Month: December 2015

Dear Friends,

Tangents:

Wishing everyone a very Happy New Year!!
  

Market Closes for December 30^th, 2015

Market Index	Close	Change
Dow Jones	17603.87	-117.11   -0.66%
S&P 500	2063.36	-15.00   -0.72%
NASDAQ	5065.848	-42.090   -0.82%
TSX	13142.29	-103.46
		-0.78%

International Markets

Market Index	Close	Change
NIKKEI	19033.71	+51.48
		+0.27%
HANG SENG	21882.15	-117.47
		-0.53%
SENSEX	25960.03	-119.45
		-0.46%
FTSE 100	6274.05	-40.52
		-0.64%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.401	1.408
CND. 30 Year Bond	2.157	2.172
U.S.    10 Year Bond	2.2943	2.3050
U.S. 30 Year Bond	3.0335	3.0359

Currencies

BOC Close	Today	Previous
Canadian $	0.72039	0.72263
US $	1.38814	1.38383
Euro Rate 1 Euro=		Inverse
Canadian $	1.51667	0.65934
US $	1.09259	0.91526

Commodities

Gold	Close	Previous
London Gold Fix	1060.00	1070.10
Oil	Close	Previous
WTI Crude Future	36.60	37.87

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks slipped the most in two weeks, as commodities producers retreated with oil and gold tumbled to leave the benchmark index on track for its first annual loss in four years.

     Canadian Natural Resources Ltd. and Encana Corp. retreated at least 2.6 percent to lead energy producers lower. Crude futures tumbled 3.4 percent in New York, resuming a slide after a government report showed stockpiles unexpectedly rose. Raw- materials producers lost 1.3 percent as a group. Barrick Gold Corp. fell 2.3 percent and Goldcorp Inc. decreased 1.4 percent as gold futures in New York declined.

     The prospect of tighter monetary policy in the U.S. — traders have increased expectations the Federal Reserve will raise interest rates again in March — bolsters the dollar, reducing demand for precious metals. Energy and materials producers account for about one-third of the weighting in Canada’s equity index.

     The Standard & Poor’s/TSX Composite Index lost 0.8 percent, or 103.34 points, to 13,142.41 at 4 p.m. in Toronto, extending a monthly decline to 2.4 percent. Trading volume Tuesday was 55 percent lower than the 30-day average.

     Canadian equities joined a slide in global markets as the MSCI All-Country World Index extended its first annual decline since 2011. The S&P/TSX has lost 10 percent this year, ahead of only Singapore and Greece among the worst-performing developed markets in the world.

     Energy producers remain the worst-performing among 10 groups in the S&P/TSX this year, down 26 percent as slowing economic growth in China and Europe and a supply glut in crude battered commodities prices around the world. West Texas Intermediate is headed for its biggest two-year drop on record. Equity valuations in the S&P/TSX have declined 11 percent to about 20.3 times earnings from a 2015 high of 22.7 in April, according to data compiled by Bloomberg.

     Ballard Power Systems Inc. advanced 5.1 percent to a six- month high after the fuel cell company said its Protonex unit had sold an additional 400 battlefield power kits to the U.S. Army.

US

By Jeremy Herron and Anna-Louise Jackson

     (Bloomberg) — Global stocks extended their first annual slide in four years as oil resumed a retreat amid data showing an increase in American inventories. The dollar gained versus commodity currencies.

     U.S. stocks fell from a three-week high amid trading that was more than 40 percent below the 30-day average. European equities extended their worst December drop since 2002, while emerging-market equities sank as oil fell below $37 a barrel in New York on data showing an increase in American inventories. The Russian ruble and Brazil’s real led a retreat in currencies. The dollar strengthened.

     “There just aren’t enough people at the switch today,” said Matt Maley, an equity strategist at Miller Tabak & Co LLC in New York. “We had a nice rally yesterday, and oil is down, so maybe investors are thinking they’ll take some chips off the table.vYear-end is even thinner than it usually is because it’s coming before a long weekend.”

     Global equities are heading for their first decline in four years as a slowdown in the Chinese economy fueled the biggest retreat in raw materials prices in seven years at the same time the Federal Reserve ended its zero interest-rate policy. The Bloomberg Commodity Index is down 25 percent in 2015, while global bonds have returned 0.8 percent, according to the Bank of America Merrill Lynch Global Broad Market Index. The Standard & Poor’s 500 Index clung to a 0.2 percent annual gain, while emerging-market equities have plunged 17 percent.

     The S&P 500 fell 0.7 percent at 4 p.m. in New York after rallying 1.1 percent Tuesday. The index extended losses in afternoon trading, with declines halting at the gauge’s average price for the past 200 days. The benchmark has lost 0.8 percent in December amid the Fed’s first rate increase in nearly a decade.

     “There are so few players out there, so few books open and so few new positions being taken, so anything could happen in an illiquid environment,” said Andrew Brenner, head of international fixed income for National Alliance Capital Markets in New York. “I don’t see us giving back yesterday’s gains, we might give back some, but I tend to think the market will be higher today.”

     If the S&P 500 closes 2015 higher, it will be its fourth consecutive annual gain, while a loss would make it the worst year since 2008. The index has risen as much as 3.5 percent in the year and was down 9.3 percent at its low in August. It closed yesterday 2.5 percent away from an all-time high set in May.

     The Stoxx Europe 600 Index lost 0.5 percent, after climbing 1.4 percent on Tuesday. The number of shares changing hands was about half the 30-day average. Markets will shut on Friday for New Year. Some including Germany, Switzerland and Italy, will also close Thursday for New Year’s Eve, while others will have shorter trading hours.

     Declines for European equities left them 5 percent lower for the month. While stocks recouped some losses in the final weeks of the year, that hasn’t been enough to reverse a slide earlier this month stoked partly by disappointing European Central Bank stimulus measures. Still, the Stoxx 600 is heading for its fourth straight annual advance.

     Oil fell after industry data showed an unexpected increase in crude inventories last week. West Texas Intermediate dropped 3.4 percent to settle at $36.60 a barrel. The contract is down 31 percent this year. Brent slid 2.9 percent to $36.68. 

     U.S. Energy Information Administration data showed an unexpected build in U.S. crude stockpiles, adding to the glut of supplies that’s pushed prices down below $40 a barrel.

     Natural gas futures retreated for the first time in five days after U.S. weather forecasts for January predicted milder weather, bolstering concern that a supply glut for the heating fuel will persist. U.S. natural gas fell after reaching a six- week high Tuesday, as February futures dropped 6.6 percent to settle at $2.214 per million British thermal units.

     U.S. 10-year Treasuries were little changed, with yields at 2.30 percent. The rate on the notes jumped eight basis points in the previous session. Demand for government securities is waning as the Federal Reserve begins raising interest rates.

     The Treasury’s final three auctions of coupon-bearing notes this year drew some of the lowest investor demand since the financial crisis with the Federal Reserve on course to raise interest rates several times next year, potentially lowering the value of the debt.

Puerto Rico will default on about $37 million in bond payments due Jan. 1 and divert revenue to make others, escalating a conflict with investors as Governor Alejandro Garcia Padilla seeks to restructure a $70 billion debt burden.

     The MSCI Emerging Markets Index fell 1.1 percent for a third day of losses that brought its retreat this year to 17 percent, the most since 2011. All 10 industry groups retreated Wednesday, with energy shares leading declines.

     Sentiment toward emerging-market assets turned more bearish as oil slumped and concern lingered that the slowdown in China will affect global growth. Chinese shares in Hong Kong extended the biggest sell-off in Asia this year on concern the nation’s deepening economic slowdown will sap corporate earnings. After China’s suspension of cross-border yuan operations, the currency’s exchange rates at home and abroad diverged by the most in three months.

     Russia’s ruble and the South African rand weakened at least 1.6 percent versus the dollar, leading declines in emerging currencies, which slid for a third day. A Bloomberg gauge of 20 emerging currencies slid 0.6 percent for a third day of losses. Brazil’s real added to a fifth annual drop as oil prices tumbled and an increase in the minimum wage fueled concern that the country’s fiscal situation will worsen.

Have a wonderful evening everyone.

Be magnificent!
 

 “In order to carry a positive action we must develop here a positive vision.” Dalai Lama

 

As ever,
 

Karen, Leyla, & Bonnie

 

“Do not go where the path may lead, go instead where there is no path and leave a trail.”

Ralph Waldo Emerson

 

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:

PHOTOS OF THE DAY

Jockey David Noonan falls from Steady Eddie at the first fence during a hurdle race at Doncaster Racecourse in Doncaster England on Friday. Mike Egerton/PA/AP

Canada’s Prime Minister Justin Trudeau poses with airport staff as they await Syrian refugees to arrive at the Toronto Pearson International Airport in Mississauga, Ontario, Thursday. After months of promises and weeks of preparation, the first planeload of Syrian refugees was headed to Canada on Thursday, aboard a military plane to be met at Toronto’s airport by Trudeau. Mark Blinch/Reuters

Market Closes for December 29^th, 2015

Market Index	Close	Change
Dow Jones	17720.98	+192.71   +1.10%
S&P 500	2078.36	+21.86   +1.06%
NASDAQ	5107.938	+66.952   +1.33%
TSX	13245.75	-64.05
		-0.48%

International Markets

Market Index	Close	Change
NIKKEI	18982.23	+108.88
		+0.58%
HANG SENG	21999.62	+80.00
		+0.36%
SENSEX	26079.48	+45.35
		+0.17%
FTSE 100	6314.57	+59.93
		+0.96%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.408	1.414
CND. 30 Year Bond	2.172	2.166
U.S.    10 Year Bond	2.3050	2.2587
U.S. 30 Year Bond	3.0359	2.9888

Currencies

BOC Close	Today	Previous
Canadian $	0.72263	0.72204
US $	1.38383	1.38497
Euro Rate 1 Euro=		Inverse
Canadian $	1.51235	0.66122
US $	1.09276	0.91511

Commodities

Gold	Close	Previous
London Gold Fix	1070.10	1068.25
Oil	Close	Previous
WTI Crude Future	37.87	36.90

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks fell, snapping a five-day rally as the market re-opened following the Christmas holiday, as Valeant Pharmaceuticals International Inc. slumped after the embattled drugmaker’s chief executive took a medical leave of absence.

     Valeant, briefly the largest company in Canada by market capitalization this year, sank 11 percent for the biggest decline in seven weeks. Chief Executive Officer Michael Pearson, who was hospitalized with a severe case of pneumonia last week, will be replaced by a team of executives while he recovers from his illness, the company said Monday.

     The Standard & Poor’s/TSX Composite Index lost 0.5 percent, or 64.05 points, to 13,245.75 at 4 p.m. in Toronto, halting a five-day rally that added 2.3 percent to the gauge. The Canadian market was closed Monday for the Boxing Day holiday. Trading volume Tuesday was 45 percent lower than the 30-day average.

     Energy producers slipped 0.9 percent as crude in New York recovered after a 3.4 percent slide Monday. The industry remains the worst-performing among 10 in the S&P/TSX this year, down 25 percent as slowing economic growth in China and Europe and a supply glut in crude battered commodities prices around the world.

     Equity valuations in the S&P/TSX have declined 9.7 percent to about 20.5 times earnings from a 2015 high of 22.7 on April 15, according to data compiled by Bloomberg. The S&P/TSX is among the worst-performing developed equity markets this year, ahead of only Singapore and Greece. The benchmark is down 1.7 percent for December and 9.5 percent for the year, headed for the worst annual retreat since 2011.

     BlackBerry Ltd. added 2.4 percent, to a more than nine- month high, after ProPakistani reported Monday the smartphone maker may reach a deal to stay in Pakistan, according to unnamed sources. BlackBerry said Nov. 30 it will shutter its operations in the country to avoid allowing authorities there to monitor its main business enterprise server and e-mail messages.

