September 14, 2015 Newsletter

Dear Friends, 

Tangents: 

PHOTOS OF THE DAY

 The Golden Temple is illuminated as Sikh devotees throng the shrine on the 411st anniversary of the installation of the Guru Granth Sahib, the religious book of Sikhs, in Amritsar, India, Monday. Munish Sharma/Reuters

 A festival goer walks through a so-called ‘luminarium’ (an interactive walk-in sculpture maze) at the Lollapalooza festival at the former Tempelhof airport in Berlin, Germany, Sunday. Britta Pedersen/dpa/AP

Market Closes for September 14, 2015

International Markets

Bonds

Currencies

Commodities

 Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canada stocks fell, adding to last week’s loss, as commodities producers slipped after disappointing Chinese industrial data deepened investor concerns that global economic growth is slowing.

     Energy and raw-materials producers paced declines among equities, dropping at least 1.4 percent. West Texas Intermediate crude fell a fifth time in six days as China’s slowdown stoked fears global oversupply will continue. New York oil tumbled 2.8 percent Friday after Goldman Sachs Group Inc. said prices could fall to as low as $20 a barrel.

     Canadian stocks have continued their slide this month after slumping 4.2 percent in August for the worst performance in a year amid a rout among global financial markets following China’s shock currency devaluation. China is Canada’s second- largest trading partner after the U.S.

     The Standard & Poor’s/TSX Composite Index lost 108.13 points, or 0.8 percent, to 13,353.34 at 4 p.m. in Toronto. The equity gauge has slumped 8.7 percent this year.

     Global stocks retreated, with the Shanghai Composite Index dropping the most in three weeks overnight. Industrial output in China rose 6.1 percent in August, short of economists’ forecasts, while investment in the first eight months increased at the slowest pace since 2000. The S&P 500 slipped 0.4 percent in New York.

     Canada’s federal government posted an unexpected surplus of C$1.9 billion in its last budget for the fiscal year ended March 31, the finance ministry said. Prime Minister Stephen Harper’s government had previously forecast a C$2 billion deficit.

     First Quantum Minerals Ltd. dropped 8.1 percent and Teck Resources Ltd. lost 3 percent as raw-materials producers slumped 1.7 percent as a group. Nickel and copper fell, leading declines in industrial metals.

     B2Gold Corp. tumbled 7 percent and Eldorado Gold Corp. retreated 3.3 percent as gold in New York rose 0.4 percent after a 1.6 percent decline last week. The U.S. Federal Reserve begins two days of meetings in Washington Wednesday, with traders predicting a 30 percent chance the central bank will raise interest rates.

     The resource-rich S&P/TSX has been one of the worst- performing developed markets in the world this year as crude plunged. Energy and raw-materials producers have the biggest declines among 10 industries in the S&P/TSX this year.

     SNC-Lavalin Group Inc. dropped 3.9 percent after naming Neil Bruce the engineering firm’s next chief executive officer effective Oct. 5, succeeding Robert Card. Bruce had been SNC’s chief operating officer.

     Bombardier Inc. sank 11 percent for a second day of losses, after soaring a record 56 percent last week amid optimism over the potential value of its rail unit and sales prospects for the CSeries jet. The company is due for a “significant correction” as the market-implied value of Bombardier’s transportation unit is less likely, Macquarie Capital Markets analyst Konark Gupta said in a note.

US 

By Emma O’Brien

     (Bloomberg) — The dollar maintained losses as bets on the Federal Reserve raising interest rates this Thursday held below 30 percent. Concern over China’s deepening slowdown saw futures on most Asian stock indexes signaling declines following a pull back in U.S. equities.

     Japanese index futures bucked the trend, rising in Osaka and Chicago ahead of a monetary policy review and after losses of more than 1 percent in stock gauges there Monday. Oil in New York remained below $45 a barrel, while copper resumed its advance with commodities trading in line with sentiment toward China, the No. 1 consumer of industrial metals.

     While the Fed’s meeting is this week’s marquee event, attention will be trained on the Bank of Japan Tuesday with some economists predicting it will expand stimulus as soon as this month amid a lackluster recovery. With two days to go until the Fed’s statement, interest-rate futures put the odds of a hike this week at 28 percent, down from more than 50 percent before China roiled markets with its surprise currency devaluation. U.S.-traded Chinese stocks followed losses in Shanghai on Monday.

     “The market is in a wait-and-see mode,” said Randy Frederick, managing director of trading and derivatives at Charles Schwab Corp. in Austin, Texas. “Unless we get a major, major move in oil or the dollar or China pulls a crazy stunt, I think we’ll be like this until Thursday.”

The dollar was little changed at 120.27 yen by 7:43 a.m. in Tokyo, after slipping 0.3 percent on Monday. Australia’s dollar was near a two-week high versus the greenback after the sitting prime minister was ousted by a former cabinet minister. Standard & Poor’s 500 Index futures climbed 0.1 percent after the gauge dropped 0.4 percent in its first decline in three days. Nikkei 225 Stock Average futures rose 0.3 percent in Chicago, with contracts on indexes in Australia and Hong Kong down at least 0.3 percent in recent trade. Copper futures advanced for the fifth time in six days.

     Monday’s retreat in U.S. equities followed their best week since July, with uncertainty over the Fed’s move taking hold. While economists are evenly divided on whether the U.S. central bank will pull the trigger on the first American rate increase since 2006, the declining odds hit the dollar Monday, with the Bloomberg Dollar Spot Index slipping a third day to its lowest level in almost three weeks. Treasuries held onto their gains, with 10-year yields down one basis point to 2.19 percent.

     Futures on Australia’s S&P/ASX 200 Index tracked the losses in the U.S., slipping 0.3 percent in most recent trading, while those on the Kospi index in Seoul were little changed. Contracts on the Hang Seng Index in Hong Kong declined 0.6 percent. Futures on the Hang Seng China Enterprises Index, a gauge of Chinese equities listed in the city, were down 0.4 percent as were those on the FTSE China A50 Index.

     While Hong Kong shares rallied last session, the Shanghai Composite Index dropped 2.7 percent, its steepest sell-off in three weeks after disappointing data on investment and industrial output underlined concerns over the economic outlook. The biggest U.S.-listed exchange-traded fund tracking Chinese stocks slid 5 percent on Monday, while the Bloomberg China-US Equity Index lost 2 percent.

Have a wonderful evening everyone.

Be magnificent!

“Aim for the moon. If you miss, you may hit a star.

W. Clement Stone

As ever,

Leyla

Optimism is the faith that leads to achievement. Nothing can be done without hope and confidence.

Helen Keller

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

Senior Portfolio Manager &

Senior Vice-President

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7