December 10, 2015 Newsletter

Dear Friends,

Tangents:

Numbers:

50 MILLION Amount (in US$) that the still unreleased “Star Wars:  The Force Awakens” has already generated in presold tickets.  The movie opens December 18^th.

3 Northern white rhinos left in the world, all in captivity, after the death last month in San Diego of Nola, a female.

4.9 Time, in seconds, it took Lucas Eitter (age 14) to solve a Rubik’s Cube puzzle.  He is the first to do so in under five seconds in a sanctioned competition.

1,000 Community libraries to be established in India to commemorate the late A.P.J. Abdul Kalam, who was president of India from 2002-2007.

1 BILLION Estimated amount (in US dollars) that US pharmaceutical company Pfizer would save in income taxes if its proposed $152 billion merger with Irish drugmaker Allergan comes to pass.

This day in 1901 the first Nobel Prizes were awarded in physics, chemistry, medicine, literature and peace in Stockholm, Sweden. The ceremony was on the fifth anniversary of Swedish inventor Alfred Nobel’s death.

PHOTOS OF THE DAY

A waiter taking a break sits in a cafe in the Galleria Vittorio Emanuele II in Milan, Italy. The Galleria is one of the world’s oldest shopping malls.Alexander Zemlianichenko/AP

Student Zheng Xiaowen flies in Snowstorm Thursday. Snowstorm is a personal flying machine built by a group of engineering students from the National University of Singapore. The prototype sports 24 motors, each driving a propeller 76cm in diameter. It can bear the load of a single person for a flight time of about five minutes. The flight control system provides automated flight controls similar to Unmanned Aerial Vehicles as well as manual control by the pilot. Edgar Su/Reuters

Market Closes for December 10^th, 2015

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Dani Burger

     (Bloomberg) — Canadian stocks rose for a second day, as BlackBerry Ltd. jumped the most since January and commodities companies continued a rebound after pledging deeper cutbacks to stem a global glut.

     The Standard & Poor’s/TSX Composite Index advanced 79 points, or 0.6 percent, to 13,016.59 at 4 p.m. in Toronto. The gauge had tumbled below 13,000 for the first time since 2013 earlier this week.

     BlackBerry jumped 7.7 percent to pace gains among technology shares in the index. An industry website reported the company’s newest phone is being sold at Wal-Mart Stores Inc. Valeant Pharmaceuticals International Inc. added 3.3. percent to contribute the most to gains in the broader index.

     Raw-material stocks were among the best-performing groups in the measure today, rallying 0.6 percent. Switzerland’s Glencore Plc said it would scale back operations to combat a rout in commodity prices. Vancouver-based Teck Resources Ltd. gained 4 percent after joining Glencore in agreeing to reduce output. Timber companies also advanced, with Interfor Corp. and Canfor Corp. gaining at least 5.6 percent.

     The world’s biggest mining companies, particularly those that loaded up on debt, are restructuring their businesses and fighting declining profits as commodity prices keep falling. A combination of slowing economic growth in China and a rally in the U.S. dollar in anticipation of an interest-rate increase by the Federal Reserve have weighed on prices of resources. Canadian raw-material companies, which account for 10 percent of the S&P/TSX, have tumbled this year.

     While oil extended a decline below $37, energy producers advanced for a third day. The group added as much as 1.3 percent, after falling on Monday to its lowest level since March 2009.

     Westshore Terminals Investment Corp. plunged 20 percent to it’s lowest level since 2009, after cutting its dividend Wednesday. The coal storage company cited declining coal prices without any foreseeable price improvements in the near term.

US

By Joseph Ciolli

     (Bloomberg) — U.S. stocks rose to halt a three-day slide, as beaten-down energy shares climbed for a second session from their lowest level since September and airlines led transportation companies off a three-month low.

     Weakness in energy and industrial shares has helped restrain equities from any meaningful advance since the Standard & Poor’s 500 Index reached a more than three-month high in early November. Airlines boosted industrials today, while Chevron Corp. added 1.9 percent to bolster energy after cutting its 2016 spending plans. A rally in biotechnology shares lifted the health-care group.

     The S&P 500 rose 0.2 percent to 2,052.23 at 4 p.m. in New York, below its average price during the past 50 days after earlier rising as much as 1 percent. The gauge remains on track for its first weekly decline in four. The Dow Jones Industrial Average added 82.45 points, or 0.5 percent, to 17,574.75, and the Nasdaq Composite Index gained 0.4 percent. About 6.7 billion shares traded hands on U.S. exchanges, 5.2 percent below the three-month average.

     “Energy has been the most volatile sector in a broader market over the last couple weeks and U.S. equities seem to be tracking it,” said Joe Bell, a Cincinnati-based senior equity analyst at Schaeffer’s Investment Research Inc. “We bounced back off yesterday’s lows and today we’re right at the lows for December, and that area is holding. We’re in a waiting period here ahead of the Fed meeting.”