     Uni-Select Inc., the second-best performing stock in the S&P/TSX this year with a 130 percent advance, rose to a record after the automotive replacement parts maker’s FinishMaster paint unit agreed to buy ColorMaster Automotive Paint assets Monday for an undisclosed amount.

     Laval, Quebec-based Valeant has plunged 60 percent from its August peak amid intense scrutiny from investors and lawmakers over its pricing practices, use of mail-order pharmacies and acquisitions for growth.

US

By Jeremy Herron and Anna-Louise Jackson

     (Bloomberg) — U.S. stocks advanced to a three-week high, helping trim the first annual loss for global equities since 2011, while Treasuries declined as oil led a rally among commodities.

     The Standard & Poor’s 500 Index halted a two-day slide as all 10 main groups climbed, and the MSCI All-Country World Index cut its loss for the year to 2.9 percent. European stocks trimmed their worst December drop since 2002. Oil gained above $37 a barrel amid forecasts for falling U.S. stockpiles. Yields on 10-year Treasury notes rose eight basis points to 2.31 percent, while a gauge of the dollar advanced.

     “This remains a Teflon market, it has been all year,” said Michael James, managing director of equity trading at Wedbush Securities Inc. in Los Angeles. “There have been plenty of negative headwinds that should’ve had the market significantly lower than it is now. And to be basically unchanged for the year is probably a net win-win for those that have a bullish mentality and bullish expectations for 2016.”

     Global equities are on track for the worst year since 2011, as the global oil glut and China’s economic weakness fanned the biggest annual drop in commodity prices in seven years. The rout in energy and resources is undermining corporate earnings and hindering central bank attempts to ignite inflation. The Bloomberg Commodity Index is down about 25 percent in 2015, while global bonds lost 2.4 percent, according to a Bank of America Merrill Lynch index. The S&P 500’s rally Tuesday left it higher by 1 percent this year.

     The S&P 500 rose 1.1 percent at 4 p.m. in New York, as technology shares surged 1.4 percent. Stocks are defying the historical trend of gains in the final month of the year, with the benchmark index down by 0.3 percent, after a series of sharp rallies and selloffs.

     Amazon.com Inc. paced gains among retailers for a second day, rising 2.9 percent to a record in post-holiday trading that was 37 percent below the 30-day average for this time of day. The so-called “FANG” stocks — Facebook Inc., Amazon, Netflix Inc. and Google’s parent Alphabet Inc. — rose at least 1.2 percent today.

     The Stoxx Europe 600 Index added 1.4 percent. The European benchmark is down 4.1 percent this month amid a disappointing increase in European Central Bank stimulus, along with the commodity rout. The index lost a big part of its annual advance amid concern over global growth, just as the Federal Reserve raised its interest rates for the first time in almost a decade.

     After surging as much as 21 percent to a record in April, the Stoxx 600 slid 12 percent through yesterday. It’s still up 7.9 percent this year, poised for a fourth annual advance.

     West Texas Intermediate crude advanced 2.9 percent to settle at $37.87 a barrel while Brent traded 3.2 percent higher to end at $37.79.

     U.S. crude inventories probably fell for a second week, according to a Bloomberg survey before government data Wednesday. Saudi Arabia’s 2016 spending plan assumes a Brent price of $37 a barrel, according to John Sfakianakis, a Riyadh- based economist at Ashmore Group Plc and a former government adviser.

     Gas futures headed for the first monthly gain since June, wiping out December losses of as much as 25 percent, after overnight computer models predicted colder weather would boost demand and may help ease a supply glut. Natural gas advanced 5.1 percent in the U.S. to $2.341 per million British thermal units, adding to a surge of 10 percent on Monday.

     Copper futures rose the most in more than a week as Chinese refiners agreed to cut sales of the metal that’s trading near a six-year low.

     The Bloomberg Dollar Spot Index gained 0.1 percent. The gauge that tracks the U.S. currency against 10 of its most- traded peers has retreated about 0.1 percent since Central bank increased the interest rate earlier in December.

     The euro dropped to $1.0938. The joint currency will fall about 4 percent against the dollar in 2016, according to the consensus of analyst forecasts compiled by Bloomberg, though two of the biggest participants in the market — Barclays Plc and Bank of America Corp.’s Merrill Lynch unit — expect it to drop through parity with the greenback.

     Emerging-market equities fell, extending the biggest annual decline in four years, as persistent weakness in commodities weighs on the global growth outlook. The MSCI Emerging-Markets Index dropped for a second day, with health care and utility stocks leading declines. Energy stocks rose for the first time in three days as oil rebounded back above $37 a barrel, outweighing concern that global growth is slowing.

     A gauge tracking 20 currencies in developing nations retreated 0.1 percent.
 

Have a wonderful evening everyone.

Be magnificent!
 

“Coming together is a beginning;

keeping together is progress;

working together is success.”

Henry Ford

 

As ever,
 

Karen

“A smile is the universal welcome.” Max Eastman

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:

Wishing everyone a very Merry Christmas!

Market Closes for December 23^rd, 2015

Market Index	Close	Change
Dow Jones	17602.61	+185.34   +1.06%
S&P 500	2064.29	+25.32   +1.24%
NASDAQ	5045.934	+44.823   +0.90%
TSX	13284.91	+202.05
		+1.54%

International Markets

Market Index	Close	Change
NIKKEI	18886.70	-29.32
		-0.16%
HANG SENG	22040.59	+210.57
		+0.96%
SENSEX	25850.30	+259.65
		+1.01%
FTSE 100	6420.98	+157.88
		+2.60%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.414	1.418
CND. 30 Year Bond	2.166	2.140
U.S.    10 Year Bond	2.2587	2.2357
U.S. 30 Year Bond	2.9888	2.9556

Currencies

BOC Close	Today	Previous
Canadian $	0.72204	0.71857
US $	1.38497	1.39166
Euro Rate 1 Euro=		Inverse
Canadian $	1.51083	0.66189
US $	1.09088	0.91669

Commodities

Gold	Close	Previous
London Gold Fix	1068.25	1074.90
Oil	Close	Previous
WTI Crude Future	36.90	35.19

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rallied a fourth day, the longest streak since October, as oil climbed to a two-week high and industrial metals advanced.

     The Standard & Poor’s/TSX Composite Index rose 1.5 percent, or 202.05 points, to 13,284.91 at 4 p.m. in Toronto, the highest close since Dec. 4. The Canadian benchmark is still down 1.4 percent for December and 9.2 percent for the year.

     Data Wednesday showed Canada’s gross domestic product unexpectedly stalled in October, bolstering speculation that the Bank of Canada will cut its 0.5 percent interest rate.

     “Another interest rate cut is likely early next year, probably in April, though possibly sooner if oil prices fall any further,” said David Madani, economist at Capital Economics, in a report to clients. “We fear that the economy may never have escaped the recession that began earlier this year.”

     Crew Energy Inc. and Crescent Point Energy Corp. jumped at least 9.8 percent as energy producers led gains. West Texas Intermediate futures rose 3.8 percent in New York after a report showed U.S. stockpiles fell 5.88 million barrels last week, easing a supply glut. WTI traded at a premium to Brent for the first time since January yesterday.

     Energy remains the worst-performing industry among 10 in the S&P/TSX this year, down more than 23 percent and headed for the steepest annual decline since 2008 as slowing economic growth in China and Europe and a supply glut in crude battered commodities prices around the world.

     Teck Resources Ltd., a producer of steelmaking coal, surged 9.3 percent and First Quantum Minerals Ltd. added 17 percent to lead an advance in raw-materials producers.

     Wi-Lan Inc. surged 12 percent, the most in more than six months, after the Canadian technology licensor’s Copy Protection unit entered into a patent license agreement with Netflix Inc. Terms of the agreement were not disclosed. Shares of Wi-Lan have slumped 48 percent this year, on pace for the worst annual slide in 10 years.

US

By Dani Burger

     (Bloomberg) — The Standard & Poor’s 500 Index rose for a third day, erasing losses for the year, as energy shares surged the most in almost three months and consumer-spending data boosted optimism on the economy.

     Commodity companies surged for a second day as crude climbed to a two-week high and industrial metals gained on optimism the Chinese and American economies will spark demand for resources. Chevron Corp. rallied 3.9 percent and copper miner Freeport-McMoRan Inc. jumped 16 percent for its biggest gain since in August. Celgene Corp. rose 9.8 percent after settling a patent dispute over its top-selling drug. Micron Technology Inc. lost 2.2 percent after its quarterly sales missed estimates.

     The Standard & Poor’s 500 Index increased 1.2 percent to 2,064.29 at 4 p.m. in New York, as a three-day rally of 2.9 percent erased its decline for the year. The Dow Jones Industrial Average climbed 184.93 points, or 1.1 percent, to 17,602.20. The Nasdaq Composite Index added 0.9 percent. Trading in S&P 500 shares was 16 percent lower than the 30-day average. U.S. exchanges will close early on Thursday for the Christmas holiday and reopen on Dec. 28.

     “The gains in oil and materials are certainly helping the market dig itself out of the hole,” said Peter Jankovskis, co- chief investment officer of Lisle, Illinois-based OakBrook Investments LLC. “Consumer spending looks good, and it bodes well for the economy.”

     Equities extended a rally in this holiday shortened week, recovering from a slide to a two-month low as data showing consumers’ willingness to spend buoyed optimism toward the outlook for growth. Investors were loading up on some of the year’s biggest losers in search of bargains among energy and raw-materials shares.

     A report today showed an increase in consumer purchases in November was accompanied by rising wages and scant inflation, indicating the biggest part of the U.S. economy will continue to underpin growth. Separate data showed orders for U.S. capital goods dropped in November for the first time in three months, showing businesses began tempering new investment after a third- quarter surge.

     The consumer spending data is the latest evidence that the economy is sturdy enough to weather tighter monetary policy from the Federal Reserve. Purchases climbed by the most in three months in November, which follows a report yesterday showing consumer spending bolstered the economy in the third quarter. Other gauges today showed consumer confidence rose to the highest since July, while new homes sold at a slower pace than projected in November.

     Investors have wrestled with signals that are often at odds as they assess prospects for the global economy. Optimism on the pace of U.S. growth has tangled with concern that a slowdown overseas, particularly in China, will spread. Fed officials last week signaled faith that the economy is performing well, while emphasizing they’re in no hurry to further boost interest rates.

     The S&P 500 has rebounded more than 10 percent from the bottom of a summer selloff that was sparked by worries over weakness in China. The benchmark historically rises in December, but the so-called Santa rally is under pressure this year. The gauge is down 0.8 percent this month, after losing as much as 3.4 percent.

     The Chicago Board Options Exchange Volatility Index fell 7.5 percent Wednesday to 15.36, a two-week low. The measure of market turbulence known as the VIX is on track to wipe out its gain this month after surging as much as 51 percent on a closing basis.

     A Goldman Sachs Group Inc. index of 50 stocks with the highest short interest jumped 2.6 percent to the highest level in more than two weeks.

     Energy companies jumped 4.2 percent Wednesday to top the S&P 500’s 10 main industries, as the group headed toward its strongest day since Oct. 2. West Texas Intermediate crude futures rose past $37 a barrel after a weekly report showed U.S. crude inventories declined, easing a supply glut.

     Energy producers are still down more than 7 percent in December, on track for their worst month since July. Williams Cos. and Southwestern Energy Co. gained more than 12 percent today.

     “There’s a fair amount of money wanting to buy into the energy sector because prices are so beaten up,” said Bob Phillips, co-founder and managing principal at Indianapolis- based Spectrum Management Group Inc. “Any indication that oil prices are ticking higher gives reason for that speculative money to start taking positions, and that can push the index higher.”

     Freeport-McMoRan rallied the most in four months to lead raw-materials shares. The copper producer is the fourth-weakest performer in the S&P 500 this year, losing 68 percent. Alcoa Inc. climbed 6.6 percent toward a more than two-month high, trimming its 2015 drop to 35 percent.

