November 10, 2016 Newsletter

Dear Friends,

Tangents:

On November 10^th, 1782, King George III wrote to Lord Shelburne:

Knavery seems to be so much the striking feature of its [America’s] inhabitants that it may not in the end be an evil that they will become aliens to this kingdom. 

November 11:  Martinmas/Veterans Day/Armistice Day:

St. Martin of Tours, France, was a popular bishop in the Middle Ages.  The English shortened the name of his feast day from Martin’s Mass to Martinmas, and the day fell at a time when people wanted to celebrate harvesting and wine making, it became a day for feasting and celebration.  A goose was often roasted for the occasion.  November II became Armistice Day in 1918 to mark the armistice between the Allies and the Central Powers that ended World War I.  The United States, England, and France celebrated the day jubilantly; many were sure there’d never be another war.  Now in England, France, and Canada, in particular, the day commemorates those who died in both World War I and II.  In 1954, the United States changed the day to Veterans’ Day, to commemorate those who have served in the armed forces during all the country’s wars.   
                                                                                                                          
from The Book of Holidays Around the World.

On November 11, 1918, Virginia Woolf wrote in her Diary:

Twenty-five minutes ago the guns went off, announcing peace.  A siren hooted on the river.  They are hooting still.  A few people ran to look out of windows.  The rooks wheeled round, and wore for a moment the symbolic look of creatures performing some ceremony, partly of thanksgiving, partly of valediction over the grave.  A very cloudy still day, the smoke toppling over heavily toward the east; and that too wearing for a moment a look of something floating, waving, drooping.  So far neither bells nor flags, but the wailing of sirens and intermittent guns. 

Also on this day in….

1951 – Direct-dial, coast-to-coast telephone service began with a call between the mayors of Englewood, N.J., and Alameda, Calif.

1954 – The U.S. Marine Corps Memorial, depicting the raising of the American flag on Iwo Jima in 1945, was dedicated in Arlington, Va.
1969 – “Sesame Street” debuted on PBS.

1997 – A judge in Cambridge, Mass., reduced Louise Woodward’s murder conviction to manslaughter and sentenced the English au pair to time served in the death of 8-month-old Matthew Eappen.

1997 – WorldCom Inc. and MCI Communications Corp. agreed to a $37 billion merger.

1982 – Soviet leader Leonid Brezhnev died at age 75.

PHOTOS OF THE DAY

Prince William, Duke of Cambridge, watches children planting seeds during a visit to the Living Memory and Centenary Fields Projects in London on Thursday. Launched by the prince in 2014 and in partnership with the Royal British Legion, Centenary Fields helps remember those who lost their lives during WWI by securing and protecting outdoor recreational space in perpetuity for the benefit of future generations. Stuart C. Wilson/AP

A rider and his horse, from the Spanish Riding School of Vienna, perform a dress rehearsal for the media at the SSE Arena in London on Thursday. Peter Nicholls/Reuters

Market Closes for November 10, 2016

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Anna-Louise Jackson

     (Bloomberg) — Canadian stocks fell slightly after a three- day rally, bucking broader gains in global financial markets amid optimism that U.S. President-Elect Donald Trump’s fiscal- stimulus plans will boost economic growth.

     The S&P/TSX Composite Index lost 0.1 percent, dropping to14,744.18 in Toronto Thursday despite gains among industrial, financial and health-care stocks. The index gyrated up-and-down throughout the session. First Quantum Minerals Ltd. gained 4.2 percent and Cott Corp. rose 5.2 percent.

     The move ran counter to large-cap U.S. stocks, which rose with the Dow Jones Industrial Average briefly hitting an all- time high before paring, while the S&P 500 Index came within 10 points of its previous record. Meanwhile the technology-heavy Nasdaq 100 Index fell 1.6 percent, its biggest retreat since Sept. 9.

     Canadian industrial stocks jumped 2.5 percent to the highest level since March 2015, buoyed by a 10.1 percent rally for Bombardier Inc. The company forecast today that its annual profits will reach the high end of its previous outlook and reported a narrower-than-expected quarterly loss. Ritchie Bros. Auctioneers Inc. and Russel Metals Inc. both added more than 5 percent.

     Shares of health-care companies rose 2.3 percent, bolstering a two-day rally of 6.4 percent. Valeant Pharmaceuticals International Inc. jumped 5.6 percent on news Blackstone Group LP, Carlyle Group LP and KKR & Co. are among buyout firms in talks with banks for financing to back their bids for the company’s Australian drug unit.

     Raw-materials stocks slumped 3.8 percent, led by a 16.2 percent decline for Silver Wheaton Corp. and a 11.4 percent tumble for Torex Gold Resources Inc. Meanwhile, shares of consumer-staples companies fell 3.1 percent to the lowest level since July.

