August 14, 2015 Newsletter

Dear Friends,

Tangents:

V-J DAY AUGUST 14^TH, 1945

THE POEM

Last Love

Towards our end, as life runs out,
love is more troubled and more tender.
Fade not, fade not, departing light
of our last love, our farewell splendour.

Shadow overshadows half the sky;
far to the west the last rays wander.
Shine on, shine on, last light of day;
allow us still to watch and wonder.

What if our blood runs thinner, cooler?
This does not make the heart less tender.
Last love, last love, what can I call you?
Joy and despair, mortal surrender.

       -by Fyodor Tyutchev, 1851.

PHOTOS OF THE DAY

The Milky Way is seen in the night sky over rocks in the natural reserve area of Wadi Al-Hitan, or the Valley of the Whales, in the desert of Al Fayoum Governorate, southwest of Cairo, Friday. Wadi Al-Hitan holds an impressive collection of fossils and bones, some of which date back more than 40 million years. The entire site resembles an open-air museum with marked trails that visitors can follow to admire the fossils and rock formations that extend over a vast area. Amr Abdallah Dalsh/Reuters

Members of the Devipujak tribe gather at a graveyard during the Diwaso festival in Ahmadabad, India, Friday. They decorate graves, mourn and offer gifts to deceased relatives during this annual festival. Ajit Solanki/AP

Married couple Kenji and Kristen Kawasaki (l.) join others as they re-enact the iconic 1945 Alfred Eisenstaedt kiss photo Friday in New York’s Times Square. Dozens of couples gathered to re-enact the famous kiss that celebrated the end of WWII. A 25-foot-high sculpture replica of the original kiss (top), entitled ‘Embracing Peace,’ is in Times Square until Sunday. Bebeto Matthews/AP

Market Closes for August 14^th, 2015

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose, halting a three-day decline, as an advance in the nation’s largest lenders overcame losses among energy producers after crude capped the longest weekly slump since January.

     Royal Bank of Canada added 0.8 percent and Just Energy Group Inc. surged 9.2 perent to lead gains among financial- services and utilities stocks.

     Bombardier Inc. and Air Canada slumped after Canadian factory sales rose in June by less than half the advance forecast by economists. Faltering exports of non-energy goods have been a puzzle to the Bank of Canada, which cut interest rates a second time this year.

     Gold producers retreated, paring their increase for the week to 8.7 percent, the most since January. China unexpectedly updated its bullion positions for a second time after six years of silence. Energy stocks slipped to extend their weekly slide to 1 percent.

     The Standard & Poor’s/TSX Composite Index rose 39.48 points to 14,277.88 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has fallen 0.2 percent this week.

     Commodities producers are the worst-performing industries in the S&P/TSX this year as crude slumped into a bear market and metals from copper to gold have declined amid concern global growth is slowing. Energy and raw-materials account for about 30 percent of the benchmark equity gauge.

     Trican Well Service Ltd. plunged a record 32 percent after warning there’s a risk it won’t emerge from the oil slump, even after agreeing to sell its Russian unit for $140 million. The stock has slumped 76 percent this year, the worst-performing stock in the S&P/TSX.

     Trican forecasts breaching a covenant with lenders by the end of September that may trigger its debt to become due on demand.

     Bombardier slumped 7.5 percent, extending a 1993 low, after the struggling aerospace manufacturer’s third-largest shareholder said Chief Executive Officer Alain Bellemare will need more time to reverse the company’s fortunes. Bombardier, the second-worst stock in the S&P/TSX this year, is down 67 percent in 2015.

US

By Callie Bost and Sofia Horta e Costa

     (Bloomberg) — U.S. equities advanced, sending the Standard & Poor’s 500 Index higher for the week, as investors turned their attention to economic reports amid the Federal Reserve’s intention to raise interest rates.

     The S&P 500 rose 0.4 percent to 2,091.54 at 4 p.m. in New York, giving it a gain of 0.7 percent for the week. The Dow Jones Industrial Average added 69.15 points, or 0.4 percent, to 17,477.40. The Nasdaq Composite Index increased 0.3 percent.

     “Economic data has been a bit better than expected and people are not worrying as much about China,” said Paul Zemsky, head of multi-asset strategies at Voya Investment Management LLC. “Those are helping, and the fact that the yuan has stabilized and hasn’t come crashing down has given a bid under the market.”

     Data today showed factory production rose more than economists forecast, indicating American manufacturing is regaining its footing after a slowdown. Improving U.S. demand will help cushion factories from weakening global markets, the stronger dollar and the slump in oil prices.

     Separate data showed wholesale prices in the U.S. climbed at a slower pace in July. Confidence among U.S. consumers eased for a second month in August as households braced for an increase in interest rates.

    Traders have raised their expectations for a September rate move by the Fed, amid the data and as concerns about the impact of China’s currency devaluation ease. The probability of a rate increase in September is 48 percent, up from 40 percent Tuesday, according to futures trading data compiled by Bloomberg.

     Even with predictions rates will rise next month, calm has blanketed the U.S. stock market. The Chicago Board Options Exchange Volatility Index, known as the VIX, is below its 12- month average. The gauge slipped 4.9 percent to 12.83 on Friday.

     U.S. stocks still trail most developed markets this year, with the S&P 500 holding in the tightest trading range since 1927. Just five mega-cap stocks — Apple Inc., Amazon.com Inc., Facebook Inc., Google Inc. and Netflix Inc. — are propping up the market, with combined gains in 2015 that actually exceed the entire S&P 500.

     As the earnings season winds down, about three-quarters of the S&P 500 companies that have reported so far beat profit estimates, while less than half topped sales projections. Analysts expect a 2.1 percent drop in second-quarter earnings, less than July 10 calls for a 6.4 percent decline.

     Nine of 10 major industries in the S&P 500 advanced, led by financial, industrial and utility companies. Energy shares slipped 0.2 percent.

     Among stocks moving on corporate news, Nordstrom Inc. rose 4.3 percent after its full-year profit forecast exceeded analysts’ estimates. J.C. Penney Co. jumped 5.6 percent after posting a second-quarter loss that was smaller than analysts estimated and saying the back-to-school shopping season was off to a “strong start.”

     Sysco Corp. rose 7.4 percent, the most since December 2013, after activist investor Nelson Peltz disclosed a 7.1 percent stake in the food distributor and said he may seek representation on the board.

     King Digital Entertainment Plc dropped 11 percent as the maker of the Candy Crush video games said bookings will drop in the third quarter.

     Applied Materials Inc. fell 2.4 percent as the largest maker of machinery used to build computer chips forecast fiscal fourth-quarter sales that trailed analysts’ estimates.

     El Pollo Loco Holdings Inc. dropped 21 percent to a record low after the chain of chicken restaurants said sales this year would rise at the low end of its forecasted range.

Have a fabulous weekend everyone.

Be magnificent!

I do not want my house to be walled in on all sides and my windows to be stuffed.

I want the cultures of all the lands to blow about my house as freely as possible.

But I refuse to be blown off my feet by any.

Mahatma Gandhi

As ever,

Carolann

Only those who dare to fail greatly can ever achieve greatly.

                                    -Robert F. Kennedy, 1925-1968

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