track for its worst monthly slide since the depths of the recession in January 2009.

     Insurers were the biggest drag on financial companies in the S&P 500. Hartford Financial Services Group Inc., Principal Financial Group Inc. and Travelers Cos. slumped at least 1 percent. Wells Fargo & Co. decreased 0.9 percent to lead a pullback among banks.

 

Have a fabulous weekend everyone.

 

Be magnificent!

Perceive the souls through the soul and you will become the Supreme soul.

There are two sides of the consciousness: the soul and the Supreme Soul…

one the seed and the other, entirety.  You must have seen how small the seed of the banyan tree is.

You must also have seen how expansive the tree is.

It is difficult to even imagine that such a small seed can become so big.

The soul is the seed of a banyan tree and the Supreme Soul its development.

Acharya Mahaprajna

As ever,
 

Carolann

 

Life itself is the proper binge.

      -Julia Child, 1912-2004

 

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM

Portfolio Manager &

Senior Vice-President

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

  There is a boom in short-term home lets by the super-rich, according to an article in  the Financial Times last weekend.  In June, the number of one bed listings at Airbnb charging more than $1500 US per night was nearly three times what it had been a year before.  Asia is leading the charge: high-end apartments – those with pools and gyms – grew quickest in Tokyo (up 78 %) and Hong Kong (up 70 %).  Over the same 12-month period, London listings grew by half and those in Paris by a third.   

  Luxury Retreats, which claims to turn away 95 % of those who offer their (mainly) holiday homes, now has 2,800 properties largely in the US and Caribbean with nightly rates ranging from $1000 to $124,000 for the plushest private island.

  Second –home owners are getting younger, meaning more look to the internet for smart rental solutions when they are not using their homes themselves.  The average age of second-home buyers in the US dropped from 52 to 43 in the 10 years to 2013, according to the US National Association of Realtors.

  Increasingly, people are renting their main homes too.  “Where the super-rich have listed secondary residences for some time, now they’re starting to offer their main homes while staying in other properties or holidaying,” says Olivier Gremillon, who runs Airbnb’s European business.

  Many rich users once avoided posting photos on their Airbnb profiles for fear of friends thinking they were hard up, says Mr. Grmillion.  All that has changed: “now it’s cool to be part of the sharing economy; it’s something for people to talk about over dinner parties.”

  The motivation is social as well as financial.  Laurent likes the company.  A scion of a large French family – he won’t give his surname – he lets his sumptuous 4,300 sq ft Louis XVI period spare apartment in Paris.  Extra income for maintenance is handy, he says, but his guests, and their generous reviews are what he gets excited about.  He’ll give tours of the house, explaining which family castle features in this painting, which French king once sat in that armchair and when that celebrity came to stay.  For between $100 and $1500 US per night, depending on the season, he’ll throw in  a few of his own staff of “cleaners, driver, guardian and cooks.”  Owners can add their own deposit requirements and checking procedures.  In 10 years, Laurent has lost only a Bose sound system and a few bottles of champagne from the cellar.

  A few users with posh pads may not be super-rich.  Lower- income European aristocrats are increasingly employing Airbnb to rent outbuildings on their estates, helping to fix leaking roofs, says Mr. 
Gremillon.

Renting guide

Home rentals:
Luxuryretreats.com
Fees: host rate agreed with owner; site sets guest rate independently and pockets the difference.
Perks: full concierge; host specifies level of pampering from basic housekeeping to full-time staff.

Onefinestay.com
Fees: host rate agreed with owner; site sets guest rate independently.
Perks: concierge, full housekeeping, imported linen, toiletries, mobile preloaded with host’s local tips

Luxury.homeaway.com
Fees: host pays annual fee of $349 or a 10-13 % fee per booking.
Perks: at discretion of host.

Airbnb.com
Fees: host pays 3% per booking; guest pays 6-12%.
Perks: whatever host will offer from use of servants to party invitations.

House swaps:
3rdhome.com
Fees: Free to list; each booking costs between $395 -$995
Perks: the sky’s the limit.

HomeExchange.com
Fees: Host chooses membership package.
Perks: negotiated with your swap.

PHOTOS OF THE DAY

Balloons in the installation ‘Heartbeat’ hang in Covent Garden Market in London Thursday. ‘Heartbeat’ is French artist Charles Petillon’s first public art installation and his first ever live work outside of France, uniting modern art with world-class architecture. The piece is created from 100,000 white balloons and stretches 54 meters in length and 12 meters in width, incorporating gentle pulsating white light to symbolize the beating of a heart and reflect the history, energy and dynamism of the district. Frank Augstein/AP

President Obama holds a child as he greets residents in the Tremé neighborhood of New Orleans Thursday for the 10th anniversary of hurricane Katrina. Tremé is one of the oldest black neighborhoods in America. Andrew Harnik/AP

Market Closes for August 27^th, 2015

Market Index	Close	Change
Dow Jones	16654.77	+369.26   +2.27%
S&P 500	1980.82	+40.31   +2.08%
NASDAQ	4812.707	+115.170   +2.45%
TSX	13729.05	+347.46
		+2.60%

International Markets

Market Index	Close	Change
NIKKEI	18574.44	+197.61
		+1.08%
HANG SENG	21838.54	+758.15
		+3.60%
SENSEX	26231.19	+516.53
		+2.01%
FTSE 100	6192.03	+212.83
		+3.56%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.461	1.442
CND. 30 Year Bond	2.208	2.196
U.S.    10 Year Bond	2.1876	2.1752
U.S. 30 Year Bond	2.9269	2.9316

Currencies

BOC Close	Today	Previous
Canadian $	0.75749	0.75204
US $	1.32014	1.32971
Euro Rate 1 Euro=		Inverse
Canadian $	1.48464	0.67357
US $	1.12460	0.88920

Commodities

Gold	Close	Previous
London Gold Fix	1119.00	1120.75
Oil	Close	Previous
WTI Crude Future	42.56	38.60

Market Commentary:
Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rallied, capping its best performance since 2011, as crude prices had the biggest jump in six years and the U.S. economy grew more than forecast.

     Markets in the U.S. and Europe climbed after Chinese stocks snapped the worst sell-off since 1996. The Chinese government resumed its intervention in the stock market Thursday and is also supporting the yuan, according to people familiar with the matter. Better-than-expected U.S. gross domestic product bolstered confidence in the outlook for the world’s largest economy.

     Energy producers jumped 5.8 percent, the biggest one-day gain since 2009. Oil climbed 10 percent, after falling below $40 this week as concern over slowing demand in China fueled volatility in global markets.

     Toronto-Dominion Bank added 1.6 percent after third-quarter profit rose to a record on retail banking. The lender reclaimed the position of Canada’s largest bank as assets climbed to C$1.1 trillion, surpassing Royal Bank of Canada. Canadian Imperial Bank of Commerce rallied 5.9 percent, the most in four years, as profit topped analysts’ estimates. It also raised its dividend.

     Canadian banks have soared 7.1 percent in three days, the biggest such rally since November 2011, as the nation’s largest lenders reported earnings. Bank of Nova Scotia is scheduled to report Friday.

     The Standard & Poor’s/TSX Composite Index jumped 385.08 points, or 2.9 percent, to 13,766.67 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has rebounded 5.5 percent in three days, the biggest such increase since November 2011. The rally cut the S&P/TSX’s loss for the month to 4.9 percent. The index is headed for a fourth straight monthly decline, the longest such streak since September 2011.

     “There’s still some concern with respect to China, but if the U.S. continues to grow bit by bit I can see further gains in this rally,” said Prab Sagoo, a Canadian equity market analyst at Nasdaq Advisory Services on the phone from Montreal.

     The MSCI All-Country World Index of developed and developing markets has increased 4.1 percent in two days, the best two-day rally since 2011. The S&P 500 rose 2.4 percent in New York while the Stoxx Europe 600 Index soared 3.5 percent.

     Global markets were buoyed today after the U.S. economy grew at a 3.7 percent annualized rate in the second quarter on bigger gains in consumer spending, and China’s government stepped up its attempts to stabilize the country’s stock market and currency by buying equities and selling U.S. treasuries, according to people familiar. China and the U.S. are Canada’s two largest trading partners.

     The resource-rich Canadian benchmark equity gauge has been one of the worst-performing developed markets in the world this year amid a collapse in crude prices. China unexpectedly devalued the yuan on Aug. 11, further fueling concerns about global growth and the demand for commodities from oil to copper.

     Teck Resources Ltd., Canada’s largest diversified miner, jumped 24 percent for the biggest gain since April 2009 after agreeing to combine its Chile copper-and-gold project with Goldcorp Inc. to cut costs.

US

By Callie Bost

     (Bloomberg) — The Standard & Poor’s 500 Index posted the biggest two-day surge since 2009 as a relief rally swept across global markets and the economy grew stronger than expected in the second quarter.

     U.S. stocks briefly pared gains in late-afternoon trading, trimming an advance of as much as 2.5 percent in the S&P 500 to less than 0.5 percent before resuming its climb, indicating markets are still vulnerable to violent swings.

     The benchmark gauge rose 2.4 percent to 1,987.66 at 4 p.m. in New York, capping a two-day gain of 6.4 percent, its strongest since the bull market began more than six years ago. The Dow Jones Industrial Average climbed 369.26 points, or 2.3 percent, to 16,654.77. The Dow had its best back-to-back run-up since December 2008. The Nasdaq Composite Index gained 2.4 percent. About 10 billion shares traded hands on U.S. exchanges, 44 percent above the three-month average.

     “We got our pullback, and now we’re going to focus on U.S. things like GDP and the Fed,” said John Canally, chief economic strategist at LPL Financial Corp. in Boston. “When you’re in a correction, it’s not fun, but when you’re out, you can refocus on what matters.”

     Raw-material and energy companies advanced the most as commodity prices rebounded, with crude oil rising 9 percent. Copper producer Freeport-McMoRan Inc. soared 29 percent after unveiling plans to cut production. Consol Energy Inc. and Transocean Ltd. added more than 11 percent. Netflix Inc. rallied for a third day, up 6.8 percent, and Apple Inc. increased 2.9 percent. Tiffany & Co. slipped as quarterly profit missed analysts’ estimates.

     Data today showed gross domestic product rose at a 3.7 percent annualized rate, exceeding all estimates of economists surveyed by Bloomberg, and up from the 2.3 percent reported last month. Bigger gains in consumer and business spending showed the U.S. expansion getting back on track. A separate report showed filings for jobless benefits declined to a three-week low.

     Contracts to purchase previously owned homes climbed in July for the sixth time in the last seven months, another report showed. The 0.5 percent increase in the pending home sales index was less than a 1 percent rise forecast by economists surveyed by Bloomberg.

     “The economy is in good shape and we’re chugging along at a good pace and that’s good for earnings,” Canally said. “It also should clear some of the noise out of this market. There has been a lot of concern about a slowdown in the economy.”

     The data come as Federal Reserve policy makers debate whether growth is strong enough to withstand the first increase in the benchmark interest rate since 2006. Additionally, the global plunge in stocks also could argue for a delay.

     Market turmoil sparked by growth concerns has reduced expectations for the Fed to increase interest rates as soon as next month. New York Fed Bank President William Dudley said Wednesday the upheaval has made the case for raising rates in September “less compelling.”

     Traders are pricing in a 30 percent chance the central bank will act at its next meeting, down from almost even odds before China’s surprise currency move earlier this month.

     Investors will seek further clues on an impending rate increase from an annual symposium at Jackson Hole, Wyoming starting today. Central bankers gather there for an academic discussion on inflation just as China’s slowdown renews fears of falling prices. Fed Chair Janet Yellen won’t attend this year.

