November 14, 2016 Newsletter

Dear Friends, 

Tangents:

ELEGY

 -by Leonard Cohen 

Do not look for him

In brittle mountain streams:

They are too cold for any god;

And do not examine the angry rivers

For shreds of his soft body

Or turn the shore stones for his blood;

But in the warm salt ocean

He is descending through cliffs

Of slow green water

And the hovering coloured fish

Kiss his snow-bruised body

And build their secret nests

In his fluttering winding-sheet.

That poem comes from one of Leonard Cohen’s books of poetry, Let Us Compare Mythologies.  A friend gave it to me after we had been to see Leonard Cohen during his last concert tour.   The concert consisted of  three straight hours of uninterrupted magic.

Gary and I were reminiscing on the weekend about what a great inspiration he was. I had friends in Montreal when I was growing up who used to run into him from time to time on the streets or in a deli and they always found him self-effacing;  unfortunately, I never did meet him in person in Montreal.  Gary remembers hearing Suzanne for the first time: he was in grade 12, and he decided to make a courageous visit to  a university (it happened to be Guelph) coffee-house (this was the sixties) and there was a folk musician at the coffee-house singing Suzanne and he thought he had never heard such a beautiful song before.  During university, Gary played guitar and sang in a folk band in any bar where they could find work – Suzanne remained a permanent part of the repertoire.   He can still recite the lyrics by heart.  Such beautiful lyrics…

And Jesus was a sailor 
When he walked upon the water 
And he spent a long time watching 
From his lonely wooden tower 
And when he knew for certain 
Only drowning men could see him 
He said “All men will be sailors then 
Until the sea shall free them” 
But he himself was broken 
Long before the sky would open 
Forsaken, almost human 
He sank beneath your wisdom like a stone 
And you want to travel with him 
And you want to travel blind 
And you think maybe you’ll trust him 
For he’s touched your perfect body with his mind….

Now Suzanne takes your hand 
And she leads you to the river 
She is wearing rags and feathers 
From Salvation Army counters 
And the sun pours down like honey 
On our lady of the harbour 
And she shows you where to look 
Among the garbage and the flowers 
There are heroes in the seaweed 
There are children in the morning 
They are leaning out for love 
And they will lean that way forever… 

Probably an inspiration for Gary to become a sailor.

RIP, Leonard.

PHOTOS OF THE DAY

A ‘supermoon’ sets behind Ocean Beach Pier Monday morning, while dozens of photographers who got up early observe it. The moon appears about 7% larger than normal and about 15% brighter during its full phase through Monday night, although the human eye is barely able to discern that difference. The moon hasn’t been this close to the Earth since 1948. It won’t be this close again until November 25, 2034. Peggy Peattie/San Diego Union-Tribune/AP

People release floating lanterns during the festival of Yee Peng in the northern capital of Chiang Mai, Thailand on Monday. Athit Perawongmetha/Reuters

A man takes a photo of post-election Post-it notes pasted along a tiled walk at Union Square subway station in New York on Monday.Shannon Stapleton/Reuters

Market Closes for November 14, 2016

International Markets

Bonds

Currencies

Commodities

Market Commentary:

On Nov. 14, 1972, the Dow Jones Industrial Average closed above 1,000 for the first time, ending the day at 1,003.16.

Go to article »

On this day in 1986, the Securities and Exchange Commission fines Ivan Boesky $100 million for insider trading.

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose Monday, after tumbling the most in two months last week, bolstered by gains among gold producers, financial services companies and consumer discretionary shares.

     The S&P/TSX Composite Index rose 0.3 percent to 14,598.51 at 4 p.m. in Toronto, after plunging 1.3 percent on Nov. 11. Only five of 11 industries in the S&P/TSX advanced on trading volume 34 percent higher than the 30-day average. The equity benchmark remains up 12 percent in 2016, making it the top performer among developed markets tracked by Bloomberg. Canadian stocks are about 9 percent more expensive than their peers in the S&P 500 Index.

     Toronto-Dominion Bank rose 2 percent while Royal Bank of Canada added 0.8 percent to lead the nation’s largest lenders higher. Manulife Financial Corp. advanced 3.3 percent to extend a four-day rally and was trading at the highest level in more than a year. The company, Canada’s largest life insurer, posted third-quarter profit that almost doubled on gains from its life insurance business and investments.

     Amaya Inc. jumped 14.4 percent, the most since February, to lead consumer shares higher after its founder made a cash offer to take the Canadian owner of the PokerStars online gambling service private in a deal valued at about $6.7 billion including debt. The offer, at C$24 for each outstanding common share, represented a 31 percent premium to Friday’s close at C$18.34 in Toronto. Amaya also reported third-quarter earnings and full- year projections that topped analysts’ estimates.

     Gildan Activewear Inc. added 5.1 percent for its biggest gain in 18 months after agreeing to buy the American Apparel Inc. brand for about $66 million. Gildan won’t be taking on any retail stores. American Apparel filed for bankruptcy Monday, less than a year after ending its first stint under court protection.

