November 21, 2016 Newsletter

Dear Friends,

Tangents:

Just back from attending the World Business Forum in New York.   Very informative; outstanding business and academic presenters; many  held the view that the US economy will continue to  improve and that the outlook for the US dollar is to continue strengthening relative to world currencies, especially given Janet Yellen’s guidance for a rate hike in December.  I stayed close to 5^th Ave. & Central Park South, so witnessed the unrelenting protesters in front of the Trump Tower.  Most of the Americans I spoke with at the business forum were reticent to express any opinion on the President-Elect.   It’s the US Thanksgiving on Thursday – a holiday with more significance for Americans than any other.  Given how divisive this election was, I’m sure there will be many contentious dinner conversations when families aggregate on the holiday.

On this day…
November 21, 1976 – World premiere of the movie Rocky.  Cost only a million to make, with virtually unknown actors and went on to be one of the biggest grossing films of all time.
Nov. 21, 1995, the presidents of three rival Balkan states agreed to make peace in Bosnia, ending nearly four years of terror and ethnic bloodletting that have left a quarter of a million people dead in the worst war in Europe since World War II.
November 21, 1988 – Brian Mulroney wins second majority for PCs with 170/295 seats (43.3% pop vote); the Free Trade election.
PHOTOS OF THE DAY

Alex Carrillo Quito of Ecuador imitates the character Rocky Balboa from the 1976 movie “Rocky,” on the steps of the Philadelphia Museum of Art, in Philadelphia, Monday. Four decades after the Nov. 21, 1976, premiere of “Rocky,” the movie’s reach is international, and the title character’s underdog tale of determination, grit, and sleepy-eyed charm still resonates with fans. Matt Rourke/AP

Children enjoy yellow leaves of ginkgo trees at Jingu Gaien, the outer garden of Meiji Jingu Shrine, on Monday in Tokyo. Shizuo Kambayashi/AP
Market Closes for November 21^st, 2016