     Celgene led gains among health-care companies and the Nasdaq Biotechnology Index, which added 9.8 percent. The company said it settled a patent dispute over its blood cancer treatment Revlimid with Natco Pharma Ltd., sending the shares toward their biggest climb in six years. 

     Beaten-down Tenet Healthcare Corp., which has lost 36 percent this year, rose 7.5 percent and is up 19 percent this week as more people than expected signed up for Obamacare coverage next year.

     The Dow Jones Transportation Average gained 1.1 percent, taking its three-day climb to 3.3 percent. Barge operator Kirby Corp. added 4.1 percent, while Ryder Systems Inc. advanced 3.5 percent. Both companies are down more than 30 percent in 2015, while the transportation average has lost about 17 percent.

     Among other companies moving on corporate news, Bed Bath & Beyond Inc. fell 4.6 percent after saying third-quarter profit and comparable sales will be less than forecast. Nike Inc. slipped 2.3 percent, even as its quarterly earnings exceeded estimates. Executives said on a conference call that the company’s gross margin may narrow in the current quarter as it works to clear out inventory in North America to make way for new products.

 

Have a wonderful holiday everyone!

Be magnificent!
 

 “Christmas is the spirit of giving without a thought of getting. It is happiness because we see joy in people. It is forgetting self and finding time for others. It is discarding the meaningless and stressing the true values.” Thomas S. Monson

 

 

As ever,
 

Karen, Leyla, & Bonnie 

 

 

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:

PHOTOS OF THE DAY

A competitor takes part in the Christmas Really Wild Mud Run on a 4.6 miles course across undulating farm land at Celtic Camping, St David’s, Pembrokeshire, Wales. Rebecca Naden/AP

The Lower Manhattan skyline is seen as runner trots at Pier A Park, Saturday, in Hoboken, N.J. Julio Cortez/AP

Market Closes for December 22^nd, 2015

Market Index	Close	Change
Dow Jones	17417.27	+165.65   +0.96%
S&P 500	2038.97	+17.82   +0.88%
NASDAQ	5001.110	+32.188   +0.65%
TSX	13082.86	+48.48
		+0.37%

International Markets

Market Index	Close	Change
NIKKEI	18886.70	-29.32
		-0.16%
HANG SENG	21830.02	+38.34
		+0.18%
SENSEX	25590.65	-145.25
		-0.56%
FTSE 100	6083.10	+48.26
		+0.80%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.418	1.383
CND. 30 Year Bond	2.140	2.109
U.S.    10 Year Bond	2.2357	2.1917
U.S. 30 Year Bond	2.9556	2.9103

Currencies

BOC Close	Today	Previous
Canadian $	0.71857	0.71627
US $	1.39166	1.39611
Euro Rate 1 Euro=		Inverse
Canadian $	1.52405	0.65615
US $	1.09513	0.91313

Commodities

Gold	Close	Previous
London Gold Fix	1074.90	1078.75
Oil	Close	Previous
WTI Crude Future	35.19	34.74

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose the most in a week as energy producers advanced with the price of crude and Valeant Pharmaceuticals International Inc. increased a second day.

     Energy producers rose 0.6 percent as a group, as pipeline operators Enbridge Inc. and TransCanada Corp. increased at least 1.3 percent. Oil futures advanced in New York for the first time in five days, halting a decline near the lowest price in more than six years.

     Valeant rallied 4 percent amid a deal with Walgreens Boots Alliance Inc. to repurchase drugs from the U.S. pharmacy operator and sell them on consignment, the Wall Street Journal reported. The stock, briefly the most valuable in Canada earlier this year before plunging amid scrutiny over its pricing practices, has soared 31 percent in December headed for the biggest monthly gain since 1999.

     The Standard & Poor’s/TSX Composite Index rose 0.4 percent, or 49.78 points, to 13,084.16 at 4 p.m. in Toronto, the biggest gain since Dec. 16. The Canadian benchmark equity gauge has lost 11 percent this year, the third-worst performing developed market in the world ahead of only Singapore and Greece.

     Bank of Montreal and Toronto-Dominion Bank lost at least 0.4 percent. Data on Tuesday showed the U.S. economy grew at a revised 2 percent annualized rate in the third quarter, ahead of market expectations for a 1.9 percent increase, according to the median forecast of economists surveyed by Bloomberg. 

     The downward revision was “relatively minimal” and is enough of a sign of the economic recovery for the Federal Reserve to continue increasing interest rates into 2016, Paul Ferley, assistant chief economist at RBC Capital Markets, wrote in a note to clients.

     Raw-materials and energy producers have plunged at least 21 percent this year. Weekly U.S. inventory and production data Wednesday is expected to show inventories rose by 1.2 million barrels last week, according to a Bloomberg survey.

     Dominion Diamond Corp. surged 22 percent, the most in more than six years, after the Canadian mining company hired financial advisers to explore a sale, according to people familiar with the matter. Hedge fund K2 & Associates Investment Management sent a letter to the company’s board Monday requesting a meeting to discuss changes, including a strategic review.

US

By Lu Wang

     (Bloomberg) — U.S. stocks rose for a second day as a rally in commodity shares ignited broader gains, while data showed consumer spending bolstered the economy amid slowing growth overseas.

     The two most beaten-down industries this year — energy and raw-materials — led most of Tuesday’s advance, keeping alive prospects for an anticipated year-end rally. Caterpillar Inc.

surged to its best gain in two months, while Wal-Mart Stores Inc. gained 1.7 percent as data showed consumers continued to spend. Chipotle Mexican Grill Inc. fell on an investigation into its links to a new spate of illnesses in three additional states.

     The Standard & Poor’s 500 Index climbed 0.9 percent to 2,038.97 at 4 p.m. in New York, as the gauge added to its rebound from a two-month low. The Dow Jones Industrial Average rose 165.65 points, or 1 percent, to 17,417.27, while the Nasdaq Composite Index advanced 0.7 percent. About 6.4 billion shares traded hands on U.S. exchanges, 12 percent below the three-month average.

     “Most of the major data is behind us for this year, you’re going to see volumes continue to decline,” said Michael Arone, the Boston-based chief investment strategist at State Street Global Advisors’ U.S. Intermediary Business. The firm oversees $2.4 trillion. GDP data “continues to tell us the same thing, that is the consumer is in reasonable shape and exports are continuing to struggle.’’

     A report today showed the economy expanded at a revised 2 percent annualized rate in the third quarter, buoyed by consumer spending. Meanwhile, businesses struggled with weaker overseas growth and a strong dollar, which have been a drag on net exports. Sustained growth in the U.S. combined with weakening in other parts of the globe, including in China, could widen the gap between exports and imports in the quarters ahead.

     Investors have wavered between optimism on the U.S. economy and concern that slower growth overseas will spread. Federal Reserve policy makers last week signaled faith that the economy is performing well, while emphasizing they’re in no hurry to further boost interest rates. Investors were initially soothed by that message, though oil’s collapse below levels last seen during the 2008 global financial crisis weighed on sentiment.

     The S&P 500 historically rises in December, with the final two weeks delivering an average gain of 1.7 percent. The so- called Santa rally is under pressure this year, with the benchmark down 2 percent in December and in the midst of its worst final month since 2002. After rebounding as much as 13 percent from its summer low through early November, the S&P 500 has retreated 3.4 percent, putting it on track for its biggest annual drop since the 2008 financial crisis.

     In addition to the GDP numbers, data this week on new-home sales, durable-goods orders and personal spending will offer further clues on the health of the economy, after the Fed’s first rate increase in almost a decade. Officials at the central bank said any further rate hikes will be gradual and depend on the path of the recovery.

     A report today showed sales of previously owned homes fell in November to the lowest level since April of last year as a change in industry rules lengthened the amount of time it took buyers to close on a deal.

     The Chicago Board Options Exchange Volatility Index fell 11 percent Tuesday to 16.60, a two-week low. The measure of market turbulence known as the VIX further pared its gain this month to about 3 percent, after surging as much as 51 percent.

     All of the S&P 500’s 10 main industries advanced, with energy, consumer staples, industrial and raw-material companies rising more than 1.2 percent. Energy remains on pace for its worst monthly decline in more than three years. Anadarko Petroleum Corp. and Diamond Offshore Drilling Inc. added more than 4.3 percent. West Texas Intermediate crude futures rose 0.9 percent to $36.14 a barrel.

     Raw-material shares gained as fertilizer maker Mosaic Co. and steel company Nucor Corp. rose at least 3.5 percent. The group rallied even as most commodities retreated, with nickel leading a drop in industrial metals as stockpiles expanded to the highest in more than two months amid signs of slowing demand.

     Caterpillar’s strongest gain since Oct. 5 led the benchmark’s industrial group. The heavy-machinery maker is one of the Dow’s worst performers this year, down 25 percent as the slump in commodities has weighed on mining-equipment manufacturers. United Rentals Inc., among the S&P 500 industrials’ weakest in 2015, climbed 4.3 percent Tuesday to trim its drop this year to 29 percent.

     The story was similar in consumer staples, where two companies battered this year were the strongest gainers today. Whole Foods Market Inc., which has struggled amid intensified competition, jumped 5.5 percent. The grocery store chain is down 31 percent year to date, headed toward its worst since 2008. Archer-Daniels-Midland Co. added 3.1 percent to pare its 2015 drop to 30 percent.

     Chipotle fell 5.3 percent, down for the seventh time in eight sessions as it reels from recent outbreaks of E. coli and norovirus at its restaurants. The shares are down almost 15 percent this month, on track for the worst in three years and have tumbled 35 percent since reaching an all-time high on Aug. 5.

     Among other companies moving on corporate news, NetApp Inc. fell 5 percent after agreeing to buy SolidFire Inc. for $870 million in cash to boost its presence in the growing market for systems that can retrieve and store vast amounts of data at rapid speeds.

 

Have a wonderful evening everyone.

Be magnificent!

 “Patience is the best remedy for every trouble”. Plautus

 

 

As ever,
 

Karen
 

“Spread love everywhere you go. Let no one ever come to you without leaving happier.” Mother Teresa

 

 

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:

PHOTOS OF THE DAY

Thousands of runners dressed in Santa Claus outfits compete in the annual Carrera de Papa Noel (Santa Claus Run), in Madrid, Spain, Saturday. Javier Barbancho/Reuters

Re-enactors Amber and Maya Miller make gingerbread cookies at Bennett Place in Durham, N.C., Saturday. Christine T. Nguyen/The Herald-Sun/AP

Market Closes for December 21^st, 2015

Market Index	Close	Change
Dow Jones	17251.62	+123.07   +0.72%
S&P 500	2021.15	+15.60   +0.78%
NASDAQ	4968.922	+45.840   +0.93%
TSX	13034.38	+10.08
		+0.08%

International Markets

Market Index	Close	Change
NIKKEI	18916.02	-70.78
		-0.37%
HANG SENG	21791.68	+36.12
		+0.17%
SENSEX	25735.90	+216.68
		+0.85%
FTSE 100	6034.84	-17.58
		-0.29%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.383	1.400
CND. 30 Year Bond	2.109	2.122
U.S.    10 Year Bond	2.1917	2.2040
U.S. 30 Year Bond	2.9103	2.9220

Currencies

BOC Close	Today	Previous
Canadian $	0.71627	0.71659
US $	1.39611	1.39550
Euro Rate 1 Euro=		Inverse
Canadian $	1.52343	0.65641
US $	1.09119	0.91643

Commodities

Gold	Close	Previous
London Gold Fix	1078.75	1062.50
Oil	Close	Previous
WTI Crude Future	34.74	34.73

Market Commentary:

Canada

By Oliver Renick

     (Bloomberg) — Canadian stocks were little changed Monday as an advance in materials shares was offset by losses in energy and utilities companies.