US

By John Hyland

     (Bloomberg) — The Dow Jones Industrial Average’s first record close in three months comes amid a market drawing increasingly bright lines between what it views as winners and losers in a Donald Trump presidency.

     Consider that the 30-stock gauge’s 218-point ascent Thursday happened the same day the Nasdaq 100 Index dropped the most since September, their biggest divergence since the internet bubble burst. Weakness in technology stocks and a handful of defensive industries that soared in the first half held the S&P 500 Index’s gain to roughly a fifth of the Dow’s.

     The surge in stocks following a presidential election echoed 1996 and 1972, when the blue-chip index made fresh highs just after victories by Bill Clinton and Richard Nixon.

     On the upside were financial shares, perceived beneficiaries should Trump make good on threats to dismantle the Dodd-Frank Act, as well as industrial and materials stocks in anticipation of infrastructure spending. Along with technology shares, pain was felt in high-dividend industries such as household product makers, utilities and phone companies as bond yields surged.

     “People are going through the possibilities about what Washington looks like today and what Washington can do or not do for them,” said John Manley, who helps oversee about $233 billion as chief equity strategist for Wells Fargo Funds Management in New York. “Corporations feel there’s a less restrictive hand. People may take that as a positive. It’s the end of the uncertainty.”

     The Dow rose 218.19 points, or 1.2 percent, to 18,807.88 at 4 p.m. in New York, topping its Aug. 15 record. The Nasdaq 100 Index lost 1.6 percent. The S&P 500 Index advanced 0.2 percent and the small-cap Russell 2000 Index jumped 1.6 percent and is up 4.7 percent since Trump’s election.

     Amazon.com Inc. fell 3.8 percent to lead the rout in technology. JPMorgan Chase & Co. jumped 4.6 percent and Goldman Sachs Group Inc. climbed 4.3 percent. Drugmakers advanced, led by Pfizer Inc.’s 4.3 percent rally. Caterpillar Inc. added 2.5 percent. Procter & Gamble Co. plunged 3.5 percent.

     Financial and health-care industries have surged since Trump’s surprise win on Tuesday, rallying on expectations that the president-elect and Republican-controlled Congress will roll back regulations. Trump’s promise to revive American infrastructure means commodities used to build everything from airports to bridges will benefit under his presidency, according to Goldman Sachs Group Inc.

     “Yields are moving their way higher, that’s good for banks,” said Art Hogan, chief market strategist and director of research for Wunderlich Securities in Boston. “If there’s going to be a friendlier regulatory environment that’s going to be good for banks. That’s the tailwind behind financials we haven’t seen for a long time.”

     While opinions vary about what’s behind the tech rout, one possibility was concern about the impact of Trump’s policies on trade overseas, where U.S. technology companies thrive. Others saw a rational retreat for a group that through Election Day had surged 11 percent in 2016, or even the potential for retaliation by the president-elect against an industry that didn’t exactly cozy up to him during the campaign.

     Department-store stocks rallied. Kohl’s Corp. jumped 12 percent after saying back-to-school sales were strong. Macy’s Inc. surged 5.6 percent after hiring Brookfield Asset Management to squeeze more money out of its real estate holdings. The largest U.S. department-store company posted another quarter of declining sales. Nordstrom Inc. surged 7.2 percent and Urban Outfitters Inc. added 5.6 percent.

     The CBOE Volatility Index rose 3.7 percent on Thursday. The measure of market turbulence known as the VIX reached a four- month high on Friday. U.S. stocks had been heavily hedged as volatility surged leading up to the vote on speculation a Trump win had the potential to rattle markets as he had pledged to clamp down on international trade deals, while adopting divisive rhetoric throughout his campaign.

     In the 22 elections going back to 1928, the S&P 500 has fallen 15 times the day after polls close, for an average loss of 1.8 percent. Stocks reversed course and moved higher over the next 12 months in nine of those instances, according to data compiled by Bloomberg.

     With the election uncertainty out of the way, investors are also weighing prospects for the timing of the Federal Reserve’s next rate increase. Odds for a December move have increased to 82 percent from 78 percent a week ago. A report today showed jobless claims declined from an almost three-month high ahead of the election.

Have  a wonderful evening everyone.

Be magnificent!

Those who are focused on the objects of the senses, become attached to those objects.

From attachment comes desire; and from desire comes anger; from anger comes confusion of mind;

from confusion of mind comes loss of memory; from loss of memory comes loss of intelligence;

and from loss of intelligence comes destruction.

The Bhagavad Gita

As ever,

Carolann

A generation which ignores history has no past and no future.

                                               -Robert Heinlein, 1907-1988                      

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

Tel: 778.430.5808

(C): 250.881.0801

Toll Free: 1.877.430.5895

Fax: 778.430.5828

www.carolannsteinhoff.com