     Raw-materials producers added 0.6 percent as a group, rebounding from a two-day slide. Gold was down 0.8 percent, paring an earlier loss of as much as 1.3 percent. The precious metal has whipsawed after topping $1,300 an ounce in the immediate aftermath of Donald Trump’s surprise presidential victory. Investors initially seeking a haven from volatility have instead warmed to the idea of a Trump presidency that favors tax cuts and infrastructure spending to boost U.S. growth.

US

By Lu Wang

     (Bloomberg) — The stock market’s post-election bifurcation sharpened Monday as technology shares extended their worst performance since the start of the bull market on speculation Donald Trump’s trade and immigration policies will translate into lower earnings.

     Apple Inc., Facebook Inc. and Alphabet Inc. led the S&P 500 Information Technology Index down 1.7 percent for the biggest retreat since September. The group stands out as the only industry that normally benefits from a rising economy not to rally on speculation Trump’s policies will stoke domestic growth. Tech stocks in the benchmark equity gauge have slumped 3.1 percent over four days, trailing the S&P 500 Index by 4.2 percentage points, the most since May 2009. Small caps in the Russell 2000 Index surged 1.2 percent to an all-time high.

     No single fact explains the tech rout though everything from trade and immigration policy to industry rotation to flat- out campaign retaliation have been cited. Technology is the biggest group in the S&P 500 by far and one of the only ones to consistently post earnings growth over the last 18 months.

     “Technology provides the productivity gains for the global economy and many of the large-cap names like Apple and Amazon were carrying the torch for the market,” Channing Smith, a managing director at Capital Advisors Inc. in Tulsa, Oklahoma, said by phone. The firm oversees about $1.8 billion. “Without their participating, that’s definitely going to create a headwind for the market.”

     The S&P 500 slipped less than one point for a second day of losses, with tech giants bearing the worst of the rout. The FANG block of Facebook, Amazon.com Inc., Netflix Inc. and Google parent Alphabet each fell more than 2.4 percent. The group has dropped every day since Trump’s victory, sinking 8 percent for the worst retreat since February amid concern about the impact of Trump’s policies on trade overseas, where U.S. technology companies thrive.

     The industry, which largely supported Hillary Clinton during her presidential campaign, may also face higher hurdles for expanding their footprints after some high-profile business leaders including Amazon Chief Executive Officer Jeff Bezos clashed with Trump during the election. Trump, responding to negative coverage in the Washington Post, which is owned by Bezos, maintained Bezos purchased the news organization to gain political influence and avoid antitrust scrutiny. Shares of the online retailer have lost more than $30 billion in value since Tuesday’s vote.

     “It’s a big deal with what potentially Trump could do,”said Blake Harper, an analyst that covers internet stocks at Loop Capital Markets LLC in Chicago. “If you look at investors in Alphabet, Facebook and Amazon, they’re stacking some type of operationality for them to continue to expand internationally and also expand into other different categories outside their core markets,” he said. “He definitely indicated he would pursue antitrust measures against companies like Amazon. You’d have more restrictive policies to prohibit expansion.”

     Any slowdown in tech earnings may deal a blow to a market that just emerged from a five-quarter profit slump, the longest since the global financial crisis. While S&P 500 income rose 2.7 percent in the third quarter, profit at tech firms expanded almost 8 percent, actual results and analyst estimates compiled by Bloomberg show.

     The decline in tech shares came after they extended their leadership at the fastest rate in four years, raising their representation in the S&P 500 by more than 1 percentage point to a 15-year high of 21.4 percent in the third quarter. From Apple to Facebook, mega techs now occupy half of the top 10 spots in ranks of the most valuable American companies, matching the number at the peak of internet mania.

     For now, the market seems to be holding up, with S&P 500 trading within 1.2 percent of an all-time high, as the retreat in tech stocks has been countered by rallies in financial and industrial companies, shares expected to benefit from Trump’s plans to boost fiscal spending and ease regulations. Banks climbed 2.3 percent Monday, extending their gains since Trump’s victory to 11 percent, while industrial stocks have added 5.2 percent in that time.

     “The market is getting ahead of itself here and selling off and being hard on tech,” said Timothy Ghriskey, who helps manage $1.5 billion as chief investment officer at Solaris Asset Management LLC in New York. “Tech is where a lot of gains were, so as money gets shifted around to different sectors, meaning into financials and into health care and industrials, it has to come out of somewhere and a lot of it has come out of tech.”

 Have a wonderful evening everyone.

Be magnificent!

When a man is deprived of the foundation that provides him everything,

his poverty loses its best virtue, simplicity, to become no more than disgraceful and sordid.

His wealth is no longer splendid, but becomes merely extravagant.

His appetites no longer remain within natural limits; they no longer have the one goal

of meeting the needs of his life; they become an end in themselves,

setting fire to his existence, and dancing madly by the light of the flames.

Rabindranath Tagore

As ever,

Carolann

Deciding what not to do is as important as

deciding what to do.

                  -Steve Jobs, 1955-2011

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