     The Standard & Poor’s/TSX Composite Index ticked up to 13,034.38 at 4 p.m. in Toronto. The gauge erased an early gain of 0.9 percent and traded lower for most of the afternoon before rebounding into the close. The index has advanced 2.7 percent since slumping on Dec. 14 to its lowest level since October 2013. Trading Monday was 13 percent below the average of the past 30 days.

     Canada’s equity benchmark — 30 percent of which is commodity producers — has had the third-worst returns year to date of all developed nations, only faring better than Greece and Singapore. Energy producers and miners diverged Monday.

     Raw-materials producers jumped 0.7 percent as the U.S. dollar, the currency used around the world to buy and sell most commodities, weakened for the second straight session against a basket of its peers. China, the world’s biggest consumer of resources, signaled it may step up stimulus.

     First Majestic Silver Corp. and Hudbay Minerals Inc. jumped at least 4.7 percent as First Quantum Minerals Ltd. and Teck Resources Ltd. each climbed at least 3.7 percent.

     Energy producers in the S&P/TSX slumped 0.9 percent as crude oil slid for a fourth straight day. Gran Tierra Energy Inc. and Penn West Petroleum Ltd. lost at least 3.7 percent as brent crude slumped to the lowest price since mid-2004 amid speculation suppliers around the world will exacerbate a glut in oil.

     Utilities shares also weakened, losing 1.2 percent as Brookfield Renewable Energy Partners LP lost 4.2 percent after climbing 12 percent in the previous four sessions. Atco Ltd shares dropped 1.8 percent.

     Shares of consumer staples companies climbed 0.7 percent on the back of gains in Jean Coutu Group Inc. and Cott Corp., with gains of at least 1.9 percent. Saputo Inc., a manufacturer of dairy and grocery products, jumped 1.5 percent.

US

By Dani Burger

     (Bloomberg) — U.S. stocks surged in the final minutes of trading, rebounding after the biggest two-day rout in three months as financial and technology companies paced a climb from equities’ lowest levels since October.

     Apple Inc. rose 1.2 percent and JPMorgan Chase & Co. advanced 1.8 percent. Avago Technologies Ltd. added 4 percent to lead chipmakers. Tenet Healthcare Corp. gained 12 percent after encouraging government data on sign-ups for Obamacare coverage for next year. Raw-materials companies increased amid signs that China may add to its stimulus efforts. Walt Disney Co. fell for a third day, losing 1.1 percent.

     The Standard & Poor’s 500 Index gained 0.8 percent to 2,021.15 at 4 p.m. in New York, as the gauge rebounded from a 3.3 percent two-day drop. The Dow Jones Industrial Average added 123.07 points, or 0.7 percent, to 17,251.62. The Nasdaq Composite Index increased 0.9 percent. About 6.8 billion shares changed hands on U.S. exchanges Monday, 6.8 percent below the three-month average.

     “After the declines of last week, there’s a little more value to be created,” said Jim McDonald, chief investment strategist at Chicago-based Northern Trust Corp., which oversees $946 billion. “There’s also chatter about stimulus out of China. It’s incremental, but it’s a signal of their determination to prevent further slowdown. Seasonally speaking, stocks tend to get a bit better into year-end.”

     Equities were bolstered earlier after China’s leaders signaled Monday they will take further steps to support growth. The government said monetary policy must be more “flexible” and fiscal policy more “forceful” to combat a slowdown in the world’s second-largest economy.

     Investors have wavered between optimism on the U.S. economy and concern that a slowdown on China will spread. Worries about weakness in the world’s second-largest economy were stoked in August by a surprise currency devaluation, triggering the S&P 500’s first correction in four years. The gauge rebounded as much as 13 percent from a summer low through early November, before giving up 4.9 percent through last week.

     The equity benchmark has fallen 2.9 percent in December, bucking the historical seasonal trend of gains, and is on track for its biggest annual drop since the 2008 financial crisis. That puts even more pressure on the so-called Santa Claus rally to save the year. Historically, the final two-weeks of December deliver a gain of 1.7 percent.

     Investors initially reacted positively to the message from Fed policy makers who signaled last week a belief that the U.S. economy is performing well while emphasizing no rush to further boost interest rates. Turbulence in commodities and the implications for global growth quickly drew renewed attention as oil collapsed below levels last seen during the 2008 global financial crisis on signs the market’s oversupply will worsen.

     Federal Reserve Bank of Atlanta President Dennis Lockhart said today the central bank’s commitment to a “gradual” tightening suggests rates could be raised at every other meeting of the policy-setting Federal Open Market Committee, though the actual pace will depend on incoming economic data. Reports later this week on home sales, durable-goods orders and personal income will provide further cues.

     The Chicago Board Options Exchange Volatility Index fell 9.7 percent Monday to 18.70. The measure of market turbulence known as the VIX remains on track for its biggest monthly gain since August, up 16 percent.

     “We’ve seen a lot of stimulus over the last year and the market is hoping to see that pay off, provide a spark to the economy,” said Joseph Betlej, who helps oversee $33 billion as vice president of Advantus Capital Management. “We’re at a point in the business cycle where macro events tend to get magnified, either positively or negatively. Look for a market with continued volatility.”

     All of the S&P 500’s 10 main industries rose today, with technology and financial companies pacing gains. Phone companies were the top performers, up 1.1 percent. Energy shares lagged as Brent crude oil slid 1.5 percent amid speculation suppliers from the Middle East to the U.S. will exacerbate a glut as they fight for market share.

     First Solar Inc. and Micron Technology Inc. added at least 2.8 percent as semiconductors had their best day in two weeks. Juniper Networks Inc. sank 5 percent to cap tech gains, falling for a third day after the maker of computer-networking equipment warned customers that it discovered unauthorized code in software that runs on some of its devices, leaving them vulnerable to “complete compromise” by remote cyber-attackers.

     Hospital operators Tenet Healthcare and HCA Holdings Inc. added more than 4.8 percent, the most since June. The government said that about 6 million people have signed up for Obamacare coverage for next year on U.S.-run markets, a good sign after concerns that the industry’s benefit from the program was shrinking.

     Cruise ship operators Royal Caribbean Cruises Ltd. and Carnival Corp. advanced more than than 2.9 percent, rising for the fifth time in six sessions. Carnival said Friday advance bookings for the first three quarters of 2016 are well ahead of the previous year at slightly higher prices.

     JPMorgan Chase rose 1.8 percent to lead the Dow, while also rising to the top of banks in the S&P 500. Comerica Inc. and KeyCorp added at least 1.3 percent. Asset manager Invesco Ltd. rallied 3 percent to lead the broader financial group.

     Energy companies wiped out declines late in the day as natural-gas producers rose along with the commodity. Gas futures capped the biggest one-day gain in seven weeks as forecasts showed mild weather fading in the U.S. Midwest. Southwestern Energy Co. and Consol Energy Inc. surged more than 5.9 percent. Oneok Inc. soared 15 percent, the most since July 2013, after its 2016 financial outlook included its dividend remaining flat.

     Disney was the biggest drags on the S&P 500, losing 1.1 percent despite Chief Executive Bob Iger saying “Star Wars: The Force Awakens” probably rang up about $528 million in worldwide box-office sales in its record weekend debut.

     Disney’s decline Monday was likely due to people taking profits after the success of the film, Cowen & Co. analyst Doug Creutz said. “People are asking themselves what they own the stock for now,” he said. The shares are in the midst of their worst three-day stretch since August.

     Chipotle Mexican Grill Inc. lost 3.5 percent to its lowest since May 2014, after the U.S. Centers for Disease Control and Prevention said the company’s restaurants were being investigated for their possible link to a new outbreak of a different strain of E. coli.

 

Have a wonderful evening everyone.

Be magnificent!

 

“Enjoy the little things in life for one day you’ll look back and realize they were big things.” – Kurt Vonnegut

 

As ever,
 

Karen
 

 “The true secret of happiness lies in taking a genuine interest in all the details of daily life.” William Morris

 

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:

PHOTOS OF THE YEAR

East Boston resident Kim Poliquin skied through the streets in the middle of winter storm Juno on Jan. 27 in Boston. A six-week-plus snow siege hit the city resulting in a record accumulation of 110.6 inches. ANN HERMES/STAFF

A young boy got help from his dad during the Strolling of the Heifers parade on June 6 in Brattleboro, Vt. MELANIE STETSON FREEMAN/STAFF

Market Closes for December 18^th, 2015

Market Index	Close	Change
Dow Jones	17128.55	-367.29   -2.10%
S&P 500	2005.55	-36.34   -1.78%
NASDAQ	4923.082	-79.471   -1.59%
TSX	13024.30	+14.37
		+0.11%

International Markets

Market Index	Close	Change
NIKKEI	18986.80	-366.76
		-1.90%
HANG SENG	21755.56	-116.50
		-0.53%
SENSEX	25519.22	-284.56
		-1.10%
FTSE 100	6052.42	-50.12
		-0.82%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.400	1.433
CND. 30 Year Bond	2.122	2.161
U.S.    10 Year Bond	2.2040	2.2287
U.S. 30 Year Bond	2.9220	2.9314

Currencies

BOC Close	Today	Previous
Canadian $	0.71659	0.71671
US $	1.39550	1.39527
Euro Rate 1 Euro=		Inverse
Canadian $	1.51653	0.65940
US $	1.08673	0.92019

Commodities

Gold	Close	Previous
London Gold Fix	1062.50	1049.40
Oil	Close	Previous
WTI Crude Future	34.73	34.95

Market Commentary:

Canada

By Allison McNeely

     (Bloomberg) — The Canadian dollar tumbled to a 11-year low on declining oil prices, one day after the U.S. Federal Reserve’s decision to boost interest rates highlighted the divergent tracks of the two economies.

     The currency weakened against most of its major peers as the price of crude traded near the lowest since February 2009 on surging U.S. inventories. The U.S. central bank raised its key interest rate target by 0.25 percentage point on Wednesday.

     “With the lurch lower in oil prices, we were anticipating C$1.40 by the end of Q1, but we might get C$1.40 later this afternoon,” said Daragh Maher, New York-based head of U.S. foreign-exchange strategy at HSBC Holdings Plc. “One of the difficulties you have at the moment is that liquidity is so thin it doesn’t take much flow to go through to suddenly prompt quite a big move.”

     The loonie has tumbled 17 percent this year amid a rout in oil that has sent Canada’s second-largest export below $40 a barrel. The U.S. interest-rate move begins a period of monetary- policy divergence between Canada and its biggest trading partner, after the Bank of Canada cut its benchmark rate twice this year to boost economic growth.

     The currency, nicknamed for the aquatic bird on the C$1 coin, fell 1.1 percent to C$1.3934 per U.S. dollar as of 10:25 a.m. in Toronto, the weakest level since May 2004.

     U.S. two-year government note yields exceeded similar- maturity Canadian debt by 0.45 percentage point, the most since 2007.

US

By Jeremy Herron and Dani Burger

     (Bloomberg) — U.S. stocks tumbled to their lowest level in two months, while the dollar trimmed a weekly gain as investors focused on prospects for a slowdown in global growth and continued to adjust to the end of near-zero interest rates in America.

     The Standard & Poor’s 500 Index pushed its worst two-day slide since Sept. 1 to 3.3 percent and erased its gain for the week. The Dow Jones Industrial Average tumbled more than 350 points Friday. Government bonds rallied as West Texas Intermediate crude traded near a six-year low, damping inflation expectations. Brazil’s real and stocks fell amid speculation that the president will name a new finance minister.

     The S&P 500 extended declines in the final 15 minutes of trading and volume soared Friday because of a quarterly event known as quadruple witching, when futures and options contracts on indexes and individual stocks expire. More than 12.5 billion shares changed hands across American exchanges, 71 percent above the three-month average and the most since the height of the summer selloff on Aug. 24.