     With the Federal Reserve’s rate-setting meeting less than a week away, the S&P 500’s performance this December is proving an exception to the historical trend for the month — typically the strongest for global equities. An early rally fizzled yesterday as Apple Inc. paced technology-share declines, while renewed worries about the pace of global growth erased all the benchmark index’s 2015 gains.

     Fed Chair Janet Yellen has recently signaled the economy is ready for higher borrowing costs. Still, investors are caught between optimism about U.S. growth and concern that a slowdown in China and the consequent tumble in commodities will damp global growth prospects. Oil prices remained at six-year lows Thursday after OPEC said crude output rose to the highest in more than three years in November.

     While policy makers have emphasized a gradual pace for future interest-rate increases, investors are watching economic data to decipher how deliberate the Fed might be. A report today showed filings for unemployment benefits jumped to a five-month high, interrupting steady labor-market progress. Even with the increase, applications are holding close to four-decade lows. Separate data showed import prices in November fell less than expected.

     Reports tomorrow on retail sales and producer prices will probably show stronger growth for November, while a gauge of consumer sentiment is expected to improve compared to last month, according to economists surveyed by Bloomberg. The data aren’t expected to alter the Fed’s anticipated move on rates, with traders pricing in a 76 percent chance that the central bank will lift off on Dec. 16.

     The S&P 500 is 3.7 percent away from its all-time high set in May, after coming within 1.4 percent of the record last week. The index is heading for its strongest quarter in two years, right after its worst since 2011. Following an 8.3 percent surge in October, the S&P 500 has made little headway, going 26 sessions without back-to-back gains. The record is 28 days set back in 1970, equaled in April 1994 and again last March.

     The Chicago Board Options Exchange Volatility Index fell 1.4 percent Thursday to 19.34. The measure of market turbulence known as the VIX surged 32 percent during the three previous days, the biggest such increase since the bottom of the summer selloff on Aug. 25.

     The Dow Jones Transportation Average rose 0.6 percent, trimming an earlier 1.3 percent rally, after sliding yesterday to its lowest since Aug. 25. Delta Air Lines Inc., United Continental Holdings Inc. and Southwest Airlines Co. gained more than 1.6 percent. A Bloomberg index of U.S. carriers climbed 2.2 percent, rebounding from its steepest two-day drop in more than three months.

     Eight of the S&P 500’s 10 main industries gained on Thursday, with health-care, energy and industrial shares performing the best, up at least 0.4 percent. Utilities lost 1.7 percent.

     Consol Energy Inc. rose 10 percent, the most in more than a month to lead energy companies, while Apache Corp. and Valero Energy Corp. increased more than 2.1 percent. The strength in energy shares outweighed a decline for crude oil. The resource fell 1.1 percent to extend its five-day skid to 11 percent.

     Drugmakers Mylan NV and Alexion Pharmaceuticals Inc. added at least 2.4 percent to lead health-care companies higher. The Nasdaq Biotechnology Index rose 1.2 percent, paring most of yesterday’s 1.6 percent retreat. Tenet Healthcare Corp. and Universal Health Services Inc. rose more than 1.9 percent.

     The KBW Bank Index closed 0.5 percent higher, after increasing as much as 1.7 percent. The gauge snapped a three-day streak of losses totaling 4.4 percent that sent it to a one- month low. KeyCorp and Regions Financial Corp. added more than 1.2 percent.

     Semiconductors led an advance among technology shares, rising for the first time in four days. Micron Technology Inc., Qorvo Inc. and Avago Technologies Ltd gained at least 1.1 percent. Among other tech companies, HP Inc. and Xerox Corp. increased more than 1.5 percent.

     Seritage Growth Properties, the real estate investment trust spun off from retailer Sears Holding Corp., soared 17 percent after billionaire Warren Buffett invested in the company. He reported a passive holding of 2 million shares, representing an 8 percent stake, according to a regulatory filing on Thursday.

     Men’s Wearhouse Inc. plummeted 17 percent to the lowest since 2009. The company warned that its struggling Jos. A. Bank unit could force it to miss a forecast, the latest sign the merger of the two menswear chains is faltering.

     Navistar International Corp. slumped 19 percent to an 18- year low. The truckmaker that counts Carl Icahn as its biggest investor dropped after Morgan Stanley cut its price target for the stock amid questions about whether the company has enough cash.

     Dow Chemical Co. retreated 3.6 percent from an all-time high, after soaring 12 percent yesterday following reports that it’s in late-stage talks to merge with DuPont Co. Dow’s decline dragged raw-materials in the S&P 500 down 0.8 percent.
 

Have a wonderful evening everyone.

Be magnificent!

Do you know that even when you look at a tree and say,

‘That is an oak,’ or ‘that is a banyan tree,’

the naming of the tree, which is botanical knowledge, has so conditioned your mind

that the word comes between you and actually seeing the tree?

To enter in contact with the tree you have to put your hand on it

and the word will not help you touch it.

Krishnamurti

As ever,

Carolann

The man who has no imagination has no wings.

                                    -Mohammad Ali, 1942-

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