September 15, 2016 Newsletter

Dear Friends,

Tangents:

Carolann is out of the office, I will be writing the newsletter on her behalf.

PHOTOS OF THE DAY

A worker fixes light bulbs on stage before the start of the Marc Jacobs Spring 2017 collection show during Fashion Week in New York on Thursday. Mary Altaffer/AP 

Curator Caroline de Guitaut poses in the Green Drawing Room at Windsor Castle in Windsor, England, on Thursday with an evening gown worn by Britain’s Queen Elizabeth. The exhibition ‘Fashioning a Reign: 90 Years of Style from The Queen’s Wardrobe’ will show at the castle from Sept. 17 to Jan. 8, 2017. Peter Nicholls/Reuters
Market Closes for September 15^th, 2016

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Canada
By Eric Lam
     (Bloomberg) — Canadian stocks jumped the most in two months, as energy producers rallied with crude oil to help spur broader gains, while fresh U.S. data showed growth in the world’s largest economy remains mediocre.
     The S&P/TSX Composite Index gained 1 percent to 14,503.67 at 4 p.m. in Toronto, rebounding for a second day from the lowest level since July 8. The index has advanced 3.1 percent this quarter. That’s made Canadian stocks more expensive than U.S. peers, with a price-to-earnings ratio of 23 maintaining a 14 percent premium over the S&P 500 Index.
     Energy producers and financial services companies gained at least 0.8 percent to lead increases across all 10 industries in the S&P/TSX. Crude futures rose 0.8 percent in New York, rebounding after losing 5.9 percent the previous two sessions. Encana Corp. increased 3.3 percent. Royal Bank of Canada and Bank of Nova Scotia rallied at least 1.6 percent, while insurer Manulife Financial Corp. added 2.3 percent, its best in nine weeks.
     Global markets are stabilizing after a sharp slide earlier this week amid fresh concern central banks are rethinking their stimulus policies even as global growth remains tepid. Reports today showed U.S. industrial production and retail sales declined more than forecast. The S&P 500 and Dow Jones Industrial Average rallied 1 percent in New York.
     SNC-Lavalin Group Inc. climbed 3.2 percent, the most since May, sending industrials companies higher after analysts at CIBC World Markets raised their rating for the stock to sector outperform, the equivalent of a buy.
     Raw-materials producers added 0.7 percent. The S&P/TSX Materials Index remains the top performer in Canada this year, fueling a rebound in the wider gauge after slumping the most since the 2008 financial crisis last year. Even as the rally in gold producers has stalled since August, reflecting the uncertainty around the Fed’s intentions, the group is still up 48 percent and set to halt the longest yearly losing streak since 1988. Gold is seen as an alternate store of value.
     Magna International Inc. added 1.4 percent after losses in four of the prior five sessions. The manufacturer is considering a new assembly plant after winning a deal to build luxury sedans for BMW AG.
     Food processor SunOpta Inc. jumped 7 percent, for the highest close since January, after activist fund Engaged Capital disclosed a new 7.5 percent stake. SunOpta is conducting a strategic review and has held talks with Engaged.