     “It’s a sloppy market,” Bernie Williams, chief investment officer at San Antonio-based USAA Federal Savings Bank, said by phone. “The world economy is slowing and China has taken some of the oil demand off the table so you’ve seen a huge wipe out in commodity stocks. Investors are wondering if this is really indicative of slowing economy or if there is something deeper here.”

     While this week’s Fed rate decision removed a measure of uncertainty on financial markets and added to optimism that the world’s largest economy is on firm footing, it did little to allay concern that global growth remains vulnerable to a slowdown in China and a related rout in commodities. Oil continues to trade near levels last seen during the global financial crisis, stoking worry that junk-rated energy producers won’t be able to remain solvent.

     The S&P 500 fell 1.8 percent at 4 p.m. in New York, as it lost 0.3 percent for the week. The index yesterday erased Wednesday’s post-Fed gains as crude oil slid and commodities deepened a drop. It’s fallen 3.6 percent in December and is down 2.6 percent in 2015.

     The Stoxx Europe 600 Index lost 1 percent. The equity benchmark cut its first weekly advance in three to 1.5 percent and is set for its worst December since 2002. After a 14 percent jump from its September low through end-November, the gauge lost more than 6.3 percent this month amid disappointing stimulus measures from the European Central Bank and a deepening of the rout in commodities.

     Japan’s Topix sank the most in two weeks and its 10-year bond yield dropped to the lowest since January as the BOJ announced a new program of exchange-traded fund purchases and plans to extend the maturities of its government debt holdings.

     A gauge of the dollar had its best week since the start of November as the Fed’s decision prompted traders to bring forward expectations since last Friday for the next increase. The U.S. currency strengthened against 12 of 16 major peers this week as futures traders raised to 49 percent the odds of an April rate increase. 

     Richmond Fed President Jeffrey Lacker said during a panel discussion in North Carolina that the economy has stabilized and is in a good position going forward.

     The U.S. currency was at $1.087 per euro, 1.1 percent higher this week.

     The Canadian dollar fell to C$1.39 per U.S. dollar the first time since 2004 after economic data continued to trail forecasts, stoking speculation the Bank of Canada may have to do more to bolster growth.

     Japan’s currency jumped 1 percent to 121.29 per dollar after the BOJ kept its main monetary stimulus target unchanged while outlining operational changes.

     The Bloomberg Commodity Index, which measures the returns on 22 raw materials, rose 1.1 percent after recording its lowest close since March 1999. The index retreated 1.2 percent in the week.

     Industrial metals climbed, paring weekly losses, after a report by industry consultancy SMM that Chinese copper producers plan to hold a meeting Saturday to discuss building inventories of the metal. Copper futures surged 3.3 percent to $2.111 a pound. Gold climbed 1.4 percent.

     Oil in New York lost 1.1 percent, after rallying as much as 1.8 percent, to fall back below $35 a barrel, after Baker Hughes Inc. reported that the number of active oil rigs in the U.S. climbed this week. Futures capped a third weekly drop with a 2.5 percent slide.

     The yield on 10-year Treasury notes fell two basis points to 2.20 percent. The rate climbed eight basis points in the week, with all of the advance coming in the first three days.

     Treasuries volatility fell to the lowest this year as the Fed’s decision removed uncertainty from fixed-income markets. Bank of America Corp.’s MOVE Index, which measures price swings in U.S. government debt, slid to 67.67 basis points Thursday, the least since December 2014.

     Brazil’s real tumbled against other emerging market currencies, while the Ibovespa stock gauge fell 3 percent amid speculation that President Dilma Rousseff will name Planning Minister Nelson Barbosa to replace Joaquim Levy as finance minister.

     Emerging-market stocks fell for the first time in four days, paring a weekly gain, while currencies advanced as investors increased bets that the Fed will tighten gradually.

     The MSCI Emerging Markets Index dropped 1.1 percent, trimming its weekly increase to 2.1 percent, the best since Nov. 20. Valuations for the benchmark gauge are just below their 10- year average even as analysts’ projections for earnings have fallen to a six-year low.

Have a wonderful evening everyone.

Be magnificent!

 

As ever,
 

 “To enjoy good health, to bring true happiness to one’s family, to bring peace to all, one must first discipline and control one’s own mind. If a man can control his mind he can find the way to Enlightenment, and all wisdom and virtue will naturally come to him.” Buddha

Karen

“Very little is needed to make a happy life; it is all within yourself, in your way of thinking.” Marcus Aurelius

 

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:

This Day in History:

On Dec. 17, 1903, Orville and Wilbur Wright made the first successful man-powered airplane flight, near Kitty Hawk, N.C.

1969 – The U.S. Air Force closed its Project “Blue Book” by concluding there was no evidence of extraterrestrial spaceships behind thousands of UFO sightings.

1989 – The animated TV series “The Simpsons” premiered on Fox.

1992 – President George H.W. Bush, Canadian Prime Minister Brian Mulroney and Mexican President Carlos Salinas de Gortari signed the North American Free Trade Agreement in separate ceremonies.

2005 – President George W. Bush acknowledged he’d personally authorized a secret eavesdropping program in the U.S. following Sept. 11.

Gary and I are heading out to New Zealand (sailing 🙂 ) for the holidays, so let me again wish all of you – and yours – the very best of the season.  May peace and prosperity reign in the New Year.

PHOTOS OF THE DAY

A giant illuminated Santa Claus is seen on the Promenade Des Anglais as part of holiday season decorations in Nice, France, Monday.

A member of the ‘Sibspas’ Siberian search and rescue group dressed as Santa Claus, shakes hands with his teammate, dressed as Father Frost, the Russian equivalent of Santa Claus, as they climb to the rock named ‘The Fourth Stolb’ (the Fourth Pillar) at the Stolby National Nature Reserve during a training session of the Russian Emergencies Ministry outside Siberian city of Krasnoyarsk, Russia on Tuesday. Ilya Naymushin/Reuters

Market Closes for December 17^th, 2015

Market Index	Close	Change
Dow Jones	17495.84	-253.25   -1.43%
S&P 500	2042.97	-30.10   -1.45%
NASDAQ	5002.555	-68.578   -1.35%
TSX	13029.52	-136.56
		-1.04%

International Markets

Market Index	Close	Change
NIKKEI	19353.56	+303.65
		+1.59%
HANG SENG	21872.06	+170.85
		+0.79%
SENSEX	25803.78	+309.41
		+1.21%
FTSE 100	6102.54	+41.35
		+0.68%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.433	1.513
CND. 30 Year Bond	2.161	2.225
U.S.    10 Year Bond	2.2287	2.2960
U.S. 30 Year Bond	2.9314	3.0039

Currencies

BOC Close	Today	Previous
Canadian $	0.71671	0.72548
US $	1.39527	1.37839
Euro Rate 1 Euro=		Inverse
Canadian $	1.50963	0.66241
US $	1.08196	0.92425

Commodities

Gold	Close	Previous
London Gold Fix	1049.40	1075.25
Oil	Close	Previous
WTI Crude Future	34.95	35.52

Market Commentary:

Canada

By Joseph Ciolli

     (Bloomberg) — Canadian stocks tumbled, halting a two-day rally, as the U.S. Federal Reserve’s interest-rate increase spurred a rally in the greenback that added to a selloff in commodities.

     The Standard & Poor’s/TSX Composite Index slid 1.2 percent to 13,009.93 at 4 p.m. in Toronto after turning in its biggest two-day gain since August. The gauge slumped on Monday to its lowest level since October 2013 and is now down 11 percent for the year.

     With the Fed’s rate decision out of the way, a Bloomberg basket of prices for natural resources from copper to oil and gold extended its decline this year. Canada’s equity benchmark – – 30 percent of which is commodity producers — has had the third-worst returns year to date of all developed nations, only faring better than Greece and Singapore.

     Raw-materials producers lost 3.7 percent after the Fed’s rate decision bolstered the value of the dollar, the currency used around the world to buy and sell most commodities. Goldcorp Inc., Barrick Gold Corp. and Teck Resources Ltd. sank at least 6.6 percent. The metal decreased the most since March, while copper led losses among industrial metals. The S&P/TSX gauge of commodity producers has fallen 25 percent in 2015.

     Energy producers in the S&P/TSX slid 1 percent as crude oil fell back below $35 a barrel after three days above the threshold. Penn West Petroleum Ltd. and Bankers Petroleum Ltd. declined more than 4 percent, while Encana Corp. slipped to its lowest level since April 2000.

     Phone companies in the Canadian equity gauge fell 4.1 percent. Telus Corp. lost 6.7 percent, the most in more than two years, after Shaw Communications Inc. bought Wind Mobile in a move that could boost wireless competition in Canada, especially in Telus’s home turf in the West of the country.

US

By Anna-Louise Jackson

     (Bloomberg) — U.S. stocks dropped, ending the Standard & Poor’s 500 Index’s three-day rally, as investors moved past the Federal Reserve’s interest-rate increase and returned their focus to weakness in commodities and prospects for global growth.

     A stronger dollar in the wake of the Fed’s move weighed on energy and raw-material shares, as crude tumbled below $35 a barrel. General Mills Inc. sank 3.3 percent after its quarterly results missed estimates, and Oracle Corp. slumped after its revenue fell short of forecasts. FedEx Corp. gained 2 percent after beating profit targets.

     The S&P 500 fell 1.5 percent to 2,041.89 at 4 p.m. in New York, erasing Wednesday’s post-Fed gains, and paring gains this week of as much as 3 percent. The index slipped below its average prices during the past 50 and 200 days. The Dow Jones Industrial Average lost 253.25 points, or 1.4 percent, to 17,495.84. The Nasdaq Composite Index declined 1.4 percent. About 8 billion shares traded hands on U.S. exchanges, 9.4 percent above the three-month average.

     “The kind-of euphoria aside over the Fed finally doing something, rates going up doesn’t mean good things for stocks,” said Malcolm Polley, who oversees $1.4 billion as president and chief investment officer at Stewart Capital Advisors LLC in Indiana, Pennsylvania. “In my mind, there’s nothing good that comes out of a Fed rate hike except they’re finally off zero.”

     The S&P 500 surged 1.5 percent Wednesday following Fed Chair Janet Yellen’s message that the economy is performing well and the central bank is in no rush to raise rates again. However, the rout today in commodities has rekindled concern that global growth remains tepid.

     Policy makers have made it clear that the pace of future rate increases will depend on progress in economic data. A report today showed fewer Americans than forecast filed applications for unemployment benefits last week, a sign of persistent strength in the labor market. A separate report showed an index of leading indicators rose more than estimated in November.

     The S&P 500 has declined 1.9 percent in December, bucking a trend of strong performance. Historically, the bulk of the final month’s gains arrive around the same time as Santa Claus and last through the end of the year. For the same thing to happen in 2015, investors will have to remain at peace with the first rate hike in more than nine years and navigate concerns ranging from weakness in commodities to stress in junk bonds.

     “Investors are focusing on some of the lingering issues with regard to stocks — falling price of oil and global weakness,” said Walter “Bucky” Hellwig, who helps manage $17 billion as a senior vice president at BB&T Wealth Management in Birmingham, Alabama. “To the extent that there’s doubt about earnings increases next year, that’s going to cause some concerns in the market.”

     Earnings had some influence on Thursday’s trading, with Oracle sinking the most in two years after revenue missed analysts’ estimates for the 10th time in 12 quarters. The company has been pressured as customers transition from the traditional model of buying software installed on corporate computer systems to products delivered over the Internet.                        

     General Mills had its biggest slide since September after the maker of Cheerios and Lucky Charms posted results that missed estimates, hurt by sluggish demand for breakfast cereals in the U.S. FedEx gained 2 percent after its earnings beat estimates and the package delivery giant said growth in e- commerce is resulting in record holiday shipments so far this season.