     The Chicago Board Options Exchange Volatility Index fell 13 percent Thursday to 26.29, after trimming its drop to just 1.4 percent during equities’ brief afternoon pullback. The measure of market turbulence known as the VIX stretched its three-day decline to 36 percent after a record six-day jump sent the gauge to its highest level since October 2011.

     Thursday’s bout of late-session turbulence came on a day when JPMorgan Chase & Co. derivatives strategist Marko Kolanovic warned that “price insensitive” program traders are likely to cause repeated selloffs in coming days.

     The biggest moves will probably happen at the beginning and end of sessions as investors employing strategies such as trend following and managed volatility seek to balance their funds to reflect recent price changes in stocks.

     “The obvious risk is if these technical flows outsize fundamental buyers,” Kolanovic said in a note to clients. “In the current environment of low liquidity, they may cause a market crash such as the one we saw at the U.S. market open on Monday.”

     All of the S&P 500’s main groups advanced, with industrial and financial companies joining energy and materials at the top. Utilities and consumer staples shares lagged for a second day.

     The energy group had the best back-to-back gain in more than six years, up 8.6 percent since Tuesday’s close. Newfield Exploration Co. increased 9.4 percent, the most in six months, after losing 25 percent during the recent market selloff. Chevron Corp. added 6.2 percent to lead the Dow amid its best two days since November 2008. Apache Corp. and Halliburton Co. rose at least 8 percent.

     Freeport-McMoRan’s strongest rally ever led raw-materials higher. The largest publicly traded copper producer unveiled plans today to cut production and investments in an effort to preserve margins after commodity prices tumbled. Freeport’s shares are still down 56 percent this year. After the close of trading, Carl Icahn disclosed a new activist stake in the miner. Alcoa Inc. jumped 7.2 percent, while Dow Chemical Co. headed for its largest increase in 19 months, up 6.6 percent.

     Signet Jewelers Ltd. surged 14 percent, its best gain since February 2014 and the most among consumer discretionary shares, after second-quarter sales and profit exceeded analysts’ forecasts. Apparel makers Michael Kors Holdings Ltd., PVH Corp. and Under Armour Inc. advanced more than 5.3 percent amid signs of better consumer spending in today’s GDP data.

     Semiconductors continued to be the driver behind the technology group, rising 8.9 percent since Tuesday. Avago Technologies Ltd. climbed 8.6 percent to bring its two-day increase to 16 percent. Micron Technology Inc. rose 8.7 percent, while Applied Materials Inc. and Qorvo Inc. added at least 3.7 percent.

     Railroads helped pace a climb among industrial companies after the second-quarter GDP report showed the economy improved more than expected. Norfolk Southern Corp., CSX Corp. and Kansas City Southern each rallied more than 4.2 percent, after sliding at least 12 percent during the five sessions that ended on Tuesday. The Dow Jones Transportation Average is up 5.4 percent after yesterday’s gain, its strongest back-to-back advance since 2011.

 

Have  a wonderful evening everyone.

 

Be magnificent!

The human soul travels from the law to love,

from discipline to freedom,

from the moral plane to the spiritual plane.

Rabindranath Tagore

As ever,
 

Carolann

 

Common sense is instinct, and enough of it is genius.

                                      -Josh Billings, 1818-1885

 

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM

Portfolio Manager &

Senior Vice-President

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

On this day in 1944 DeGaulle enters a free Paris.

If you’ve got less than a day to explore a city, check out the ideas at 12hrs.net.  Founded by in-the-know Europeans (Soren Jepsen is a  contributor to GQ and Anna Peuckert wrote National Geographic’s Copenhagen guide-book), the site maps out routes that squeeze a lot of fashion-forward discovery into half a day.  A dozen cities in Europe and North America are covered, including Berlin, Barcelona, Paris, and Vancouver.  Photos of cool locals and shop windows give a sense of place before you get there, with useful tips included. –by Mercedeh Sanati, Globe & Mail.

PHOTOS OF THE DAY

People walk near sculptures of fiberglass horses in downtown Ciudad Juarez, Mexico, Tuesday. Twenty fiberglass horses, designed and painted by local artists, were displayed to the public by the local government to attract tourism and to improve their urban image. Jose Luis Gonzalez/Reuters

Two woman lie in a puddle of squashed tomatoes during the annual ‘tomatina’ tomato fight fiesta in the village of Bunol, Spain, Wednesday. The streets are awash with red pulp as thousands of people pelt each other with tomatoes. Trucks dumped 150 tons of ripe tomatoes for some 22,000 participants, many from abroad, to throw during the hour-long morning festivities. Alberto Saiz/AP

Market Closes for August 26^th, 2015

Market Index	Close	Change
Dow Jones	16285.51	+619.07   +3.95%
S&P 500	1940.51	+72.90   +3.90%
NASDAQ	4697.535	+191.047   +4.24%
TSX	13381.59	+230.66
		+1.75%

International Markets

Market Index	Close	Change
NIKKEI	18376.83	+570.13
		+3.20%
HANG SENG	21080.39	-324.57
		-1.52%
SENSEX	25714.66	-317.72
		-1.22%
FTSE 100	5979.20	-102.14
		-1.68%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.442	1.330
CND. 30 Year Bond	2.196	2.084
U.S.    10 Year Bond	2.1752	2.0714
U.S. 30 Year Bond	2.9316	2.7992

Currencies

BOC Close	Today	Previous
Canadian $	0.75204	0.75030
US $	1.32971	1.33280
Euro Rate 1 Euro=		Inverse
Canadian $	1.50424	0.66479
US $	1.13126	0.88397

Commodities

Gold	Close	Previous
London Gold Fix	1120.75	1137.50
Oil	Close	Previous
WTI Crude Future	38.60	39.13

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rallied the most since January, rebounding from an early slump to follow the Standard & Poor’s 500 Index as it halted a six-day selloff.

     Equities were whipsawed as volatility continued throughout global markets. The Standard & Poor’s/TSX Composite Index rallied in the opening moments, only to wipe out those gains in the first half hour. The gauge remained little changed until U.S. stocks took off after 2:30 p.m. in New York.

     Stocks fluctuated early in the day as the price of raw goods from oil to copper and gold resumed their decline following a reprieve Tuesday, overshadowing banks as they advanced amid earnings reports.

     National Bank of Canada surged 4.8 percent after posting third-quarter results ahead of estimates. Valeant Pharmaceuticals International Inc., the second-best performing stock in the S&P/TSX this year, climbed 3 percent.

     The S&P/TSX jumped 230.66 points, or 1.8 percent, to 13,381.59 at 4 a.m. in Toronto, for the biggest gain since Jan. 21. The rally cut the benchmark Canadian equity gauge’s loss for the month to 7.5 percent. The index is headed for a fourth straight monthly decline, the longest such streak since September 2011.

     The MSCI All-Country World Index of developed and developing markets rose 1.9 percent as U.S. equities rallied the most since 2011 to offset losses in Europe and China.

     A volatility gauge for 60 of the largest, most liquid Canadian stocks dropped 16 percent. Nine of 10 industry groups in the S&P/TSX advanced on trading volume 12 percent higher than the 30-day average today, paced by a 2.5 percent gain in financial shares.

     Raw-materials producers slumped 2.1 percent to a November 2008 low. The Bloomberg Commodity Index, which tracks a basket of 22 resources, declined 1.3 percent. Gold fell for a third day, the longest stretch in a month, while copper led industrial metals lower and crude traded below $40 a barrel.

     The resource-rich Canadian benchmark equity gauge has been one of the worst-performing developed markets in the world this year amid a collapse in crude prices. China unexpectedly devalued the yuan on Aug. 11, further fueling concerns about global growth and the demand for commodities from oil to copper.

     Teck Resources Ltd., the largest diversified miner in Canada, dropped 3.7 percent. Gold stocks sank 5.5 percent for a fourth straight day of declines as Yamana Gold Inc. slumped 6.8 percent and Goldcorp Inc. lost 5.3 percent.

     Raw-materials and energy producers, which account for about 30 percent of the broader equity gauge, are the worst-performing industries in the S&P/TSX this year. Crude has slumped more than 35 percent from this year’s June peak amid concern global growth is slowing.

US

By Joseph Ciolli and Anna-Louise Jackson

     (Bloomberg) — Two things that have supported U.S. stocks in the past, dovish words from the Federal Reserve and improving economic data, triggered the biggest rally since 2011 and halted a plunge that erased $2.2 trillion from share values.

     Technology companies led the gains with Apple Inc., Google Inc. and Intel Inc. rising at least 5.5 percent. Amazon.com Inc. surged 7.4 percent, and Netflix Inc. posted a two-day gain of 14 percent. JPMorgan Chase & Co. and Citigroup Inc. increased more than 4.8 percent. Cameron International Corp. soared 41 percent after agreeing to be bought by Schlumberger Ltd. in a $14.8 billion deal.

     Gains in equities accelerated in the final hour as the Standard & Poor’s 500 Index climbed 3.9 percent to 1,940.51 at 4 p.m. in New York, halting a six-day slide that was its steepest in four years. The Dow Jones Industrial Average added 619.07 points, or 4 percent, to 16,285.51. The Nasdaq Composite Index rose 4.2 percent for its strongest increase since August 2011. About 10.7 billion shares traded hands on U.S. exchanges, 55 percent above the three-month average.

     “This type of short-term rally shouldn’t be much surprise given recent weakness,” said Chad Morganlander, a money manager at Stifel, Nicolaus & Co. in Florham Park, New Jersey, which oversees about $170 billion. “Eventually the reality that valuations have come off so much will come into play.”

     The recent turmoil in global stock markets sparked by growth concerns has reduced expectations for the Federal Reserve to increase interest rates as soon as next month. New York Fed Bank President William Dudley said Wednesday the upheaval has reduced the case for raising rates in September, while cautioning it’s important not to overreact to short-term developments.

     Traders are pricing in a one-in-four chance the central bank will act at its next meeting, down from almost even odds before China’s surprise currency devaluation earlier this month.

     Fed policy makers remain focused on economic data, which financial markets can influence, Dudley said, through the wealth effect on U.S. households. A report today showed orders for capital goods increased in July by the most in more than a year, indicating corporate spending was finding its footing prior to the turmoil in financial markets. Orders for all durable goods – – items meant to last at least three years — rose 2 percent, exceeding all forecasts of economists surveyed by Bloomberg.

     More than $2 trillion had been erased from American equity values since the S&P 500 started its losing streak, breaking a calm in a stock market that had gone almost four years without a 10 percent correction. The measure plunged 11 percent in the six days through Tuesday, the most since the U.S. was stripped of its AAA credit rating by S&P in August 2011, and was 1 percent away from erasing its gains since the end of 2013.

     “It’s definitely a positive to see markets move higher,” said Tom Manning, chief investment officer from Boston Private Wealth, which oversees about $9 billion in assets. “I don’t know that we found the bottom. I’m not convinced we don’t have more negative days to follow. We’re not likely to go from extreme volatility to extreme calm overnight.”

     A rally in the first few minutes of trading Wednesday eroded by more than half throughout the morning, before an afternoon rebound took over. That was the opposite of Tuesday’s action when more than 440 points on the Dow disappeared by the final hour of trading, with investors giving in to trepidation over what would happen overnight in China. The Shanghai Composite Index closed down 1.3 percent, erasing an advance of as much as 4.3 percent.

     The Chicago Board Options Exchange Volatility Index slipped 16 percent Wednesday to 30.32. The measure of market turbulence known as the VIX declined for a second day after a record six- day jump sent the gauge to its highest level since October 2011.

