November 9, 2015 Newsletter

Dear Friends,

Tangents:

On Nov. 9, 1989, East Germany lifted restrictions on emigration or travel to the West, and within hours tens of thousands of East and West Berliners swarmed across the infamous Berlin Wall for a boisterous celebration.

Kristallnacht, “Crystal Night’, November 9, 1938: pogrom against Jews in Germany.

On this day in 1989, East Germany opens the Berlin Wall.

The Poem:

      -selected by Natahsa Tretheway, NY Times, 11/8/2015.

My Life
    -by Lynn Emanuel

Like Jonas by the fish was I received by it,
swung and swept in its dark waters,
driven to the deeps by it and beyond many rocks.
Without any touching of its teeth, I tumbled into it
with no more struggle than a mote of dust
entering the door of a cathedral, so muckle were its jaws.
How heel over head was I hurled down
the broad road of its throat, stopped inside
its chest wide as a hall, and like Jonas I stood up
asking where the beast was and finding it nowhere,
there in grease and sorrow I build my bower.

PHOTOS OF THE DAY

A man walks past vineyards around Kappelberg hill near Fellbach and Stuttgart, Germany, Monday. Christoph Schmidt/dpa/AP

An Egyptian policeman walks near the Khufu pyramid in Giza, Egypt, Monday. Egypt’s Antiquities Ministry says a scanning project in the Giza pyramids has identified thermal anomalies, including one in the largest pyramid, built by Cheops, known locally as Khufu. Nariman El-Mofty/AP

Market Closes for November 9^th, 2015

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks fell a fourth day, for the lowest close in a month, as financial services companies declined and energy producers slipped with crude prices.

     Weaker demand for coal, iron and other commodities from declining heavy industries led to a slump in imports in China, one of the world’s largest consumers of raw-materials. The nation is Canada’s second-largest trading partner after the U.S. The rising prospect for higher American interest rates led to a slump in financial services shares.

     The Standard & Poor’s/TSX Composite Index fell 70.68 points, or 0.5 percent, to 13,482.62 at 4 p.m. in Toronto. The index has lost 7.9 percent this year, trailing only Singapore and Greece among developed markets.

     Canadian equities have lagged most peers as the country’s resource-dominated market has been hampered by a slump in oil prices, slowing overseas growth and the prospect of an interest rate hike from the Federal Reserve.

     Canadian Pacific Railway Corp. jumped 5.7 percent, the most in two years. The company, the second-biggest railroad in Canada, is exploring a takeover of U.S. carrier Norfolk Southern Corp. according to people familiar with the matter.

     Energy shares and base-metals producers slipped Monday, as nickel fell to the lowest in more than two months and a basket of global commodities tumbled a fourth day. First Quantum Minerals Ltd. and Teck Resources Ltd. retreated 2.7 percent.

     Crude futures in New York slipped below $44 a barrel to the lowest level in two weeks. Oil has slumped more than 40 percent in the past year amid speculation global oversupply will persist. Canadian Natural Resources Ltd. and Suncor Energy Inc. dropped at least 1.3 percent.

     Brookfield Asset Management Inc., Canada’s largest alternative asset manager, lost 5.6 percent for the biggest decline in five years, after an Australian newspaper reported Qube Holdings Ltd. will submit a counter-proposal to Brookfield’s earlier bid for Asciano Ltd., an Australian rail and port operator.

     Financial stocks retreated 1.1 percent as a group, reversing a two-day advance. Royal Bank of Canada and Bank of Nova Scotia, among the nation’s largest lenders, slipped at least 0.8 percent.

     Valeant Pharmaceuticals International Inc. increased 3.7 percent for a second day of gains, after rebounding from a 2013 low. The drugmaker will host an investor call Tuesday to provide an update on its operations including the transition from its prior relationship with specialty pharmacy Philidor. Valeant has lost 68 percent from an Aug. 5 high amid pressure over how it prices its drugs.

US

By Kate Garber and Anna-Louise Jackson

     (Bloomberg) — The Standard & Poor’s 500 Index tumbled the most in more than a month as the possibility that the Federal Reserve will raise interest rates as early as December weighed on equities.

     Investors had shrugged off the threat of higher rates on Friday, focusing instead on a robust jobs report that signaled the U.S. economy may be ready to withstand tighter monetary policy. That sentiment reversed Monday in the absence of any additional data and after American equities ended last week near the highest level in three months.

     “People sort-of stewed on it over the weekend that we’re facing a rate hike in December,” said Robert Pavlik, who helps oversee $9.1 billion as chief market strategist at Boston Private Wealth. “I don’t think it’s the 25 basis points that’s necessarily leading the market down, but what comes after. How fast and furious do the rate hikes come now that this cheap money environment is coming to an end?”

     The S&P 500 slipped 1 percent to 2,078.58 at 4 p.m. in New York, the most since Sept. 28 and its fourth straight drop. The Dow Jones Industrial Average lost 179.85 points, or 1 percent, to 17,730.48. The Chicago Board Options Exchange Volatility Index jumped 15 percent, its biggest increase since September.