     The Chicago Board Options Exchange Volatility Index rose 6.1 percent Thursday to 18.94, after tumbling 15 percent yesterday amid the post-Fed rally. The measure of market turbulence known as the VIX is down 22 percent this week after a 65 percent surge last week, which was the most since August.

     Nine of the S&P 500’s 10 main industries retreated, with energy and raw-materials shares losing more than 1.9 percent. Technology, financial and consumer discretionary companies drop at least 1.5 percent, while utilities rose for a fourth day, their longest streak in more than a month.

     Marathon Oil Corp. and Williams Cos. dropped more than 7.2 percent to lead declines among energy producers. The group is down 10 percent in December. West Texas Intermediate crude futures slid 1.6 percent to settle at $34.95 a barrel, trading near levels last seen during the global financial crisis on signs a record surplus will worsen.

     While energy was the hardest-hit sector in today’s selloff, three of the S&P 500’s best-performing stocks were from the group, with Consol Energy Inc., Marathon Petroleum Corp. and Valero Energy Corp. up at least 2.1 percent.

     Raw-materials stocks fell 1.9 percent. Newmont Mining Corp. and Freeport-McMoran Inc. both tumbled more than 7.7 percent as gold and copper prices fell amid the stronger dollar. A rising U.S. currency cuts the appeal of metals and other commodities as stores of value.

     CVS Health Corp. and Wal-Mart Stores Inc. both fell more than 2.1 percent, helping to drag consumer-staples companies down as much as 1.3 percent. Coca-Cola Enterprises Inc. slipped 4.4 percent, the most in four months, after trimming its first- quarter guidance.

     Financial companies slipped 1.6 percent, with Bank of America Corp. and JPMorgan Chase & Co. pacing the selloff. Aon Plc fell 3.8 percent, the most in three months, while State Street Corp. declined 3.2 percent after saying it incorrectly invoiced at least $200 million in asset servicing expenses to clients.

     Comcast Corp. and Walt Disney Co. weighed the most on consumer-discretionary companies with declines of at least 1.5 percent. Wynn Resorts Ltd. and Nordstrom Inc. were the group’s worst performers, losing more than 5 percent.

     Among other companies moving on corporate news, Polaris Industries Inc. lost nearly 11 percent, its steepest drop in seven years to a more than two-year low. The maker of snowmobiles and all-terrain vehicles cut this year’s earnings and sales estimates, citing weak demand, in part because of relatively warm weather.

     Pier 1 Imports Inc. tumbled 20 percent to the lowest since February 2010 after third-quarter sales and profits missed analysts’ estimates. The furniture chain also cut its earnings forecast, citing a decline in “casual” in-store shoppers.

Have a wonderful evening everyone.

Be magnificent!

Thought is crooked

because it can invent anything

and see things that are not there.

It can perform the most extraordinary tricks,

therefore it cannot be depended upon.

Krishnamurti

As ever,

 

Carolann

 

To simply wake up every morning a better person than when I went to bed.

                                                                         -Sidney Poitier, 1927-

 

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:

Good News:

Indonesia “Loon balloons” could bring the Internet to at least 250 million people.  Alphabet, Google’s corporate parent, announced last month that it has secured a deal with three major Indonesian telecom firms to begin trials in 2016.  The project, developed in Google’s labs, is aimed at using helium balloons – at least somewhat controllable – to allow wireless service to penetrate remote rural areas. –MIT Technology Review.

Massarosa, Italy: Cycling to work can pay, literally, under a yearlong pilot program in this city north of Pisa.  The city council, using funds generated by traffic tickets, will be paying 50 commuters a small per-kilometer stipend – as much as 50 euros a month – for switiching from cars to bicycles.  A smartphone application is used to record the distance travelled daily. –BBC.

Numbers:

45 Billion: Value (in US dollars) of the Facebook stock that Mark Zuckerberg and his wife, Priscilla Chan, have pledged to donate to philanthropy and public advocacy causes during their lifetimes.

217:  Number of Michelin stars awarded to restaurants in Tokyo, according to Michelin’s just published 2016 guide, thus reaffirming that city’s status as the world’s culinary capital.

On This Day In History:

1770- Beethoven was born.

1773 – The Boston Tea Party happened on this day in 1773. A group of Massachusetts colonists disguised as Mohawk Indians boarded three British tea ships in Boston Harbor and dumped 342 chests of tea into the water.

1775 – Jane Austen was born.

On Dec. 16, 1950, President Truman proclaimed a national state of emergency in order to fight “Communist imperialism.”

1809 – Napoleon Bonaparte was divorced from the Empress Josephine by an act of the French Senate.

1944 – The Battle of the Bulge during World War II began as German forces launched a surprise counterattack against Allied forces in Belgium.

1985 – Reputed organized-crime chief Paul Castellano was shot to death outside a New York City restaurant.

1990 – Jean-Bertrand Aristide was elected president of Haiti in the country’s first democratic elections.

1998 – President Bill Clinton ordered a sustained series of airstrikes against Iraq by American and British forces in response to Saddam Hussein’s continued defiance of U.N. weapons inspectors.

PHOTO OF THE DAY

HERE WE ARE AT OUR 2015 OFFICE CHRISTMAS PARTY, THE BENGAL LOUNGE, EMPRESS HOTEL:

 
Carolann, Karen, Bonnie & Leyla – December 4^th, 2015

A good time was had by all!

Market Closes for December 16^th, 2015

Market Index	Close	Change
Dow Jones	17749.09	+224.18   +1.28%
S&P 500	2073.07	+29.66   +1.45%
NASDAQ	5071.133	+75.776   +1.52%
TSX	13166.08	+246.51
		+1.91%

International Markets

Market Index	Close	Change
NIKKEI	19049.91	+484.01
		+2.61%
HANG SENG	21701.21	+426.84
		+2.01%
SENSEX	25494.37	+173.93
		+0.69%
FTSE 100	6061.19	+43.40
		+0.72%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.513	1.490
CND. 30 Year Bond	2.225	2.223
U.S.    10 Year Bond	2.2960	2.2676
U.S. 30 Year Bond	3.0039	2.9904

Currencies

BOC Close	Today	Previous
Canadian $	0.72548	0.72809
US $	1.37839	1.37346
Euro Rate 1 Euro=		Inverse
Canadian $	1.49953	0.66687
US $	1.08789	0.91921

Commodities

Gold	Close	Previous
London Gold Fix	1075.25	1061.50
Oil	Close	Previous
WTI Crude Future	35.52	37.35

Market Commentary:

Canada

By Dani Burger

     (Bloomberg) — Canadian stocks surged the most since September, as the end of seven years of near-zero interest rates in the U.S. bolstered confidence that the economy of Canada’s largest trading partner is on a steady growth path.

     The Standard & Poor’s/TSX Composite Index advanced 1.9 percent to 13,166.08 at 4 p.m. in Toronto, the biggest gain in 11 weeks. The gauge slumped on Monday to its lowest level since October 2013.

     Equities rallied as the Federal Open Market Committee boosted rates today for the first time since 2006. All 10 groups in the benchmark advanced today, with health-care stocks leading gains. Raw-material producers advanced 3.9 percent, as gold, silver and copper prices rallied. OceanaGold Corp., Barrick Gold Corp. and Lundin Mining Corp. rose as much as 7.8 percent.

     Canadian commodity and financial shares tumbled after the Fed didn’t raise rates in September, partly due to a slowdown in China, the world’s largest consumer of commodities. The concerns have weighed on Canada’s resource-rich equity gauge, making it third worst performer this year among developed-nation benchmarks.

     Canadian Pacific Railway Ltd. rose 2.9 percent after raising its takeover offer for Norfolk Southern Corp. The company is attempting to persuade Norfolk Southern to accept a proposal to create a transcontinental railroad.

     Valeant Pharmaceuticals International Inc. jumped 8.1 percent as it attempted to restore confidence during an investor conference Wednesday. The drugmaker said that the fallout with Philidor Rx Services will cut hundreds of millions of dollars from earnings this quarter and next year.

US

By Oliver Renick and Lu Wang

     (Bloomberg) — U.S. stocks rallied as the Federal Reserve ended seven years of near-zero interest rates, and assured investors that the world’s largest economy is resilient enough to withstand future increases in borrowing costs at a gradual pace.

     Equities extended gains following the central bank’s move, pushing the Standard & Poor’s 500 Index to its biggest three-day rally since Oct. 5 as the benchmark rebounded from its worst weekly drop since August. Gains were widespread with nine of the gauge’s 10 main industries rising more than 1 percent after Fed Chair Janet Yellen expressed confidence in the economic outlook.

     The S&P 500 jumped 1.5 percent to 2,073.07 at 4 p.m. in New York, rising for three consecutive days for the first time since October and erasing losses for the year. The benchmark surged above its average prices during the past 50 and 200 days. The Dow Jones Industrial Average added 224.18 points, or 1.3 percent, to 17,749.09. The Nasdaq Composite Index gained 1.5 percent. About 8.6 billion shares traded hands on U.S. exchanges, 18 percent above the three-month average.

     “This is a very dovish rate increase,” said Stephen Wood, who helps manage $237 billion as chief market strategist for North America at Russell Investments in New York. “It came right in in line with expectations and markets appear to like that. It’s the Fed giving its seal of approval on the economy and financial conditions, but also the Fed didn’t surprise with a more aggressive future path.”

     The Fed raised rates in a widely telegraphed move while signaling that the pace of subsequent increases will be “gradual” and in line with previous projections. The Federal Open Market Committee unanimously voted to set the new target range for the federal funds rate at 0.25 percent to 0.5 percent, up from zero to 0.25 percent.

     Policy makers separately forecast an appropriate rate of 1.375 percent at the end of 2016, the same as September, implying four quarter-point increases in the target range next year, based on the median number from 17 officials.

     “The committee judges that there has been considerable improvement in labor market conditions this year, and it is reasonably confident that inflation will rise, over the medium term, to its 2 percent objective,” the FOMC said in a statement. The Fed said it raised rates “given the economic outlook, and recognizing the time it takes for policy actions to affect future economic outcomes.”

     The action ends an era of unprecedented monetary stimulus that pushed stocks higher by more than 200 percent and added $15 trillion in value during the 6 1/2 year bull market. Investors will now find out how much stocks are worth in the absence of Fed support, and how high borrowing costs will be without the central bank stoking growth as aggressively.

     For equities, history suggests two immediate consequences from tightening: higher volatility and lower valuations, meaning earnings and ultimately the economy are left to drive prices.

     Investors have spent the second half of 2015 coping with the first correction in four years and an increase in volatility that by some measures was a record. From plunging oil to emerging-market turmoils and the selloff in junk bonds, anticipation of the Fed’s retreat added to anxiety that’s already pushed a measure of volatility above levels at the start of past Fed liftoffs.

     “This was probably the most expected rate change in the history of the Fed,” said Larry Peruzzi, managing director of international equities at Mischler Financial Group Inc. in Boston. “Markets had pretty fairly readjusted their pricing on the equity and fixed-income side going into this, and the optimism now is in the wording warranting gradual interest rate increases as opposed to measured ones.”

     While policy makers have deemed the economy ready for higher borrowing costs, they continue to stress that progress in data will dictate the ultimate pace of rate increases. A report today showed new-home construction rebounded in November, led by gains in single-family dwellings. Work began on the most stand- alone houses since January 2008, and permits for similar projects reached an eight-year high.

     A separate gauge showed manufacturing stagnated last month, held back by less production of durable goods such as automobiles and metals that reflects weak global demand.                         

     The Chicago Board Options Exchange Volatility Index fell 15 percent Wednesday to 17.86, extending its decline this week to 27 percent, on track for the steepest drop since July. The measure of market turbulence known as the VIX surged 65 percent last week, the most since a record monthly jump in August.

     Nine of the S&P 500’s 10 main industries rose, with utilities up 2.6 percent, the group’s biggest advance in nine months. Phone companies and consumer staples rose at least 1.9 percent. Energy shares fell along with crude oil.