     All of the S&P 500’s 10 main industries advanced at least 1.6 percent, with financial, health-care and consumer discretionary companies joining technology shares as the top performers. Tech had its strongest day since March 2009, while the health-care group rose the most in four years.                      

     Semiconductors spearheaded the gains within the tech group, as Skyworks Solutions Inc., Nvidia Corp. and Avago Technologies Ltd. advanced more than 6.9 percent. Nvidia halted a seven-day losing streak that clipped 14 percent off its share price. Software maker Intuit Inc. added 4.3 percent to stop a four-day, 25 percent skid.

     Biotechnology shares hard hit in the market’s downdraft staged a recovery, with Amgen Inc. and Biogen Inc. rising at least 5.8 percent. Amgen had lost 13 percent in the previous six sessions. The Nasdaq Biotechnology Index climbed 5.1 percent, its largest jump since August 2011. Merck & Co. rose 6.4 percent, the most in 19 months, to pace gains among health-care companies.

     Banks in the S&P 500 had their strongest increase in more than three years, with rising Treasury yields helping to lift sentiment on the prospects for earnings. Wells Fargo & Co. and Bank of America Corp. gained at least 4.5 percent. KeyCorp, Regions Financial Corp. and Fifth Third Bancorp led the group, up more than 5.2 percent after losing more than 9 percent in the prior three sessions.

     Energy shares rebounded despite further declines in oil prices, with Cameron leading the group amid its deal with Schlumberger. Exxon Mobil Corp. jumped 5.5 percent, the most in more than six years. Chevron Corp. rose 4.4 percent, while Chesapeake Energy Corp. gained 5.1 percent.

     Monsanto Co. helped power gains in the materials group, rising 8.6 percent, the most since January 2009. The company abandoned its effort to acquire Syngenta AG, the world’s top maker of pesticides, after a sweetened bid valuing the Swiss company at $46.2 billion was rejected.

 

Have  a wonderful evening everyone.

 

Be magnificent!

To be truly united with all in knowledge, love, and service, and thus to realize the Self…

is the essence of good.  This is the keystone of the Upanishad teaching:  Life is immense.

Rabindranath Tagore

As ever,

 

Carolann

 

Everything should be made as simple as possible, but not simpler.

                                                    -Albert Einstein, 1879-1955

 

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM

Portfolio Manager &

Senior Vice-President

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

On Aug. 25, 1944, Paris was liberated by Allied forces after four years of Nazi occupation.

1939: Wizard of Oz was released.

PHOTOS OF THE DAY

This undated file photo released Tuesday on a social media site used by Islamic State militants, which has been verified and is consistent with other AP reporting, shows smoke from the detonation of the 2,000-year-old temple of Baalshamin in Syria’s ancient caravan city of Palmyra. The temple was the latest victim in the Islamic State group’s campaign of destruction of historic sites across the territory it controls in Iraq and Syria. Arabic at bottom reads, ‘The moment of detonation of the pagan Baalshamin temple in the city of Palmyra.’ Islamic State social media account/AP

Environmental activists opposed to expansion of the Alberta Clipper tar sands pipeline protest outside the home of Secretary of State John Kerry in Washington Tuesday. Yuri Gripas/Reuters

Market Closes for August 25^th, 2015

Market Index	Close	Change
Dow Jones	15666.44	-204.91   -1.29%
S&P 500	1867.61	-25.60   -1.35%
NASDAQ	4506.488	-19.760   -0.44%
TSX	13150.93	+98.19
		+0.75%

International Markets

Market Index	Close	Change
NIKKEI	17806.70	-733.98
		-3.96%
HANG SENG	21404.96	+153.39
		+0.72%
SENSEX	26032.38	+290.82
		+1.13%
FTSE 100	6081.34	+182.47
		+3.09%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.330	1.265
CND. 30 Year Bond	2.084	2.008
U.S.    10 Year Bond	2.0714	2.0173
U.S. 30 Year Bond	2.7992	2.7353

Currencies

BOC Close	Today	Previous
Canadian $	0.75030	0.75251
US $	1.33280	1.32889
Euro Rate 1 Euro=		Inverse
Canadian $	1.53535	0.65132
US $	1.15197	0.86807

Commodities

Gold	Close	Previous
London Gold Fix	1137.50	1166.50
Oil	Close	Previous
WTI Crude Future	39.13	38.09

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rebounded from the worst plunge in almost four years, snapping a six-day slide, as banks led an advance after Bank of Montreal’s earnings topped analysts’ estimates.

     Royal Bank of Canada and Toronto-Dominion Bank, the nation’s largest lenders, rallied at least 1.7 percent as financial-services stocks jumped 1.7 percent as a group. Bank of Montreal rose 2.4 percent. Energy shares rose as commodities prices surged, with crude climbing from a six-year low.

     Equities in Canada advanced as much as 3 percent at the open, the most since November 2011, before giving back about two-thirds of gains in the final hour of trading with U.S. equities sliding to a loss.

     Equities around the world rallied earlier after China’s central bank cut its benchmark interest rate for the fifth time since November in an effort to drive domestic growth. Some $2.7 trillion had been erased from the value of global stocks Monday.

     The Standard & Poor’s/TSX Composite Index rose 98.19 points, or 0.8 percent, to 13,150.93 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has fallen 9.1 percent this month, headed for a fourth straight monthly decline, the longest such streak since September 2011.

     A volatility gauge for 60 of the largest, most liquid Canadian stocks slipped 3.2 percent after soaring 35 percent on Monday. Seven of 10 industry groups in the S&P/TSX advanced on trading volume 24 percent higher than the 30-day average today.

     The MSCI All-Country World Index of developed and developing markets slipped 0.1 percent, erasing an earlier gain of as much as 2.2 percent. The U.S. benchmark S&P 500 fell 1.4 percent in New York, reversing an earlier 2.9 percent increase after entering a correction yesterday. The Stoxx Europe 600 jumped 4.2 percent.

     The resource-rich Canadian benchmark equity gauge has been one of the worst-performing developed markets in the world this year amid a collapse in crude prices. China unexpectedly devalued the yuan on Aug. 11, further fueling concerns about global growth and the demand for commodities from oil to copper.

     Encana Corp. advanced 3.5 percent after agreeing to sell natural gas properties in northern Louisiana for $850 million to a venture run by GSO Capital Partners LP and GeoSouthern Haynesville LP in a bid to cut debt.

     Cenovus Energy Inc. rallied 3.6 percent and Suncor Energy Inc. added 2.1 percent to lead energy stocks higher. West Texas Intermediate oil gained 2.8 percent in New York, rebounding from the lowest settlement since February 2009 on Monday.

     Energy producers are the worst-performing industry in the S&P/TSX this year pacing declines with a 26 percent drop. Crude has slumped more than 35 percent from this year’s June peak amid concern global growth is slowing.

US

By Joseph Ciolli

     (Bloomberg) — Volatility continued to jolt financial markets after a rebound that took the Standard & Poor’s 500 Index up 2.9 percent melted away in the final hours of trading. The dollar its pared gains while Treasuries trimmed losses.

     The S&P 500 Index ended Tuesday down 1.4 percent as traders said trepidation over how China’s market will react to policy easing made holding on to stocks too risky for most investors. Before the rally disappeared, it appeared the appetite for risk in markets was returning following a selloff that erased $2.7 trillion from the value of global equities in a few days.

     Equities had climbed earlier in the day, with the Dow Jones Industrial Average regaining more than 440 points as China’s central bank cut its benchmark lending rate for the fifth time since November and lowered the amount of cash banks must set aside in reserves. Commodities rallied, with oil rebounding from a six-year low, while the yen and euro retreated.

     “We just saw a crazy evaporation of gains after being up the majority of the day,” said Stephen Carl, principal and head equity trader at Williams Capital Group LP. “People are nervous about the potential volatility that could erupt or resurface in the market. They’re not sure what’s going to happen overseas, and that uncertainty is winning out.”

     China’s unexpected devaluation of the yuan on Aug. 11 sparked the biggest rout in U.S. stocks in nearly four years on concern that the slowdown in the world’s second-largest economy is worse than anticipated. A pull back in Chinese equities torpedoed emerging-market assets and sank commodities from oil to metals. Also looming over the markets is the Federal Reserve, which is contemplating the first increase in interest rates since 2006.

     The Dow slid 1.3 percent to 15,666.44 by 4 p.m. in New York, down 4 percent from its highest point. The peak-to-trough retreat exceeded Monday’s loss. The S&P 500 closed at 1,867.61.

     “There’s still some technical damage that needs to be corrected,” said Terry Morris, a senior equity manager who helps oversee about $2.8 billion at Wyomissing, Pennsylvania-based National Penn Investors Trust Co. “There’s still some selling that needs to take place. We’re not just going to slingshot back up.”

     More than $2 trillion has been erased from American equity values since last Wednesday, breaking a calm in a stock market that before this week had gone almost four years without a 10 percent loss. After a day of wild swings, the S&P 500 lost 3.9 percent Monday. That capped a 7 percent two-day retreat, the most since December 2008, sending the index into its first correction since 2011.                       

     A gauge of options prices on U.S. equities dropped 9.1 percent today, paring an earlier drop of 31 percent. The Chicago Board Options Exchange Volatility Index, or VIX, retreated 12 percent after surging as much as 90 percent finishing to its highest level since October 2011 on Monday.

     Other markets rallied in the wake of China’s policy moves, with European shares clawing back most of their biggest decline since the 2008 financial crisis. The Stoxx Europe 600 Index jumped 4.2 percent, the most since 2011, as German equities rallied after entering a bear market and the U.K.’s FTSE 100 Index climbed from its lowest level since 2012.

     The MSCI Emerging Markets Index climbed 2.2 percent after closing Monday at the lowest since July 2009, with benchmarks from Taiwan to Turkey and South Africa advancing at least 3 percent.

     Half of the 30 largest equity markets in developing economies have fallen 20 percent or more from their peaks, surpassing the threshold for a bear market. China and Russia have led the pack, tumbling more than 30 percent each. The remainder are either in a correction, or on the brink of one.

     Mark Mobius says investors should hold off from buying developing-nation shares as the rebound will be short-lived amid widening price swings.

     “We have a little bit to go before we see stabilization, but volatility will remain,” Mobius, chairman of the emerging- markets group at Franklin Templeton Investments, said in an interview with Bloomberg TV. “We are sitting on cash.”

     The dollar pared back some of its advance as U.S. stocks erased their advances. Some of its biggest gains came against the Swiss franc, the euro and the yen — all currencies that investors consider havens in times of market turmoil. The dollar ended the Tuesday session up 0.4 percent to 118.83 yen, after earlier rallying as much as 1.7 percent.

     Tepid demand at a U.S. bond auction helped Treasuries to their first decline in a week, with yields on 10-year debt up seven basis points, or 0.07 percentage point, to 2.07 percent. The notes pared declines as stocks retreated, with the gyrations in equity markets the past week stoking a flight into government debt.

     The Bloomberg Commodity Index rose 0.5 percent from a 16- year low as copper climbed 2.3 percent from a six-year low. Gold futures slid for a second day in New York as the early gains in equities hurt demand for haven assets.

     West Texas Intermediate crude added 2.8 percent to $39.31 a barrel and Brent futures advanced 1.2 percent to $43.21. The oil market is healthier than Monday’s drop to six-year lows suggests, according to banks including Morgan Stanley and Standard Chartered Plc.

 

Have a wonderful evening everyone.

 

Be magnificent!

Nature’s law dictates that, in order to survive, bees must work together.

As a result, they instinctively possess a sense of social responsibility.

They have no constitution, no law, no police, no religion or moral training but,

because of their nature, the whole colony survives.

We human beings have a constitution, laws and a police force.