International Markets

Bonds

Currencies

Commodities

Market Commentary:
On November 21, 1995 – Dow Jones tops 5000 for the first time.
Number of the Day
$1.06
The level the euro against the dollar, rekindling an old debate: Will the common currency reach parity with the dollar?
Canada
By Eric Lam
     (Bloomberg) — Canadian stocks advanced for a third day to their highest level in 17 months as natural resources producers rallied with oil on continued optimism of an OPEC production cut and gold rebounded from the lowest level in five months.
     The S&P/TSX Composite Index rose 1.2 percent to 15,039.87 at 4 p.m. in Toronto, and is trading at the highest level since June 2015. The equity benchmark is up almost 16 percent in 2016, making it the top performer among developed markets tracked by Bloomberg. Canadian shares are about 11 percent more expensive than their peers in the S&P 500 Index.
     Energy companies picked up 2.5 percent, also hitting 17- month high, and raw-materials producers gained 1.7 percent to lead advances in 10 of 11 industries in the S&P/TSX. Telecommunications stocks were the only laggards. Trading volume was 4.4 percent lower than the 30-day average.
     Suncor Energy Inc. and Canadian Natural Resources Ltd. increased more than 2.2 percent as energy stocks jumped for a third day with the price of oil at a three-week high. Crude prices rose 3.9 percent in New York, adding to last week’s 5.3 percent gain, as Iran signaled optimism that the Organization of Petroleum Exporting Countries will reach a consensus. Iraq said it will offer new proposals to help reach a deal at the Nov. 30 meeting in Vienna.
     Teck Resources Ltd., the nation’s largest diversified miner, added 3.9 percent as industrial metals were led by a rally in copper while nickel rebounded from the lowest in two weeks. The London Metal Exchange’s index of metal prices slid the most since August last week. Copper producer First Quantum Minerals Ltd. jumped 7.2 percent.
     Natural resource producers are the top-performing companies in the Canadian market this year, with materials stocks climbing 40 percent on a rebound in commodities prices from gold to crude. Investors have shrugged off a series of market surprises — from the U.K. Brexit vote in June to Donald Trump’s surprise U.S. presidential win earlier in November — to propel global markets higher. The MSCI All-Country World Index of developed and developing markets is up 3.3 percent this year and is headed for its biggest annual gain since 2013.
     Teck Resources is the top stock in the S&P/TSX, up almost six-fold this year as prices for coking coal and zinc have also surged. Energy producers have jumped 30 percent, led by Bonavista Energy Corp. and Encana Corp.
     Goldcorp Inc. rose 1.3 percent as gold advanced from the lowest level in more than five months as the Bloomberg Dollar Spot Index snapped three days of gains. Silver also rose after nearing a bear market.
US
By Lu Wang and Rebecca Spalding
     (Bloomberg) — U.S. stocks rose, pushing four major benchmark indexes to simultaneous records for the first time since 1999, as investors added to a post-election advance spurred by speculation the incoming administration’s policies will incite brisker economic growth.
     The S&P 500 Index rose 0.8 percent to 2,198.19 at 4 p.m. in New York, for its first record since Aug. 15. The Dow Jones Industrial Average advanced 88.62 points to 18,956.55 to a fresh high, while the Russell 2000 Index capped a 12th day of gains in its longest rally since 2003. The Nasdaq Composite Index added 0.9 percent to its highest level ever.
     “It’s a push on the upper end of the equity markets due to this renewed belief that there’s tax cuts and stimulus spending coming in 2017 and 2018,” said Chad Morganlander, a money manager at Stifel, Nicolaus & Co. in Florham Park, New Jersey, where he helps oversee about $172 billion. “The overall equity markets are taking a cue from that and they are trading on the belief that earnings will move higher as well as revenues in 2017.”
     The new milestone for the S&P 500 arrived as companies ended a five-quarter profit slump and Donald Trump’s election fueled optimism that his plans to cut taxes and boost fiscal spending will benefit industries more geared toward economic growth. Acknowledging the strength in the economy, Federal Reserve Chair Janet Yellen said Thursday that the central bank is close to lifting interest rates, comments that sent Treasuries lower and yields on the 10-year note toward 2.25 percent.
     “There’s optimism that it’s more likely that Trump is going to put us on an economic fast track versus Clinton,” said Terry Morris, manager director of equities at BB&T Institutional Investment Advisors in Wyomissing, Pennsylvania. “The election had something to do with this, and I also think there’s some short covering going on. People that were hedging the election had to rush to cover after the news, and I think generally the perception is the economy is starting to pick up as the Fed is likely to raise rates in December.”
     Investors have boosted bets for tighter monetary policy since Donald Trump’s election win, on speculation his policies will spur growth and increase inflation. After Federal Reserve Chair Janet Yellen said last week the central bank is close to raising rates, traders are now pricing in a 98 percent chance of a move in December. If the Fed doesn’t act as expected, it may bring on more market turmoil, says Seven Investment Management’s Ben Kumar.
     Most-hated stocks are among the biggest winners since Trump’s victory. A Goldman Sachs Group Inc. basket of 50 companies that have the highest short interest in the Russell 3000 Index has climbed 11 percent since Nov. 8, four times the gain in the broad market measure.
     Financial shares have done the heavy lifting since the last record, rising 14 percent since the August high. Energy producers are up 3.9 percent, while groups coveted for their high dividend yields have tumbled with bonds. Real-estate investment trusts and phone companies have tumbled more than 11 percent.
     Energy shares rallied 2.2 percent Monday, following crude higher, after Iran signaled optimism OPEC will agree to a supply-cut deal and Iraq said it will offer new proposals to help bolster the group’s unity before members meet next week. Chesapeake Energy Corp. and Murphy Oil Corp. led gains.
     Tyson Foods Inc. tumbled 14 percent after posting earnings that missed estimates and appointing Tom Hayes to succeed Donnie Smith as chief executive officer.

Have a wonderful evening everyone.

Be magnificent!

The spiritual can never be attained,
until the material has been extinguished.
Swami Vivekananda

As ever,

Carolann

Nothing is impossible, the word itself says “I’m possible!”
                                                 -Audrey Hepburn, 1929-1993

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

Tel: 778.430.5808
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