     CVS Health Corp. climbed 5.4 percent, the most in four years, to lead consumer staples. The biggest provider of prescription drugs in the U.S. raised the low end of its 2016 earnings forecast and increased its dividend. Walgreens Boots Alliance Inc. added 3.2 percent.

     Honeywell International Inc. jumped 5.7 percent, its strongest gain in more than three years. The maker of jet engines and gas detectors forecast sales and earnings above analysts’ expectations, defying an industrial slump as it cuts costs and markets new products. General Electric Co. rallied 2.2 percent to a seven-year high after projecting the return of about $26 billion in cash to investors through dividends and stock repurchases in 2016.

     Sustainable energy power generator NextEra Energy Inc. jumped 5 percent, the most in six years, to help boost the utilities group. U.S. lawmakers agreed to extend a key federal tax credit and also provided a five-year retroactive extension for the production tax credit, which benefits wind-power developers and expired at the end of 2014.

     First Solar Inc. added 9.7 percent and SolarCity Corp. soared 34 percent, the most in two years, following the extension on the tax credits, and as California regulators upheld policies that promote the use of rooftop solar panels.

     West Texas Intermediate crude-oil futures lost 4.9 percent, dragging energy producers down for the first time in three days. Pioneer Natural Resources Co. fell 7 percent, while Marathon Oil Corp. and Devon Energy Corp. dropped at least 4 percent. A report today showed U.S. crude inventories climbed to the highest level for this time of year since 1930.
 

Have a wonderful evening everyone.

 

Be magnificent!

The state of mind is a vicious circle.  It creates problems for itself, and then tries to resolve them.

Swami Prajnanpad

As ever,

Carolann

 

I never wanted to be famous.  I only wanted to be great.

                                          -Ray Charles, 1930-2004

 

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:

FALL SONG

  By Joy Harjo

It is a dark fall day.
The earth is slightly damp with rain.
I hear a jay.
The cry is blue.
I have found you in the story again.
Is there another word for “divine”?
I need a song that will keep sky open in my mind.
If I think behind me, I might break.
If I think forward, I lose now.
Forever will be a day like this
Strung perfectly on the necklace of days.
Slightly overcast
Yellow leaves
Your jacket hanging in the hallway
Next to mine.

This Day In History:

On Dec. 15, 1916, the French defeated the Germans in the World War I Battle of Verdun.

1939 – The movie “Gone With the Wind” had its world premiere in Atlanta.

1944 – Bandleader Glenn Miller’s U.S. Army plane disappeared over the English Channel.

1961 – Former Nazi official Adolf Eichmann was sentenced to death by an Israeli court.

1966 – Movie producer Walt Disney died at age 65.

PHOTOS OF THE DAY

A flock of starlings flies in the dusk sky over Rome, Italy on Tuesday. Tony Gentile/Reuters

A dog is reflected in the water of a fountain as it runs by a Ferris wheel on the place Massena as part of Christmas holiday season illuminations in Nice, France, Tuesday. Eric Gaillard/Reuters

Market Closes for December 15^th, 2015

Market Index	Close	Change
Dow Jones	17524.91	+156.41   +0.90%
S&P 500	2043.41	+21.47   +1.06%
NASDAQ	4995.355	+43.127   +0.87%
TSX	12919.57	+224.08
		+1.77%

International Markets

Market Index	Close	Change
NIKKEI	18565.90	-317.52
		-1.68%
HANG SENG	21274.37	-35.48
		-0.17%
SENSEX	25320.44	+170.09
		+0.68%
FTSE 100	6017.79	+143.73
		+2.45%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.490	1.471
CND. 30 Year Bond	2.223	2.212
U.S.    10 Year Bond	2.2676	2.2217
U.S. 30 Year Bond	2.9904	2.9525

Currencies

BOC Close	Today	Previous
Canadian $	0.72809	0.72844
US $	1.37346	1.37280
Euro Rate 1 Euro=		Inverse
Canadian $	1.50215	0.66571
US $	1.09370	0.91433

Commodities

Gold	Close	Previous
London Gold Fix	1061.50	1068.25
Oil	Close	Previous
WTI Crude Future	37.35	36.31

Market Commentary:

Canada

By Dani Burger

     (Bloomberg) — Canadian stocks rebounded from a two-year low, joining a rally in global equities as tensions on credit markets eased and oil held onto gains from a six-year low, while Valeant Pharmaceuticals International Inc. rallied the most in a decade.

     The Standard & Poor’s/TSX Composite Index advanced 1.8 percent to 12,919.57 at 4 p.m. in Toronto, the biggest gain in a month. The gauge is still down by 12 percent in this year and on Monday slumped to its lowest level since October 2013.

     Equities rebounded Tuesday as investors piled into risk assets a day before the U.S. Federal Reserve is expected to raise interest rates for the first time since 2006. The loss of stimulus comes amid ongoing concern that slowing growth in China may spread. Worries that the world’s largest consumer of resources has sent for raw materials tumbling, and pushed Canada’s resource-rich equity benchmark to the the third worst returns this year among developed nations.

     Those concerns dissipated, at least for a day, as energy- related companies rose 2.3 percent Tuesday as a selloff in crude halted amid signs that the U.S. may lift an export ban for the first time in 40 years. West Texas Intermediate climbed 2.8 percent, adding to Monday’s 1.9 percent gain.

     While traders are pricing in a 78 percent probability that the Fed will raise rates, almost all economists surveyed by Bloomberg predict that the Bank of Canada will hold interest rates steady next year. It would be a rare break between the major central banks as prices plunge for oil, copper and other commodities that Canada produces.

     Valeant rose 16 percent, its biggest gain since 2005, after agreeing to cut some drug prices in a distribution pact with Walgreens Boots Alliance Inc. The drugmaker, under scrutiny for its drug-pricing practices, will trim prices by 10 percent for branded prescription-based skin and eye products.

     A Canadian index measuring 429 micro-cap companies slid for a seventh consecutive day to a record low. The S&P/TSX Venture Composite Index sank below 500 for the first time yesterday, declining 1.2 percent.

US

By Anna-Louise Jackson

     (Bloomberg) — The Standard & Poor’s 500 Index capped its first back-to-back gains in more than a month as energy companies led a rally with crude oil, while Federal Reserve officials started a two-day meeting at which they’re widely expected to raise interest rates for the first time since 2006.

     Chevron Corp. and Exxon Mobil Corp. gained more than 3.8 percent, taking their two-day advances to at least 6.8 percent. Financial shares increased as concern over turmoil in high-yield bonds abated, with banks rallying the most in seven weeks on the eve of what most believe will be the end of the Fed’s zero interest rate policy. 3M Co. fell 6 percent, weighing on industrials after cutting its profit forecast.

     The S&P 500 climbed 1.1 percent to 2,043.41 at 4 p.m. in New York, marking its first consecutive increases since Nov. 3. The Dow Jones Industrial Average rose 156.41 points, or 0.9 percent, to 17,524.91, even as 3M’s retreat amounted to about 63 points off the index. The Nasdaq Composite Index rallied 0.9 percent. About 8.1 billion shares traded hands on U.S. exchanges, 12 percent above the three-month average.

     “What’s happening today is a realization that we ended up with a sizable rally in oil yesterday,” said Bob Baur, chief global economist at Principal Global Investors, which oversees $333 billion. “I think maybe the market is looking for some stabilization in oil and materials to put a bottom in some of the anxiety that’s hanging around the market.”

     Prospects for the first U.S. rate increase since 2006 and a deepening oil rout had sparked a selloff in riskier assets in December. The S&P 500’s 1.8 percent decline is bucking the historical trend of gains in the final month, with the equity gauge on track for its worst December in 13 years and the biggest annual drop since 2008. It has slipped 4.1 percent since a May record.

     Fed officials announce their rate decision tomorrow at 2 p.m. in Washington, and traders are pricing in a 78 percent chance of a liftoff. Data today reinforced expectations for a gradual increase in rates, with the cost of living holding steady in November, underscoring scant inflation that is well below the Fed’s goal. Among the other few economic cues before the rate announcement are reports on housing starts and industrial production Wednesday.

     “I think the Fed will be comfortable with a rate hike tomorrow,” said Brian Jacobsen, who helps oversee $242 billion as the chief portfolio strategist at Wells Fargo Advantage Funds in Menomonee Falls, Wisconsin. “They’ll certainly want to convincingly signal that they’re going to follow a very shallow path in future rate hikes.”

     While an improving U.S. economy has helped equities recover from a summer selloff and kept the Fed on track to raising borrowing costs, investors remain in a quandary as China’s slowdown threatens to weigh on global growth, a risk which continues to be reflected by weakness in commodity prices. Despite oil’s climb today, the Bloomberg Commodity Index extended further into 16-year lows.

     Amid Tuesday’s rally there were signs of easing bond-market anxiety that had leaked into equities after Third Avenue Management last week froze redemptions at a high-yield mutual fund. The SPDR Barclays High Yield Bond ETF rose 1.2 percent, and the iShares iBoxx $ High Yield Corporate Bond ETF surged 1.6 percent, the most in almost a year.

     Another gauge of investor nervousness, the Chicago Board Options Exchange Volatility Index, fell 7.8 percent Tuesday to 20.95, extending its two-day decline to 14 percent. The measure of market turbulence known as the VIX surged 65 percent last week, the most since a record monthly jump in August.

     All of the S&P 500’s 10 main industries climbed today, led by energy’s 2.9 percent jump. Financial and health-care companies added more than 1.3 percent.

     Ensco Plc rose almost 8 percent to lead the energy group, while Diamond Offshore Drilling Inc. and Transocean Ltd. added at least 4.7 percent. Exxon Mobil had its strongest gain in more than three months. West Texas Intermediate crude futures settled 2.8 percent higher, up for a second day amid signs the U.S. may allow unfettered exports for the first time in 40 years.

     Banks surged, rising along with Treasury yields amid speculation that higher interest rates will lift profits. Comerica Inc. rallied 4.3 percent, while Regions Financial Corp. and Huntington Bancshares Inc. gained at least 3.6 percent. The KBW Bank Index climbed 3.1 percent as it recovered half of its worst weekly drop since August. Among other financial companies, Morgan Stanley and Goldman Sachs Group Inc. increased more than 3 percent.

     Gains among biotechnology companies boosted the health-care group, with the Nasdaq Biotechnology Index jumping 2.8 percent. Illumina Inc. and Endo International Plc added more than 6 percent. Celgene Corp., Amgen Inc. and Biogen Inc. climbed at least 2.3 percent. Pharma giant Johnson & Johnson gained 1.9 percent.

     Walt Disney Co. rose 2.6 percent, the most since Oct. 22. The entertainment company paced gains among consumer discretionary shares just days before “Star Wars: The Force Awakens” opens in theaters nationwide. Disney and Alibaba Group Holding Ltd. also announced a multiyear licensing agreement for a device that will deliver Disney and Pixar movies, games and travel services in China.

     Media companies in the S&P 500 increased, with News Corp. and CBS Corp. advancing at least 1 percent. The group had declined more than 8 percent during the previous three weeks.

     Among other consumer shares, online travel companies Priceline Group Inc., TripAdvisor Inc. and Expedia Inc. all climbed at least 1.9 percent. Ford Motor Co. added 1.8 percent, the most in a month.

     Industrial companies in the benchmark were the day’s smallest gainer, thanks to the drag from 3M’s 6 percent drop. The maker of Post-it Notes and industrial products slid the most since in four years after cutting its 2015 earnings forecast for the second time in as many months, blaming sluggish growth in the world economy.

     Agco Corp. lost 6.8 percent, the most in a year. The world’s third-largest agricultural machinery maker projected lower-than-expected sales and profit for next year. Competitor Deere & Co. slipped 2.1 percent.
 

Have a wonderful evening everyone.

Be magnificent!
 