We have religion, remarkable intelligence, and hearts with a great capacity to love.

We have many extraordinary qualities but, in actual practice,

I think we are behind those small insects.

In some ways, I feel that we are poorer than the bees.

His Holiness the XIVth Dalai Lama.

As ever,

 

Carolann

 

And when we lead, we are most led.

              -Lord Byron, 1788-1824

 

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM

Portfolio Manager &

Senior Vice-President

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

Advice After Stock Market Drop: Take Some Deep Breaths, and Don’t Do a Thing

                                                                                                -by Ron Lieber

The impulse when the stock market falls hard for a few days in a row is to do something. Anything. Our life savings are often on the line, after all.

But that’s just the thing: Stocks are most useful for long-term goals. So unless those goals have changed in the last few days, it probably doesn’t make much sense to overhaul an investment strategy based on a blip of market activity.

So pour yourself a drink, or sit down with a pint of ice cream, and consider the following six things.

First, you are not the stock market. Chances are, your portfolio is a diverse mix of investments. Many people save in target-date mutual funds that do the work of diversification for them. Vanguard’s 2035 fund was down 4.6 percent last week, better than the 5.77 percent decline in the Standard & Poor’s 500-stock index from where it closed a week earlier.

Second, if you have been investing in stocks in the last six years, you most likely are a big winner. It’s generally a bad idea to look at your investment statements too often, but take a quick peek.

That outsize gain you see is one reason you are in stocks in the first place. Plenty of research shows that if you miss just a few days of the market’s biggest gains, your long-term portfolio will suffer badly. If you decide to put a bunch of your money in cash this week, how will you know when to get back in the market? You’ll probably be looking for a sign, and that sign will be the very rebound days that you will have missed out on.

Still uneasy? Consider a third point: At some time in the past, when you were not scared, you made a decision to construct your portfolio a certain way. You knew that stocks involved risk and that the returns they have traditionally delivered, above and beyond what cash and bonds do, was the reward for your persistence.

Nothing about the events of recent days suggests that the fundamentals of capitalism have changed. So neither should your confidence in very long-term ownership of the pieces of the for-profit enterprises that benefit from your fortitude.

Nobody knows for sure whether we’re in for a decline in the stock market of 25 percent or more. But if such a decline does happen and you are a regular investor, you’ll be buying more when prices are lower.

How worried are you about the recent declines in global markets? Do you plan to change your investments?

Which brings us to point No. 4: Long-term investors have time to recover. I know too many 70-year-olds who sold all of their stocks in 2009 and are healthy enough to live to 100. They’d be going on a lot more vacations now and be worrying less about long-term care if they had held firm.

Worried about a 529 college savings plan for a 12-year-old? Hopefully, you weren’t 100 percent in stocks with six years to go before needing money for tuition. Still, you have at least nine years for a portion of that portfolio to recover from any sustained downturn. If that 12-year-old is the oldest of at least two children, you could use cash to pay some tuition bills for the eldest and let some of the account ride even longer for the next child.

Let’s say you still have trouble sleeping. Then you may be the sort of person who needs to consider a fifth point: Some people cannot handle the stress of investing in stocks. But try to give this more time, and consider the alternatives. There are few investments that can deliver the kinds of returns that stocks can without their own accompanying anxiety.

Another alternative is to save a lot more in safer investments like cash or certain bonds. Most people don’t have enough income to do that easily, so settling for lower returns will mean a combination of working longer and living modestly, forever. For some people, that is a fine trade-off.

One final point for new investors (and their parents and grandparents, who ought to be counseling them right about now): This is what markets do. There is absolutely nothing abnormal about what is going on here.

Most of us have to save somewhere, and history suggests that stocks are the most accessible route to get the returns you’ll need to retire someday. It would take decades of systemic economic erosion to prove otherwise, and a few days of market declines do not suggest that anything like that is upon us.

A version of this article appears in print on August 22, 2015, on page B2 of the New York edition with the headline: Take Some Deep Breaths, and Don’t Do a Thing. 

PHOTOS OF THE DAY

Tourists pose for photographs with the iconic statue of a bull in New York’s financial district Monday. Wall Street opened sharply lower with the Dow Jones industrial average losing more than 1,000 points following a more-than 8 percent drop in Chinese shares and a selloff in oil and other commodities. Lucas Jackson/Reuters

 

A TV camerawoman takes footage of an emergency exit at a multifunction station in the NEAT Gotthard Base Tunnel during a media visit near the town of Sedrun, Switzerland, Monday. The world’s longest train tunnel, which crosses the Alps, will consist of two parallel single track tunnels, each 57 km (35 miles) long. It should become operational at the end of 2016. Arnd Wiegmann/Reuters

Market Closes for August 24^th, 2015

Market Index	Close	Change
Dow Jones	15871.28	-588.47   -3.58%
S&P 500	1908.82	-62.07   -3.15%
NASDAQ	4526.250	-179.789   -3.82%
TSX	13173.13	-300.54
		-2.23%

International Markets

Market Index	Close	Change
NIKKEI	18540.68	-895.15
		-4.61%
HANG SENG	21251.57	-1158.05
		-5.17%
SENSEX	25741.56	-1624.51
		-5.94%
FTSE 100	5898.87	-288.78
		-4.67%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.265	1.271
CND. 30 Year Bond	2.008	2.011
U.S.    10 Year Bond	2.0173	2.0452
U.S. 30 Year Bond	2.7353	2.7346

Currencies

BOC Close	Today	Previous
Canadian $	0.75251	0.76413
US $	1.32889	1.30868
Euro Rate 1 Euro=		Inverse
Canadian $	1.54060	0.64910
US $	1.15932	0.86258

Commodities

Gold	Close	Previous
London Gold Fix	1166.50	1147.70
Oil	Close	Previous
WTI Crude Future	38.09	41.37

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks plunged the most in almost four years, joining a rout in markets around the world as the U.S. benchmark entered a correction and commodities stumbled to a 16-year low.

     Equities in the resource-rich Standard & Poor’s/TSX Composite Index sank as much as 5.7 percent as the market opened, the most since March 2009 on an intraday basis, as investors fled all but the safest assets in the world. Stocks then pared those losses by some three-quarters by midday before succumbing to further selling in the final two hours of trading.

     Brent crude slid to less than $45 a barrel for the first time since 2009 as the Bloomberg Commodity Index of 22 raw materials sank to a 1999 low.

     “Let’s be cognizant we’ve had a pretty remarkable week here of stock price movement and very rarely do we see that switch on, then switch off,” said Gareth Watson, vice president of investment management and research at Richardson GMP Ltd. in Toronto. His firm manages about C$28 billion ($21.1 billion). “We will see more volatility here before things settle out.”

     The S&P/TSX fell 420.93 points, or 3.1 percent, to 13,052.74 at 4 p.m. in Toronto, the most since October 2011. Trading volume was 64 percent higher than the 30-day average today. The benchmark Canadian equity gauge has fallen 9.8 percent this month, headed for a fourth straight monthly decline, the longest such streak since September 2011.                       

     Seven Canadian stocks triggered automatic trading halts today, including Hudson’s Bay Co., a record since the circuit breaker program was adopted in 2012, according to data from the Investment Industry Regulatory Organization of Canada. In the past, IIROC has only seen as many as six such halts in an entire quarter.

     A volatility gauge for 60 of the largest, most liquid Canadian stocks surged as much as 56 percent before paring the gain to 35 percent.

     The MSCI All-Country World Index of developed and developing markets tumbled 3.8 percent, the most since 2011. The U.S. benchmark S&P 500 plunged 3.9 percent, down 11 percent from its May high, while stocks in Germany entered a bear market and Chinese stocks tumbled the most since 2007.

     More than $5 trillion has been erased from the value of global equities since China unexpectedly devalued the yuan on Aug. 11, fueling concerns about global growth and the demand for commodities.

     “Canada was dealing with its own issues prior to the massive pullback in global activity,” said Andrew Pyle, a fund manager at ScotiaMcLeod Inc. in Peterborough, Ontario who manages about C$300 million. “A lot of that is tied to oil and the global rout in capital markets just compounds the problem for Canada.”

     Energy producers are the worst-performing industry in the S&P/TSX this year pacing declines with a 26 percent drop. Crude has slumped more than 30 percent from this year’s June peak amid concern global growth is slowing.

     Bombardier Inc., the second-worst performing stock in the S&P/TSX this year, sank 16 percent in heavy trading.

     “The markets are getting a little panicky and that’s what we saw at the open,” said Michael O’Brien, a fund manager and head of core Canadian equities at TD Asset Management in Toronto. His firm manages about C$333 billion.

US

By Anna-Louise Jackson and Joseph Ciolli

     (Bloomberg) — The Standard & Poor’s 500 Index fell into a correction for the first time since 2011 in one of the most volatile trading days ever, as a rout in global equity markets deepened.

     It was a day of wild swings as equities plunged at the open before staging a sharp rebound, with the Nasdaq 100 Index by midday nearly erasing a 9.8 percent drop. The Dow Jones Industrial Average dropped 1,000 points in the opening minutes of trading, while the S&P 500 tumbled 5.3 percent and then pared declines before an afternoon wave of renewed selling.

     The S&P 500 dropped 3.9 percent to 1,893.21 at 4 p.m. in New York, and closed 11 percent below its May record. The Dow lost 588.40 points, or 3.6 percent, to 15,871.35, after sliding as much as 6.6 percent. The Nasdaq Composite Index retreated 3.8 percent to its lowest level since Oct. 27, trimming an early 8.8 percent skid.

     “Investors in China have lost confidence in the central bank, and it’s a very alarming and difficult situation for the markets,” said Bruce Bittles, chief investment strategist at Milwaukee-based Robert W. Baird & Co., which oversees $110 billion. “It ultimately depends on whether the China situation results in a severe economic slowdown. It that happens, it’s going to ripple through the U.S.”

     About 14 billion shares traded hands on U.S. exchanges, the most in more than four years. It was the second-highest value traded ever, according to Ana Avramovic, a U.S. strategist at Credit Suisse Group AG.

     The Chicago Board Options Exchange Volatility Index rose 45 percent to 40.74, after an early 90 percent surge that temporarily sent the index to its loftiest level since January 2009. The gauge known as the VIX closed at a nearly four-year high after more than doubling last week.

     The Dow’s 1,089.42-point swing from its session low to its high is the biggest one-day net point swing in the average’s history. The 7.1 percent move between Monday’s high and low is the largest since the flash crash of May 6, 2010. Both the S&P 500 and the Dow posted their largest two-day declines since December 2008.

     The S&P 500’s rout sent valuations tumbling. The price-to- earnings ratio for the gauge sank to 16.76, the lowest level since the October pullback. Then, the measure bottomed just above 16.50, the cheapest since January 2014. The less-expensive shares enticed some buyers, as equities sharply trimmed their opening losses.

     “As prices go lower, we see selective opportunities to buy as opposed to a provocation to become more bearish,” said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland, the private-banking unit of KeyCorp that oversees more than $25 billion in assets. “We’re emphasizing large-caps relative to smaller ones,” and within the U.S., companies that are less export-oriented.                          

     Calm in the U.S. market shattered last week, with volatility soaring by the most on record as the Dow entered a correction and investors dumped the biggest winners of 2015. Shares succumbed to a global selloff that’s wiped more than $5 trillion off the value of equities around the world since China’s shock currency devaluation on Aug. 11.

     The S&P 500 is on track for its worst August decline in 17 years. It sank the most since 2011 on Friday amid signs China’s economy is weakening, capping its single 5 percent decline of the year after spending the previous seven months locked in a trading range that had no precedent in a century of market history.

