November 3, 2015 Newsletter

Dear Friends,

Tangents:

On November 3^rd, 1874, Francis Kilvert wrote in his Diary:

I went into Bowood Park by the Studey Gate and turned sharp to the left down a drive that brought me soon into the very heart and splendour of the beeches.  As the sun shone through the roof of beech boughs overhead the very air seemed gold and scarlet and green and crimson in the deep places of the wood and the red leaves shone brilliant standing out against the splendid blue of the sky.  A crowd of wood pigeons rose from the green and misty azure hollows of the plantation and flapped swiftly down the glades, the blue light glancing off their clapping wings.  I went by the house down to the lakeside and crossed the water by the hatches above the cascade.  From the other side of the water the lake shone as blue as the sky and beyond it rose from the water’s edge the grand bank of sloping woods glowing with colours, scarlet, gold, orange and crimson and dark green.  Two men were fishing on the further shore of an arm of the lake and across the water came the hoarse belling of a buck while a coot fluttered skimming along the surface of the lake with a loud cry and rippling splash.

  –Robert Francis Kilvert (3 December 1840 – 23 September 1879), always known as Francis, or Frank, was an English clergyman remembered for his diaries reflecting rural life in the 1870s, which were published over fifty years after his death.

Bowood Woodland Gardens were named  “Garden of the Year for 2014.”

PHOTOS OF THE DAY

The Northern Lights, or Aurora Borealis, appear over Ludington State Park at about 2:40 a.m. on Tuesday in Ludington, Mich. Joel Bissell/MLive.com/AP

People take pictures during the opening ceremony Tuesday of Rome’s Trevi Fountain after it was restored. Italian fashion house Fendi is one of the luxury companies that stepped in to prop up Italy’s crumbling monuments as public funding for their upkeep dwindled. Alessandro Bianchi/Reuters

Market Closes for November 3^rd, 2015

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose a second day, extending last month’s rally, with energy companies advancing as oil climbed to a three-week high and as fertilizer makers gained.

     Cenovus Energy Inc. and Crescent Point Energy Corp. paced an increase among energy stocks, rallying at least 5.5 percent. West Texas Intermediate oil futures added 3.8 percent in New York on speculation U.S. refineries increased crude demand for a third week and on supply risks from Brazil to Libya.

     The Standard & Poor’s/TSX Composite Index rose 87.30 points, or 0.6 percent, to 13,710.31 at 4 p.m. in Toronto. The Canadian benchmark equity gauge climbed 1.7 percent in October, the best since April. It was nevertheless the worst performance among 24 developed-nation markets in that time, as a gauge of global equities capped its best month in four years.

     Canadian energy stocks jumped 2.3 percent, to a two-week high, the most among 10 industries in the S&P/TSX. An Energy Information Administration report Wednesday is expected to show crude stockpiles rose by the smallest amount in six weeks while gasoline supplies fell.

     Also, Libya’s Tripoli-based National Oil Corp. declared force majeure due to a “deteriorated security situation,” allowing it to suspend deliveries on crude shipments. In Brazil, oil workers are on strike in the Campos Basin, as workers demand Petroleo Brasileiro SA reverse spending cuts and halt an asset sale.

     Fertilizer producers Potash Corp. of Saskatchewan Inc. and Agrium Inc. increased at least 2 percent after U.S. producer Mosaic Co., the largest maker of potash, told investors it will continue to manage supply to stabilize prices and that inventory levels are falling in North America. Most of the new potash supply planned by the industry is still years away from reaching the market, Mosaic Chief Executive Officer Joc O’Rourke said during a Tuesday conference call.

     Consumer staples added 1.7 percent, led by a 3.8 percent climb by Alimentation Couche-Tard Inc., the most in two months, after RBC Capital Markets raised its rating on the shares to the equivalent of a buy.

     TransCanada Corp. rose 0.4 percent after requesting to pause a U.S. review of its long-delayed Keystone XL oil pipeline. The Calgary-based company asked Secretary of State John Kerry in a letter Monday to suspend assessment of the $8- billion project while awaiting results of a separate review in Nebraska.

US

By Joseph Ciolli and Kate Garber

     (Bloomberg) — U.S. stocks extended a rally, with the Standard & Poor’s 500 Index reaching a three-month high, as beaten-down commodity producers continued to pace the recovery from a third-quarter rout.

     Chevron Corp. and Exxon Mobil Corp. gained more than 1.8 percent as crude oil climbed to a three-week high. The energy group has rebounded 22 percent from an August low. Copper producer Freeport-McMoRan Inc. increased 5 percent today, while raw-material companies in the benchmark index have surged nearly 18 percent in the last five weeks. Gains have come as the Federal Reserve kept interest rates pinned near zero and other central banks signaled their willingness to boost stimulus.

     The S&P 500 rose 0.3 percent to 2,109.79 at 4 p.m. in New York, to close 1 percent below its all-time high set in May. The Dow Jones Industrial Average added 89.39 points, or 0.5 percent, to 17,918.15 after yesterday erasing its loss for the year. The Nasdaq 100 Index, the first major U.S. stock gauge to retake a multiyear high established earlier in 2015, climbed 0.3 percent to a record for the first time since the dot-com bubble.