US
By Oliver Renick and Jeremy Herron
     (Bloomberg) — U.S. stocks rose from a two-month low as Apple Inc. extended a rally, while a rebound in crude boosted shares of energy producers. Treasuries retreated with the dollar amid data showing the American economy is on uneven footing.
     The S&P 500 Index jumped as Apple pushed its four-day gain past 12 percent. The index bounced off its 100-day moving average before pushing higher as the level held for a fourth day. Industrial production contracted more than forecast and retail sales unexpectedly slid, sending the odds for a rate increase next week below 20 percent. The dollar was little changed, while the yield on the 10-year Treasury note rose to 1.70 percent.
     Equities continued to whipsaw investors after Friday’s rout jolted markets from a two-month torpor and wiped almost $2 trillion in value from stocks amid concern that central banks would deliver smaller doses of stimulus even as the global economy sputters along. Apple’s advance has buttressed U.S. equity indexes, as consumers snapped up the new iPhone model. The Federal Reserve and Bank of Japan meet separately next week, while U.K. policy makers maintained the BOE’s asset-purchase target.
      “Markets are being driven more by sentiment than logic right now,” said Peter Andersen, chief investment officer at Fiduciary Trust Co. in Boston, which has more than $11 billion of assets under supervision. “Everybody is very anxious to get clear trends in the market right now and investors have been reduced to looking at the data of the day and immediately factoring it into some calculus over whether the Fed will take action.”
     The S&P 500 Index gained 1 percent to 2,147.30 at 4 p.m. in New York, after a 0.1 percent slide on Wednesday left the index at its lowest level since July 7. The measure is down 1.6 percent since Friday and is up 2.3 percent for the third quarter.
     Apple rallied for a fourth day to the highest this year on continued optimism over the prospects for its new iPhone. Skyworks Solutions Inc. rose 6.3 percent and Intel Corp. gained 2.5 percent to lead chip stocks higher. Oil and gas companies rebounded from the worst two-day drop since June. Wells Fargo & Co. fell 0.7 percent after reports that the Justice Department is investigating its sales practices.
     The Stoxx Europe 600 Index added 0.6 percent, halting a five-day slide. Siemens climbed 1.6 percent after Chief Executive Officer Joe Kaeser said Europe’s biggest engineering company may beat its earnings forecast for the fiscal year ending this month. Lenders rebounded after their worst three-day drop in two months, with those in Italy, Spain and Portugal among the biggest gainers.
     The yield on U.S. Treasuries due in a decade rose one basis point to 1.70 percent, after falling three basis points the previous day. Thirty-year yields rose two basis points to 2.47 percent. The spread between the two securities reached the widest in more than six weeks on Wednesday.
     “There’s nothing in these numbers that tells us rates should be heading up,” Mark Kepner, managing director and equity trader at Themis Trading LLC in Chatham, New Jersey, said by phone. “Yields are moving higher overseas and that means there is demand that’s going to come out of our bond market and maybe our stock market because of those investors that have been trying for yield that will leave. That’s more important than the data here.”
     Securities with longer due dates have come under pressure after a selloff in Japan’s 30-year debt before next week’s BOJ meeting. Traders have been favoring shorter-dated notes, which tend to be influenced more by the prospect of policy changes from central banks, on confidence that the Fed will keep interest rates on hold, at least through next week’s policy meeting.
     Yields rose across the euro area as Spain and France sold bonds. Germany’s benchmark 10-year bond yield increased three basis points to 0.05 percent. Yields on similar-maturity French bonds also rose three basis points, to 0.35 percent, and Spain’s were one basis point higher at 1.08 percent.
     The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, slipped 0.1 percent for a second day of declines after the retail sales report damped speculation that the Fed will raise interest rates anytime soon. The U.S. currency fell 0.1 percent to $1.1240 per euro and dropped 0.3 percent to 102.16 yen.
     Britain’s pound was little changed at $1.3239 as Bank of England policy makers indicated there’s still a chance of another rate cut this year as they assess the potential longer- term fallout from Britain’s decision to leave the European Union.
     Crude climbed, led by gasoline’s biggest jump since May, after the restart of a pipeline carrying fuel to New York Harbor was delayed. Gasoline surged 5.1 percent after the projected restart of Colonial Pipeline’s Line 1, which can carry more than 1 million barrels a day of gasoline from the Gulf Coast to the eastern U.S., was pushed back to next week.
     West Texas Intermediate for October delivery advanced 33 cents, or 0.8 percent, to settle at $43.91 a barrel on the New York Mercantile Exchange. It slid almost 6 percent in the prior two days.
     Copper futures touched the highest in three weeks amid signs that demand may improve in China, the world’s biggest consumer of the metal. Aluminum, nickel, tin, zinc and lead fell in London.

Have a wonderful evening everyone.

Be magnificent!
 

“For success, attitude is equally as important as ability.” Walter Scott

As ever,

Karen

 “Put your heart, mind, and soul into even your smallest acts. This is the secret of success.” Swami Sivananda

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