     Moreover, speculation had been building all year for the Federal Reserve to raise interest rates in September for the first time since 2006, following the end of quantitative easing in 2014.

     Traders are now pricing in a less than one-in-four chance the central bank will act next month, from about 48 percent just before the yuan devaluation, as the rout in equity markets has shaken confidence that the global economy will be strong enough to withstand higher U.S. rates.

     “The chickens are coming home to roost,” said Thomas Thygesen, SEB’s head of cross-asset strategy in Copenhagen. “We’ve been too hopeful that Fed tapering didn’t matter, that they could hike interest rates and we’d still have a healthy economy. Since the Fed stopped bond purchases, they’ve been choking the life out of global manufacturing and that matters most for commodities and emerging markets.”

     The retreat in global stock markets bears resemblances to losses that hit equities in 1998, when financial stress from Asia to Russia sent the S&P 500 down 19 percent, only to recover in three months, said Laszlo Birinyi, the president of Birinyi Associates in Westport, Connecticut.

     “I wouldn’t expect a mirror image but my point is that for all the negative things I’ve read this weekend, almost all of these have been comments by people who were bearish to begin with,” Birinyi said Monday in an interview on Bloomberg Radio. m“This is a short-term painful correction but when you have a situation where the market is well aware of the issues, the market has ability to correct.”

     All of the benchmark index’s main groups tumbled at least 3 percent today, with raw-materials shares approaching a two-year low while energy companies slumped to the lowest since October 2011. Citigroup Inc. and JPMorgan Chase & Co. fell at least 5.2 percent as banks retreated the most since June 2012.

     Only six stocks in the S&P 500 rose, led by AGL Resources Inc. The natural-gas distributor soared 28 percent after agreeing to be acquired for $8 billion in cash by Southern Co., the third-largest U.S. utility owner. Southern slid 4.9 percent.

 

Have a wonderful evening everyone.

 

Be magnificent!

The person who can wear the mantle of a Master

is one who is devoted to the cause of non-violence and non-possession

who is driven by the quest for truth and the right perspective,

who is capable of solving his own emotional and mental problems and

who can show others the way to overcome their emotional and mental problems.

Acharya Mahaprajna

As ever,

 

Carolann

 

Laughter is the sun that drives winter from the human face.

                                              -Victor Hugo, 1802-1885

 

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM

Portfolio Manager &

Senior Vice-President

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

On August 21^st, 1810, Lady Granville wrote to her sister, Lady Morpeth:

Sandon [home of Lord Granville’s sister, Lady Harrowby] is a very modern place with young plantations but the ground lying very prettily and the woods are all well bestowed.  Of comforts and luxuries I never had an idea before – the rooms are so full of couches, armchairs, flowers, books footstools etc. that one’s difficulty is where to settle in the midst of so much possibility of enjoyment.  The flower garden to which everything opens is beautiful, and a greenhouse with sofas in it . . . the very sight of which would make my grandmother [Lady Spencer] and Miss Trimmer [her governess] faint away.  Lady Harrowby is perfectly kind and amiable, but I do not think her quite well – she is oppressed with her situation [pregnancy] and I do think an eighth Ryder [the family name] must incline one to sing á quoi bon. –from The Book of Days.

PHOTOS OF THE DAY

Visitors admire a display at the Southport Flower Show in Southport, England. The show, first held in 1924, is held annually for four days in August and is the largest independent flower show in Britain. Andrew Yates/Reuters

People interact with ‘Pixel Wave 2015,’ a projection art installation by France’s Miguel Chevalier and local designers Carolyn Kan and Depression, during the Singapore Night Festival at the Singapore Design Center Friday. ‘Pixel Wave 2015’ features geometric patterns that react to movements and interactions of people. The festival features local and international light installations and performances. Edgar Su/Reuters

Market Closes for August 21^st, 2015

Market Index	Close	Change
Dow Jones	16459.75	-530.94     -3.12%
S&P 500	1974.98	-60.75     -2.98%
NASDAQ	4706.039	-171.448   -3.52%
TSX	13493.13	-243.87
		-1.78%

International Markets

Market Index	Close	Change
NIKKEI	19435.83	-597.69
		-2.98%
HANG SENG	22409.62	-347.85
		-1.53%
SENSEX	27366.07	-241.75
		-0.88%
FTSE 100	6187.65	-180.24
		-2.83%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.271	1.293
CND. 30 Year Bond	2.011	2.018
U.S.    10 Year Bond	2.0452	2.0748
U.S. 30 Year Bond	2.7346	2.7482

Currencies

BOC Close	Today	Previous
Canadian $	0.75880	0.76413
US $	1.31787	1.30868
Euro Rate 1 Euro=		Inverse
Canadian $	1.50058	0.66641
US $	1.13864	0.87824

Commodities

Gold	Close	Previous
London Gold Fix	1156.50	1147.70
Oil	Close	Previous
WTI Crude Future	40.24	41.37

Market Commentary:

When you have only two pennies left in the world, buy a loaf of bread with one and a lily with the other. –Chinese Proverb.

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks slumped a fifth day, closing at the lowest level in almost two years, as global markets plunged with commodities amid growing concern economic growth is slowing.

     Equities tumbled the most since September 2011 this week, after manufacturing data from China slowed to the weakest since the global financial crisis. Energy producers, the worst- performing industry in the Canadian benchmark this year, plunged 8.9 percent this week, trading at a March 2009 low. Crude prices capped an eighth straight week of losses, the longest slump since 1986, and dipped to less than $40 a barrel in New York for the first time since 2009.

     Royal Bank of Canada, the nation’s largest lender, tumbled 1.7 percent as financial services companies retreated 2 percent. Canada’s largest banks begin reporting third-quarter earnings Aug. 25.

     The Standard & Poor’s/TSX Composite Index fell 263.33 points, or 1.9 percent, to 13,473.67 at 4 p.m. in Toronto, a December 2013 low. The benchmark Canadian equity gauge has fallen 5.6 percent this week, the worst drop since September 2011.

     “China and the emerging markets are starting to slow significantly,” said James Thorne, a fund manager at Caldwell Investment Management in Toronto. His firm manages about C$1 billion ($759 million). “It’s on the forefront of everybody’s minds. Canada is viewed as a commodity-based economy and international investors are pulling money out of Canada.”

     The Dow Jones Industrial Average plunged 3.1 percent into a correction and the S&P 500 fell 3.2 percent in New York, the biggest decline since November 2011.

     The MSCI All-Country World Index of developed and developing markets sank 2.7 percent, the most in almost two years. The Shanghai Composite Index decreased 4.3 percent as global markets retreated. European shares tumbled into a correction while equities in Hong Kong, Indonesia and Taiwan entered bear markets.                      

     The preliminary Purchasing Managers’ Index for China from Caixin Media and Markit Economics was at 47.1 in August, compared with a median estimate of 48.2 and the final reading of 47.8 the previous month. Numbers less than 50 indicate contraction. China is Canada’s second-largest trading partner.

     Energy producers are the worst-performing industry in the S&P/TSX this year pacing declines with a 23 percent drop. Crude has slumped more than 30 percent from this year’s June peak amid concern global growth is slowing.

     Baytex Energy Corp. plunged 10 percent after the company said it will suspend its dividend and cut capital spending plans for 2016.

     The Bloomberg Commodity Index, which tracks a basket of 22 resources from crude to gold, sank 1.6 percent to a 2002 low. First Quantum Minerals Ltd. plunged 7.4 percent as copper retreated.

     Eldorado Gold Corp. plunged 14 percent, the most since January, after the gold producer said it would suspend operations in northern Greece. Eldorado is struggling to develop mines in the face of government operation, describing the Greek ministry of energy as “openly hostile.”

     Goldcorp Inc. rose 0.7 percent as gold capped its biggest weekly gain since January with a 4.2 percent increase. The roiling equity markets has investors seeking a haven in gold, seen as an alternative investment. Gold producers rallied 6.1 percent this week.

US

By Joseph Ciolli and Oliver Renick

     (Bloomberg) — Turbulence in financial markets gathered momentum amid intensifying concern over slowing global growth, pushing the Dow Jones Industrial Average into a correction and giving other stock gauges their worse losses since 2011.

     More than $3.3 trillion has been erased from the value of global equities after China’s decision to devalue its currency spurred a wave of selling across emerging markets. The worries over slower economic growth come as a strong dollar and plunge in oil prices take a toll on corporate earnings at the same time the Federal Reserve is contemplating the first boost to interest rates since 2006.

     “For much of this year, the glass was considered half full and now people the last 48 hours are thinking it’s looking more empty,” George Hashbarger, who oversees $224 million as chief executive officer and portfolio manager at Knoxville, Tennessee- based Quintium Advisors LLC, said by phone. “This is more like October than it is buy-the-dip.”

     Volatility surged as Standard & Poor’s 500 Index capped the worst week in three years while Europe entered a correction and stocks from Hong Kong to Indonesia tumbled into bear markets. Junk bond yields rose to the highest since October 2012 and U.S. Treasuries had the largest weekly gain in five months. Oil sank below $40 a barrel for the first time since 2009 and was set for its longest losing streak since 1986.

     The S&P 500 dropped 3.2 percent, the most since November 2011, to below 2,000. The index is down more than 7 percent from a record after sinking below a trading range that has supported it for most of the year. The Dow Jones Industrial Average fell more than 500 points, as is down 10 percent from its record high in May.

     Investors are selling the biggest winners of 2015. Companies that have come to be known as the Fab Five — Netflix Inc., Facebook Inc., Amazon.com Inc., Google Inc. and Apple Inc.–have seen $97 billion in market value erased over two days. Losses have pushed the Nasdaq 100 Index down 7 percent, the biggest two-day decline since 2008. Apple entered a bear market, dropping 20 percent from a February high.

     To Apple and energy shares already snared in a bear market, add semiconductor stocks. Meanwhile, the Dow joins biotechnology, small-caps, media, transportation and commodity companies in a correction.

     The VIX, the benchmark gauge of U.S. equity options, more than doubled during the week for its largest gain ever amid demand for contracts to protect against further losses. It is at the highest level since 2011.

     Before this week, U.S. equities had held their ground throughout 2015. The S&P 500 had stayed within a range roughly tracking its 50-, 100- and 200-day moving averages, boosted by signs the economy is recovering and support from central banks. The benchmark index hadn’t had a decline of more than 5 percent all year.

     The selloff “simply means that all areas of the market are in gear now, and unfortunately it’s on the downside,” Bruce Bittles, chief investment strategist at Milwaukee-based Robert W. Baird & Co., which oversees $110 billion, said in an interview on Bloomberg Television’s “Market Makers” with Cory Johnson and Olivia Sterns. “Investors have to be much more careful now with that technical development.”

     The week’s retreat from the riskiest assets picked up speed as data showing a gauge of China manufacturing at the lowest level in more than six years highlighted the challenges facing the nation’s economy.

     The MSCI All-Country World Index tumbled 2.7 percent to the lowest since October. The MSCI Emerging Markets Index slid 2.2 percent, with the Malaysian ringgit and South Korean won leading currencies lower. Investors have sought safety in the yen, which strengthened for a third day against the dollar. Gold also gained.

     “This week’s selloff started from the yuan’s devaluation, which generated speculation about the true state of China’s economy,” Hertta Alava, who helps oversee the equivalent of $395 million as the head of emerging markets at FIM Asset Management Ltd. in Helsinki, said by e-mail. “China’s PMI was weak, so it is just adding fuel to this negativity.”

     Hong Kong’s Hang Seng Index dropped 1.3 percent, taking declines since an April high beyond 20 percent. The Shanghai Composite Index slumped 4.3 percent, bringing the week’s loss to more than 10 percent and coming within one point of erasing all gains since the government began efforts to prop up the market in July.