     “We’re back to where we were before that downturn took place, with reasonable earnings, modest growth and low interest rates,” said Bill Schultz, who oversees $1.2 billion as chief investment officer at McQueen, Ball & Associates Inc. in Bethlehem, Pennsylvania. “That’s a backdrop that’s allowing upward momentum to re-enter the market. All of the fears built into the market in August and September haven’t come to fruition.”

     The S&P 500 has rallied 13 percent since bottoming amid an August selloff that sent the benchmark into its first correction in four years. Fading concern that China’s slowdown will spread, optimism for further stimulus from central banks overseas and better-than-expected U.S. corporate earnings have all have a hand in propelling the recovery.

     As the Fed boosted prospects of an interest-rate increase last month, investors continue to look to data to gauge whether the world’s largest economy can withstand higher borrowing costs. A report today showed factory orders slipped more than expected in September, while the prior month’s decline was steeper than previously reported. That comes a day after separate data showed manufacturing activity remained stuck in neutral in October.

     Traders are pricing in a 50 percent chance of liftoff at the Fed’s December meeting. Fed Chair Janet Yellen, Vice Chair Stanley Fischer and New York Fed’s William Dudley are all scheduled to deliver remarks on Wednesday.

     Investors will also look to earnings for a read on the health of the economy. Time Warner Inc., Allergan Plc and Facebook Inc. are among more than 100 S&P 500 companies releasing results this week. Of those that have reported this season, about 74 percent exceeded profit projections, while 56 percent missed sales forecasts. Analysts now estimate earnings dropped 3.9 percent in the third quarter, up from predictions for a 6.1 percent decline a week earlier.

     The Chicago Board Options Exchange Volatility Index rose 2.8 percent Tuesday to 14.54, up for the third time in four sessions and reversing an earlier 2.4 percent decline. The measure of market turbulence known as the VIX posted its biggest monthly drop ever in October. About 7.5 billion shares traded hands on U.S. exchanges today, in line with the three-month average.

     Energy companies led gains among the S&P 500’s 10 main groups for a third session as oil rallied for the fourth time in five days. Shares of consumer staples and phone companies declined the most.

     “When you see energy and cyclicals continue to rally like this it’s because they’re under-owned sectors,” said Michael Antonelli, an institutional equity sales trader at Robert W. Baird & Co. “They’re the sectors that were left for dead. When you get these pain-trade rallies like we’re seeing right now, those are the sectors that people go to because they’re under- owned.”

     Visa Inc., Apple Inc. and Microsoft Corp. increased more than 1.1 percent to help send technology companies in the benchmark index to a 15-year high. The sector is up about 19 percent from an August low, with the rebound boosted last month by stronger-than-expected profits at Microsoft and Google parent Alphabet Inc.

     Consumer discretionary shares reached a record, with Wynn Resorts Ltd. up 2.9 percent, and L Brands Inc. rising 3 percent to an all-time high as the owner of the Victoria’s Secret lingerie brand posted stronger-than-expected preliminary results.

     Diamond Offshore Drilling Inc. and Consol Energy Inc. increased more than 4.8 percent, with both extending their two- day climb to at least 18 percent. The energy group has kicked off November with a 5 percent rally, reaching the highest level since July 17.

     Mosaic Co. gained 5.9 percent, its strongest advance in four years, to lead raw-materials higher. The fertilizer maker posted a better-than-estimated quarterly profit, while it also trimmed its full-year outlook on capital expenditures. Alcoa Inc. and Monsanto Co. rose more than 2.2 percent.                         

     King Digital Entertainment Plc jumped 15 percent to its highest in more than a year after the maker of the Candy Crush game agreed to a $5.9 billion takeover from Activision Blizzard Inc. Activision advanced 3.6 percent to an all-time high. Mobile-game maker Zynga Inc. climbed 2.5 percent.

     Archer-Daniels-Midland Co. lost 6.8 percent, the most in four years, to drag on consumer staples. The world’s largest corn processor reported third-quarter earnings that missed analysts’ estimates as ethanol margins shrank and the stronger dollar curbed U.S. exports of the grain. Kellogg Co. slumped 3.6 percent as third-quarter revenue trailed estimates after sales of breakfast foods slumped and currency fluctuations ate into revenue.

     American International Group Inc. lost 4.4 percent, its biggest drop in two months, after reporting a third-quarter loss and lower-than-expected operating income. Chief Executive Officer Peter Hancock also dismissed activist investor Carl Icahn’s proposal to split the company into three insurers.

     Martin Marietta Materials Inc. slumped 8.5 percent, the most since 2008. The largest U.S. producer of crushed stone reported third-quarter profit and sales that missed analysts’ estimates on a sluggish nonresidential market.

     Fidelity National Information Services Inc. tumbled 12 percent, the worst performance in the S&P 500. The payment services provider fell the most in 13 years after third-quarter revenue missed expectations while earnings were in line.
 

Have a wonderful evening everyone.

Be magnificent!

When you abandon every desire that rises up within you,

and when you become content with things as they are, then you experience inner peace.

When your mind is untroubled by misfortune, when you desire no pleasures,

when your emotions are tranquil, and when you are free from fear and anger,

then you experience inner calm.  When you are free from all attachments,

when you are indifferent to success and failure,

then you experience inner serenity.

When you can withdraw your senses from pleasures of the senses,

just as a tortoise withdraws its limbs,

then you experience inner wisdom.

The Bhagavad Gita

As ever,

Carolann

Your attitude, not your aptitude, will determine your altitude.

                                                   -Zig Ziglar, 1926-2012

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