No one can understand the sound of a drum,

without understanding both the drum and the drummer.

No one can understand the sound of a conch shell,

Without

without understanding both the lute and the one who plays it.

As there can be no water without the sea, no touch without the skin,

no thought without the mind, no work without hands, and no walking without feet,

so there can be nothing without the soul.

Brihadaranyaka Upanishad

As ever,

 

Carolann

 

Try to learn something about everything and everything about something.

                                                              –Thomas Huxley, 1825-1895

 

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:

The Poem

Selected by Natasha Tretheway, NY Times, December 13^th, 2015:  Reading this poem, I thought of Percy Bysshe Shelley’s notion that “poetry is a mirror which makes beautiful that which is distorted.”  Here, the less-than-lovely pigeons – “huddled” scavengers “the color of sullied steel” – suddenly ascend to the sublime.

PIGEONS
     -by Danusha Laméris

Because they crowd the corner
of every city street,
Because they are the color
of sullied steel,
because they scavenge,
eating every last crust,
we do not favor them.

They raise their young
huddled under awnings
above the liquor store

circle our feet, pecking at crumbs
pace the sidewalk
with that familiar strut.

None will ever attain greatness.
Though every once in a while
in a tourist’s blurry snapshot
of a grand cathedral

they rise into the pale gray sky
all at once.

THIS DAY IN HISTORY:

On Dec. 14, 1981, Israel annexed the Golan Heights, seized from Syria in 1967.

1861 – Prince Albert, husband of Britain’s Queen Victoria, died suddenly in London at the age of 42, propelling the Queen into lifelong mourning.

1911 – Norwegian explorer Roald Amundsen became the first man to reach the South Pole.

1946 – The United Nations General Assembly voted to establish the U.N. headquarters in New York City.

1979 – The album “London Calling” by the Clash was released.

PHOTOS OF THE DAY

The Eiffel Tower is engulfed in early morning fog in Paris Monday. Gonzalo Fuentes/Reuters

Christmas lights and a lit Christmas tree adorn the Vittoriano monument, the tomb of the unknown soldier, in downtown Rome Monday.Gregorio Borgia/AP

Market Closes for December 14^th, 2015

Market Index	Close	Change
Dow Jones	17368.50	+103.29   +0.60%
S&P 500	2021.97	+9.60   +0.48%
NASDAQ	4952.230	+18.765   +0.38%
TSX	12694.25	-95.70
		-0.75%

International Markets

Market Index	Close	Change
NIKKEI	18883.42	-347.06
		-1.80%
HANG SENG	21309.85	-154.20
		-0.72%
SENSEX	25150.35	+105.92
		+0.42%
FTSE 100	5874.06	-78.72
		-1.32%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.471	1.413
CND. 30 Year Bond	2.212	2.164
U.S.    10 Year Bond	2.2217	2.1358
U.S. 30 Year Bond	2.9525	2.8817

Currencies

BOC Close	Today	Previous
Canadian $	0.72844	0.72773
US $	1.37280	1.37413
Euro Rate 1 Euro=		Inverse
Canadian $	1.50886	0.66275
US $	1.09911	0.90988

Commodities

Gold	Close	Previous
London Gold Fix	1068.25	1072.50
Oil	Close	Previous
WTI Crude Future	36.31	35.62

Market Commentary:

Canada

By Joseph Ciolli

     (Bloomberg) — Canadian stocks fell to their lowest level in more than two years as commodity prices continued to decline ahead of the U.S. Federal Reserve’s rate hike decision on Wednesday.

     The Standard & Poor’s/TSX Composite Index declined 0.7 percent to 12,695.49 at the close in Toronto, its lowest since Oct. 8, 2013. The gauge tumbled 4.3 percent last week, its third consecutive week of declines.

     As the Fed’s decision on Wednesday looms closer, a Bloomberg basket of prices for natural resources from copper to oil and gold extended its decline this year to 25 percent. Canada’s equity benchmark — 30 percent of which is commodity producers — has had the third worst returns year to date of all developed nations, only faring better than Greece and Singapore.

     Raw-materials producers lost 5 percent after Macquarie Group Ltd. said there are still doubts over improving demand for metals. First Quantum Minerals Ltd., Centerra Gold Inc. and Teck Resources Ltd. sank at least 6 percent. Gold decreased 1 percent, while copper lost 0.5 percent. The S&P/TSX gauge of commodity producers has fallen 25 percent in 2015.

     Energy producers in the S&P/TSX slid 0.7 percent even as oil rebounded after prices fell below $35 a barrel in New York for the first time since 2009. Encana Corp. and Enerplus Corp. lost more than 7.2 percent. Baytex Energy Corp. fell 5 percent to a record low, while Bankers Petroleum Ltd. decreased 4.1 percent to its lowest level since February 2009.

     Valeant Pharmaceuticals International Inc. climbed, as an index of S&P/TSX health-care companies rose 0.7 percent higher. Rogers Communications Inc. gained 1.1 percent, as Canadian phone companies advanced 1.3 percent.

US

By Anna-Louise Jackson

     (Bloomberg) — U.S. stocks rose, surging in the final minutes of trading as a rebound in crude oil overshadowed credit market turbulence and weakness in commodity shares before the Federal Reserve prepares to raise interest rates.

     The Standard & Poor’s 500 Index wiped out a 1 percent drop that briefly took the benchmark to its lowest since Oct. 6, as Chevron Corp. and Exxon Mobil Corp. rallied more than 2.2 percent. Amazon.com Inc. and Microsoft Corp. added at least 2 percent to help pace Monday’s advance.

     The S&P 500 rose 0.5 percent to 2,021.94 at 4 p.m. in New York, rebounding from its worst week since August. Equities erased earlier declines as crude oil rose 1.9 percent after swinging between gains and losses. The Dow Jones Industrial Average added 103.29 points, or 0.6 percent, to 17,368.50. The Nasdaq Composite Index gained 0.4 percent. About 8.9 billion shares traded hands on U.S. exchanges, 24 percent above the three-month average.

     “Right now the focus is macroeconomic, the Federal Reserve and commodities prices,” said John Carey, a fund manager at Pioneer Investment Management Inc. in Boston, which oversees $244.1 billion globally. “We’re on hold until Wednesday.”

     Stocks worldwide have sputtered this month, as the prospects for a Fed rate increase as soon as Dec. 16 and a drop in oil sparked a selloff in riskier assets. The deepening rout on commodities markets amplified concern that struggling resource producers won’t be able to stay solvent, while weakness in high-yield credit markets has sparked fear of contagion.

     Bond market anxiety has caught the notice of equity investors after Third Avenue Management froze redemptions at a high-yield mutual fund last week, and Lucidus Capital Partners liquidated its entire high-yield portfolio. The SPDR Barclays High Yield Bond ETF slipped 0.8 percent, trimming an earlier 1.4 percent drop, after its biggest one-day drop in four years on Friday. The iShares iBoxx $ High Yield Corporate Bond ETF fell 0.9 percent to its lowest since 2009.

     The S&P 500 slid to a two-month nadir on Friday, rounding off its first weekly drop in four as commodity and financial shares led the retreat. Asset managers extended declines today after a rout Friday following Third Avenue’s move to freeze redemptions in its $789 million Focused Credit Fund. Franklin Templeton Funds parent Franklin Resources Inc. lost 2.9 percent, while Legg Mason Inc. declined 3.4 percent.

     Nerves were further frayed just after 10 a.m. in New York when benchmark indexes such as the S&P 500 and Dow average briefly surged and retreated. In two minutes starting at 10:14 a.m., the SPDR S&P 500 ETF Trust exchange-traded fund jumped about 1 percent on volume of about 10 times the day’s earlier rate. Then it erased the move.

     “It’s clear somebody had a mistake, whether it’s a computer or a human,” said Michael Antonelli, an institutional equity sales trader and managing director at Robert W. Baird & Co. in Milwaukee. “In these kind of illiquid market days when everybody’s just kind of nervous, it can disjoint the market for an instant. It’s something we deal with a lot these days.”

     The Chicago Board Options Exchange Volatility Index fell 6.8 percent Monday to 22.73, reversing an earlier 10 percent climb. The measure of market turbulence known as the VIX surged 65 percent last week, the most since a summer market swoon led the gauge to a record monthly jump in August.

     The 2.8 percent decline for the S&P 500 in December is so far proving an exception to a historical trend of strong performance for the month, and would mark the worst end to a year since 2002. The benchmark is 8.3 percent above an August low, after rebounding as much as 13 percent from a summer selloff. Its recent drop has dragged the gauge closer to levels that chart analysts call oversold. Its relative-strength index is the lowest since September.

     Next year isn’t looking too bright for U.S. equity investors, with valuations likely to contract after the Fed’s rate increase. Past hikes have almost always put a ceiling on S&P 500 price-earnings ratios, and this would come at a time when profits are already in decline. Such a combination hasn’t occurred in five decades.

     Traders are pricing in a 78 percent chance that the Fed’s meeting will confirm Chair Janet Yellen’s belief that the U.S. economy is strong enough to withstand the first increase in borrowing costs since 2006. Investors have wavered between optimism about the U.S. and concern that a slowdown in China will damp global growth prospects.

     There will be few economic cues to go on before the Fed’s announcement Wednesday, with reports on U.S. housing starts and industrial production scheduled for the day of the decision.

     FedEx Corp., Oracle Corp., General Mills Inc. and homebuilder Lennar Corp. are due to report quarterly results this week. With a little more than two weeks left in the fourth quarter, analysts forecast a 5.8 percent drop in S&P 500 companies’ profits for the period, after a 3.8 percent decline last quarter.

     In Monday’s trading, nine of the S&P 500’s 10 main industries climbed, led by phone, energy and consumer staples companies. Raw-materials shares lost 1.4 percent as the group fell for a third consecutive day to the lowest level in two months.

     “There are a lot of fireworks here coming down to the wire with the Fed,” said Jim Paulsen, the Minneapolis-based chief investment strategist at Wells Capital Management Inc. “Oil seems to be the big story today. If oil does show some stability, you’ve got people who would buy on a bounce.”

     Oil and gas producers advanced as crude rebounded on speculation hedge funds were buying back some of their record bearish bets after prices dropped below $35 a barrel in New York for the first time since 2009. ConocoPhillips and Chevron climbed more than 2.9 percent, after losing at least 2.2 percent on Friday. Diamond Offshore Drilling Inc. led the group with a 3.6 percent gain.

     Technology shares erased an earlier drop as Apple Inc. pared its decline after losing as much as 3 percent. Morgan Stanley cut its 2016 iPhone sales outlook while JPMorgan Chase & Co. noted signs of weakness in the company’s supply chain. Facebook Inc. and Google parent Alphabet Inc. added at least 1.6 percent.                    

     Financial companies closed little changed. In addition to the retreat among asset managers, American International Group Inc. and Hartford Financial Services Group Inc fell at least 1.4 percent. Those declines were offset as CME Group Inc. and Charles Schwab Corp. rose more than 1.5 percent.

     DuPont Co. and Dow Chemical Co., which last week agreed on the largest-ever chemicals merger, lost more than 3.5 percent. Dan Loeb, the founder of hedge fund Third Point which holds a 2 percent stake in Dow, is calling for the removal of Dow Chemical Co. Chief Executive Officer Andrew Liveris. Loeb supports the merger.

     Newmont Mining Corp. and Freeport-McMoRan Inc. fell at least 4 percent as gold and copper prices declined.

Have a wonderful evening everyone.

Be magnificent!

The like and dislike is the result of my culture, my training, my associations,

my inclinations, my acquired and inherited characteristics.

It is from that center that I observe and make my judgments,

and the observer is separate from the thing he observes.

Krishnamurti

As ever,

 

Carolann

 

Success is getting what you want.  Happiness is wanting what you get.

                                                       -Dale Carnegie, 1888-1955

 

 

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