     “The whole world’s looking a little bit sad,” said Mark Lister, head of private wealth research at Craigs Investment Partners Ltd. in Wellington, which manages about $7.2 billion. “China still looks really worrying on a number of fronts.”

     The Stoxx Europe 600 Index lost 3.3 percent, as the selloff engulfed all western European markets and industries in the benchmark gauge. The index had its worst weekly loss since 2011, down 6.5 percent. It is down 13 percent from an April high, entering a correction.

     Trading patterns show the declines are poised to slow. The 14-day relative strength index on the MSCI All-Country World Index closed below 30 on Thursday, a level that signals an asset is poised to rebound, according to some technical analysts.

     Amid the selloff, the S&P 500 is trading at 17.5 times earnings. That’s down from 18.9 times a month ago, which was near a five-year high, though still exceeds the five-year historical average of 16.1 times profit.

     U.S. Treasuries had their biggest weekly gain in five months as demand for fixed income soared. Ten-year notes drew support from signs the Federal Reserve will keep interest rates close to zero for longer, and from a decline in oil prices that helped push a gauge of inflation expectations toward its lowest since 2010.

     Futures show that traders see a 34 percent chance the Fed will raise interest rates at its September meeting, down from a 48 percent probability at the end of last week.                        

     Government debt from Australia to Britain also gained this week, driving the average yield on developed-nation bonds to a three-month low.

     Yields on junk bonds rose to an average 7.39 percent, the highest since October 2012, according to Bank of America Merrill Lynch bond indexes. The premium investors demand to hold junk bonds over investment-grade debt climbed to the most since December, the indexes show.

     Oil briefly plunged below $40 a barrel in New York for the first time in more than six years on signs the supply glut will be prolonged. The U.S. pumped crude in July at the fastest pace for the month since at least 1920, the American Petroleum Institute reported Thursday. Prices dropped for an eighth week, the longest streak since 1986.

     Copper extended its longest run of weekly declines since January, with aluminum, lead, nickel and zinc also dropping.

Have a wonderful weekend everyone.

 

Be magnificent!

A diamond is lost in the mud;

all are seeking it.

Some go to the East – or to the West,

Wishing to find it.

Is it lost in the river?

Or in the rocks?

Kabir, your servant, appreciates it

for its just value.

He will take it away,

warmly sheltered

in a corner of his heart.

Kabir

As ever,
 

Carolann

 

The longer the island of knowledge, the longer the shoreline of wonder.

                                                          -Ralph W. Sockman, 1889-1970

 

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM

Portfolio Manager &

Senior Vice-President

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

On this day in in 1920, professional football was born when seven men, including legendary athlete Jim Thorpe, met in Canton, Ohio, to organize a professional league. Out of the meeting came the American Professional Football Conference (APFC), the precursor to the National Football League (NFL).

Changi Airport, Singapore: Butterfly Garden

(© Kevin R. Morris/Corbis )

Singapore’s Changi Airport routinely tops “Best Airports in the World” lists for its incredible amenities: a free 24-hour movie theater, a swimming pool, an enormous indoor children’s slide, massage chair lounges and more. But Changi’s outdoor spaces are perhaps the most innovative of its offerings. Most airports don’t allow travelers outside once they’ve cleared security, which can make long delays or layovers feel even longer. But Changi has several unique outdoor spaces within its terminals, including a rooftop cactus garden, a cheerful sunflower garden and various orchid displays (orchids are Singapore’s national flower). Our favorite is the butterfly garden. Visitors step into a fenced outdoor grotto, where some 1,000 butterflies flit from flower to flower, occasionally landing on a head or shoulder. If you’re lucky, you can even see one emerging from its chrysalis in a special “emergence enclosure.”  -Smithsonian Magazine, 8/20/2015

PHOTOS OF THE DAY

Artworks, sculptures, and performers are seen at ‘Dismaland,’ a theme park-styled art installation by British artist Banksy at Weston-Super-Mare in southwest England Thursday. Toby Melville/Reuters

Mechanics with the Ferrari Formula One team push the car of driver Sebastian Vettel of Germany in the pit lane ahead of this weekend’s Belgian F1 Grand Prix in Spa-Francorchamps, Belgium, Thursday. Yves Herman/Reuters

Market Closes for August 20^th, 2015

Market Index	Close	Change
Dow Jones	16990.82	-357.91   -2.06%
S&P 500	2040.85	-38.76   -1.86%
NASDAQ	4877.488	-141.563   -2.82%
TSX	13761.94	-274.69
		-1.96%

International Markets

Market Index	Close	Change
NIKKEI	20033.52	-189.11
		-0.94%
HANG SENG	22757.47	-410.38
		-1.77%
SENSEX	27607.82	-323.82
		-1.16%
FTSE 100	6367.89	-35.56
		-0.56%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.293	1.316
CND. 30 Year Bond	2.018	2.050
U.S.    10 Year Bond	2.0748	2.1239
U.S. 30 Year Bond	2.7482	2.8099

Currencies

BOC Close	Today	Previous
Canadian $	0.76413	0.76237
US $	1.30868	1.31170
Euro Rate 1 Euro=		Inverse
Canadian $	1.47078	0.67991
US $	1.12386	0.88979

Commodities

Gold	Close	Previous
London Gold Fix	1147.70	1126.15
Oil	Close	Previous
WTI Crude Future	41.37	40.80

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks joined a global selloff in equities, falling to the lowest since December as the rout in emerging markets spread.

     The benchmark equity gauge slumped a fourth day, as equities around the world tumbled on intensifying concern that global growth is slowing. Canadian energy producers decreased 2.7 percent, extending a 2009 low. Barrick Gold Corp. jumped as gold rallied to the highest in more than a month as investors sought safety.

     The Standard & Poor’s/TSX Composite Index fell 299.63 points, or 2.1 percent, to 13,737 at 4 p.m. in Toronto, the lowest level since Dec. 15. The benchmark Canadian equity gauge has fallen 6.1 percent this year.

     The MSCI All-Country World Index of developing and developed markets declined a third session to a January low.

     Selling in emerging-market currencies intensified after Kazakhstan switched to a free float for the tenge, triggering a 23 percent slide. It’s the latest sign emerging nations will stop defending their currencies after China devalued the yuan, roiling markets and highlighting risks in emerging markets.

     Commodities producers are the worst-performing industries in the S&P/TSX this year with energy producers pacing declines with an 22 percent drop. Crude has slumped more than 30 percent from this year’s June peak and metals from copper to gold have declined amid concern global growth is slowing.

     Canadian Pacific Railway Ltd. tumbled 3.5 percent and Canadian National Railway Co. retreated 2.7 percent as industrials stocks slumped the most in the S&P/TSX. North American commodity carloads fell 5.8 percent in the week ended Aug. 15, according to a Bloomberg Intelligence report.

     Bank of Nova Scotia declined 2.2 percent and Royal Bank of Canada lost 1.2 percent. The nation’s largest lenders begin reporting third-quarter earnings next week.

     Valeant Pharmaceuticals International Inc. sank 6.7 percent after agreeing to buy female libido-drug developer Sprout Pharmaceuticals Inc. for $1 billion. Sprout received approval to sell the pill this week from U.S. regulators

US

By Callie Bost and Oliver Renick

     (Bloomberg) — The Standard & Poor’s 500 Index tumbled the most since February 2014, sending it below a trading range that has supported it for most of the year amid intensifying concern that global growth is slowing.

     The S&P 500 slipped out of the 70-point trading range it has been stuck in since March, falling below 2,040 to as low as 2,035.73. The gauge erased its gain for the year and is now 4.5 percent below its May record. The benchmark slid through its average price for the past 200 days for the fourth time this month, failing to rise back above it by the close for the first time since July 9.

     “Until today we’ve had nothing to break us out of the bottom or top end of the trading range,” Frank Ingarra, head trader at Greenwich, Connecticut-based NorthCoast Asset Management LLC, said by phone. “The question is if this is the catalyst that will break us to the downside or if we’ll go back into the range.”

     Other major indexes also tumbled. The Dow Jones Industrial Average lost 358.04 points, or 2.1 percent, to 16,990.69, the lowest level since October. The Nasdaq 100 Index retreated 2.8 percent, with only four members advancing. The Chicago Board Options Exchange Volatility Index rose for a fourth day, heading for its biggest weekly gain of 2015.

     Netflix Inc. lost 7.8 percent as investors targeted the biggest winners of the year. Media stocks entered a correction as Walt Disney Co. tumbled 6 percent amid an analyst downgrade. The Nasdaq Biotechnology Index also entered a correction, falling more than 10 percent from a record set a month ago. The Philadelphia Semiconductor Index slid into a bear market, plunging more than 20 percent from a June peak.                   
     U.S. equities had held their ground throughout 2015, weathering turmoil from Greece and headwinds including a strong dollar that threatened multinationals’ earnings and a more than 60 percent drop in oil prices.

     The S&P 500 stuck within a range roughly tracking its 50-, 100- and 200-day moving averages, boosted by signs the economy is recovering and support from central banks. The S&P 500 hasn’t had a decline of more than 5 percent all year, and hasn’t dropped more than 10 percent since 2011.

     The index today plunged below the 200-day moving average as the rout in emerging markets intensified, with Kazakhstan becoming the latest country to stop defending its currency, as developing nations struggle to overcome plunging prices for commodity exports and China’s shock devaluation.

     Currency weakness and a slowdown in Chinese growth prompted Citigroup to cut its 2016 global growth forecast to 3.1 percent from 3.3 percent, its third consecutive downgrade, while holding its 2015 estimate at 2.7 percent.

     “Right now there are so many more concerns than hopes,” said Larry Peruzzi, director of international trading at Cabrera Capital Markets LLC in Boston. “There are global growth concerns, Fed minutes created some uncertainty about rates, and also playing a part is oil poised to dip below $40.”

     Slower growth may cause the Fed to delay its first interest rate increase since 2006. Minutes of the central bank’s latest meeting, released yesterday, showed officials are concerned about stubbornly low inflation even as the job market improves. Traders are now pricing in a 34 percent probability of a rate move at the September meeting, down from 50 percent before the release of the minutes.

     Led by a 7.8 percent plunge in Netflix, companies that have come to be known as the Fab Five saw $49 billion in market value erased Thursday, the most since Jan. 2013. Losses in Facebook Inc., Amazon.com Inc., Google Inc. and Apple Inc. pushed the Nasdaq 100 down the most since April 2014.

     “You’re finally starting to see the untouchable stocks — some of the biggest weighting of the market — get touched,”  said Jonathan Krinsky, chief market technician at MKM Holdings LLC. “Eventually the market needed to correct and for that to happen, the larger-cap stocks needed to get hit. We’re finally seeing that happen.”

     The VIX jumped 26 percent to 19.14. The volatility gauge has rallied 49 percent over four days, heading for its biggest weekly advance since December.

     All 10 major groups in the S&P 500 retreated. Financial companies dropped 2.1 percent, and technology and consumer- discretionary shares slid more than 2.4 percent.

     Disney fell 6 percent to the lowest since February after Sanford C. Bernstein & Co. downgraded the entertainment company to market perform from outperform.

     Eli Lilly & Co. rallied 4.3 percent. A diabetes drug sold by Lilly and Boehringer Ingelheim GmbH lowered the risk of heart attacks, stroke and death in a large trial of adults with type 2 diabetes, compared with the standard of care alone. The results could give the companies an advantage in a market crowded with diabetes treatments. Merck & Co. slid 4.5 percent.