     The day’s selloff was broad-based. Multinationals with exposure to a stronger dollar were hit hard, with Caterpillar Inc. sliding 2.6 percent. Macy’s Inc. and Kohl’s Corp. led retailers lower. Mallinckrodt Plc plummeted 17 percent after the drugmaker was mentioned by the stock-commentary site whose scrutiny helped lead to a rout in Valeant Pharmaceuticals International Inc.

     Norfolk Southern Corp. and Apache Corp. rallied on merger speculation, while utility shares had the only gains among 10 S&P 500 groups after plunging 3.6 percent Friday.

     The S&P 500 is coming off its sixth straight weekly gain, a streak that pushed it within 1.5 percent of its May record. The S&P 500’s rebound since suffering its first correction in four years has helped restore almost $2 trillion to the market value of U.S. stocks. 

     “I’m sure a few people will want to use this moment to trim some positions — it’s only prudent,” said Heinz-Gerd Sonnenschein, a strategist at Deutsche Postbank AG in Bonn, Germany. “We have to consider the levels we’ve reached now, given that the S&P 500 is only just slightly off its record.”

     The benchmark equity gauge rose 1 percent last week even as the best monthly employment report of the year pushed odds for an interest-rate hike in 2015 to as high as 70 percent. The surge in hiring spurred speculation that the world’s largest economy is strong enough to withstand higher borrowing costs.

     Global investors continue to adjust to the increased likelihood that America’s benchmark rate will rise this year, a move that would end an unprecedented era of record-low borrowing costs. The policy-setting Federal Open Market Committee meets in Washington on Dec. 15-16, when it will decide on whether to raise the benchmark federal funds rate for the first time since 2006.

     Federal Reserve Bank of Boston President Eric Rosengren said in remarks today that encouraging U.S. economic data coupled with emerging signs of risk-taking by some investors make it appropriate for the central bank to consider raising rates as soon as next month, while moving gradually thereafter.

     Consumer-discretionary and energy stocks had the biggest declines among 10 groups in the S&P 500. Macy’s and Kohl’s declined more than 5.4 percent after Citigroup Inc. cut its earnings estimates for the companies, saying the industry is suffering from a sales slowdown and inventory glut.

     Priceline Group Inc. dropped 9.6 percent, the most since 2012. The largest U.S. online travel agent gave a fourth-quarter earnings forecast range that trailed analysts’ estimates as it faces competition from Expedia Inc. and Airbnb Inc.

     Energy shares fell 1.5 percent, with Exxon Mobil Corp. and Chevron Corp. losing more than 1.8 percent.

     Mallinckrodt plummeted as much as 26 percent after Citron Research said in a Twitter message that the company has “significantly more downside” than Valeant and is “a far worse offender” of the reimbursement system. The firm is led by short- seller Andrew Left.

     Valeant shares have fallen more than 40 percent since Citron’s report examined the drugmaker’s relationship with specialty pharmacies and questioned whether the company was faking sales through its distribution channel — an allegation Valeant has denied. Valeant rose 4.5 percent today.

     Financial companies slumped 1.2 percent, as JPMorgan Chase & Co. and Bank of America Corp. retreated at least 1.5 percent. The Bloomberg U.S. Airlines Index dropped 1.5 percent while an S&P measure of home builders tumbled 1.6 percent. Technology companies also slid as International Business Machines Corp., Intel Corp. and Microsoft Corp. retreated at least 1.4 percent.

     “I don’t think anyone came into work today figuring that they had to load up on stocks,” Peter Tuz, who helps manage $400 million as president of Chase Investment Counsel Corp. in Charlottesville, Virginia. “With the recovery of the market, there are fewer bargains than there were 6 or 8 weeks ago.”

     Some of the day’s biggest winners were companies tied to acquisition news.

     Norfolk Southern jumped 11 percent, paring a 2.2 percent drop in the Dow Jones Transportation Average, after people familiar with the matter said Canadian Pacific Railway Ltd. is exploring a takeover of the U.S. carrier in a fresh attempt to consolidate the North American industry.

     Apache jumped 13 percent, its biggest jump since 2008, as people familiar with the matter said the oil and natural gas company has received an unsolicited takeover approach.

     Plum Creek Timber Co. climbed 17 percent as Weyerhaeuser Co. agreed to buy the company for about $8.4 billion to create a real estate investment trust that will be the largest private owner of timberland in the U.S.

     Weight Watchers International Inc. added 3.5 percent after Steven A. Cohen’s Point72 Asset Management reported a new stake in the company. Weight Watchers has more than tripled since announcing a partnership with Oprah Winfrey last month. The shares soared 35 percent Friday as quarterly results topped analysts’ estimates.

     Dean Foods Co. gained 7.3 percent, the most in a year. The largest U.S. dairy processor posted third-quarter profit and forecast earnings for the fourth quarter that both topped analysts’ estimates as it benefits from a decline in raw-milk costs.
 

Have a wonderful evening everyone.

Be magnificent!
 

Violence is not merely killing another.

It is violence when we use a sharp word,

when we make a gesture to brush away a person,

when we obey because there is fear.

So violence isn’t merely organized butchery in the name of God,

in the name of society, or country.

Violence is much more subtle, much deeper,

and we are inquiring into the very depths of violence.

Krrishnamurti

As ever,

Carolann

Change your thoughts and you change your world.

                    -Norman Vincent Peale, 1898-1993

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