     “We have been conditioned to buying on the dip,” said Quincy Krosby, a market strategist for Newark, New Jersey-based Prudential Financial Inc., which oversees more than $1 trillion. “What’s happening is that investors want that dip deeper. It’s no longer a knee-jerk reaction to buy on the dip because the Fed will underpin the market. Investors are being much more cautious and not as sure that the Fed will be there.”

 

Have  a wonderful evening everyone.

 

Be magnificent!

Your way is very good for you, but not for me.

My way is good for me, but not for you.

Swami Vivekananda

As ever,

 

Carolann

Insanity is often the logic of an accurate mind overtasked.

                       -Oliver Wendell Holmes, Sr., 1809-1894

 

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM

Portfolio Manager &

Senior Vice-President

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

On this day in 1964, The Beatles kicked off their first American tour at San Francisco’s Cow Palace.

1871: Orville Wright, aviator, was born.
1946: Bill Clinton, 42^nd president was born.

The saying, “Getting there is half the fun” became obsolete with the advent of commercial airlines. –Henry Tillman.

Numbers:
30
The number of text messages sent or received by the average US teen on a typical day. (Pew Research Ctr.)
25
Average monthly disposable income (in US dollars) in Cuba, after taxes.  More than 2,000 Cubans have registered their homes for short-term tourist stays through the online service Airbnb, charging multiples of that amount.
17000
Fewer children die each day than in 1990.  In 2013, the mortality rate for children under 5 years of age in all developing countries was cut in half (from 99 deaths per 1,000 births in 1990).  Still, current trends suggest developing countries will short of the United Nations Millennium Development Goal of reducing under-5 mortality by two-thirds by the end of 2015. (World Bank)

PHOTOS OF THE DAY

The Stad Amsterdam clipper ship sails during the Sail-In Parade Wednesday marking the beginning of Sail Amsterdam 2015, a nautical festival held every five years in the Netherlands. Toussaint Kluiters/United Photos/Reuters

Children sign their name and draw on a giant board during the Vacation for Everyone event at the Eiffel Tower in Paris Wednesday. The French charity Secours Populaire brought children from dozens of different countries, including those living through war, poverty or natural disasters, to join French kids for a day of summer fun, allowing even those with limited means to take a vacation at the height of the French holiday season. Francois Mori/AP

Market Closes for August 19^th, 2015

Market Index	Close	Change
Dow Jones	17348.86	-162.48   -0.93%
S&P 500	2084.89	-12.03   -0.57%
NASDAQ	5019.051	-40.296   -0.80%
TSX	14039.74	-154.13
		-1.09%

International Markets

Market Index	Close	Change
NIKKEI	20222.63	-331.84
		-1.61%
HANG SENG	23167.85	-307.12
		-1.31%
SENSEX	27931.64	+100.10
		+0.36%
FTSE 100	6403.45	-122.84
		-1.88%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.316	1.399
CND. 30 Year Bond	2.050	2.100
U.S.    10 Year Bond	2.1239	2.1943
U.S. 30 Year Bond	2.8099	2.8602

Currencies

BOC Close	Today	Previous
Canadian $	0.76237	0.76571
US $	1.31170	1.30598
Euro Rate 1 Euro=		Inverse
Canadian $	1.45876	0.68551
US $	1.11211	0.89919

Commodities

Gold	Close	Previous
London Gold Fix	1126.15	1111.45
Oil	Close	Previous
WTI Crude Future	40.80	42.62

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — The rout in Canadian energy producers worsened amid concern the global supply glut will persist, sending the nation’s benchmark stock index to a third day of losses.

     Energy stocks tumbled to an April 2009 low and a seventh day of losses as an unexpected increase in U.S. crude stockpiles sent oil prices deeper into a bear market. West Texas Intermediate in New York tumbled 4.3 percent to the lowest level in more than six years.

     Stocks also fell amid increasing anxiety over deteriorating overseas markets. The selloff gripping emerging markets isn’t letting up as stocks drop to four-year lows and countries including Vietnam and Kazakhstan weaken their currencies to adjust to the fallout from China’s devaluation.

     The Standard & Poor’s/TSX Composite Index fell 157.24 points, or 1.1 percent, to 14,036.63 at 4 p.m. in Toronto, the biggest decline since July 27. The benchmark Canadian equity gauge has fallen 4.1 percent this year.

     Crescent Point Energy Corp. fell 6.7 percent and Baytex Energy Corp. sank 17 percent as energy stocks retreated 3.5 percent as a group, the most since January. Oil plunged as the Energy Information Administration said U.S. crude supplies rose 2.62 million barrels last week. An 820,000 barrel stockpile decline was projected by analysts surveyed by Bloomberg.

     Commodities producers are the worst-performing industries in the S&P/TSX this year with energy producers pacing declines with an 18 percent drop. Crude has slumped more than 30 percent from this year’s June peak and metals from copper to gold have declined amid concern global growth is slowing.

     Bombardier Inc. lost 2.5 percent, extending a 1991 low. The struggling aerospace manufacturer has slumped for five sessions and is the second-worst performing stock in the S&P/TSX this year with a 71 percent slide.

US

By Callie Bost and Oliver Renick

     (Bloomberg) — A midafternoon rally in U.S. stocks faded as encouragement from Federal Reserve minutes proved fleeting and investors refocused on China and the global economy.

     Stocks briefly trimmed losses as Fed minutes showed policy makers judged conditions for higher rates haven’t been met yet. While that reduced speculation the central bank will raise rates at its next gathering, China’s shock devaluation continued to roil emerging-market assets and threatened to slow global growth amid a rout in commodities.

     “No matter what you’re going to get a knee-jerk reaction,” Steve Bombardiere, an equity trader at Conifer Securities LLC in New York, said by phone. “Trading is so thin it’s easy to push things around but there is some nervousness now with commodities getting weaker and China seeming like it’s losing a little control.”

     The Standard & Poor’s 500 Index fell 0.8 percent to 2,079.61 at 4 p.m. in New York, hovering above its average price for the past 200 days. The gauge nearly erased all of its losses after the minutes were released, before it resumed a slide. The Dow Jones Industrial Average lost 162.61 points, or 0.9 percent, to 17,348.73.

     Caterpillar Inc. and Freeport-McMoRan Inc. paced declines as raw-material and industrial shares slumped more than 1 percent as a group. Energy shares tumbled the most since January as an unexpected increase in U.S. crude stockpiles sent oil prices deeper into a bear market.

     Investor anxiety over deteriorating overseas markets is returning to American equities after a week of relative calm. The selloff gripping emerging markets isn’t letting up as stocks drop to four-year lows and countries including Vietnam and Kazakhstan weaken their currencies to adjust to the fallout from China’s devaluation. Meanwhile, oil has tumbled more than 30 percent since this year’s peak amid signs that producers are maintaining output despite surpluses.

     U.S. stocks slumped with global equities, as the MSCI All- Country World Index dropped 0.9 percent and the Stoxx Europe 600 Index tumbled 1.8 percent. The Chicago Board Options Exchange Volatility Index, known as the VIX, rose 11 percent to 15.25 for its third day of gains.

     Concerns about global growth are increasing as the Fed considers the timing of its first interest rate increase since 2006. Officials said last month that while conditions for raising interest rates were approaching, they saw more room for labor market healing and need more confidence that inflation is moving toward their goal, according to Fed minutes released Wednesday.

     “Almost all voters needed more evidence on inflation,” said Anthony Valeri, a market strategist with LPL Financial Corp. in San Diego. “Since the meeting, inflation expectations have declined, the dollar has increased further and China has devalued its currency. All of those would argue inflation is less of a risk now than it was at the time of the meeting. That would argue against a Fed rate hike.”

     The Fed gathering preceded China’s surprise devaluation on Aug. 11 that prompted some investors to scale back bets on a rate increase in September. Those odds were reduced further on Wednesday, with traders pricing in a 36 percent probability of a rate move next month.

     Data earlier in the day showed the cost of living in the U.S. rose in July at the slowest pace in three months, casting doubt on how quickly inflation will return toward the Fed’s goal.

     Oil’s plunge will probably hold down inflation in the coming months. When combined with a stronger dollar and slower growth overseas, the energy slump will make the Fed’s 2 percent inflation target even more elusive.                         

     The benchmark measure is stuck in the tightest trading range since 1927. Some momentum trades that worked well for investors earlier this year are showing signs of unraveling. A Citigroup Inc. index that tracks U.S. momentum stocks like Apple Inc. and Netflix Inc. fell last week.

     Despite the gloom, some fund managers aren’t shying away from U.S. stocks, citing confidence in the economy and the American consumer. The S&P 500 is still up 1 percent for 2015, and is less than 2.5 percent away from a record reached in May.

     Eight of 10 major groups in the S&P 500 dropped on Wednesday. Energy shares slid 2.8 percent as data showed U.S. crude inventories rose 2.62 million barrels last week, according to the Energy Information Administration. Analysts projected a 820,000 barrel decline in stockpiles.

     Target Corp. rose 0.7 percent, paring an earlier rally of 5.4 percent. While second-quarter earnings beat estimates, the retailer said on a conference call that it’s having difficulties with items being out of stock.

     As the earnings season winds down, about 74 percent of the S&P 500 members that have reported so far beat profit estimates, while 48 percent topped sales projections.

     Yum! Brands Inc. rose 2.2 percent after saying Mickey Pant will succeed Sam Su as chief executive officer of its China unit.
 

Have a wonderful evening everyone.

 

Be magnificent!

Truth resides in the heart of every man.

And it is there that he must seek it, in order to be guided by it so that,

at the least, it will appear to him.

But we do not have the right to force others to see the Truth in our way.

Mahatma Gandhi

 

As ever,

 

Carolann

 

Procrastination is the thief of time.

         -Edward Young, 1683-1765

 

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM

Portfolio Manager &

Senior Vice-President

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

In case you missed it, the following article appeared in The New York Times last Sunday, August 16^th, 2015:

The Closing of the Canadian Mind

  The prime minister of Canada, Stephen Harper, has called an election for Oct. 19, but he doesn’t want anyone to talk about it.

  He has chosen not to participate in the traditional series of debates on national television, confronting his opponents in quieter, less public venues, like the scholarly Munk Debates and CPAC, Canada’s equivalent of CSPAN. His own campaign events were subject to gag orders until a public outcry forced him to rescind the forced silence of his supporters.

  Mr. Harper’s campaign for re-election has so far been utterly consistent with the personality trait that has defined his tenure as prime minister: his peculiar hatred for sharing information.

  Americans have traditionally looked to Canada as a liberal haven, with gun control, universal health care and good public education.

  But the nine and half years of Mr. Harper’s tenure have seen the slow-motion erosion of that reputation for open, responsible government. His stance has been a know-nothing conservatism, applied broadly and effectively. He has consistently limited the capacity of the public to understand what its government is doing, cloaking himself and his Conservative Party in an entitled secrecy, and the country in ignorance.

  His relationship to the press is one of outright hostility. At his notoriously brief news conferences, his handlers vet every journalist, picking and choosing who can ask questions. In the usual give-and-take between press and politicians, the hurly-burly of any healthy democracy, he has simply removed the give.

  Mr. Harper’s war against science has been even more damaging to the capacity of Canadians to know what their government is doing. The prime minister’s base of support is Alberta, a western province financially dependent on the oil industry, and he has been dedicated to protecting petrochemical companies from having their feelings hurt by any inconvenient research.

  In 2012, he tried to defund government research centers in the High Arctic, and placed Canadian environmental scientists under gag orders. That year, National Research Council members were barred from discussing their work on snowfall with the media. Scientists for the governmental agency Environment Canada, under threat of losing their jobs, have been banned from discussing their research without political approval. Mentions of federal climate change research in the Canadian press have dropped 80 percent. The union that represents federal scientists and other professionals has, for the first time in its history, abandoned neutrality to campaign against Mr. Harper.

  His active promotion of ignorance extends into the functions of government itself. Most shockingly, he ended the mandatory long-form census, a decision protested by nearly 500 organizations in Canada, including the Canadian Medical Association, the Canadian Chamber of Commerce and the Canadian Catholic Council of Bishops. In the age of information, he has stripped Canada of its capacity to gather information about itself. The Harper years have seen a subtle darkening of Canadian life.

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  The darkness has resulted, organically, in one of the most scandal-plagued administrations in Canadian history. Mr. Harper’s tenure coincided with the scandal of Rob Ford, the mayor of Toronto who admitted to smoking crack while in office and whose secret life came to light only when Gawker, an American website, broke the story. In a famous video at a Ford family barbecue, Mr. Harper praised the Fords as a “Conservative political dynasty.”

  Mr. Harper’s appointments to the Senate — which in Canada is a mercifully impotent body employed strictly for political payoffs — have proved greedier than the norm. Mr. Harper’s chief of staff was forced out for paying off a senator who fudged his expenses. The Mounties have pressed criminal charges.

  After the 2011 election, a Conservative staffer, Michael Sona, was convicted of using robocalls to send voters to the wrong polling places in Guelph, Ontario. In the words of the judge, he was guilty of “callous and blatant disregard for the right of people to vote.” In advance of this election, instead of such petty ploys, the Canadian Conservatives have passed the Fair Elections Act, a law with a classically Orwellian title, which not only needlessly tightens the requirements for voting but also has restricted the chief executive of Elections Canada from promoting the act of voting. Mr. Harper seems to think that his job is to prevent democracy.

  But the worst of the Harper years is that all this secrecy and informational control have been at the service of no larger vision for the country. The policies that he has undertaken have been negligible — more irritating distractions than substantial changes. He is “tough on crime,” and so he has built more prisons at great expense at the exact moment when even American conservatives have realized that over-incarceration causes more problems than it solves. Then there is a new law that allows the government to revoke citizenship for dual citizens convicted of terrorism or high treason — effectively creating levels of Canadianness and problems where none existed.

  For a man who insists on such intense control, the prime minister has not managed to control much that matters. The argument for all this secrecy was a technocratic impulse — he imagined Canada as a kind of Singapore, only more polite and rule abiding.

  The major foreign policy goal of his tenure was the Keystone Pipeline, which Mr. Harper ultimately failed to deliver. The Canadian dollar has returned to the low levels that once earned it the title of the northern peso. Despite being left in a luxurious position of strength after the global recession, he coasted on what he knew: oil. In the run-up to the election, the Bank of Canada has announced that Canada just had two straight quarters of contraction — the technical definition of a recession. He has been a poor manager by any metric.

  The early polls show Mr. Harper trailing, but he’s beaten bad polls before. He has been prime minister for nearly a decade for a reason: He promised a steady and quiet life, undisturbed by painful facts. The Harper years have not been terrible; they’ve just been bland and purposeless. Mr. Harper represents the politics of willful ignorance. It has its attractions.

  Whether or not he loses, he will leave Canada more ignorant than he found it. The real question for the coming election is a simple but grand one: Do Canadians like their country like that?

                                      -by Stephen Marche, A novelist and a columnist at Esquire Magazine who lives in Toronto.

PHOTOS OF THE DAY

Dancers from the ‘Legend Lin Dance Theatre’ perform the artistic director and choreographer Li-chen Lin’s classic works ‘Hymne aux Fleurs qui Passent, Anthem to the Fading Flowers’ during a rehearsal at the National Theater Concert Hall in Taipei, Taiwan, Tuesday. The piece pays tribute to the cycle of the year and the complementary principles of Yin and Yang whose eternal struggle provides the driving force behind the changing of the seasons. Chiang Ying-ying/AP 

Ants carry a leaf with a slogan reading ‘Forest = Future’ at the zoo in Cologne, Germany, Tuesday. Some of the zoo’s 500,000 leaf-cutting ants carry laser-cut leaves with slogans during a campaign to protect the Amazon rain forest organized by the German branch of World Wide Fund for Nature (WWF) and the Cologne Zoo. Ina Fassbender/Reuters

Market Closes for August 18^th, 2015

Market Index	Close	Change
Dow Jones	17511.34	-33.84   -0.19%
S&P 500	2096.13	-6.31   -0.30%
NASDAQ	5059.348	-32.352   -0.64%
TSX	14196.04	-55.49
		-0.39%

International Markets

Market Index	Close	Change
NIKKEI	20554.47	-65.79
		-0.32%
HANG SENG	23474.97	-339.68
		-1.43%
SENSEX	27831.54	-46.73
		-0.17%
FTSE 100	6526.29	-24.01
		-0.37%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.399	1.372
CND. 30 Year Bond	2.100	2.078
U.S.    10 Year Bond	2.1943	2.1678
U.S. 30 Year Bond	2.8602	2.8176

Currencies

BOC Close	Today	Previous
Canadian $	0.76571	0.76429
US $	1.30598	1.30840
Euro Rate 1 Euro=		Inverse
Canadian $	1.44028	0.69431
US $	1.10286	0.90673

Commodities

Gold	Close	Previous
London Gold Fix	1111.45	1118.80
Oil	Close	Previous
WTI Crude Future	42.62	41.87

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — The deepening rout in commodities from copper to silver sent Canadian stocks to a three-week low.

     The miners and energy producers that make up about one- third of Canada’s benchmark stock index led losses as metals prices plunged to levels last seen in 2009 amid signs China’s economy is weakening further. China is the world’s biggest consumer of commodities and Canada’s second-largest trading partner.

     The Standard & Poor’s/TSX Composite Index fell 57.66 points, or 0.4 percent, to 14,193.87 at 4 p.m. in Toronto, the lowest level since July 28. The benchmark Canadian equity gauge has fallen 3 percent this year.

     The Bloomberg Commodity Index, a basket of 22 raw materials including crude and gold, tumbled 0.6 percent for a sixth straight decline. The gauge is trading at a 2002 low and has slumped 14 percent this year.

     Materials producers sank 1.7 percent, as Teck Resources Ltd., the biggest diversified miner in Canada, dropped 8 percent and First Quantum Minerals Ltd. sank 9.7 percent.

     Commodities producers are the worst-performing industries in the S&P/TSX this year as crude has slumped more than 30 percent from this year’s June peak into a bear market and metals from copper to gold have declined amid concern global growth is slowing.

     Commodities selling resumed today after shares in Shanghai sank 6.2 percent, the most in three weeks, as investors lowered expectations for further monetary stimulus. China is growing more slowly than official data suggests and below potential, a Bloomberg survey indicates.

     Bombardier Inc. slumped 6.2 percent for a fourth day of losses, extending a 1993 low. The stock has plunged 71 percent this year and is the second-worst performing stock in the S&P/TSX ahead of Trican Well Service Ltd.

US

By Callie Bost

     (Bloomberg) — U.S. stocks fell as concern over slowing growth in China and other developing nations amid a deepening commodities selloff overshadowed improvements in America’s housing market.

     Freeport McMoRan Inc. dropped 3.1 percent as copper prices tumbled. Wal-Mart Stores Inc. fell 3.4 percent after cutting its annual earnings forecast, while Home Depot Inc. added 2.6 percent after boosting its outlook. Homebuilders extended yesterday’s rally, with Lennar Corp. and Toll Brothers Inc. pacing gains.

     The Standard & Poor’s 500 Index fell 0.3 percent to 2,096.92 at 4 p.m. in New York. The Dow Jones Industrial Average lost 33.84 points, or 0.2 percent, to 17,511.34. About 5.5 billion shares changed hands on U.S. exchanges, 16 percent below the three-month average.

     “We’re seeing China dominating headlines and concern the consumer is not all in right now,” said Bill Schultz, who oversees $1.2 billion as chief investment officer at McQueen, Ball & Associates Inc. in Bethlehem, Pennsylvania. “Until this economic environment and earnings stabilize, we’re going to continue to see the back-and-forth in stocks.”

     Copper led a slide in commodities on speculation the global fuel glut will persist and China’s economy will face further headwinds. The declines come a week after China’s first major currency devaluation since 1994 surprised global investors and fueled concern authorities are struggling to combat a slowdown in the world’s second-largest economy.                        

     Concern over the impact on global growth comes as the Federal Reserve is signaling it will raise interest rates this year. The central bank releases minutes from its July meeting on Wednesday, with market expectations of a September rate hike falling to about 48 percent from about 50 percent last week.

     The S&P 500 continues to trade in the tightest range in nine decades, and is hovering around its average price for the past 100 days. The index is about 1.6 percent below its all-time high reached May 21.

     “You can’t get any definitive traction in the market one way or another,” said Mark Luschini, chief investment strategist in Philadelphia at Janney Capital Management LLC, which oversees about $68 billion. “You don’t feel the impetus to invest money because it looks like the market will run away from you, but at the same time it doesn’t cause enough selling pressure because investors feel economic strength is decent and profit growth is OK.”

     The S&P 500 rose 0.5 percent on Monday as data showing strong confidence among U.S. homebuilders helped reverse earlier losses spurred by weak manufacturing in the New York region.                        

     Futures pared losses early today after data showed new-home construction in the U.S. climbed in July to the highest level in almost eight years. A drop in permits, a proxy for future construction, signals additional gains will take time to develop.

     Homebuilder stocks in the S&P 500 added 2.1 percent, posting their best two-day rally since January. Lennar and Toll Brothers surged more than 2.7 percent.

     Up 19 percent in 2015 to the highest level since 2006, the S&P Supercomposite Homebuilding Index has climbed in seven of the last eight days. The group’s 13 members rose yesterday as the National Association of Home Builders/Wells Fargo said its builder sentiment gauge advanced to the highest since November 2005.

     Home Depot climbed 2.6 percent to a record. The world’s largest home-improvement retailer is benefiting from 40 straight months of rising U.S. housing prices, which make homeowners more confident about investing in their dwellings. Americans also may be betting on future gains, since home prices still haven’t returned to their 2006 peak.

     Wal-Mart dropped the most since May. Chief Executive Officer Doug McMillon is coping with a strong dollar overseas, which has cut into revenue. He’s also raised wages in the U.S., aiming to retain more employees and improve customer service.

     About three-quarters of S&P 500 members that have reported so far this earnings season beat profit estimates, while almost half topped sales projections. Analysts expect a 2.1 percent drop in second-quarter earnings, according to an August 14 Bloomberg survey.

     The Chicago Board Options Exchange Volatility Index rose 5.9 percent to 13.79 for its second day of gains.

     Eight of 10 main S&P 500 industries declined, with technology and raw-materials shares dropping more than 0.5 percent.

     Semiconductor stocks slid 1.9 percent as Micron Technology Inc. slumped 4.9 percent, SanDisk Corp. lost 2.2 percent and Skyworks Solutions Inc. tumbled 5.8 percent. Bank of America Merrill Lynch analyst Simon Woo wrote in a note today that he is cautious on the memory chip sector given high capital expenditure targets.

     Energy shares pared a steeper loss of as much as 0.9 percent after oil rebounded on speculation that a government report will show that U.S. crude inventories declined for a fourth week.
 

Have a wonderful evening everyone.

 

Be magnificent!

To go from opinion to perception,

from imagination to fact, from illusion to reality,

from something that is not there,

to something that is;

that is the way forward.

Swami Prajnanpad

As ever,

 

Carolann

One can acquire everything in solitude except character.

                                               -Stendhal, 1783-1842

 

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM

Portfolio Manager &

Senior Vice-President

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7